BD Announces Results for First Fiscal Quarter
- First-quarter earnings per share from continuing operations, excluding specified item, increased 12% to 96 cents
- Raises guidance for full fiscal year 2007 earnings per share from continuing operations, excluding specified item, to a range of $3.71 to $3.77
FRANKLIN LAKES, N.J., Jan. 25 /PRNewswire-FirstCall/ -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported record quarterly revenues of $1.502 billion for the first fiscal quarter ended December 31, 2006, representing an increase of 8 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 2 percentage points of the growth.
"We are pleased with our strong start to fiscal 2007," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "Increased sales of safety-engineered devices, prefillable drug delivery devices, and Biosciences products demonstrate the breadth of our growth drivers. Higher margin products and increased operating effectiveness continued to expand our operating profit margin. This performance has enabled us to increase the pace of our R&D spending while delivering double-digit earnings growth."
TriPath Imaging Acquisition Completed
On December 20, 2006, BD completed its acquisition of TriPath Imaging, a maker of innovative solutions to improve the clinical management of cancer. The Company recorded an in-process research and development charge of $115 million associated with the acquisition, which reduced diluted earnings per share from continuing operations by 45 cents in the first quarter (see Table 1 below).
BGM Product Line Sold
Following the receipt of an unsolicited offer during the quarter, the Company sold the blood glucose monitoring (BGM) product line for $20 million, resulting in a pre-tax gain of $15 million. Consequently, the results of operations of the BGM product line have been classified as discontinued operations for all quarters and years referred to in this release. Included in the attached financial tables are the Company's Consolidated Income Statements for fiscal year 2006, which reflect this classification change.
Analysis of First Quarter Fiscal Year 2007 and 2006 Earnings
Reported diluted earnings per share from continuing operations was 51 cents for the first quarter of fiscal 2007, which included the in-process research and development charge of 45 cents related to the TriPath acquisition. The following analysis of diluted earnings per share from continuing operations for the first quarter of fiscal 2007 and 2006 identifies specified items that affect comparability of results between periods. As illustrated in Table 1, diluted earnings per share from continuing operations, excluding specified item, for the first fiscal quarter of 2007 of 96 cents increased by 12 percent over diluted earnings per share from continuing operations, excluding specified items, of 86 cents for the first fiscal quarter of 2006.
(Table 1) Three Months Ended December 31,
FY2007 FY2006 % Change
Diluted EPS from Continuing Operations: $0.51 $0.87 -41%
Specified Items:
In-Process Research and Development
Charge(1) 0.45 -
Insurance Settlement(2) - (0.02)
Rounding - 0.01
0.45 (0.01)
Diluted EPS from Continuing Operations
Excluding Specified Items: $0.96 $0.86 12%
(1) Represents the effect on diluted earnings per share from continuing
operations of the in-process research and development charge recorded
in the first quarter of fiscal 2007 related to the TriPath
acquisition.
(2) Represents the effect on diluted earnings per share from continuing
operations related to proceeds received from insurance settlements
regarding the Company's previously owned latex glove business.
Segment Results
In the BD Medical segment, worldwide revenues for the quarter were $826 million, representing an increase of 10 percent over the prior year period. Strong sales of Pharmaceutical Systems products and safety-engineered devices contributed to growth.
In the BD Diagnostics segment, worldwide revenues for the quarter were $442 million, representing an increase of 2 percent over the prior year period. The Preanalytical Systems unit of the segment reported revenue growth of 8 percent due to strong sales of safety-engineered devices. Revenues in the Diagnostic Systems unit of the segment decreased 5 percent. The decline in sales of flu diagnostics tests, as compared to strong sales in the prior year period, more than offset double-digit growth from the BD ProbeTec(TM) ET and BD Phoenix(TM) instruments.
In the BD Biosciences segment, worldwide revenues for the quarter were $233 million, representing an increase of 11 percent over the prior year period. Research instruments and reagent sales continued to be the primary growth contributors, driven by increased demand for research analyzers and clinical reagents.
Geographic Results
First quarter revenues in the U.S. were $721 million, representing an increase of 9 percent over the prior year period. Revenues outside the U.S. were $781 million, representing an increase of 7 percent over the prior year period, and reflect an estimated 4 percent favorable impact from foreign currency translation.
Fiscal 2007 Outlook for Full Year
The following analysis 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 in Table 2, the Company estimates that diluted earnings per share from continuing operations, excluding specified item, for the full fiscal year 2007 will be in the $3.71 to $3.77 range, representing an increase of approximately 11 to 13 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: $3.26-$3.32 $3.18 3%-4%
Specified Items:
In-Process Research and
Development Charge(1) 0.45 0.21
Insurance Settlements(2) - (0.04)
Rounding - (0.01)
0.45 0.16
Diluted EPS from Continuing
Operations Excluding
Specified Items: $3.71-$3.77 $3.34 11%-13%
(1) Represents the effect on diluted earnings per share from continuing
operations of the in-process research and development charge recorded
in the first quarter of fiscal 2007 related to the TriPath acquisition
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 related to proceeds received from insurance settlements
regarding the Company's previously owned latex glove business.
Conference Call Information
A conference call regarding BD's first 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, January 25, 2007. The conference call will be available for replay on BD's website, www.bd.com/investors, or at 1-866-427-6404 (domestic) and 1-203-369-0894 (international) through the close of business on February 1, 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 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 December 31,
2006 2005 % Change
REVENUES $ 1,501,526 $ 1,393,845 7.7
Cost of products sold 708,933 665,946 6.5
Selling and administrative 384,084 349,027 10.0
Research and development 194,679 68,359 NM
TOTAL OPERATING COSTS
AND EXPENSES 1,287,696 1,083,332 18.9
OPERATING INCOME 213,830 310,513 (31.1)
Interest income 16,114 14,671 9.8
Interest expense (12,868) (16,760) (23.2)
Other expense, net (2,368) (1,163) NM
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES 214,708 307,261 (30.1)
Income tax provision 83,657 83,559 0.1
INCOME FROM CONTINUING
OPERATIONS 131,051 223,702 (41.4)
INCOME/(LOSS) FROM
DISCONTINUED OPERATIONS
NET OF INCOME TAX
PROVISION/(BENEFIT) OF
$7,140 AND $(3,550),
RESPECTIVELY 11,828 (5,842) NM
NET INCOME $ 142,879 $ 217,860 (34.4)
EARNINGS PER SHARE
Basic:
Income from continuing
operations $ 0.53 $ 0.90 (41.1)
Income/(loss) from
discontinued operations $ 0.05 $ (0.02) NM
Net income $ 0.58 $ 0.88 (34.1)
Diluted:
Income from continuing
operations $ 0.51 $ 0.87 (41.4)
Income/(loss) from
discontinued operations $ 0.05 $ (0.02) NM
Net income $ 0.56 $ 0.85 (34.1)
AVERAGE SHARES OUTSTANDING
Basic 245,550 248,046
Diluted 254,941 255,851
NM - Not Meaningful
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended December 31,
(Unaudited; Amounts in thousands, except per-share data)
2006
As Tri Path Excluding
Reported IPR&D (1) Items
Research and Development $ 194,679 $ (114,739) $ 79,940
as a % of Revenue 13.0% 5.3%
Operating Income 213,830 114,739 328,569
as a % of Revenues 14.2% 21.9%
Income from continuing
operations 131,051 114,739 245,790
as a % of revenues 8.7% 16.4%
Diluted earnings per share
Income from continuing
operations $ 0.51 $ 0.45 $ 0.96
(1) Represents the in-process research and development ("IPR&D") charge
related to the TriPath acquisition.
2005
As Insurance Excluding
Reported Settlement(2) Items
Selling and administrative $ 349,027 $ 7,000 $ 356,027
as a % of revenues 25.0% 25.5%
Operating Income 310,513 (7,000) 303,513
as a % of revenues 22.3% 21.8%
Income taxes 83,559 (2,660) 80,899
effective tax rate 27.2% 26.9%
Income from continuing
operations 223,702 (4,340) 219,362
as a % of revenues 16.0% 15.7%
Diluted earnings per share
Income from continuing
operations(3) $ 0.87 $ (0.02) $ 0.86
(2) Represents the effect in 2006 related to proceeds received from
insurance settlements in connection with the Company's previously
owned latex glove business.
(3) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Three Months Ended December 31,
2006 2005 % Change
BD MEDICAL
United States $ 381,806 $ 347,670 9.8
International 444,441 402,814 10.3
TOTAL $ 826,247 $ 750,484 10.1
BD DIAGNOSTICS
United States $ 242,899 $ 224,731 8.1
International 199,501 209,387 (4.7)
TOTAL $ 442,400 $ 434,118 1.9
BD BIOSCIENCES
United States $ 95,921 $ 89,670 7.0
International 136,958 119,573 14.5
TOTAL $ 232,879 $ 209,243 11.3
TOTAL REVENUES
United States $ 720,626 $ 662,071 8.8
International 780,900 731,774 6.7
TOTAL $ 1,501,526 $1,393,845 7.7
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,
(Unaudited; Amounts in thousands)
United States
2006 2005 % Change
BD MEDICAL
Medical Surgical Systems $ 242,301 $ 222,266 9.0
Diabetes Care 90,492 91,488 (1.1)
Pharmaceutical Systems 42,899 28,400 51.1
Ophthalmic Systems 6,114 5,516 10.8
TOTAL $ 381,806 $ 347,670 9.8
BD DIAGNOSTICS
Preanalytical Systems $ 131,703 $ 122,789 7.3
Diagnostic Systems(1) 111,196 101,942 9.1
TOTAL $ 242,899 $ 224,731 8.1
BD BIOSCIENCES
Discovery Labware(1) $ 34,088 $ 32,056 6.3
Immunocytometry Systems 43,905 40,437 8.6
Pharmingen 17,928 17,177 4.4
TOTAL $ 95,921 $ 89,670 7.0
TOTAL UNITED STATES $ 720,626 $ 662,071 8.8
(1) Refer to page 9.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,(continued)
(Unaudited; Amounts in thousands)
International
% Change
2006 2005 Reported FX FX Impact
Neutral
BD MEDICAL
Medical Surgical
Systems $ 225,450 $ 205,897 9.5 6.2 3.3
Diabetes Care 78,194 71,992 8.6 5.1 3.5
Pharmaceutical
Systems 130,041 115,363 12.7 7.9 4.8
Ophthalmic
Systems 10,756 9,562 12.5 7.7 4.8
TOTAL $ 444,441 $ 402,814 10.3 6.5 3.8
BD DIAGNOSTICS
Preanalytical
Systems $ 108,369 $ 99,374 9.1 4.8 4.3
Diagnostic
Systems(1) 91,132 110,013 (17.2) (19.3) 2.1
TOTAL $ 199,501 $ 209,387 (4.7) (7.8) 3.1
BD BIOSCIENCES
Discovery
Labware(1) $ 29,800 $ 27,389 8.8 5.7 3.1
Immunocytometry
Systems 85,696 72,415 18.3 14.4 3.9
Pharmingen 21,462 19,769 8.6 5.2 3.4
TOTAL $ 136,958 $ 119,573 14.5 10.9 3.6
TOTAL INTERNATIONAL $ 780,900 $ 731,774 6.7 3.1 3.6
(1) Refer to page 9.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,(continued)
(Unaudited; Amounts in thousands)
Total
% Change
2006 2005 Reported FX FX Impact
Neutral
BD MEDICAL
Medical Surgical
Systems $ 467,751 $ 428,163 9.2 7.6 1.6
Diabetes Care 168,686 163,480 3.2 1.6 1.6
Pharmaceutical
Systems 172,940 143,763 20.3 16.5 3.8
Ophthalmic
Systems 16,870 15,078 11.9 8.9 3.0
TOTAL $ 826,247 750,484 10.1 8.0 2.1
BD DIAGNOSTICS
Preanalytical
Systems $ 240,072 $ 222,163 8.1 6.2 1.9
Diagnostic
Systems(1) 202,328 211,955 (4.5) (5.6) 1.1
TOTAL $ 442,400 434,118 1.9 0.4 1.5
BD BIOSCIENCES
Discovery
Labware(1) $ 63,888 $ 59,445 7.5 6.0 1.5
Immunocytometry
Systems 129,601 112,852 14.8 12.3 2.5
Pharmingen 39,390 36,946 6.6 4.8 1.8
TOTAL $ 232,879 209,243 11.3 9.2 2.1
TOTAL REVENUES $1,501,526 $1,393,845 7.7 5.8 1.9
(1) Refer to page 9.
BECTON DICKINSON AND COMPANY
CONSOLIDATED INCOME STATEMENTS FISCAL 2006
Revised for Blood Glucose Monitoring Discontinued Operations
(Unaudited; Amounts in thousands, except per-share data)
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
REVENUES $1,393,845 $1,424,209 $1,457,347 $1,462,616 $5,738,017
Cost of
products sold 665,946 698,766 719,515 709,038 2,793,265
Selling and
administrative 349,027 346,322 374,565 378,252 1,448,166
Research and
development 68,359 127,715 76,699 82,399 355,172
TOTAL OPERATING
COSTS AND
EXPENSES 1,083,332 1,172,803 1,170,779 1,169,689 4,596,603
OPERATING INCOME 310,513 251,406 286,568 292,927 1,141,414
Interest expense (16,760) (19,805) (15,425) (14,056) (66,046)
Interest income 14,671 16,991 12,146 15,488 59,296
Other expense, net (1,163) (451) (2,385) (4,763) (8,762)
INCOME FROM
CONTINUING
OPERATIONS BEFORE
INCOME TAXES 307,261 248,141 280,904 289,596 1,125,902
Income tax
provision 83,559 84,683 69,834 72,716 310,792
INCOME FROM
CONTINUING
OPERATIONS 223,702 163,458 211,070 216,880 815,110
Loss from
Discontinued
Operations before
Income Tax (9,392) (15,102) (7,562) (63,597) (95,653)
Income Tax Benefit (3,550) (5,712) (2,865) (20,696) (32,823)
NET LOSS FROM
DISCONTINUED
OPERATIONS (5,842) (9,390) (4,697) (42,901) (62,830)
NET INCOME $ 217,860 $ 154,068 $ 206,373 $ 173,979 $ 752,280
EARNINGS PER SHARE
Basic:
Income from
continuing
operations $ 0.90 $ 0.66 $ 0.86 $ 0.88 $ 3.30
Loss from
discontinued
operations $ (0.02) $ (0.04) $ (0.02)$ (0.17) $ (0.25)
Net income (1) $ 0.88 $ 0.62 $ 0.84 $ 0.71 $ 3.04
Diluted:
Income from
continuing
operations $ 0.87 $ 0.63 $ 0.83 $ 0.85 $ 3.18
Loss from
discontinued
operations(1) $ (0.02) $ (0.04) $ (0.02)$ (0.17) $ (0.24)
Net income (1) $ 0.85 $ 0.60 $ 0.81 $ 0.68 $ 2.93
AVERAGE SHARES
OUTSTANDING
Basic 248,046 248,088 246,633 245,522 247,067
Diluted 255,851 258,299 255,070 254,843 256,554
(1) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
REVISED SUPPLEMENTAL INFORMATION
Revised for Blood Glucose Monitoring Discontinued Operations
(Unaudited; Amounts in thousands, except per-share data)
Second Quarter 2006 (1)
As Insurance GeneOhm Excluding
Revised Settlement(2) IPR&D(3) Items
Selling and
administrative $ 346,322 $ 10,000 $ - $ 356,322
as a % of revenues 24.3% 25.0%
Research and
development 127,715 - (53,300) 74,415
as a % of revenues 9.0% 5.2%
Operating Income 251,406 (10,000) 53,300 294,706
as a % of revenues 17.7% 20.7%
Income taxes 84,683 (3,800) - 80,883
effective tax rate 34.1% 27.8%
Income from continuing
operations 163,458 (6,200) 53,300 210,558
as a % of revenues 11.5% 14.8%
Diluted earnings per
share
Income from continuing
operations(4) $ 0.63 $ (0.02) $ 0.21 $ 0.81
Fiscal Year 2006 (1)
As Insurance GeneOhm Excluding
Revised Settlement(2) IPR&D(3) Items
Selling and
administrative $1,448,166 $ 17,000 $ - $1,465,166
as a % of revenues 25.2% 25.5%
Research and
development 355,172 - (53,300) 301,872
as a % of revenues 6.2% 5.3%
Operating Income 1,141,414 (17,000) 53,300 1,177,714
as a % of revenues 19.9% 20.5%
Income taxes 310,792 (6,460) - 304,332
effective tax rate 27.6% 26.2%
Income from continuing
operations 815,110 (10,540) 53,300 857,870
as a % of revenues 14.2% 15.0%
Diluted earnings per
share
Income from continuing
operations(4) $ 3.18 $ (0.04) $ 0.21 $ 3.34
(1) Revised supplemental information is not applicable for the third and
fourth quarters of 2006.
(2) Represents the effect in 2006 related to proceeds received from
insurance settlements in connection with the Company's previously
owned latex glove business.
(3) Represents the IPR&D charge related to the GeneOhm acquisition.
(4) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
SEGMENT RECLASSIFICATION FOR FISCAL 2006 REVENUES
(Unaudited; Amounts in thousands)
United States(1) International(1) Total (1)
Quarter 1 $ 4,357 $ 5,379 $ 9,736
Quarter 2 4,344 4,568 8,912
Quarter 3 4,389 5,085 9,474
Quarter 4 5,432 6,222 11,654
TOTAL $ 18,522 $ 21,254 $ 39,776
(1) Represents the impact of the reclassification of BD Advanced
Bioprocessing revenues from the Diagnostic Systems unit of the BD
Diagnostics Segment to the Discovery Labware unit of the BD
Biosciences segment to conform to the current year presentation.
SOURCE BD (Becton, Dickinson and Company)
Released January 25, 2007