News & Events
BD Announces Fiscal Fourth Quarter and Full Year Results
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Contact: Patricia A. Spinella Investor Relations (201) 847-5453 Email: patricia_spinella@bd.com Colleen T. White Corporate Communications (201) 847-5369 Email: colleen_white@bd.com Franklin Lakes, NJ (November 04, 2004) -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported quarterly revenues from continuing operations of $1.253 billion for the fiscal fourth quarter ended September 30, 2004, representing an increase of 8 percent from the same period a year ago. For the full year, the Company reported record revenues of $4.935 billion from continuing operations, which represents an 11 percent increase over the same period a year ago. At constant foreign exchange rates, revenues increased 5 percent for the quarter and 6 percent for the fiscal year. Revenue growth in all segments benefited from favorable foreign currency translation, particularly with respect to the Euro, for the quarter and the year. "We had a strong finish to a successful year in which BD exceeded its operating goals and showed significant improvement over 2003," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "In the fourth quarter, all segments contributed solid revenue growth, resulting in diluted earnings per share from continuing operations of 70 cents, which exceeded our expectations. For the year, pro forma gross profit margin improvement of 100 basis points and cash flow from operations of over $1 billion were driven by a combination of revenue growth, continued operating effectiveness and productivity improvement." Reported diluted earnings per share for the fourth quarter were 26 cents, which reflected diluted earnings per share of 70 cents from continuing operations, and a loss of 44 cents per share from discontinued operations. Reported diluted earnings per share for the year were $1.77, which reflected diluted earnings per share of $2.21 from continuing operations, and a loss of 44 cents per share from discontinued operations. Included in the results of continuing operations for the year were a first quarter charge of 11 cents related to our blood glucose monitoring products and a third quarter charge of 24 cents related to the settlement of the Retractable Technologies, Inc. litigation. Excluding these items, pro forma diluted earnings per share from continuing operations for fiscal 2004 were $2.56. Reconciliations of these pro forma financial measures and other financial measures discussed in this release are provided in the tables below. Planned Sale of Clontech Operation On October 4, 2004, BD announced that a plan had been initiated to offer Clontech, a unit of the BD Biosciences segment, for sale. The results of operations for Clontech have been classified as "discontinued operations" for all quarters and years referred to in this release. In connection with the planned disposition, BD has recorded a charge in the fourth quarter of 44 cents per diluted share in the results of discontinued operations, reflecting the write-down of Clontech's net assets to estimated fair value. Also included in the results of discontinued operations for the quarter and the year were a loss from operations of $0.1 million and income from operations of $0.7 million, respectively, resulting in an impact of less than 1 cent on reported diluted earnings per share for the quarter and the year. Fourth Quarter and Full Year 2003 Reported diluted earnings per share for the fourth quarter of fiscal year 2003 were 61 cents, which included a net loss from discontinued operations of $0.9 million (less than 1 cent diluted earnings per share). Reported diluted earnings per share for fiscal year 2003 were $2.07 and reflected diluted earnings per share of $2.10 from continuing operations and a loss of 3 cents per share from discontinued operations. The loss from discontinued operations included 2 cents per diluted share related to the write-down of certain intangible assets and inventory and 1 cent per diluted share of operating loss. Also reflected in the full fiscal year 2003 diluted earnings per share from continuing operations were additional charges of 6 cents per diluted share related to the write-down of certain intangible assets and inventory in the BD Biosciences segment unrelated to Clontech. Excluding this 6 cents charge per diluted share, pro forma diluted earnings per share from continuing operations for fiscal 2003 were $2.16. Reconciliations of Reported Results The following tables are provided to assist in reconciling reported diluted earnings per share to diluted earnings per share from continuing operations and pro forma diluted earnings per share from continuing operations: from Continuing Operations and Pro Forma Diluted Earnings Per Share from Continuing Operations
2004 2003 % Growth
Three Months Ended September 30,
Reported Diluted EPS: $ 0.26 $ 0.61
Diluted EPS from Discontinued
Operations:
Loss from Discontinued Operations 0.00(1) 0.00(2)
Write-down of Clontech Net Assets 0.44 -
0.44 0.00
Diluted EPS from Continuing
Operations $ 0.70 $ 0.62(2) 13%
Full Year:
Reported Diluted EPS: $ 1.77 $ 2.07
Diluted EPS from Discontinued
Operations:
(Income)/Loss from Discontinued
Operations(3) (0.00) 0.01
Write-down of Clontech Net Assets 0.44 -
Non-cash charges - 0.02(4)
0.44 0.03
Diluted EPS from Continuing
Operations 2.21 2.10
Pro Forma Adjustments:
BGM Charges 0.11 -
Litigation Settlement 0.24 -
Non-cash charges - 0.06(4)
0.35 0.06
Pro Forma Diluted EPS from
Continuing Operations $ 2.56 $ 2.16 19%
(1) Loss from FY2004 Discontinued Operations of $(0.1) Million is less
than $(0.01) Diluted EPS.
(2) Loss from FY2003 Discontinued Operations of $(0.9) Million is less
than $(0.01) Diluted EPS, however, due to rounding, Diluted EPS from
Continuing Operations is $0.01 higher than Reported Diluted EPS.
(3) Income from FY2004 Discontinued Operations of $0.7 Million is less
than $0.01 Diluted EPS. Loss from FY2003 Discontinued Operations of
$(3.8) Million represents $0.01 Diluted EPS.
(4) Total of $0.08 relates to charges in the third quarter of FY2003,
reflecting write-down of certain intangible assets and inventory in
the BD Biosciences segment, of which $0.02 is related to Clontech.
Segment Results In the BD Medical segment, worldwide revenues for the quarter were $688 million, representing an increase of 8 percent over the prior year period. BD Medical revenues reflect the continued conversion in the U.S. to safety- engineered products, accounting for sales of $118 million compared with $108 million in the prior year's quarter. Also contributing to the growth of the segment were sales of prefillable drug delivery devices, which grew to $126 million from $101 million in the prior year's quarter. U.S. sales of safety- engineered products for the full year in the BD Medical segment totaled $448 million compared with $407 million in the prior year. BD Medical worldwide revenues for the year were $2.680 billion, representing an increase of 9 percent over the prior year. In the BD Diagnostics segment, worldwide revenues for the quarter were $374 million, representing an increase of 8 percent over the prior year period. Revenue growth of 12 percent in the Preanalytical Systems unit of the segment reflects the continued conversion in the U.S. to safety-engineered products, accounting for sales of $85 million, compared with $74 million in the prior year's quarter. U.S. sales of safety-engineered products for the full year in the BD Diagnostics segment totaled $317 million compared with $273 million in the prior year. Total U.S. sales of safety-engineered products for the full year were $765 million compared with $680 million in the prior year, representing an increase of 13 percent. Revenue growth in the Diagnostic Systems unit of the segment was 3 percent for the quarter. Sales of the unit's molecular diagnostic platform, the BD ProbeTec™ ET system, continued to contribute to its growth, while sales of respiratory and flu diagnostic tests for the quarter were lower than the prior year's period due to a shift in the timing of distributor purchases, which are expected to occur over the next two quarters. In the BD Diagnostics segment, worldwide revenues for the full fiscal year were $1.532 billion, representing an increase of 12 percent over the prior year. In the BD Biosciences segment, worldwide revenues from continuing operations for the quarter were $192 million, representing an increase of 7 percent over the prior year period. Instrument revenue growth was driven by sales of the recently launched BD FACSCanto™ and BD FACSArray™ analyzers and continued strong market acceptance of the BD FACSAria™ cell sorter. Fourth quarter sales of flow cytometry reagents were also strong in both the clinical and research markets. BD Biosciences worldwide revenues for the year were $723 million, representing an increase of 14 percent over the prior year. As previously discussed, revenue results exclude sales from the Clontech business unit. Geographic Results Fourth quarter revenues in the U.S. of $631 million represented an increase of 5 percent over the prior year period. Revenues outside the U.S. of $622 million represented an increase of 11 percent over the prior year period, or 6 percent at constant foreign exchange rates. For the full year, revenues in the U.S. of $2.436 billion represented an increase of 6 percent over the prior year. Revenues outside the U.S. of $2.499 billion increased by 15 percent, or 6 percent at constant foreign exchange rates. Fiscal 2005 Outlook The Company estimates pro forma diluted earnings per share from continuing operations for fiscal 2005 will increase in the range of 10 to 12 percent as compared with fiscal 2004 pro forma diluted earnings per share from continuing operations of $2.56, excluding the anticipated impact of expensing equity-based compensation as described below. The Company also estimates that first quarter 2005 pro forma diluted earnings per share from continuing operations will increase about 7 percent, compared with fiscal first quarter 2004 pro forma diluted earnings per share from continuing operations of 58 cents, which excludes the previously noted charge of 11 cents per diluted share related to our blood glucose monitoring products. Anticipated first quarter growth is affected by the timing of respiratory and flu diagnostic sales, which occurred in the fiscal first quarter of last year due to an early expectation of an unusually severe flu season. Equity-Based Compensation The Company anticipates that it will adopt, in the first quarter of fiscal 2005, the fair value recognition provisions for stock-based compensation in accordance with Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." As a result, prior unvested stock options and new equity-based awards issued pursuant to the Company's previously approved long-term incentive program (which replaces, in part, grants of stock options with performance-based stock awards and restricted stock units), will begin to be expensed. These changes, in the aggregate, are estimated to reduce full year fiscal 2005 pro forma diluted earnings per share from continuing operations by about 6 percent. Conference Call Information A conference call regarding BD's fourth quarter and full year results and expectations for fiscal 2005 will be broadcast live on BD's website (www.bd.com/investors) at 10:00 a.m. (ET) Thursday, November 4, 2004. A replay of the conference call will be available on the investors page of BD's website or at 1-800-685-8573 (domestic) and 1-402-220-0286 (international) through Thursday, November 11, 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 the news 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, 2004, BD reported revenues of $4.935 billion. This press release, including the section entitled "Fiscal 2005 Outlook," contains 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. With respect to statements regarding the charge BD recorded in the fourth quarter of fiscal 2004, factors that could cause actual results to vary materially from any forward-looking statement include, but are not limited to: BD's ability to successfully complete the proposed divestiture within the expected time frame; and the structure of any transaction involving a divestiture of Clontech and the purchase price and other terms relating thereto. With respect to other 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; increases in energy costs; fluctuations in costs and availability of raw materials and in BD's ability to maintain favorable supplier arrangements and relationships; and changes in healthcare or other governmental regulation; 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.
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