IRVINE,
Calif., Oct. 27, 2022 /PRNewswire/ -- Edwards
Lifesciences (NYSE: EW) today reported financial results for the
quarter ended September 30, 2022.
Third Quarter Highlights and Outlook
- Q3 sales of $1.32 billion grew 1
percent; constant currency1 sales grew 7 percent
- Q3 TAVR sales grew 1 percent; constant currency sales grew 6
percent
- Q3 EPS of $0.55;
adjusted1 EPS increased 13 percent to $0.61
- Recently discontinued surgical HARPOON program resulted in a
net $0.07 per share charge
- 2022 adjusted EPS guidance revised: $2.40 to $2.50,
compared to 2021 adjusted EPS of $2.22
- Received U.S. FDA and CE Mark approval for PASCAL
Precision
- Received U.S. FDA approval for SAPIEN 3 Ultra RESILIA
valve
"The third quarter strengthened our conviction in our company's
patient-focused innovation strategy," said Michael A. Mussallem, chairman and CEO.
"Despite a challenging macro environment, our team made significant
progress advancing our breakthrough technologies. Our
rigorous evidence generation has resulted in new global product
approvals of innovative therapies, which will enable us to reach
many more patients."
Transcatheter Aortic Valve Replacement (TAVR)
In the third quarter, the company reported TAVR sales of
$862 million, a year-over-year
increase of 1 percent, or 6 percent on a constant currency
basis. Sales were impacted primarily by persistent U.S.
hospital staffing shortages and COVID headwinds in Japan, which intensified the typical summer
seasonality. In the U.S., Edwards' TAVR procedures increased
in the mid-single digits versus the prior year.
During the quarter, Edwards received approval to begin selling
the SAPIEN 3 Ultra RESILIA valve in the U.S. The company's
industry-leading SAPIEN 3 Ultra transcatheter aortic heart valve
now incorporates Edwards' breakthrough RESILIA tissue
technology.
Outside the U.S., in the third quarter, Edwards' constant
currency TAVR sales grew in the low-double digits on a
year-over-year basis. Long-term, the company sees excellent
opportunities for international growth as TAVR therapy adoption
remains low.
Globally, the company's local average selling prices and market
positions were stable.
The company continues to estimate that the global TAVR
opportunity will reach $10 billion by
2028, implying a low double-digit compounded annual growth
rate.
Transcatheter Mitral and Tricuspid Therapies (TMTT)
Edwards continued to make progress on three key value drivers
for TMTT in the third quarter: a portfolio of differentiated
therapies, positive pivotal trial results to support approvals and
adoption, and favorable real-world clinical outcomes.
During the third quarter, the company received U.S. FDA approval
for the PASCAL Precision system for the treatment of patients
suffering from degenerative mitral regurgitation, as well as
European regulatory approval for PASCAL Precision. The
company remains very positive about its three new valve replacement
therapies, which include SAPIEN M3, EVOQUE Eos and the EVOQUE
tricuspid replacement system. Due to the uncertain Medical
Devices Regulation process, the company now anticipates CE Mark
approval for EVOQUE in late 2023.
Third quarter TMTT sales were $30
million and grew sequentially despite summer seasonality.
Adoption of the PASCAL system in Europe increased as the company initiated a
limited introduction of PASCAL Precision. This therapy
continues to have excellent outcomes for patients as the company
gradually expands into more centers in Europe.
Edwards anticipates that the global TMTT opportunity will reach
$5 billion by 2028. The company
remains committed to transforming the treatment of patients with
transcatheter solutions for mitral and tricuspid valve diseases
around the world.
Surgical Structural Heart and Critical Care
Surgical Structural Heart sales for the quarter were
$220 million, up 1 percent compared
to the third quarter of 2021, or up 8 percent on a constant
currency basis. The company experienced strong global growth
driven by increased penetration of its premium RESILIA tissue
products. In addition, adoption of the MITRIS surgical mitral
valve, launched in the U.S. in the second quarter, now represents
the majority of the company's mitral valve sales in this
region.
Critical Care sales were $207
million for the quarter, down 3 percent versus the third
quarter of 2021, or up 3 percent on a constant currency
basis. Sales growth was driven by increased adoption of
Edwards' broad portfolio of Smart Recovery products, including
FloTrac and ClearSight sensors with its unique Hypotension
Prediction Index algorithm.
Additional Financial Results
For the quarter, the adjusted gross profit margin was 81.0
percent, compared to 76.3 percent in the same period last
year. The improvement was driven by the expected positive
impact from the company's FX program, which includes hedge contract
gains and natural hedges that offset the negative sales impact from
the weakening of the Euro and Yen against the dollar.
Selling, general and administrative expenses in the third
quarter were $377 million, or 28.6
percent of sales, compared to $364
million in the prior year. The year-over-year increase
was primarily due to a resumption of in-person commercial
activities, partially offset by the strengthening of the
dollar.
Research and development expenses in the third quarter declined
2 percent to $234 million, or 17.7
percent of sales. The decline reflects unusually high
year-ago spending.
The discontinuation of the company's HARPOON surgical mitral
repair system resulted in a net $0.07
per share charge, consisting of a non-cash impairment of intangible
assets, a reduction of contingent liabilities, and other related
exit costs. Additional details of the charge and a
reconciliation between GAAP and adjusted EPS is included with
today's release.
Free cash flow for the third quarter was $250 million, defined as cash flow from operating
activities of $310 million, less
capital spending of $60 million.
Cash, cash equivalents and short-term investments totaled
$1.7 billion as of
September 30, 2022.
Outlook
The company anticipates that the U.S. hospital staffing
challenge and strong U.S. dollar are likely to persist and now
expects total company sales for 2022 at the low end of its previous
range of $5.35 to $5.55 billion. TAVR sales are also expected
at the low end of the previous range of $3.5 to $3.7
billion. For TMTT, Edwards expects reported fourth
quarter sales to be similar to the third quarter as the weaker Euro
impacts sales. The company continues to expect full year
Surgical Structural Heart sales of $870 to $950
million, and Critical Care sales of $820 to $900
million. Edwards now expects full year adjusted EPS of
$2.40 to $2.50, up from 2021 adjusted EPS of $2.22. The company had previously
guided to the bottom end of its $2.50
to $2.65 range.
For the fourth quarter of 2022, Edwards projects year-over-year
and sequential sales growth in constant currency. The company
expects reported sales and adjusted EPS to be similar to the third
quarter.
"Despite ongoing procedure headwinds associated with the
pandemic, we are pleased with our year-to-date performance, which
includes strong progress on strategic milestones. We believe
hospital staffing constraints will gradually improve and we are
committed to aggressively investing in our focused innovation
strategy for the broad group of patients suffering from structural
heart disease," said Mussallem. "We remain confident that the
innovative therapies resulting from our investments will allow us
to treat more patients and continue to drive strong organic growth
in the years to come."
About Edwards
Lifesciences
Edwards Lifesciences is the global leader of patient-focused
innovations for structural heart disease and critical care
monitoring. We are driven by a passion for patients,
dedicated to improving and enhancing lives through partnerships
with clinicians and stakeholders across the global healthcare
landscape. For more information, visit Edwards.com and follow us on
Facebook, Instagram, LinkedIn, Twitter and YouTube.
Conference Call and Webcast
Information
Edwards Lifesciences will be hosting a conference call today at
2:00 p.m. PT to discuss its third quarter results. To
participate in the conference call, dial (877) 704-2848 or (201)
389-0893. The call will also be available live and archived
on the "Investor Relations" section of the Edwards web site at
ir.edwards.com or www.edwards.com.
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These
forward-looking statements can sometimes be identified by the use
of words such as "may," "will," "should," "anticipate," "believe,"
"plan," "project," "estimate," "potential," "predict," "early
clinician feedback," "expect," "intend," "guidance," "outlook,"
"optimistic," "aspire," "confident" or other forms of these words
or similar expressions and include, but are not limited to,
statements made by Mr. Mussallem, third quarter and full year 2022
financial guidance, statements regarding the TAVR and TMTT
opportunity, statements regarding the RESILIA tissue technology,
and the international adoption of TAVR, the compounded annual
growth rate, statements regarding transforming patient treatment,
approvals, pivotal trials, clinical outcomes, adoption, and the
information in the Outlook section. No inferences or
assumptions should be made from statements of past performance,
efforts, or results which may not be indicative of future
performance or results. Forward-looking statements are based
on estimates and assumptions made by management of the company and
are believed to be reasonable, though they are inherently
uncertain, difficult to predict, and may be outside of the
company's control. The company's forward-looking statements
speak only as of the date on which they are made and the company
does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of the
statement. If the company does update or correct one or more
of these statements, investors and others should not conclude that
the company will make additional updates or corrections.
Forward-looking statements involve risks and uncertainties that
could cause actual results or experience to differ materially from
that expressed or implied by the forward-looking statements.
Factors that could cause actual results or experience to differ
materially from that expressed or implied by the forward-looking
statements include risk and uncertainties associated with the
COVID pandemic, clinical trial or commercial results or new product
approvals and therapy adoption; unpredictability of product
launches; competitive dynamics; changes to reimbursement for the
company's products; the company's success in developing new
products and avoiding manufacturing and quality issues; the impact
of currency exchange rates; the timing or results of R&D and
clinical trials; unanticipated actions by the U.S. Food and Drug
Administration and other regulatory agencies; unexpected litigation
impacts or expenses; and other risks detailed in the company's
filings with the Securities and Exchange Commission (SEC),
including its Annual Report on Form 10-K for the year ended
December 31, 2021, its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2022, its
Quarterly Report on its Form 10-Q for the quarter ended
June 30, 2022 and its other filings
with the SEC. These filings, along with important safety
information about our products, may be found at edwards.com.
Edwards, Edwards Lifesciences, the stylized E logo, ClearSight,
EVOQUE, EVOQUE Eos, FloTrac, HARPOON, Hypotension Prediction Index,
MITRIS, PASCAL, PASCAL Precision, RESILIA, SAPIEN 3, SAPIEN 3
Ultra, and SAPIEN M3 are trademarks of Edwards Lifesciences
Corporation or its affiliates. All other trademarks are the
property of their respective owners. This statement is made
on behalf of Edwards Lifesciences Corporation and its
subsidiaries.
[1] "Adjusted" amounts are non-GAAP items.
"Constant currency" or "underlying" growth rates in this press
release exclude foreign exchange fluctuations. Adjusted
earnings per share is a non-GAAP item computed on a diluted basis
and in this press release excludes intellectual property litigation
expenses, amortization of intangible assets, fair value adjustments
to contingent consideration liabilities arising from acquisitions
and a significant program discontinuation. See "Non-GAAP
Financial Information" and reconciliation tables below.
EDWARDS LIFESCIENCES CORPORATION
Unaudited
Consolidated Statements of Operations
(in millions, except per share data)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
$
1,319.0
|
|
$
1,310.2
|
|
$
4,034.1
|
|
$
3,902.8
|
Cost of
sales
|
253.8
|
|
311.7
|
|
822.5
|
|
939.4
|
|
|
|
|
|
|
|
|
Gross profit
|
1,065.2
|
|
998.5
|
|
3,211.6
|
|
2,963.4
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses
|
377.3
|
|
364.4
|
|
1,156.6
|
|
1,069.7
|
Research and
development expenses
|
233.6
|
|
238.0
|
|
713.0
|
|
670.3
|
Intellectual property
litigation (income) expenses, net
|
(2.4)
|
|
4.7
|
|
10.8
|
|
13.5
|
Change in fair value of
contingent consideration liabilities, net
|
(12.5)
|
|
1.1
|
|
(36.3)
|
|
(106.0)
|
Special
charge
|
66.8
|
|
—
|
|
66.8
|
|
—
|
|
|
|
|
|
|
|
|
Operating
income
|
402.4
|
|
390.3
|
|
1,300.7
|
|
1,315.9
|
|
|
|
|
|
|
|
|
Interest (income)
expense, net
|
(6.9)
|
|
0.8
|
|
(8.4)
|
|
1.5
|
Other expense (income),
net
|
2.0
|
|
(1.4)
|
|
1.0
|
|
(11.3)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
407.3
|
|
390.9
|
|
1,308.1
|
|
1,325.7
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
63.8
|
|
50.8
|
|
184.6
|
|
157.9
|
|
|
|
|
|
|
|
|
Net income
|
$ 343.5
|
|
$ 340.1
|
|
$
1,123.5
|
|
$
1,167.8
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.55
|
|
$
0.55
|
|
$
1.81
|
|
$
1.87
|
Diluted
|
$
0.55
|
|
$
0.54
|
|
$
1.79
|
|
$
1.85
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
619.8
|
|
623.6
|
|
621.0
|
|
623.0
|
Diluted
|
624.5
|
|
631.7
|
|
626.9
|
|
631.0
|
|
|
|
|
|
|
|
|
Operating
statistics
|
|
|
|
|
|
|
|
As a percentage of net
sales:
|
|
|
|
|
|
|
|
Gross
profit
|
80.8 %
|
|
76.2 %
|
|
79.6 %
|
|
75.9 %
|
Selling, general, and
administrative expenses
|
28.6 %
|
|
27.8 %
|
|
28.7 %
|
|
27.4 %
|
Research and
development expenses
|
17.7 %
|
|
18.2 %
|
|
17.7 %
|
|
17.2 %
|
Operating
income
|
30.5 %
|
|
29.8 %
|
|
32.2 %
|
|
33.7 %
|
Income before
provision for income taxes
|
30.9 %
|
|
29.8 %
|
|
32.4 %
|
|
34.0 %
|
Net income
|
26.0 %
|
|
26.0 %
|
|
27.9 %
|
|
29.9 %
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
15.7 %
|
|
13.0 %
|
|
14.1 %
|
|
11.9 %
|
|
|
|
|
|
Note: Numbers may not
calculate due to rounding.
|
EDWARDS LIFESCIENCES CORPORATION
Unaudited Balance
Sheets
(in
millions)
|
|
|
September 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
1,247.8
|
|
$
862.8
|
Short-term
investments
|
490.9
|
|
604.0
|
Accounts and other
receivables, net
|
618.1
|
|
582.2
|
Other
receivables
|
43.3
|
|
82.7
|
Inventories
|
757.8
|
|
726.7
|
Prepaid
expenses
|
88.4
|
|
85.2
|
Other current
assets
|
267.6
|
|
237.1
|
Total current
assets
|
3,513.9
|
|
3,180.7
|
|
|
|
|
Long-term
investments
|
1,381.0
|
|
1,834.2
|
Property, plant, and
equipment, net
|
1,566.4
|
|
1,546.6
|
Operating lease
right-of-use assets
|
87.7
|
|
92.1
|
Goodwill
|
1,158.7
|
|
1,167.9
|
Other intangible
assets, net
|
266.5
|
|
323.6
|
Deferred income
taxes
|
347.5
|
|
246.7
|
Other assets
|
316.5
|
|
110.8
|
|
|
|
|
Total assets
|
$
8,638.2
|
|
$
8,502.6
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
894.4
|
|
$
1,006.8
|
Operating lease
liabilities
|
23.5
|
|
25.5
|
Total current
liabilities
|
917.9
|
|
1,032.3
|
|
|
|
|
Long-term
debt
|
596.2
|
|
595.7
|
Contingent
consideration liabilities
|
25.7
|
|
62.0
|
Taxes
payable
|
142.9
|
|
190.0
|
Operating lease
liabilities
|
67.1
|
|
69.1
|
Uncertain tax
positions
|
295.6
|
|
259.0
|
Litigation settlement
accrual
|
153.9
|
|
191.3
|
Other
liabilities
|
221.1
|
|
267.3
|
Total
liabilities
|
2,420.4
|
|
2,666.7
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock
|
645.7
|
|
642.0
|
Additional paid-in
capital
|
1,914.5
|
|
1,700.4
|
Retained
earnings
|
7,191.6
|
|
6,068.1
|
Accumulated other
comprehensive loss
|
(256.0)
|
|
(157.7)
|
Treasury stock, at
cost
|
(3,278.0)
|
|
(2,416.9)
|
Total stockholders'
equity
|
6,217.8
|
|
5,835.9
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
8,638.2
|
|
$
8,502.6
|
EDWARDS LIFESCIENCES CORPORATION
Non-GAAP Financial
Information
To supplement the consolidated financial results prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"),
the Company uses non-GAAP historical financial measures.
Management makes adjustments to the GAAP measures for items (both
charges and gains) that (a) do not reflect the core operational
activities of the Company, (b) are commonly adjusted within the
Company's industry to enhance comparability of the Company's
financial results with those of its peer group, or (c) are
inconsistent in amount or frequency between periods (albeit such
items are monitored and controlled with equal diligence relative to
core operations). The Company uses the term "underlying" when
referring to non-GAAP sales and sales growth information, which
excludes currency exchange rate fluctuations. The Company uses the
term "adjusted" to also exclude intellectual property litigation
expenses, amortization of intangible assets, fair value adjustments
to contingent consideration liabilities arising from acquisitions,
and a significant program discontinuation.
Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results, and
evaluating current performance. These non-GAAP financial
measures are used in addition to, and in conjunction with, results
presented in accordance with GAAP and reflect an additional way of
viewing aspects of the Company's operations by investors that, when
viewed with its GAAP results, provide a more complete understanding
of factors and trends affecting the Company's business and
facilitate comparability to historical periods.
Non-GAAP financial measures are not prepared in accordance with
GAAP; therefore, the information is not necessarily comparable to
other companies and should be considered as a supplement to, and
not as a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP. A reconciliation of
non-GAAP historical financial measures to the most comparable GAAP
measure is provided in the tables below.
Fluctuations in currency exchange rates impact the comparative
results and sales growth rates of the Company's underlying
business. Management believes that excluding the impact of currency
exchange rate fluctuations from its sales growth provides investors
a more useful comparison to historical financial results. The
impact of the fluctuations has been detailed in the "Reconciliation
of Sales by Product Group and Region."
Guidance for sales and sales growth rates is provided on an
"underlying basis," and projections for diluted earnings per share,
net income and growth, gross profit margin, taxes, and free cash
flow are also provided on a non-GAAP basis, as adjusted, for the
items identified above due to the inherent difficulty in
forecasting such items without unreasonable efforts. The
Company is not able to provide a reconciliation of the non-GAAP
guidance to comparable GAAP measures due to the unknown effect,
timing, and potential significance of special charges or gains, and
management's inability to forecast charges associated with future
transactions and initiatives.
Management considers free cash flow to be a liquidity measure
which provides useful information to management and investors about
the amount of cash generated by business operations, after
deducting payments for capital expenditures, which can then be used
for strategic opportunities or other business purposes including,
among others, investing in the Company's business, making strategic
acquisitions, strengthening the balance sheet, and repurchasing
stock.
The items described below are adjustments to the GAAP
financial results in the reconciliations that follow:
Intellectual Property Litigation Expenses, net - The
Company incurred net intellectual property litigation expenses of
$7.1 million and $6.4 million in the first quarter of 2022 and
2021, respectively, $6.1 million and
$2.4 million in the second quarter of
2022 and 2021, respectively, and income of $2.4 million and expense of $4.7 million in the third quarter of 2022 and
2021, respectively.
Change in Fair Value of Contingent Consideration Liabilities,
net - The Company recorded gains of $2.9
million and $4.5 million in
the first quarter of 2022 and 2021, respectively, $20.9 million and $102.6
million in the second quarter of 2022 and 2021,
respectively, and gains of $12.5
million and expense of $1.1
million in the third quarter of 2022 and 2021, respectively,
related to changes in the fair value of its contingent
consideration liabilities arising from acquisitions.
Amortization of Intangible Assets - The Company recorded
amortization expense related to developed technology and patents in
the amount of $1.7 million and
$1.1 million in the first quarter of
2022 and 2021, respectively, $1.2
million and $3.3 million in
the second quarter of 2022 and 2021, respectively, and $1.5 million and $1.7
million in the third quarter of 2022 and 2021,
respectively.
Program Discontinuation - The Company recorded a
$68.4 million charge in the third
quarter of 2022 as a result of its decision to exit its
HARPOON surgical mitral repair system program.
The charge primarily related to the impairment of intangible assets
associated with the technology and other related exit costs.
EDWARDS LIFESCIENCES CORPORATION
Unaudited
Reconciliation of GAAP to Non-GAAP Financial
Information
(in millions, except
per share and percentage data)
|
|
|
|
Three Months Ended
September 30, 2022
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
1,319.0
|
|
80.8 %
|
|
$ 402.4
|
|
$
343.5
|
|
$ 0.55
|
|
15.7 %
|
Non-GAAP adjustments:
(A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual property
litigation expenses, net
|
|
—
|
|
—
|
|
(2.4)
|
|
(2.2)
|
|
—
|
|
—
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
—
|
|
(12.5)
|
|
(12.1)
|
|
(0.02)
|
|
0.4
|
Amortization of
intangible assets
|
|
—
|
|
0.1
|
|
1.5
|
|
1.3
|
|
—
|
|
—
|
Program
discontinuation
|
|
—
|
|
0.1
|
|
68.4
|
|
53.3
|
|
0.08
|
|
0.9
|
Adjusted
|
|
$
1,319.0
|
|
81.0 %
|
|
$ 457.4
|
|
$
383.8
|
|
$ 0.61
|
|
17.0 %
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
1,310.2
|
|
76.2 %
|
|
$ 390.3
|
|
$
340.1
|
|
$ 0.54
|
|
13.0 %
|
Non-GAAP adjustments:
(A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual property
litigation expenses, net
|
|
—
|
|
—
|
|
4.7
|
|
3.5
|
|
0.01
|
|
0.1
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
—
|
|
1.1
|
|
1.1
|
|
—
|
|
—
|
Amortization of
intangible assets
|
|
—
|
|
0.1
|
|
1.7
|
|
1.5
|
|
—
|
|
—
|
Prior period ongoing
tax impacts
|
|
—
|
|
—
|
|
—
|
|
(3.2)
|
|
(0.01)
|
|
0.8
|
Adjusted
|
|
$
1,310.2
|
|
76.3 %
|
|
$ 397.8
|
|
$
343.0
|
|
$ 0.54
|
|
13.9 %
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
4,034.1
|
|
79.6 %
|
|
$
1,300.7
|
|
$
1,123.5
|
|
$ 1.79
|
|
14.1 %
|
Non-GAAP adjustments:
(A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual property
litigation expenses, net
|
|
—
|
|
—
|
|
10.8
|
|
8.4
|
|
0.02
|
|
0.1
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
—
|
|
(36.3)
|
|
(34.0)
|
|
(0.05)
|
|
0.2
|
Amortization of
intangible assets
|
|
—
|
|
0.1
|
|
4.4
|
|
3.8
|
|
—
|
|
—
|
Program
discontinuation
|
|
—
|
|
0.1
|
|
68.4
|
|
53.3
|
|
0.08
|
|
0.4
|
Adjusted
|
|
$
4,034.1
|
|
79.8 %
|
|
$
1,348.0
|
|
$
1,155.0
|
|
$ 1.84
|
|
14.8 %
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
3,902.8
|
|
75.9 %
|
|
$
1,315.9
|
|
$
1,167.8
|
|
$ 1.85
|
|
11.9 %
|
Non-GAAP adjustments:
(A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual property
litigation expenses, net
|
|
—
|
|
—
|
|
13.5
|
|
10.5
|
|
0.02
|
|
0.1
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
—
|
|
(106.0)
|
|
(97.0)
|
|
(0.15)
|
|
0.3
|
Amortization of
intangible assets
|
|
—
|
|
0.2
|
|
6.1
|
|
5.5
|
|
0.01
|
|
—
|
Prior period ongoing
tax impacts
|
|
—
|
|
—
|
|
—
|
|
(3.2)
|
|
(0.01)
|
|
0.3
|
Adjusted
|
|
$
3,902.8
|
|
76.1 %
|
|
$
1,229.5
|
|
$
1,083.6
|
|
$ 1.72
|
|
12.6 %
|
|
|
(A)
|
See description of
non-GAAP adjustments under "Non-GAAP Financial
Information."
|
(B)
|
The tax effect on
non-GAAP adjustments is calculated based upon the impact of the
relevant tax jurisdictions' statutory tax rates on the Company's
estimated annual effective tax rate, or discrete rate in the
quarter, as applicable. The impact on the effective tax rate
is reflected on each individual non-GAAP adjustment line
item.
|
RECONCILIATION OF
SALES BY PRODUCT GROUP AND REGION
|
|
|
|
|
|
|
|
|
|
|
2021 Adjusted
|
|
|
Sales by Product Group (QTD)
|
|
3Q
2022
|
|
3Q
2021
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
FX
Impact
|
|
3Q 2021 Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter Aortic
Valve Replacement
|
|
$
862.3
|
|
$
857.8
|
|
$
4.5
|
|
0.5 %
|
|
$
(44.4)
|
|
$
813.4
|
|
6.1 %
|
Transcatheter Mitral
and Tricuspid Therapies
|
|
29.7
|
|
22.3
|
|
7.4
|
|
34.2 %
|
|
(2.7)
|
|
19.6
|
|
51.7 %
|
Surgical Structural
Heart
|
|
219.7
|
|
217.4
|
|
2.3
|
|
1.1 %
|
|
(14.7)
|
|
202.7
|
|
8.2 %
|
Critical
Care
|
|
207.3
|
|
212.7
|
|
(5.4)
|
|
(2.6) %
|
|
(11.7)
|
|
201.0
|
|
3.2 %
|
Total
|
|
$
1,319.0
|
|
$
1,310.2
|
|
$
8.8
|
|
0.7 %
|
|
$
(73.5)
|
|
$
1,236.7
|
|
6.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Adjusted
|
|
|
Sales by Product Group (YTD)
|
|
YTD 3Q
2022
|
|
YTD 3Q
2021
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
FX
Impact
|
|
YTD 3Q 2021 Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter Aortic
Valve Replacement
|
|
$
2,650.5
|
|
$
2,551.0
|
|
$ 99.5
|
|
3.9 %
|
|
$
(97.1)
|
|
$ 2,453.9
|
|
8.0 %
|
Transcatheter Mitral
and Tricuspid Therapies
|
|
84.6
|
|
60.7
|
|
23.9
|
|
39.5 %
|
|
(5.2)
|
|
55.5
|
|
52.6 %
|
Surgical Structural
Heart
|
|
669.0
|
|
667.8
|
|
1.2
|
|
0.2 %
|
|
(32.1)
|
|
635.7
|
|
5.2 %
|
Critical
Care
|
|
630.0
|
|
623.3
|
|
6.7
|
|
1.1 %
|
|
(25.8)
|
|
597.5
|
|
5.4 %
|
Total
|
|
$
4,034.1
|
|
$
3,902.8
|
|
$
131.3
|
|
3.4 %
|
|
$
(160.2)
|
|
$
3,742.6
|
|
7.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Adjusted
|
|
|
Sales by Region (QTD)
|
|
3Q
2022
|
|
3Q
2021
|
|
Change
|
|
GAAP
Growth Rate*
|
|
FX
Impact
|
|
3Q 2021 Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
786.8
|
|
$
753.2
|
|
$ 33.6
|
|
4.4 %
|
|
$
—
|
|
$
753.2
|
|
4.3 %
|
Europe
|
|
270.1
|
|
291.1
|
|
(21.0)
|
|
(7.2) %
|
|
(41.5)
|
|
249.6
|
|
8.9 %
|
Japan
|
|
104.1
|
|
125.9
|
|
(21.8)
|
|
(17.3) %
|
|
(25.0)
|
|
100.9
|
|
3.7 %
|
Rest of
World
|
|
158.0
|
|
140.0
|
|
18.0
|
|
12.9 %
|
|
(7.0)
|
|
133.0
|
|
18.6 %
|
Outside of the
United States
|
|
532.2
|
|
557.0
|
|
(24.8)
|
|
(4.4) %
|
|
(73.5)
|
|
483.5
|
|
10.1 %
|
Total
|
|
$
1,319.0
|
|
$
1,310.2
|
|
$
8.8
|
|
0.7 %
|
|
$
(73.5)
|
|
$
1,236.7
|
|
6.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Adjusted
|
|
|
Sales by Region (YTD)
|
|
YTD 3Q
2022
|
|
YTD 3Q
2021
|
|
Change
|
|
GAAP
Growth Rate*
|
|
FX
Impact
|
|
YTD 3Q 2021 Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
2,337.1
|
|
$
2,223.6
|
|
$
113.5
|
|
5.1 %
|
|
$
—
|
|
$
2,223.6
|
|
5.0 %
|
Europe
|
|
884.0
|
|
880.9
|
|
3.1
|
|
0.4 %
|
|
(90.7)
|
|
790.2
|
|
12.1 %
|
Japan
|
|
362.5
|
|
390.0
|
|
(27.5)
|
|
(7.1) %
|
|
(55.6)
|
|
334.4
|
|
8.4 %
|
Rest of
World
|
|
450.5
|
|
408.3
|
|
42.2
|
|
10.3 %
|
|
(13.9)
|
|
394.4
|
|
14.2 %
|
Outside of the
United States
|
|
1,697.0
|
|
1,679.2
|
|
17.8
|
|
1.1 %
|
|
(160.2)
|
|
1,519.0
|
|
11.7 %
|
Total
|
|
$
4,034.1
|
|
$
3,902.8
|
|
$
131.3
|
|
3.4 %
|
|
$
(160.2)
|
|
$
3,742.6
|
|
7.8 %
|
|
* Numbers may not
calculate due to rounding.
|
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SOURCE Edwards Lifesciences Corporation