BD Announces Results for Third Fiscal Quarter
* Reports third-quarter earnings per share from continuing operations of 95 cents, an increase of 14% from the prior year's quarter
* Raises guidance for full fiscal year 2007 earnings per share from continuing operations to $3.81 to $3.83 from $3.76 to $3.80, excluding specified items
FRANKLIN LAKES, N.J., July 26 /PRNewswire-FirstCall/ -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported record quarterly revenues of $1.631 billion for the third fiscal quarter ended June 30, 2007, representing an increase of 12 percent over the prior year period. This quarter's growth rate reflects the favorable impact on all segments from foreign currency translation, which overall is estimated to account for 3 percentage points of the increase in quarterly revenues.
"We are pleased with our strong results this quarter, with each of our three segments contributing to our growth," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "The combination of solid revenue growth and continued margin improvement is allowing us to increase our investment in innovation while at the same time driving double-digit increases in earnings. These results, along with our expectations for the remainder of fiscal 2007, have enabled us to once again increase our earnings outlook for the year."
Analysis of Third Quarter and Nine-Month Periods of Fiscal Year 2007 and 2006 Earnings
Reported diluted earnings per share from continuing operations were 95 cents for the third quarter of fiscal 2007. The following analysis (Table 1) of diluted earnings per share from continuing operations for the third quarters of fiscal 2007 and 2006 identifies specified items that affect comparability of results between periods. As illustrated, third quarter fiscal 2007 diluted earnings per share from continuing operations of 98 cents, which exclude a specified item, increased by 18 percent over comparable third quarter fiscal 2006 diluted earnings per share from continuing operations of 83 cents. For the nine-month periods, diluted earnings per share from continuing operations of $2.86 for fiscal 2007, which exclude specified items, increased by 14 percent over comparable fiscal 2006 diluted earnings per share from continuing operations of $2.50, which exclude specified items.
(Table 1) Three Months Ended June 30, Nine Months Ended June 30,
FY2007 FY2006 %Change FY2007 FY2006 %Change
Diluted EPS from
Continuing Operations: $0.95 $0.83 14% $2.38 $2.33 2%
Specified Items:
In-Process Research
and Development
Charge 0.03(1) - 0.48(2) 0.21(2)
Insurance Settlement - - - (0.04)(3)
0.03 - 0.48 0.17
Diluted EPS from
Continuing Operations
Excluding Specified
Items: $0.98 $0.83 18% $2.86 $2.50 14%
(1) Represents the effect on diluted earnings per share from continuing
operations of an in-process research and development ("IPR&D") charge
recorded in the third quarter of fiscal 2007 related to the
acquisition of Plasso Technology, Ltd. on May 4, 2007 for
approximately $10 million.
(2) Represents the effect on diluted earnings per share from continuing
operations of the IPR&D charges recorded in the third and first
quarters of fiscal 2007 related to the Plasso and TriPath
acquisitions, respectively, and in the second quarter of fiscal 2006
related to the GeneOhm acquisition.
(3) Represents the effect on diluted earnings per share from continuing
operations in fiscal 2006 related to proceeds received from insurance
settlements associated with the Company's previously owned latex glove
business.
Segment Results
In the BD Medical segment, worldwide revenues for the quarter were $882 million, representing an increase of 10 percent from the prior year period. For the nine-month period ended June 30, 2007, the BD Medical segment reported 10 percent revenue growth. Strong sales in the Pharmaceutical Systems unit continued to significantly contribute to the growth of the segment.
In the BD Diagnostics segment, worldwide revenues for the quarter were $492 million, representing an increase of 15 percent from the prior year's quarter. This growth includes $27 million of revenues from TriPath, which was acquired at the end of the first quarter of fiscal 2007. The Preanalytical Systems unit of the segment reported revenue growth of 9 percent. Third quarter revenues in the Diagnostic Systems unit of the segment increased 23 percent, again including revenues from the TriPath acquisition. For the nine- month period ended June 30, 2007, the BD Diagnostics segment reported 9 percent revenue growth.
In the BD Biosciences segment, worldwide revenues for the quarter were $258 million, representing an increase of 13 percent from the prior year's quarter. Flow cytometry instrument and reagent sales, as well as sales of advanced bioprocessing products, contributed to growth. For the nine-month period ended June 30, 2007, the BD Biosciences segment reported 12 percent revenue growth, resulting from continued strong sales of those same products.
Geographic Results
Third quarter revenues in the U.S. were $768 million, representing an increase of 10 percent over the prior year period, and include $27 million of revenues from TriPath. Revenues outside the U.S. were $863 million, representing an increase of 13 percent over the prior year period. Approximately 6 percentage points of the increase in international revenues resulted from the favorable impact of foreign currency translation.
For the nine-month period ended June 30, 2007, revenues in the U.S. were $2.243 billion, representing an increase of 10 percent over the prior year period. Revenues outside of the U.S. were $2.466 billion, representing an increase of 10 percent over the prior year period. Approximately 5 percentage points of the increase in international revenues relate to the favorable impact from foreign currency translation.
Fiscal 2007 Outlook for Full Year
The following analysis (Table 2) of estimated diluted earnings per share from continuing operations for the full fiscal year identifies specified items that affect the comparability of results between periods. As illustrated, the Company estimates that diluted earnings per share from continuing operations, excluding specified items, for the full fiscal year 2007 will be in the $3.81 to $3.83 range, representing an increase of approximately 14 to 15 percent over diluted earnings per share from continuing operations, excluding specified items, of $3.34 for the fiscal year 2006.
(Table 2) Twelve Months Ended
September 30,
FY2007 FY2006 % Change
(Estimated)
Diluted EPS from Continuing
Operations: $3.33-$3.35 $3.18 5%
Specified Items:
In-Process Research and
Development Charge(1) 0.48 0.21
Insurance Settlement(2) - (0.04)
Rounding - (0.01)
0.48 0.16
Diluted EPS from Continuing
Operations Excluding
Specified Items: $3.81-$3.83 $3.34 14%-15%
(1) Represents the effect on diluted earnings per share from continuing
operations of the IPR&D charges recorded in the third and first
quarters of fiscal 2007 related to the Plasso and TriPath
acquisitions, respectively, and in the second quarter of fiscal 2006
related to the GeneOhm acquisition.
(2) Represents the effect on diluted earnings per share from continuing
operations in fiscal 2006 related to proceeds received from insurance
settlements associated with the Company's previously owned latex glove
business.
Conference Call Information
A conference call regarding BD's third fiscal quarter results and its expectations for the full fiscal year will be broadcast live on BD's website, www.bd.com/investors, at 10:00 a.m. (ET) Thursday, July 26, 2007. The conference call will be available for replay on BD's website, www.bd.com/investors, or at 1-800-475-6701 (domestic) and 1-320-365-3844 (international), using access code 879048, through the close of business on Thursday, August 2, 2007.
This news release contains certain non-GAAP financial measures. A reconciliation of these and other measures to the comparable GAAP measures is included in this release and in the attached financial tables.
About BD
BD, a leading global medical technology company that manufactures and sells medical devices, instrument systems and reagents, is dedicated to improving people's health throughout the world. BD is focused on improving drug therapy, enhancing the quality and speed of diagnosing infectious diseases, and advancing research and discovery of new drugs and vaccines. The Company's capabilities are instrumental in combating many of the world's most pressing diseases. Founded in 1897 and headquartered in Franklin Lakes, New Jersey, BD employs approximately 27,000 people in approximately 50 countries throughout the world. The Company serves healthcare institutions, life science researchers, clinical laboratories, industry and the general public. For more information, please visit www.bd.com.
This press release, including the section entitled "Fiscal 2007 Outlook for Full Year," contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding BD's performance, including future revenues, earnings per share and income, or events or developments that BD expects to occur or anticipates occurring in the future. All such statements are based upon current expectations of BD and involve a number of business risks and uncertainties. Actual results could vary materially from anticipated results described, implied or projected in any forward-looking statement. With respect to forward-looking statements contained herein, factors that could cause actual results to vary materially from any forward-looking statement include, but are not limited to: competitive factors; pricing and market share pressures; changes in interest or foreign currency exchange rates; difficulties inherent in product development and delays in product introductions; changes in regional, national or foreign economic conditions; further increases in energy costs and their effect on, among other things, the cost of producing BD's products; fluctuations in costs and availability of raw materials and in BD's ability to maintain favorable supplier arrangements and relationships; uncertainties of litigation (as described in BD's filings with the Securities and Exchange Commission); the effects of potential pandemic diseases; changes in healthcare or other governmental regulation; and issuance of new or revised accounting standards, as well as other factors discussed in this press release and in BD's filings with the Securities and Exchange Commission. We do not intend to update any forward-looking statements to reflect events or circumstances after the date hereof except as required by applicable laws or regulations.
BECTON DICKINSON AND COMPANY
CONSOLIDATED INCOME STATEMENTS
(Unaudited; Amounts in thousands, except per-share data)
Three Months Ended June 30,
2007 2006 % Change
REVENUES $1,631,159 $1,457,347 11.9
Cost of products sold 791,071 719,515 9.9
Selling and administrative 412,164 374,565 10.0
Research and development 92,993 76,699 21.2
Acquired in-process research and
development 7,394 - NM
TOTAL OPERATING COSTS AND EXPENSES 1,303,622 1,170,779 11.3
OPERATING INCOME 327,537 286,568 14.3
Interest expense (11,598) (15,425) (24.8)
Interest income 11,938 12,146 (1.7)
Other expense, net 1,774 (2,385) NM
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 329,651 280,904 17.4
Income tax provision 89,182 69,834 27.7
INCOME FROM CONTINUING OPERATIONS 240,469 211,070 13.9
INCOME/(LOSS) FROM DISCONTINUED
OPERATIONS NET OF INCOME TAX
PROVISION/(BENEFIT) OF $2,704 AND
$(2,865), RESPECTIVELY 4,340 (4,697) NM
NET INCOME $ 244,809 $ 206,373 18.6
EARNINGS PER SHARE
Basic:
Income from continuing operations $ 0.98 $ 0.86 14.0
Income/(loss) from discontinued
operations $ 0.02 $ (0.02) NM
Net income $ 1.00 $ 0.84 19.0
Diluted:
Income from continuing operations $ 0.95 $ 0.83 14.5
Income/(loss) from discontinued
operations $ 0.02 $ (0.02) NM
Net income (1) $ 0.96 $ 0.81 18.5
AVERAGE SHARES OUTSTANDING
Basic 244,918 246,633
Diluted 254,128 255,070
NM - Not Meaningful
(1) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended June 30,
(Unaudited; Amounts in thousands, except per-share data)
2007
As Plasso Excluding
Reported IPR&D(1) Item
Operating Income $327,537 $7,394 $334,931
as a % of revenues 20.1% 20.5%
Income from continuing operations 240,469 7,394 247,863
as a % of revenues 14.7% 15.2%
Diluted earnings per share
Income from continuing operations $ 0.95 $ 0.03 $ 0.98
(1) Represents the Acquired in-process research and development charge
of $7,394 related to the Plasso acquisition.
BECTON DICKINSON AND COMPANY
CONSOLIDATED INCOME STATEMENTS
(Unaudited; Amounts in thousands, except per-share data)
Nine Months Ended June 30,
2007 2006 % Change
REVENUES $4,708,607 $4,275,401 10.1
Cost of products sold 2,264,544 2,084,227 8.7
Selling and administrative 1,202,879 1,069,914 12.4
Research and development 259,620 219,473 18.3
Acquired in-process research and
development 122,133 53,300 NM
TOTAL OPERATING COSTS AND EXPENSES 3,849,176 3,426,914 12.3
OPERATING INCOME 859,431 848,487 1.3
Interest expense (36,152) (51,990) (30.5)
Interest income 37,138 43,808 (15.2)
Other expense, net 5,278 (3,999) NM
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 865,695 836,306 3.5
Income tax provision 258,636 238,076 8.6
INCOME FROM CONTINUING OPERATIONS 607,059 598,230 1.5
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS NET OF INCOME TAX
PROVISION/(BENEFIT) OF $14,066
AND $(12,127), RESPECTIVELY 23,162 (19,929) NM
NET INCOME $ 630,221 $ 578,301 9.0
EARNINGS PER SHARE
Basic:
Income from continuing operations $ 2.47 $ 2.42 2.1
Income (loss) from discontinued
operations $ 0.09 $ (0.08) NM
Net income (1) $ 2.57 $ 2.34 9.8
Diluted:
Income from continuing operations $ 2.38 $ 2.33 2.1
Income (loss) from discontinued
operations $ 0.09 $ (0.08) NM
Net income $ 2.47 $ 2.25 9.8
AVERAGE SHARES OUTSTANDING
Basic 245,296 247,588
Diluted 255,129 256,500
NM - Not Meaningful
(1) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Nine Months Ended June 30,
(Unaudited; Amounts in thousands, except per-share data)
2007
As TriPath Plasso Excluding
Reported IPR&D(1) IPR&D(1) Items
Operating Income $859,431 $114,739 $7,394 $981,564
as a % of revenues 18.3% 20.8%
Income from continuing operations 607,059 114,739 7,394 729,192
as a % of revenues 12.9% 15.5%
Diluted earnings per share
Income from continuing operations $ 2.38 $ 0.45 $ 0.03 $ 2.86
(1) Represents the Acquired in-process research and development charges of
$114,739 and $7,394 related to the TriPath and Plasso acquisitions,
respectively.
2006
As Insurance GeneOhm Excluding
Reported Settlement(1) IPR&D(2) Items
Selling and
administrative $1,069,914 $17,000 $ - $1,086,914
as a % of revenues 25.0% 25.4%
Operating Income 848,487 (17,000) 53,300 884,787
as a % of revenues 19.8% 20.7%
Income taxes 238,076 (6,460) - 231,616
effective tax rate 28.5% 26.5%
Income from continuing
operations 598,230 (10,540) 53,300 640,990
as a % of revenues 14.0% 15.0%
Diluted earnings per share
Income from continuing
operations $ 2.33 $(0.04) $0.21 $ 2.50
(1) Represents the effect in 2006 related to proceeds received from
insurance settlements in connection with the Company's previously
owned latex glove business.
(2) Represents the Acquired in-process research and development charge of
$53,300 related to the GeneOhm acquisition.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Three Months Ended June 30,
2007 2006 % Change
BD MEDICAL
United States $ 385,546 $ 359,146 7.4
International 496,440 442,972 12.1
TOTAL $ 881,986 $ 802,118 10.0
BD DIAGNOSTICS
United States $ 272,946 $ 233,428 16.9
International 218,579 193,511 13.0
TOTAL $ 491,525 $ 426,939 15.1
BD BIOSCIENCES
United States $ 109,593 $ 102,547 6.9
International 148,055 125,743 17.7
TOTAL $ 257,648 $ 228,290 12.9
TOTAL REVENUES
United States $ 768,085 $ 695,121 10.5
International 863,074 762,226 13.2
TOTAL $1,631,159 $1,457,347 11.9
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Nine Months Ended June 30,
2007 2006 % Change
BD MEDICAL
United States $1,146,143 $1,056,878 8.4
International 1,406,233 1,265,953 11.1
TOTAL $2,552,376 $2,322,831 9.9
BD DIAGNOSTICS
United States $ 781,644 $ 686,728 13.8
International 625,512 599,497 4.3
TOTAL $1,407,156 $1,286,225 9.4
BD BIOSCIENCES
United States $ 314,942 $ 291,878 7.9
International 434,133 374,467 15.9
TOTAL $ 749,075 $ 666,345 12.4
TOTAL REVENUES
United States $2,242,729 $2,035,484 10.2
International 2,465,878 2,239,917 10.1
TOTAL $4,708,607 $4,275,401 10.1
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended June 30,
(Unaudited; Amounts in thousands)
United States
2007 2006 % Change
BD MEDICAL
Medical Surgical Systems $238,360 $230,123 3.6
Diabetes Care 92,116 88,548 4.0
Pharmaceutical Systems 48,692 34,612 40.7
Ophthalmic Systems 6,378 5,863 8.8
TOTAL $385,546 $359,146 7.4
BD DIAGNOSTICS
Preanalytical Systems $139,572 $131,909 5.8
Diagnostic Systems 133,374 101,519 31.4
TOTAL $272,946 $233,428 16.9
BD BIOSCIENCES
Discovery Labware $ 37,907 $ 35,665 6.3
Immunocytometry Systems 51,234 47,027 8.9
Pharmingen 20,452 19,855 3.0
TOTAL $109,593 $102,547 6.9
TOTAL UNITED STATES $768,085 $695,121 10.5
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended June 30, (continued)
(Unaudited; Amounts in thousands)
International
% Change
FX FX
2007 2006 Reported Neutral Impact
BD MEDICAL
Medical Surgical Systems $233,835 $217,993 7.3 1.6 5.7
Diabetes Care 82,754 75,193 10.1 4.3 5.8
Pharmaceutical Systems 168,057 139,468 20.5 12.6 7.9
Ophthalmic Systems 11,794 10,318 14.3 7.0 7.3
TOTAL $496,440 $442,972 12.1 5.7 6.4
BD DIAGNOSTICS
Preanalytical Systems $121,761 $107,589 13.2 6.8 6.4
Diagnostic Systems 96,818 85,922 12.7 7.7 5.0
TOTAL $218,579 $193,511 13.0 7.2 5.8
BD BIOSCIENCES
Discovery Labware $ 32,561 $ 29,356 10.9 6.1 4.8
Immunocytometry Systems 93,331 76,947 21.3 15.5 5.8
Pharmingen 22,163 19,440 14.0 8.0 6.0
TOTAL $148,055 $125,743 17.7 12.2 5.5
TOTAL INTERNATIONAL $863,074 $762,226 13.2 7.1 6.1
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended June 30, (continued)
(Unaudited; Amounts in thousands)
Total
% Change
FX FX
2007 2006 Reported Neutral Impact
BD MEDICAL
Medical Surgical
Systems $ 472,195 $ 448,116 5.4 2.6 2.8
Diabetes Care 174,870 163,741 6.8 4.2 2.6
Pharmaceutical Systems 216,749 174,080 24.5 18.2 6.3
Ophthalmic Systems 18,172 16,181 12.3 7.6 4.7
TOTAL $ 881,986 802,118 10.0 6.4 3.6
BD DIAGNOSTICS
Preanalytical Systems $ 261,333 $ 239,498 9.1 6.2 2.9
Diagnostic Systems 230,192 187,441 22.8 20.5 2.3
TOTAL $ 491,525 426,939 15.1 12.5 2.6
BD BIOSCIENCES
Discovery Labware $ 70,468 $ 65,021 8.4 6.2 2.2
Immunocytometry Systems 144,565 123,974 16.6 13.0 3.6
Pharmingen 42,615 39,295 8.4 5.5 2.9
TOTAL $ 257,648 228,290 12.9 9.8 3.1
TOTAL REVENUES $1,631,159 $1,457,347 11.9 8.7 3.2
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Nine Months Ended June 30,
(Unaudited; Amounts in thousands)
United States
2007 2006 % Change
BD MEDICAL
Medical Surgical Systems $ 711,545 $ 672,438 5.8
Diabetes Care 280,255 272,508 2.8
Pharmaceutical Systems 135,961 95,040 43.1
Ophthalmic Systems 18,382 16,892 8.8
TOTAL $1,146,143 $1,056,878 8.4
BD DIAGNOSTICS
Preanalytical Systems $ 403,211 $ 380,110 6.1
Diagnostic Systems 378,433 306,618 23.4
TOTAL $ 781,644 $ 686,728 13.8
BD BIOSCIENCES
Discovery Labware $ 109,705 $ 100,828 8.8
Immunocytometry Systems 146,684 133,691 9.7
Pharmingen 58,553 57,359 2.1
TOTAL $ 314,942 $ 291,878 7.9
TOTAL UNITED STATES $2,242,729 $2,035,484 10.2
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Nine Months Ended June 30, (continued)
(Unaudited; Amounts in thousands)
International
% Change
FX FX
2007 2006 Reported Neutral Impact
BD MEDICAL
Medical Surgical
Systems $ 675,741 $ 628,421 7.5 3.0 4.5
Diabetes Care 234,491 217,899 7.6 2.9 4.7
Pharmaceutical Systems 462,540 389,912 18.6 11.5 7.1
Ophthalmic Systems 33,461 29,721 12.6 6.0 6.6
TOTAL $1,406,233 $1,265,953 11.1 5.7 5.4
BD DIAGNOSTICS
Preanalytical Systems $ 342,941 $ 308,413 11.2 5.7 5.5
Diagnostic Systems 282,571 291,084 (2.9) (6.4) 3.5
TOTAL $ 625,512 $ 599,497 4.3 (0.2) 4.5
BD BIOSCIENCES
Discovery Labware $ 94,987 $ 87,279 8.8 4.8 4.0
Immunocytometry Systems 272,082 226,709 20.0 14.9 5.1
Pharmingen 67,064 60,479 10.9 6.2 4.7
TOTAL $ 434,133 $374,467 15.9 11.1 4.8
TOTAL INTERNATIONAL $2,465,878 $2,239,917 10.1 5.0 5.1
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Nine Months Ended June 30, (continued)
(Unaudited; Amounts in thousands)
Total
% Change
FX FX
2007 2006 Reported Neutral Impact
BD MEDICAL
Medical Surgical
Systems $1,387,286 $1,300,859 6.6 4.5 2.1
Diabetes Care 514,746 490,407 5.0 2.9 2.1
Pharmaceutical
Systems 598,501 484,952 23.4 17.7 5.7
Ophthalmic Systems 51,843 46,613 11.2 7.0 4.2
TOTAL $2,552,376 $2,322,831 9.9 6.9 3.0
BD DIAGNOSTICS
Preanalytical
Systems $ 746,152 $ 688,523 8.4 5.9 2.5
Diagnostic
Systems 661,004 597,702 10.6 8.9 1.7
TOTAL $1,407,156 $1,286,225 9.4 7.3 2.1
BD BIOSCIENCES
Discovery Labware $ 204,692 $ 188,107 8.8 7.0 1.8
Immunocytometry
Systems 418,766 360,400 16.2 13.0 3.2
Pharmingen 125,617 117,838 6.6 4.2 2.4
TOTAL $ 749,075 $ 666,345 12.4 9.7 2.7
TOTAL REVENUES $4,708,607 $4,275,401 10.1 7.5 2.6
SOURCE BD (Becton, Dickinson and Company)
Released July 26, 2007