DUBLIN, Nov. 23, 2021 /PRNewswire/ -- Medtronic plc
(NYSE:MDT) today announced financial results for its second quarter
of fiscal year 2022, which ended October 29,
2021.
Key Highlights
- Revenue of $7.8 billion increased
3% reported and 2% organic
- GAAP diluted EPS of $0.97;
non-GAAP diluted EPS of $1.32
- Reiterates full year EPS guidance
"As our markets recover, Medtronic is one of the best positioned
companies in healthcare." Chairman & CEO Geoff Martha
The company reported second quarter worldwide revenue of
$7.847 billion, an increase of 3% as
reported and 2% on an organic basis, which excludes the
$32 million benefit of foreign
currency translation. Unless otherwise stated, all revenue growth
rates in this press release are stated on an organic basis, which
excludes the impact of foreign currency translation. The company's
second quarter revenue results reflect the unfavorable market
impact of COVID-19 and health system labor shortages on medical
device procedure volumes, primarily in the U.S.
As reported, second quarter GAAP net income and diluted earnings
per share (EPS) were $1.311 billion
and $0.97, respectively, increases of
168% and 169%, respectively. As detailed in the financial schedules
included at the end of this release, second quarter non-GAAP net
income and non-GAAP diluted EPS were $1.792
billion and $1.32,
respectively, increases of 30% and 29%, respectively.
Second quarter U.S. revenue of $3.997
billion represented 51% of company revenue and decreased 1%.
Non-U.S. developed market revenue of $2.478
billion represented 32% of company revenue and increased 1%
as reported and 2% organic. Emerging Markets revenue of
$1.372 billion represented 17% of
company revenue and increased 20% as reported and 16% organic.
"Our second quarter results reflect focused execution of our
strategy and the strong underlying health of the business, despite
the market impact of the pandemic resurgence and healthcare system
staffing challenges on medical procedure volumes, particularly in
the U.S., which affected our quarterly revenue growth," said
Geoff Martha, Medtronic chairman and
chief executive officer. "During the quarter, we continued to
advance our pipeline, launched new products, and grew share in the
majority of our businesses. Looking ahead, as our markets recover,
Medtronic is one of the best positioned companies in healthcare. We
have an expansive pipeline of leading technology, a robust balance
sheet, and an expanding roster of proven top talent. Coupled with
our revitalized operating model and new competitive mindset, we're
poised to accelerate and sustain growth."
Cardiovascular Portfolio
The Cardiovascular Portfolio
includes the Cardiac Rhythm & Heart Failure (CRHF), Structural
Heart & Aortic (SHA), and Coronary & Peripheral Vascular
(CPV) divisions. Cardiovascular revenue of $2.827 billion increased 4% as reported and 3%
organic, driven by mid-single digit organic growth in CPV and
low-single digit organic growth in CRHF and SHA.
- Cardiac Rhythm & Heart Failure revenue of
$1.471 billion increased 3% as
reported and organic. Adjusting for the discontinuation of HVAD™
System sales, CRHF revenue increased 6% organic. Cardiac Rhythm
Management revenue increased in the high-single digits, driven by
mid-single digit growth in Defibrillation Solutions and high-single
digit growth in Cardiac Pacing Therapies, including mid-teens
growth in Leadless Pacemakers on the continued global adoption of
Micra™ transcatheter pacing systems. Cardiovascular Diagnostics
revenue declined in the mid-single digits, as procedure volumes
were affected by COVID-19 resurgence. Cardiac Ablation Solutions
revenue increased in the mid-single digits on the continued
adoption of Arctic Front Advance™ cryoballoon catheters and
consoles.
- Structural Heart & Aortic revenue of $750 million increased 2% as reported and
organic. Structural Heart grew in the high-single digits, with
high-single digit growth in transcatheter aortic valves (TAVR).
Cardiac Surgery increased in the high-single digits. Aortic
declined in the mid-teens as a result of the previously announced
global recall of the Valiant Navion™ thoracic stent graft
system.
- Coronary & Peripheral Vascular revenue of
$606 million increased 7% as reported
and 6% organic. Coronary & Renal Denervation (CRDN) increased
in the mid-single digits, driven by strength in emerging markets.
Peripheral Vascular Health increased in the high-single digits,
with mid-twenties endoVenous growth on strong sales of the
VenaSeal™ closure system and the Abre™ venous stent.
Medical Surgical Portfolio
The Medical Surgical
Portfolio includes the Surgical Innovations (SI) and the
Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical
Surgical revenue of $2.299 billion
increased 1% as reported and was flat organic, with high-single
digit organic growth in SI partially offset by low double-digit
organic declines in RGR. Excluding the impact of ventilator sales
declines, Medical Surgical revenue increased 6% organic.
- Surgical Innovations revenue of $1.497 billion increased 7% as reported and
organic. The division had mid-single digit growth in Advanced
Surgical Instruments, driven by the continued adoption of the
company's LigaSure™, Sonicision™, and Tri-Staple™ technologies.
Hernia & Wound Management increased in the high-single digits,
with strength in sutures.
- Respiratory, Gastrointestinal & Renal revenue of
$802 million decreased 10% as
reported and 11% organic. Excluding the impact of ventilator sales
declines, RGR revenue increased 4% organic. Respiratory
Interventions decreased in the mid-thirties, with sales of
ventilators declining in the mid-fifties as demand returns to
pre-pandemic levels. Patient Monitoring increased in the low-double
digits, with mid-teens growth in the company's Nellcor™ pulse
oximetry products driven in part by increased monitoring of COVID
hospitalized patients. Gastrointestinal revenue increased in the
mid-single digits, with low double-digit growth in Chronic &
Colorectal on strength of PillCam™ system sales. Renal Care
Solutions increased in the mid-single digits with low-forties
growth in acute therapies driven by increased demand for adult and
pediatric continuous renal replacement therapy.
Neuroscience Portfolio
The Neuroscience Portfolio
includes the Cranial & Spinal Technologies (CST), Specialty
Therapies, and Neuromodulation divisions. Neuroscience revenue of
$2.136 billion increased 4% as
reported and 3% organic, with high-single digit growth in Specialty
Therapies and mid-single digit growth in Neuromodulation, partially
offset by low-single digit declines in CST, all on an organic
basis.
- Cranial & Spinal Technologies revenue of
$1.067 billion was flat as reported
and decreased 1% organic. Spine & Biologics decreased in the
mid-single digits, driven by decreased spine market procedures as a
result of the COVID-19 resurgence. Neurosurgery increased in the
high-single digits, with strength in sales of StealthStation™
navigation systems, O-arm™ imaging systems, and Midas Rex™ powered
surgical instruments.
- Specialty Therapies revenue of $634 million increased 9% as reported and 8%
organic. Neurovascular increased in the low double-digits, with
high-teens growth in Hemorrhagic Stroke products. Pelvic Health
increased in the low-single digits, as market growth was affected
by the COVID-19 resurgence. ENT grew in the low double-digits,
driven by strong sales of NIM Vital™ nerve monitoring systems.
- Neuromodulation revenue of $435
million increased 6% as reported and organic. Brain
Modulation increased in the mid-twenties, driven by the launch of
the Percept™ PC deep brain stimulation (DBS) system and SenSight™
directional DBS lead system. Pain Therapies decreased in the
mid-single digits, as high-single digit declines in Targeted Drug
Delivery and flat results in Pain Stim offset high-single digit
growth in Interventional.
Diabetes
Diabetes revenue of $585 million increased 2% as reported and 1%
organic. Durable insulin pumps grew in the low-twenties, including
high-teens growth in the U.S. and low-twenties growth in
international markets on the continued launches of the MiniMed™
770G and MiniMed™ 780G systems, respectively. Strong pump sales
were offset by lower sales of consumables, which declined in the
high-single digits. Sales of continuous glucose monitoring (CGM)
products increased in the low-single digits.
Guidance
The company today updated its revenue growth
guidance and reiterated its EPS guidance range for fiscal year
2022.
Given the greater-than-expected market impact of the pandemic
and healthcare system staffing challenges in the fiscal second
quarter, which is expected to continue into the second half of the
fiscal year, the company now expects fiscal year 2022 revenue
growth of 7-8% on an organic basis versus the prior expectation of
approximately 9%. If recent foreign currency exchange rates hold,
revenue growth in fiscal year 2022 would be positively affected by
approximately $0 to $50 million versus the $100 to $200
million positive impact previously.
The company reiterated its fiscal year 2022 diluted non-GAAP EPS
guidance range of $5.65 to
$5.75, including an estimated 5 to
10 cent positive impact from foreign
currency exchange based on recent rates.
"We delivered strong margin improvement, earnings growth, and
free cash flow in a tough environment this quarter," said
Karen Parkhill, Medtronic chief
financial officer. "While we expect our markets to continue to be
affected by the pandemic in the second half of our fiscal year, we
remain focused on delivering solid revenue growth and strong
earnings growth while investing in our robust pipeline."
Webcast Information
Medtronic will host a webcast
today, November 23, at 8:00 a.m. EST (7:00 a.m.
CST) to provide information about its businesses for the
public, investors, analysts, and news media. This webcast can be
accessed by clicking on the Investor Events link at
investorrelations.medtronic.com and this earnings release will be
archived at news.medtronic.com. Medtronic will be live tweeting
during the webcast on its Newsroom Twitter account, @Medtronic.
Within 24 hours of the webcast, a replay of the webcast and
transcript of the company's prepared remarks will be available by
clicking on the Investor Events link at
investorrelations.medtronic.com.
Medtronic plans to report its fiscal year 2022 third and fourth
quarter results on February 22, 2022,
and May 26, 2022, respectively.
Confirmation and additional details will be provided closer to the
specific event.
Financial Schedules
The second quarter financial
schedules and non-GAAP reconciliations can be viewed by clicking on
the Investor Events link at investorrelations.medtronic.com. To
view a printable PDF of the financial schedules and non-GAAP
reconciliations, click here. To view the second quarter
earnings presentation, click here.
MEDTRONIC
PLC
WORLD WIDE
REVENUE(1)
(Unaudited)
|
|
|
|
|
|
|
SECOND
QUARTER
|
|
|
SECOND QUARTER
YEAR-TO-DATE(2)
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
|
Growth
|
|
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
Growth
|
Cardiovascular(3)
|
$
|
2,827
|
|
|
$
|
2,725
|
|
|
3.7
|
%
|
|
$
|
11
|
|
|
$
|
2,816
|
|
|
3.3
|
%
|
|
|
$
|
5,717
|
|
|
$
|
5,158
|
|
|
10.8
|
%
|
|
$
|
106
|
|
|
$
|
5,611
|
|
|
8.8
|
%
|
Cardiac Rhythm &
Heart Failure
|
1,471
|
|
|
1,426
|
|
|
3.2
|
|
|
5
|
|
|
1,466
|
|
|
2.8
|
|
|
|
2,954
|
|
|
2,673
|
|
|
10.5
|
|
|
51
|
|
|
2,903
|
|
|
8.6
|
|
Structural Heart &
Aortic
|
750
|
|
|
733
|
|
|
2.3
|
|
|
2
|
|
|
748
|
|
|
2.0
|
|
|
|
1,537
|
|
|
1,360
|
|
|
13.0
|
|
|
30
|
|
|
1,507
|
|
|
10.8
|
|
Coronary &
Peripheral Vascular
|
606
|
|
|
567
|
|
|
6.9
|
|
|
3
|
|
|
603
|
|
|
6.3
|
|
|
|
1,226
|
|
|
1,125
|
|
|
9.0
|
|
|
25
|
|
|
1,201
|
|
|
6.8
|
|
Medical
Surgical
|
2,299
|
|
|
2,285
|
|
|
0.6
|
|
|
8
|
|
|
2,291
|
|
|
0.3
|
|
|
|
4,621
|
|
|
4,086
|
|
|
13.1
|
|
|
85
|
|
|
4,536
|
|
|
11.0
|
|
Surgical
Innovations
|
1,497
|
|
|
1,393
|
|
|
7.5
|
|
|
5
|
|
|
1,492
|
|
|
7.1
|
|
|
|
3,051
|
|
|
2,473
|
|
|
23.4
|
|
|
59
|
|
|
2,992
|
|
|
21.0
|
|
Respiratory,
Gastrointestinal, & Renal
|
802
|
|
|
893
|
|
|
(10.2)
|
|
|
3
|
|
|
799
|
|
|
(10.5)
|
|
|
|
1,570
|
|
|
1,613
|
|
|
(2.7)
|
|
|
26
|
|
|
1,544
|
|
|
(4.3)
|
|
Neuroscience
|
2,136
|
|
|
2,063
|
|
|
3.5
|
|
|
10
|
|
|
2,126
|
|
|
3.1
|
|
|
|
4,340
|
|
|
3,774
|
|
|
15.0
|
|
|
57
|
|
|
4,283
|
|
|
13.5
|
|
Cranial & Spinal
Technologies
|
1,067
|
|
|
1,071
|
|
|
(0.4)
|
|
|
3
|
|
|
1,064
|
|
|
(0.7)
|
|
|
|
2,189
|
|
|
2,015
|
|
|
8.6
|
|
|
22
|
|
|
2,167
|
|
|
7.5
|
|
Specialty
Therapies
|
634
|
|
|
581
|
|
|
9.1
|
|
|
6
|
|
|
628
|
|
|
8.1
|
|
|
|
1,275
|
|
|
1,035
|
|
|
23.2
|
|
|
25
|
|
|
1,250
|
|
|
20.8
|
|
Neuromodulation
|
435
|
|
|
411
|
|
|
5.8
|
|
|
1
|
|
|
434
|
|
|
5.6
|
|
|
|
875
|
|
|
725
|
|
|
20.7
|
|
|
11
|
|
|
864
|
|
|
19.2
|
|
Diabetes
|
585
|
|
|
574
|
|
|
1.9
|
|
|
3
|
|
|
582
|
|
|
1.4
|
|
|
|
1,157
|
|
|
1,136
|
|
|
1.8
|
|
|
29
|
|
|
1,128
|
|
|
(0.7)
|
|
TOTAL
|
$
|
7,847
|
|
|
$
|
7,647
|
|
|
2.6
|
%
|
|
$
|
32
|
|
|
$
|
7,815
|
|
|
2.2
|
%
|
|
|
$
|
15,835
|
|
|
$
|
14,154
|
|
|
11.9
|
%
|
|
$
|
277
|
|
|
$
|
15,558
|
|
|
9.9
|
%
|
|
(1) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(2) Fiscal year 2021
was a 53-week fiscal year, with the extra week occurring in the
first fiscal month of the first quarter and included in reported
prior year second quarter year-to-date results. While it is
difficult to calculate the impact of the extra week, the Company
estimates the extra week benefited the prior year second quarter
year-to-date revenue by approximately $360 to $390
million.
|
(3) In the fourth
quarter of fiscal year 2021, the Company realigned its divisions
within Cardiovascular. As a result, fiscal year 2021 results have
been recast to adjust for this realignment.
|
(4) The currency
impact to revenue measures the change in revenue between current
and prior year periods using constant exchange rates.
|
MEDTRONIC
PLC
U.S.(1)(2) REVENUE
(Unaudited)
|
|
|
|
|
|
|
SECOND
QUARTER
|
|
|
SECOND QUARTER
YEAR-TO-DATE
|
|
REPORTED
|
|
|
REPORTED
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
|
|
FY22
|
|
FY21
|
|
Growth
|
Cardiovascular(3)
|
$
|
1,373
|
|
|
$
|
1,377
|
|
|
(0.3)
|
%
|
|
|
$
|
2,793
|
|
|
$
|
2,582
|
|
|
8.2
|
%
|
Cardiac Rhythm &
Heart Failure
|
761
|
|
|
760
|
|
|
0.1
|
|
|
|
1,530
|
|
|
1,431
|
|
|
6.9
|
|
Structural Heart &
Aortic
|
327
|
|
|
328
|
|
|
(0.3)
|
|
|
|
674
|
|
|
602
|
|
|
12.0
|
|
Coronary &
Peripheral Vascular
|
286
|
|
|
289
|
|
|
(1.0)
|
|
|
|
589
|
|
|
549
|
|
|
7.3
|
|
Medical
Surgical
|
970
|
|
|
996
|
|
|
(2.6)
|
|
|
|
1,959
|
|
|
1,718
|
|
|
14.0
|
|
Surgical
Innovations
|
550
|
|
|
560
|
|
|
(1.8)
|
|
|
|
1,170
|
|
|
960
|
|
|
21.9
|
|
Respiratory,
Gastrointestinal, & Renal
|
420
|
|
|
436
|
|
|
(3.7)
|
|
|
|
790
|
|
|
758
|
|
|
4.2
|
|
Neuroscience
|
1,394
|
|
|
1,397
|
|
|
(0.2)
|
|
|
|
2,840
|
|
|
2,533
|
|
|
12.1
|
|
Cranial & Spinal
Technologies
|
749
|
|
|
770
|
|
|
(2.7)
|
|
|
|
1,544
|
|
|
1,462
|
|
|
5.6
|
|
Specialty
Therapies
|
354
|
|
|
346
|
|
|
2.3
|
|
|
|
714
|
|
|
588
|
|
|
21.4
|
|
Neuromodulation
|
291
|
|
|
281
|
|
|
3.6
|
|
|
|
582
|
|
|
483
|
|
|
20.5
|
|
Diabetes
|
261
|
|
|
284
|
|
|
(8.1)
|
|
|
|
506
|
|
|
572
|
|
|
(11.5)
|
|
TOTAL
|
$
|
3,997
|
|
|
$
|
4,054
|
|
|
(1.4)
|
%
|
|
|
$
|
8,098
|
|
|
$
|
7,405
|
|
|
9.4
|
%
|
|
(1) U.S. includes the
United States and U.S. territories.
|
(2) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(3) In the fourth
quarter of fiscal year 2021, the Company realigned its divisions
within Cardiovascular. As a result, fiscal year 2021 results have
been recast to adjust for this realignment.
|
MEDTRONIC
PLC
WORLD WIDE
REVENUE: GEOGRAPHIC (1)(2)
(Unaudited)
|
|
|
|
|
|
|
SECOND
QUARTER
|
|
|
SECOND QUARTER
YEAR-TO-DATE(3)
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
Growth
|
|
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
Growth
|
U.S.
|
$
|
1,373
|
|
$
|
1,377
|
|
|
(0.3)
|
%
|
|
$
|
—
|
|
$
|
1,373
|
|
(0.3)
|
%
|
|
|
$
|
2,793
|
|
$
|
2,582
|
|
8.2
|
%
|
|
$
|
—
|
|
$
|
2,793
|
|
8.2
|
%
|
Non-U.S.
Developed
|
948
|
|
945
|
|
0.3
|
|
|
(2)
|
|
950
|
|
0.5
|
|
|
|
1,952
|
|
1,798
|
|
8.6
|
|
|
69
|
|
1,883
|
|
4.7
|
|
Emerging
Markets
|
506
|
|
404
|
|
25.2
|
|
|
13
|
|
493
|
|
22.0
|
|
|
|
972
|
|
778
|
|
24.9
|
|
|
37
|
|
935
|
|
20.2
|
|
Cardiovascular
|
2,827
|
|
2,725
|
|
3.7
|
|
|
11
|
|
2,816
|
|
3.3
|
|
|
|
5,717
|
|
5,158
|
|
10.8
|
|
|
106
|
|
5,611
|
|
8.8
|
|
U.S.
|
970
|
|
996
|
|
(2.6)
|
|
|
—
|
|
970
|
|
(2.6)
|
|
|
|
1,959
|
|
1,718
|
|
14.0
|
|
|
—
|
|
1,959
|
|
14.0
|
|
Non-U.S.
Developed
|
841
|
|
837
|
|
0.5
|
|
|
(3)
|
|
844
|
|
0.8
|
|
|
|
1,710
|
|
1,556
|
|
9.9
|
|
|
54
|
|
1,656
|
|
6.4
|
|
Emerging
Markets
|
488
|
|
452
|
|
8.0
|
|
|
11
|
|
477
|
|
5.5
|
|
|
|
951
|
|
811
|
|
17.3
|
|
|
31
|
|
920
|
|
13.4
|
|
Medical
Surgical
|
2,299
|
|
2,285
|
|
0.6
|
|
|
8
|
|
2,291
|
|
0.3
|
|
|
|
4,621
|
|
4,086
|
|
13.1
|
|
|
85
|
|
4,536
|
|
11.0
|
|
U.S.
|
1,394
|
|
1,397
|
|
(0.2)
|
|
|
—
|
|
1,394
|
|
(0.2)
|
|
|
|
2,840
|
|
2,533
|
|
12.1
|
|
|
—
|
|
2,840
|
|
12.1
|
|
Non-U.S.
Developed
|
433
|
|
426
|
|
1.6
|
|
|
(1)
|
|
434
|
|
1.9
|
|
|
|
898
|
|
802
|
|
12.0
|
|
|
28
|
|
870
|
|
8.5
|
|
Emerging
Markets
|
309
|
|
240
|
|
28.8
|
|
|
11
|
|
298
|
|
24.2
|
|
|
|
602
|
|
439
|
|
37.1
|
|
|
29
|
|
573
|
|
30.5
|
|
Neuroscience
|
2,136
|
|
2,063
|
|
3.5
|
|
|
10
|
|
2,126
|
|
3.1
|
|
|
|
4,340
|
|
3,774
|
|
15.0
|
|
|
57
|
|
4,283
|
|
13.5
|
|
U.S.
|
261
|
|
284
|
|
(8.1)
|
|
|
—
|
|
261
|
|
(8.1)
|
|
|
|
506
|
|
572
|
|
(11.5)
|
|
|
—
|
|
506
|
|
(11.5)
|
|
Non-U.S.
Developed
|
256
|
|
238
|
|
7.6
|
|
|
2
|
|
254
|
|
6.7
|
|
|
|
519
|
|
465
|
|
11.6
|
|
|
25
|
|
494
|
|
6.2
|
|
Emerging
Markets
|
69
|
|
51
|
|
35.3
|
|
|
1
|
|
68
|
|
33.3
|
|
|
|
132
|
|
100
|
|
32.0
|
|
|
4
|
|
128
|
|
28.0
|
|
Diabetes
|
585
|
|
574
|
|
1.9
|
|
|
3
|
|
582
|
|
1.4
|
|
|
|
1,157
|
|
1,136
|
|
1.8
|
|
|
29
|
|
1,128
|
|
(0.7)
|
|
U.S.
|
3,997
|
|
4,054
|
|
(1.4)
|
|
|
—
|
|
3,997
|
|
(1.4)
|
|
|
|
8,098
|
|
7,405
|
|
9.4
|
|
|
—
|
|
8,098
|
|
9.4
|
|
Non-U.S.
Developed
|
2,478
|
|
2,446
|
|
1.3
|
|
|
(5)
|
|
2,483
|
|
1.5
|
|
|
|
5,079
|
|
4,621
|
|
9.9
|
|
|
177
|
|
4,902
|
|
6.1
|
|
Emerging
Markets
|
1,372
|
|
1,147
|
|
19.6
|
|
|
37
|
|
1,335
|
|
16.4
|
|
|
|
2,658
|
|
2,128
|
|
24.9
|
|
|
100
|
|
2,558
|
|
20.2
|
|
TOTAL
|
$
|
7,847
|
|
$
|
7,647
|
|
2.6
|
%
|
|
$
|
32
|
|
$
|
7,815
|
|
2.2
|
%
|
|
|
$
|
15,835
|
|
$
|
14,154
|
|
11.9
|
%
|
|
$
|
277
|
|
$
|
15,558
|
|
9.9
|
%
|
|
(1) U.S. includes the
United States and U.S. territories. Non-U.S. developed markets
include Japan, Australia, New Zealand, Korea, Canada, and the
countries of Western Europe. Emerging Markets include the countries
of the Middle East, Africa, Latin America, Eastern Europe, and the
countries of Asia that are not included in the non-U.S. developed
markets, as previously defined.
|
(2) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(3) Fiscal year 2021
was a 53-week fiscal year, with the extra week occurring in the
first fiscal month of the first quarter and included in reported
prior year second quarter year-to-date results. While it is
difficult to calculate the impact of the extra week, the Company
estimates the extra week benefited the prior year second quarter
year-to-date revenue by approximately $360 to $390
million.
|
(4) The currency
impact to revenue measures the change in revenue between current
and prior year periods using constant exchange rates.
|
MEDTRONIC
PLC
CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
(in millions,
except per share data)
|
October 29,
2021
|
|
October 30,
2020
|
|
October 29,
2021
|
|
October 30,
2020
|
Net
sales
|
$
|
7,847
|
|
|
$
|
7,647
|
|
|
$
|
15,835
|
|
|
$
|
14,154
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of products
sold
|
2,497
|
|
|
2,705
|
|
|
5,095
|
|
|
5,209
|
|
Research and
development expense
|
676
|
|
|
639
|
|
|
1,426
|
|
|
1,260
|
|
Selling, general, and
administrative expense
|
2,615
|
|
|
2,600
|
|
|
5,163
|
|
|
5,017
|
|
Amortization of
intangible assets
|
431
|
|
|
443
|
|
|
866
|
|
|
884
|
|
Restructuring charges,
net
|
10
|
|
|
97
|
|
|
21
|
|
|
150
|
|
Certain litigation
charges, net
|
34
|
|
|
84
|
|
|
60
|
|
|
(4)
|
|
Other operating
expense, net
|
21
|
|
|
149
|
|
|
781
|
|
|
35
|
|
Operating
profit
|
1,563
|
|
|
930
|
|
|
2,422
|
|
|
1,603
|
|
Other non-operating
income, net
|
(66)
|
|
|
(65)
|
|
|
(177)
|
|
|
(147)
|
|
Interest
expense
|
136
|
|
|
470
|
|
|
273
|
|
|
641
|
|
Income before
income taxes
|
1,493
|
|
|
525
|
|
|
2,326
|
|
|
1,109
|
|
Income tax
provision
|
176
|
|
|
31
|
|
|
240
|
|
|
124
|
|
Net
income
|
1,317
|
|
|
494
|
|
|
2,086
|
|
|
985
|
|
Net income
attributable to noncontrolling interests
|
(6)
|
|
|
(5)
|
|
|
(12)
|
|
|
(9)
|
|
Net income
attributable to Medtronic
|
$
|
1,311
|
|
|
$
|
489
|
|
|
$
|
2,074
|
|
|
$
|
976
|
|
Basic earnings per
share
|
$
|
0.97
|
|
|
$
|
0.36
|
|
|
$
|
1.54
|
|
|
$
|
0.73
|
|
Diluted earnings
per share
|
$
|
0.97
|
|
|
$
|
0.36
|
|
|
$
|
1.53
|
|
|
$
|
0.72
|
|
Basic weighted
average shares outstanding
|
1,345.1
|
|
|
1,344.4
|
|
|
1,344.8
|
|
|
1,343.1
|
|
Diluted weighted
average shares outstanding
|
1,355.3
|
|
|
1,352.1
|
|
|
1,355.9
|
|
|
1,351.1
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
Three months ended
October 29, 2021
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
Attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
7,847
|
|
|
$
|
2,497
|
|
|
68.2
|
%
|
|
$
|
1,563
|
|
|
19.9
|
%
|
|
$
|
1,493
|
|
|
$
|
1,311
|
|
|
$
|
0.97
|
|
|
11.8
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(31)
|
|
|
0.4
|
|
|
77
|
|
|
1.0
|
|
|
77
|
|
|
62
|
|
|
0.05
|
|
|
19.5
|
|
Acquisition-related
items (3)
|
—
|
|
|
(5)
|
|
|
0.1
|
|
|
(13)
|
|
|
(0.2)
|
|
|
(13)
|
|
|
(15)
|
|
|
(0.01)
|
|
|
(15.4)
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
0.4
|
|
|
34
|
|
|
30
|
|
|
0.02
|
|
|
11.8
|
|
(Gain)/loss on minority
investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
Medical device
regulations (5)
|
—
|
|
|
(15)
|
|
|
0.2
|
|
|
24
|
|
|
0.3
|
|
|
24
|
|
|
20
|
|
|
0.01
|
|
|
16.7
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
431
|
|
|
5.5
|
|
|
431
|
|
|
361
|
|
|
0.27
|
|
|
16.0
|
|
Certain tax
adjustments, net (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
0.01
|
|
|
—
|
|
Non-GAAP
|
$
|
7,847
|
|
|
$
|
2,447
|
|
|
68.8
|
%
|
|
$
|
2,116
|
|
|
27.0
|
%
|
|
$
|
2,052
|
|
|
$
|
1,792
|
|
|
$
|
1.32
|
|
|
12.4
|
%
|
Currency
impact
|
(32)
|
|
|
30
|
|
|
(0.5)
|
|
|
(58)
|
|
|
(0.7)
|
|
|
|
|
|
|
(0.04)
|
|
|
|
Currency
Adjusted
|
$
|
7,815
|
|
|
$
|
2,477
|
|
|
68.3
|
%
|
|
$
|
2,058
|
|
|
26.3
|
%
|
|
|
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
October 30, 2020
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
Attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
7,647
|
|
|
$
|
2,705
|
|
|
64.6
|
%
|
|
$
|
930
|
|
|
12.2
|
%
|
|
$
|
525
|
|
|
$
|
489
|
|
|
$
|
0.36
|
|
|
5.9
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(32)
|
|
|
0.4
|
|
|
179
|
|
|
2.3
|
|
|
179
|
|
|
135
|
|
|
0.10
|
|
|
24.6
|
|
Acquisition-related
items (3)
|
—
|
|
|
(2)
|
|
|
—
|
|
|
47
|
|
|
0.6
|
|
|
47
|
|
|
39
|
|
|
0.03
|
|
|
17.0
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
1.1
|
|
|
84
|
|
|
63
|
|
|
0.05
|
|
|
25.0
|
|
(Gain)/loss on minority
investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Medical device
regulations (5)
|
—
|
|
|
(11)
|
|
|
0.1
|
|
|
19
|
|
|
0.2
|
|
|
19
|
|
|
16
|
|
|
0.01
|
|
|
15.8
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
443
|
|
|
5.8
|
|
|
443
|
|
|
373
|
|
|
0.28
|
|
|
15.8
|
|
Debt tender premium and
other charges (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
248
|
|
|
0.18
|
|
|
19.5
|
|
Certain tax
adjustments, net (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
0.01
|
|
|
—
|
|
Non-GAAP
|
$
|
7,647
|
|
|
$
|
2,660
|
|
|
65.2
|
%
|
|
$
|
1,702
|
|
|
22.3
|
%
|
|
$
|
1,606
|
|
|
$
|
1,380
|
|
|
$
|
1.02
|
|
|
13.8
|
%
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million or
$0.01 for EPS figures, and, therefore, may not sum.
|
(2) Associated costs
include costs incurred as a direct result of the restructuring
program, such as salaries for employees supporting the program and
consulting expenses.
|
(3) The charges
primarily include business combination costs, changes in fair value
of contingent consideration, and for the three months ended October
30, 2020, certain license payments for unapproved
technology.
|
(4) We exclude
unrealized and realized gains and losses on our minority
investments as we do not believe that these components of income or
expense have a direct correlation to our ongoing or future business
operations.
|
(5) The charges
represent incremental costs of complying with the new European
Union (E.U.) medical device regulations for previously registered
products and primarily include charges for contractors supporting
the project and other direct third-party expenses.
|
(6) The charges
include the amortization on previously established deferred tax
assets from intercompany intellectual property
transactions.
|
(7) The charges
relate to the early redemption of approximately $6.0 billion of
debt.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
Six months ended
October 29, 2021
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
15,835
|
|
|
$
|
5,095
|
|
|
67.8
|
%
|
|
$
|
2,422
|
|
|
15.3
|
%
|
|
$
|
2,326
|
|
|
$
|
2,074
|
|
|
$
|
1.53
|
|
|
10.3
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(64)
|
|
|
0.4
|
|
|
159
|
|
|
1.0
|
|
|
159
|
|
|
128
|
|
|
0.09
|
|
|
19.5
|
|
Acquisition-related
items (3)
|
—
|
|
|
(9)
|
|
|
0.1
|
|
|
96
|
|
|
0.6
|
|
|
96
|
|
|
72
|
|
|
0.05
|
|
|
25.0
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
0.4
|
|
|
60
|
|
|
51
|
|
|
0.04
|
|
|
15.0
|
|
(Gain)/loss on
minority investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25)
|
|
|
(22)
|
|
|
(0.02)
|
|
|
—
|
|
Medical device
regulations (5)
|
—
|
|
|
(26)
|
|
|
0.2
|
|
|
45
|
|
|
0.3
|
|
|
45
|
|
|
36
|
|
|
0.03
|
|
|
20.0
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
866
|
|
|
5.5
|
|
|
866
|
|
|
728
|
|
|
0.54
|
|
|
16.1
|
|
MCS impairments /
costs (6)
|
—
|
|
|
(58)
|
|
|
0.4
|
|
|
726
|
|
|
4.6
|
|
|
726
|
|
|
564
|
|
|
0.42
|
|
|
22.3
|
|
Certain tax
adjustments, net (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
0.05
|
|
|
—
|
|
Non-GAAP
|
$
|
15,835
|
|
|
$
|
4,938
|
|
|
68.8
|
%
|
|
$
|
4,374
|
|
|
27.6
|
%
|
|
$
|
4,253
|
|
|
$
|
3,699
|
|
|
$
|
2.73
|
|
|
12.8
|
%
|
Currency
impact
|
(277)
|
|
|
(26)
|
|
|
(0.4)
|
|
|
(105)
|
|
|
(0.2)
|
|
|
|
|
|
|
(0.07)
|
|
|
|
Currency
Adjusted
|
$
|
15,558
|
|
|
$
|
4,912
|
|
|
68.4
|
%
|
|
$
|
4,269
|
|
|
27.4
|
%
|
|
|
|
|
|
$
|
2.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
October 30, 2020
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
14,154
|
|
|
$
|
5,209
|
|
|
63.2
|
%
|
|
$
|
1,603
|
|
|
11.3
|
%
|
|
$
|
1,109
|
|
|
$
|
976
|
|
|
$
|
0.72
|
|
|
11.2
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(59)
|
|
|
0.4
|
|
|
307
|
|
|
2.2
|
|
|
307
|
|
|
241
|
|
|
0.18
|
|
|
21.5
|
|
Acquisition-related
items (3)
|
—
|
|
|
(5)
|
|
|
—
|
|
|
(49)
|
|
|
(0.3)
|
|
|
(49)
|
|
|
(28)
|
|
|
(0.02)
|
|
|
42.9
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
|
(6)
|
|
|
—
|
|
|
(50.0)
|
|
(Gain)/loss on
minority investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(10)
|
|
|
(0.01)
|
|
|
(11.1)
|
|
Medical device
regulations (5)
|
—
|
|
|
(20)
|
|
|
0.1
|
|
|
37
|
|
|
0.3
|
|
|
37
|
|
|
32
|
|
|
0.02
|
|
|
13.5
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
884
|
|
|
6.2
|
|
|
884
|
|
|
743
|
|
|
0.55
|
|
|
16.0
|
|
Debt tender premium
and other charges (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
248
|
|
|
0.18
|
|
|
19.5
|
|
Certain tax
adjustments, net (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
0.01
|
|
|
—
|
|
Non-GAAP
|
$
|
14,154
|
|
|
$
|
5,125
|
|
|
63.8
|
%
|
|
$
|
2,778
|
|
|
19.6
|
%
|
|
$
|
2,583
|
|
|
$
|
2,216
|
|
|
$
|
1.64
|
|
|
13.9
|
%
|
|
See description of
non-GAAP financial measures contained in this release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million or
$0.01 for EPS figures, and, therefore, may not sum.
|
(2) Associated costs
include costs incurred as a direct result of the restructuring
program, such as salaries for employees supporting the program and
consulting expenses.
|
(3) The charges
primarily include business combination costs, changes in fair value
of contingent consideration, and specifically for the six months
ended October 30, 2020, change in amounts accrued for certain
contingent liabilities for recent acquisitions.
|
(4) We exclude
unrealized and realized gains and losses on our minority
investments as we do not believe that these components of income or
expense have a direct correlation to our ongoing or future business
operations.
|
(5) The charges
represent incremental costs of complying with the new E.U. medical
device regulations for previously registered products and primarily
include charges for contractors supporting the project and other
direct third-party expenses.
|
(6) The charges
relate to the Company's June 2021 decision to stop the distribution
and sale of the Medtronic HVAD System within the Mechanical
Circulatory Support Operating Unit (MCS). The charges included $515
million of non-cash impairments, primarily related to $409 million
of intangible asset impairments, as well as $211 million for
commitments and obligations in connection with the decision,
including customer support obligations, restructuring, and other
associated costs. Medtronic is committed to serving the needs of
the approximately 4,000 patients currently implanted with the HVAD
System.
|
(7) The charges
include the amortization on previously established deferred tax
assets from intercompany intellectual property transactions, and
specifically for the six months ended October 29, 2021, charges
associated with a change in the company's permanent reinvestment
assertion on certain historical earnings.
|
(8) The charges
relate to the early redemption of approximately $6.0 billion of
debt.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
Three months ended
October 29, 2021
|
(in
millions)
|
Net
Sales
|
|
SG&A
Expense
|
|
SG&A
Expense as
a % of Net
Sales
|
|
R&D
Expense
|
|
R&D
Expense as
a % of Net
Sales
|
|
Other
Operating
Expense,
net
|
|
Other
Operating
Expense, net
as a % of Net
Sales
|
|
Other Non-
Operating
(Income)
Expense, net
|
GAAP
|
$
|
7,847
|
|
|
$
|
2,615
|
|
|
33.3
|
%
|
|
$
|
676
|
|
|
8.6
|
%
|
|
$
|
21
|
|
|
0.3
|
%
|
|
$
|
(66)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(37)
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition-related
items (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
0.2
|
|
|
—
|
|
Medical device
regulations (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gain/(loss) on minority
investments (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6)
|
|
Non-GAAP
|
$
|
7,847
|
|
|
$
|
2,578
|
|
|
32.9
|
%
|
|
$
|
667
|
|
|
8.5
|
%
|
|
$
|
39
|
|
|
0.5
|
%
|
|
$
|
(72)
|
|
Currency
impact
|
(32)
|
|
|
(11)
|
|
|
(0.1)
|
|
|
(2)
|
|
|
—
|
|
|
9
|
|
|
0.1
|
|
|
—
|
|
Currency
Adjusted
|
$
|
7,815
|
|
|
$
|
2,567
|
|
|
32.8
|
%
|
|
$
|
665
|
|
|
8.5
|
%
|
|
$
|
48
|
|
|
0.6
|
%
|
|
$
|
(72)
|
|
|
|
|
|
|
Six months ended
October 29, 2021
|
(in
millions)
|
Net
Sales
|
|
SG&A
Expense
|
|
SG&A
Expense as
a % of Net
Sales
|
|
R&D
Expense
|
|
R&D
Expense as
a % of Net
Sales
|
|
Other
Operating
Expense
(Income),
net
|
|
Other
Operating
Expense, net
as a % of Net
Sales
|
|
Other Non-
Operating
(Income)
Expense, net
|
GAAP
|
$
|
15,835
|
|
|
$
|
5,163
|
|
|
32.6
|
%
|
|
$
|
1,426
|
|
|
9.0
|
%
|
|
$
|
781
|
|
|
4.9
|
%
|
|
$
|
(177)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(74)
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition-related
items (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(90)
|
|
|
(0.6)
|
|
|
4
|
|
|
—
|
|
|
—
|
|
Medical device
regulations (4)
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(18)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
MCS impairment / costs
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(668)
|
|
|
(4.2)
|
|
|
—
|
|
Gain/(loss) on
minority investments (5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
Non-GAAP
|
$
|
15,835
|
|
|
$
|
5,087
|
|
|
32.1
|
%
|
|
$
|
1,318
|
|
|
8.3
|
%
|
|
$
|
118
|
|
|
0.7
|
%
|
|
$
|
(152)
|
|
Currency
impact
|
(277)
|
|
|
(80)
|
|
|
0.1
|
|
|
(9)
|
|
|
0.1
|
|
|
(57)
|
|
|
(0.3)
|
|
|
1
|
|
Currency
Adjusted
|
$
|
15,558
|
|
|
$
|
5,007
|
|
|
32.2
|
%
|
|
$
|
1,309
|
|
|
8.4
|
%
|
|
$
|
61
|
|
|
0.4
|
%
|
|
$
|
(151)
|
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
(2) Associated costs
include costs incurred as a direct result of the restructuring
program, such as salaries for employees supporting the program and
consulting expenses.
|
(3) The charges
primarily includeusiness combination costs, changes in fair value
of contingent consideration, and specifically in the six months
ended October 29, 2021, acquisitions of, and certain license
payments for, unapproved technology.
|
(4) The charges
represent incremental costs of complying with the new E.U. medical
device regulations for previously registered products and primarily
include charges for contractors supporting the project and other
direct third-party expenses.
|
(5) We exclude
unrealized and realized gains and losses on our minority
investments as we do not believe that these components of income or
expense have a direct correlation to our ongoing or future business
operations.
|
(6) The charges
relate to the Company's June 2021 decision to stop the distribution
and sale of the Medtronic HVAD System within the Mechanical
Circulatory Support Operating Unit (MCS). The charges included $515
million of non-cash impairments, primarily related to $409 million
of intangible asset impairments, as well as $211 million for
commitments and obligations in connection with the decision,
including customer support obligations, restructuring, and other
associated costs. Medtronic is committed to serving the needs of
the approximately 4,000 patients currently implanted with the HVAD
System.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
Fiscal
year
|
(in
millions)
|
October 29,
2021
|
|
October 30,
2020
|
|
2021
|
Net cash provided
by operating activities
|
$
|
3,061
|
|
|
$
|
2,139
|
|
|
$
|
6,240
|
|
Additions to property,
plant, and equipment
|
(649)
|
|
|
(615)
|
|
|
(1,355)
|
|
Free Cash Flow
(2)
|
$
|
2,412
|
|
|
$
|
1,524
|
|
|
$
|
4,885
|
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
(2) Free cash
flow represents operating cash flows less property, plant, and
equipment additions.
|
MEDTRONIC
PLC
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
|
|
|
(in millions)
|
|
October 29,
2021
|
|
April 30,
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,900
|
|
|
$
|
3,593
|
|
Investments
|
|
7,769
|
|
|
7,224
|
|
Accounts receivable,
less allowances and credit losses of $255 and $241,
respectively
|
|
5,493
|
|
|
5,462
|
|
Inventories,
net
|
|
4,349
|
|
|
4,313
|
|
Other current
assets
|
|
2,220
|
|
|
1,955
|
|
Total current
assets
|
|
22,731
|
|
|
22,548
|
|
Property, plant, and
equipment
|
|
12,978
|
|
|
12,700
|
|
Accumulated
depreciation
|
|
(7,790)
|
|
|
(7,479)
|
|
Property, plant,
and equipment, net
|
|
5,188
|
|
|
5,221
|
|
Goodwill
|
|
41,612
|
|
|
41,961
|
|
Other intangible
assets, net
|
|
16,523
|
|
|
17,740
|
|
Tax
assets
|
|
3,203
|
|
|
3,169
|
|
Other
assets
|
|
2,499
|
|
|
2,443
|
|
Total
assets
|
|
$
|
91,756
|
|
|
$
|
93,083
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current debt
obligations
|
|
$
|
16
|
|
|
$
|
11
|
|
Accounts
payable
|
|
1,917
|
|
|
2,106
|
|
Accrued
compensation
|
|
1,934
|
|
|
2,482
|
|
Accrued income
taxes
|
|
467
|
|
|
435
|
|
Other accrued
expenses
|
|
3,469
|
|
|
3,475
|
|
Total current
liabilities
|
|
7,803
|
|
|
8,509
|
|
Long-term
debt
|
|
25,607
|
|
|
26,378
|
|
Accrued
compensation and retirement benefits
|
|
1,505
|
|
|
1,557
|
|
Accrued income
taxes
|
|
2,110
|
|
|
2,251
|
|
Deferred tax
liabilities
|
|
1,024
|
|
|
1,028
|
|
Other
liabilities
|
|
1,547
|
|
|
1,756
|
|
Total
liabilities
|
|
39,596
|
|
|
41,481
|
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Ordinary shares— par
value $0.0001, 2.6 billion shares authorized, 1,344,861,769 and
1,345,400,671 shares issued and outstanding,
respectively
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
26,059
|
|
|
26,319
|
|
Retained
earnings
|
|
28,974
|
|
|
28,594
|
|
Accumulated other
comprehensive loss
|
|
(3,042)
|
|
|
(3,485)
|
|
Total shareholders'
equity
|
|
51,991
|
|
|
51,428
|
|
Noncontrolling
interests
|
|
168
|
|
|
174
|
|
Total
equity
|
|
52,159
|
|
|
51,602
|
|
Total liabilities
and equity
|
|
$
|
91,756
|
|
|
$
|
93,083
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
MEDTRONIC
PLC
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
Six months
ended
|
(in
millions)
|
|
October 29,
2021
|
|
October 30,
2020
|
Operating
Activities:
|
|
|
|
|
Net income
|
|
$
|
2,086
|
|
|
$
|
985
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
1,347
|
|
|
1,340
|
|
Provision for doubtful
accounts
|
|
34
|
|
|
86
|
|
Deferred income
taxes
|
|
(78)
|
|
|
(69)
|
|
Stock-based
compensation
|
|
209
|
|
|
210
|
|
Loss on debt
extinguishment
|
|
—
|
|
|
308
|
|
MCS asset impairment
and inventory write-down
|
|
515
|
|
|
—
|
|
Other, net
|
|
130
|
|
|
112
|
|
Change in operating
assets and liabilities, net of acquisitions and
divestitures:
|
|
|
|
|
Accounts receivable,
net
|
|
(171)
|
|
|
(669)
|
|
Inventories
|
|
(156)
|
|
|
(145)
|
|
Accounts payable and
accrued liabilities
|
|
(446)
|
|
|
108
|
|
Other operating assets
and liabilities
|
|
(409)
|
|
|
(127)
|
|
Net cash provided
by operating activities
|
|
3,061
|
|
|
2,139
|
|
Investing
Activities:
|
|
|
|
|
Acquisitions, net of
cash acquired
|
|
(91)
|
|
|
(370)
|
|
Additions to property,
plant, and equipment
|
|
(649)
|
|
|
(615)
|
|
Purchases of
investments
|
|
(5,311)
|
|
|
(5,360)
|
|
Sales and maturities
of investments
|
|
4,637
|
|
|
4,337
|
|
Other investing
activities, net
|
|
(79)
|
|
|
(4)
|
|
Net cash used in
investing activities
|
|
(1,493)
|
|
|
(2,012)
|
|
Financing
Activities:
|
|
|
|
|
Change in current debt
obligations, net
|
|
—
|
|
|
(57)
|
|
Proceeds from
short-term borrowings (maturities greater than 90 days)
|
|
—
|
|
|
2,789
|
|
Issuance of long-term
debt
|
|
—
|
|
|
7,172
|
|
Payments on long-term
debt
|
|
(1)
|
|
|
(6,336)
|
|
Dividends to
shareholders
|
|
(1,693)
|
|
|
(1,558)
|
|
Issuance of ordinary
shares
|
|
274
|
|
|
119
|
|
Repurchase of ordinary
shares
|
|
(744)
|
|
|
(68)
|
|
Other financing
activities
|
|
(46)
|
|
|
(70)
|
|
Net cash provided
by (used in) financing activities
|
|
(2,210)
|
|
|
1,991
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(51)
|
|
|
162
|
|
Net change in cash
and cash equivalents
|
|
(693)
|
|
|
2,280
|
|
Cash and cash
equivalents at beginning of period
|
|
3,593
|
|
|
4,140
|
|
Cash and cash
equivalents at end of period
|
|
$
|
2,900
|
|
|
$
|
6,420
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
Income
taxes
|
|
$
|
615
|
|
|
$
|
384
|
|
Interest
|
|
280
|
|
|
321
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
About Medtronic
Bold thinking. Bolder actions. We are
Medtronic. Medtronic plc, headquartered in Dublin, Ireland, is the leading global
healthcare technology company that boldly attacks the most
challenging health problems facing humanity by searching out and
finding solutions. Our Mission — to alleviate pain, restore health,
and extend life — unites a global team of 90,000+ passionate people
across 150 countries. Our technologies and therapies treat 70
health conditions and include cardiac devices, surgical robotics,
insulin pumps, surgical tools, patient monitoring systems, and
more. Powered by our diverse knowledge, insatiable curiosity, and
desire to help all those who need it, we deliver innovative
technologies that transform the lives of two people every second,
every hour, every day. Expect more from us as we empower
insight-driven care, experiences that put people first, and better
outcomes for our world. In everything we do, we are engineering the
extraordinary. For more information on Medtronic (NYSE:MDT), visit
www.Medtronic.com and follow @Medtronic on Twitter and
LinkedIn.
FORWARD LOOKING STATEMENTS
This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which are subject
to risks and uncertainties, including risks related to competitive
factors, difficulties and delays inherent in the development,
manufacturing, marketing and sale of medical products, government
regulation and general economic conditions and other risks and
uncertainties described in the company's periodic reports on file
with the U.S. Securities and Exchange Commission including the most
recent Annual Report on Form 10-K of the company, as filed with the
U.S. Securities and Exchange Commission. In some cases, you can
identify these statements by forward-looking words or expressions,
such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "intend," "looking ahead," "may," "plan," "possible,"
"potential," "project," "should," "going to," "will," and similar
words or expressions, the negative or plural of such words or
expressions and other comparable terminology. Actual results may
differ materially from anticipated results. Medtronic does not
undertake to update its forward-looking statements or any of the
information contained in this press release, including to reflect
future events or circumstances.
NON-GAAP FINANCIAL MEASURES
This press release
contains financial measures, including adjusted net income,
adjusted diluted EPS, and organic revenue, which are considered
"non-GAAP" financial measures under applicable SEC rules and
regulations. References to quarterly figures increasing, decreasing
or remaining flat are in comparison to the second quarter of fiscal
year 2021.
Medtronic management believes that non-GAAP financial
measures provide information useful to investors in understanding
the company's underlying operational performance and trends and to
facilitate comparisons with the performance of other companies in
the med tech industry. Non-GAAP net income and diluted EPS exclude
the effect of certain charges or gains that contribute to or reduce
earnings but that result from transactions or events that
management believes may or may not recur with similar materiality
or impact to operations in future periods (Non-GAAP Adjustments).
Medtronic generally uses non-GAAP financial measures to facilitate
management's review of the operational performance of the company
and as a basis for strategic planning. Non-GAAP financial measures
should be considered supplemental to and not a substitute for
financial information prepared in accordance with U.S. generally
accepted accounting principles (GAAP), and investors are cautioned
that Medtronic may calculate non-GAAP financial measures in a way
that is different from other companies. Management strongly
encourages investors to review the company's consolidated financial
statements and publicly filed reports in their entirety.
Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the
financial schedules accompanying this press release.
Medtronic calculates forward-looking non-GAAP financial
measures based on internal forecasts that omit certain amounts that
would be included in GAAP financial measures. For instance,
forward-looking organic revenue growth guidance excludes the impact
of foreign currency fluctuations, as well as significant
acquisitions or divestitures. Forward-looking diluted non-GAAP EPS
guidance also excludes other potential charges or gains that would
be recorded as Non-GAAP Adjustments to earnings during the fiscal
year. Medtronic does not attempt to provide reconciliations of
forward-looking non-GAAP EPS guidance to projected GAAP EPS
guidance because the combined impact and timing of recognition of
these potential charges or gains is inherently uncertain and
difficult to predict and is unavailable without unreasonable
efforts. In addition, the company believes such reconciliations
would imply a degree of precision and certainty that could be
confusing to investors. Such items could have a substantial impact
on GAAP measures of financial performance.
Contacts:
|
|
|
|
Erika
Winkels
|
Ryan
Weispfenning
|
Public
Relations
|
Investor
Relations
|
+1-763-526-8478
|
+1-763-505-4626
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/medtronic-reports-second-quarter-fiscal-2022-financial-results-301430732.html
SOURCE Medtronic plc