News & Events
BD Announces Fiscal First Quarter Revenue and Earnings Growth
|
Results Include Charge of 11 Cents Per Share Related to Actions Taken in Connection With Blood Glucose Monitoring Products
Contact: Colleen T. White Corporate Communications (201) 847-5369 Email: colleen_white@bd.com Patricia A. Spinella Investor Relations (201) 847-5453 Email: patricia_spinella@bd.com Franklin Lakes, NJ (January 29, 2004) -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported record revenues of $1.2 billion for the fiscal first quarter ended December 31, 2003, an increase of 14 percent from the same period a year ago. Revenue growth in all segments benefited from favorable foreign currency translation, particularly with respect to the Euro. Excluding the favorable impact of foreign exchange rates, revenues increased 7 percent. Diluted earnings per share and net income for the quarter were 48 cents and $125 million, respectively. For the same period in fiscal 2003, diluted earnings per share and net income were 43 cents and $114 million, respectively. Included in the first quarter results of fiscal 2004 was a charge of $45 million related to certain actions taken in connection with our blood glucose monitoring products, which are sold by the BD Medical segment. This charge reduced net income by $28 million and diluted earnings per share by 11 cents. Excluding the charge of 11 cents, fully diluted earnings per share for the quarter were 59 cents. "BD's strong underlying performance was the result of solid revenue growth and continued improvement in operating effectiveness. Sales growth was driven, in particular, by exceptionally strong sales of respiratory and flu diagnostic tests, as well as our broad line of safety-engineered products, immunocytometry instruments and reagents, and the BD ProbeTec™ ET system," said Edward J. Ludwig, BD Chairman, President and Chief Executive Officer. "We are also pleased that our gross profit margin, excluding the blood glucose monitoring charge, continues to improve." The $45 million charge for blood glucose monitoring products, recorded in cost of products sold, includes a reserve established in connection with the planned voluntary recall of certain lots of test strips, to be announced separately today, and the write-off of certain test strip inventories. The charge also reflects the Company's decision to focus its sales and marketing efforts on the BD Logic™ and Paradigm Link™ blood glucose meters, and to discontinue supply of the BD Latitude™ system product offering in the U.S., resulting in a write-off of related blood glucose meters and fixed assets. BD is undertaking the product recall and related inventory write-off as a result of a product performance issue that recently emerged. The issue involves an increase in the frequency of "E-3" messages during blood glucose testing. E-3 messages are a protective feature of the meter to signal that the meter is unable to obtain a reading from the test strip for various reasons. Based upon internal testing, it was determined that certain test strip lots were not performing within BD's specifications for E-3 messages. To maintain the highest product quality standards and ensure customer satisfaction, BD decided to recall the affected lots and dispose of non- conforming product in inventory. BD has a sufficient remaining quantity of test strips in inventory to replace the recalled product and to continue supplying the market. As a result, the Company anticipates that any customer impacts from these actions will be short term in nature. Segment Results In the BD Medical segment, worldwide revenues of $627 million increased 10 percent in the quarter, driven by U.S. safety-engineered product sales of $112 million, versus $100 million in the prior year's quarter. The overall growth rate in the segment was partly affected by reduced sales of certain conventional devices in the U.S. due to the transition to safety-engineered devices and sales growth in the Pharmaceutical Systems unit being lower than recent quarters. In the BD Diagnostics segment, worldwide revenues increased 21 percent for the quarter to $401 million. Revenue growth of 11 percent in the Preanalytical Systems unit of the segment was due primarily to strong U.S. safety-engineered product sales, which were $76 million, versus $65 million in the prior year's quarter, and which were partly affected by reduced sales of certain conventional devices in the U.S. due to the transition to safety-engineered devices. Revenues in the Diagnostic Systems unit of the segment grew 31 percent based on exceptionally strong sales of respiratory and flu diagnostic tests in Japan and the U.S., and an increase in worldwide sales of the BD ProbeTec™ ET molecular diagnostic platform. Revenues in the BD Biosciences segment grew 16 percent to $172 million for the quarter. These results reflected strong sales of the BD FACSAria™ cell sorter, which BD Biosciences began shipping at the end of the second fiscal quarter of 2003, along with strong sales of flow cytometry reagents. This growth was partly affected by continued weak demand of certain Clontech reagents. Geographic Results On a geographic basis, first quarter revenues in the U.S. increased 6 percent to $592 million. Revenues outside the U.S. of $608 million grew 23 percent, or 9 percent at constant foreign exchange rates. International revenues in the first quarter benefited from strong performance in Japan, which experienced exceptionally strong sales of respiratory and flu diagnostic tests. Fiscal 2004 Outlook The Company estimates diluted earnings per share for fiscal 2004, including the charge of 11 cents per share for blood glucose monitoring products, will increase in the range of 10 to 12 percent. This estimate is based on fiscal 2003 pro forma earnings per share of $2.15, which excludes 8 cents of non-cash charges related to the write-down of certain intangible assets and inventory in the BD Biosciences segment. The Company estimates that second quarter diluted earnings per share will increase approximately 10 to 12 percent, based on fiscal second quarter 2003 diluted earnings per share of $0.54. Conference Call Information A conference call regarding BD's first quarter results and its expectations for the second quarter and full fiscal year will be broadcast live on BD's website, www.bd.com/investors, at 10:00 a.m. (ET) Thursday, January 29, 2004. The conference call will be available for replay on BD's website www.bd.com/investors, or at 1-888-568-0139 (domestic) and 1-402-530-7805 (international) through the close of business on February 5, 2004. 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. BD is a medical technology company that serves healthcare institutions, life science researchers, clinical laboratories, industry and the general public. BD manufactures and sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products. For the fiscal year ended September 30, 2003, BD reported total revenues of $4.528 billion. BECTON DICKINSON AND COMPANY
CONSOLIDATED INCOME STATEMENTS
(Unaudited; Amounts in thousands, except per-share data)
Three Months Ended December 31,
2003 2002 % Change
REVENUES $1,199,531 $1,051,648 14.1%
Cost of products sold 640,884 550,039 16.5%
Selling and administrative 329,620 284,181 16.0%
Research and development 60,653 59,845 1.4%
TOTAL OPERATING COSTS AND EXPENSES 1,031,157 894,065 15.3%
OPERATING INCOME 168,374 157,583 6.8%
Interest expense, net (8,929) (8,633) 3.4%
Other income (expense), net (46) 84 NM
INCOME BEFORE INCOME TAXES 159,399 149,034 7.0%
Income tax provision 33,997 35,396 -4.0%
NET INCOME $125,402 $113,638 10.4%
EARNINGS PER SHARE
Basic $0.50 $0.44 13.6%
Diluted $0.48 $0.43 11.6%
AVERAGE SHARES OUTSTANDING
Basic 252,132 255,286
Diluted 261,872 263,081
NM - Not Meaningful
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Three Months Ended December 31,
2003 2002 % Change
BD MEDICAL
United States $303,748 $296,426 2.5%
International 323,120 275,211 17.4%
TOTAL $626,868 $571,637 9.7%
BD DIAGNOSTICS
United States $212,917 $191,532 11.2%
International 188,028 140,122 34.2%
TOTAL $400,945 $331,654 20.9%
BD BIOSCIENCES
United States $75,029 $69,337 8.2%
International 96,689 79,020 22.4%
TOTAL $171,718 $148,357 15.7%
TOTAL REVENUES
United States $591,694 $557,295 6.2%
International 607,837 494,353 23.0%
TOTAL $1,199,531 $1,051,648 14.1%
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,
(Unaudited; Amounts in thousands)
United States
2003 2002 % Change
BD MEDICAL
Medical Surgical Systems $198,519 $192,751 3.0%
Diabetes Care 74,849 75,496 -0.9%
Pharmaceutical Systems 24,355 21,527 13.1%
Ophthalmic Systems 6,025 6,652 -9.4%
TOTAL $303,748 $296,426 2.5%
BD DIAGNOSTICS
Preanalytical Systems $106,627 $101,023 5.5%
Diagnostic Systems 106,290 90,509 17.4%
TOTAL $212,917 $191,532 11.2%
BD BIOSCIENCES
Discovery Labware $23,415 $23,120 1.3%
Immunocytometry Systems 28,768 23,199 24.0%
Clontech 6,853 7,863 -12.8%
Pharmingen 15,993 15,155 5.5%
TOTAL $75,029 $69,337 8.2%
TOTAL UNITED STATES $591,694 $557,295 6.2%
International
% Change
2003 2002 Reported FX FX
Neutral Impact
BD MEDICAL
Medical Surgical Systems $176,324 $152,768 15.4% 3.4% 12.0%
Diabetes Care 58,177 44,049 32.1% 15.4% 16.7%
Pharmaceutical Systems 80,844 71,718 12.7% -3.3% 16.0%
Ophthalmic Systems 7,775 6,676 16.5% 3.9% 12.6%
TOTAL $323,120 $275,211 17.4% 3.6% 13.8%
BD DIAGNOSTICS
Preanalytical Systems $78,353 $66,180 18.4% 4.6% 13.8%
Diagnostic Systems 109,675 73,942 48.3% 33.3% 15.0%
TOTAL $188,028 $140,122 34.2% 19.7% 14.5%
BD BIOSCIENCES
Discovery Labware $21,468 $18,755 14.5% 1.2% 13.3%
Immunocytometry Systems 53,376 40,853 30.7% 16.9% 13.8%
Clontech 7,500 7,892 -5.0% -15.3% 10.3%
Pharmingen 14,345 11,520 24.5% 8.5% 16.0%
TOTAL $96,689 $79,020 22.4% 8.7% 13.7%
TOTAL INTERNATIONAL $607,837 $494,353 23.0% 9.0% 14.0%
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
Reported FX FX
2003 2002 Neutral Impact
BD MEDICAL
Medical Surgical Systems $374,843 $345,519 8.5% 3.2% 5.3%
Diabetes Care 133,026 119,545 11.3% 5.1% 6.2%
Pharmaceutical Systems 105,199 93,245 12.8% 0.5% 12.3%
Ophthalmic Systems 13,800 13,328 3.5% -2.8% 6.3%
TOTAL $626,868 $571,637 9.7% 3.0% 6.7%
BD DIAGNOSTICS
Preanalytical Systems $184,980 $167,203 10.6% 5.2% 5.4%
Diagnostic Systems 215,965 164,451 31.3% 24.6% 6.7%
TOTAL $400,945 $331,654 20.9% 14.8% 6.1%
BD BIOSCIENCES
Discovery Labware $44,883 $41,875 7.2% 1.2% 6.0%
Immunocytometry Systems 82,144 64,052 28.2% 19.5% 8.7%
Clontech 14,353 15,755 -8.9% -14.1% 5.2%
Pharmingen 30,338 26,675 13.7% 6.8% 6.9%
TOTAL $171,718 $148,357 15.7% 8.5% 7.2%
TOTAL REVENUES $1,199,531 $1,051,648 14.1% 7.5% 6.6%
BECTON DICKINSON AND COMPANY
RECONCILIATION TO PRO FORMA AMOUNTS
Three Months Ended December 31,
(Unaudited; Amounts in thousands, except per-share data)
2003
As BGM Excluding
Reported Charges* Charges
Gross Profit $558,647 $45,024 $603,671
as a % of revenues 46.6% 50.3%
Operating Income 168,374 45,024 213,398
as a % of revenues 14.0% 17.8%
Net Income 125,402 27,915 153,317
as a % of revenues 10.5% 12.8%
Diluted EPS 0.48 0.11 0.59
* Relates to the fiscal 2004 charge associated with blood glucose
monitoring (BGM) products.
BECTON DICKINSON AND COMPANY
RECONCILIATION TO PRO FORMA AMOUNTS
Twelve Months Ended September 30,
(Unaudited)
2003
As Non-cash Excluding
Reported Charges Charges
Diluted EPS $ 2.07 $ 0.08 ** $ 2.15
** Relates to the fiscal 2003 write-down of certain intangible assets and
inventory in the BD Biosciences segment.
This press release may contain certain forward-looking statements (as defined under Federal securities laws) regarding BD's performance, including future revenues, products 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. 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; uncertainties of litigation; BD's ability to achieve sales and earnings forecasts, which are based on sales volume and product mix assumptions, to achieve its cost savings objectives, and to achieve anticipated synergies and other cost savings in connection with acquisitions; changes in regional, national or foreign economic conditions; increases in energy costs; fluctuations in costs and availability of raw materials and in BD's ability to maintain favorable supplier arrangements and relationships; changes in interest or foreign currency exchange rates; delays in product introductions; and changes in health care or other governmental regulation, 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.
|