News & Events
BD Announces Results for Fiscal First Quarter
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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 (January 26, 2005) -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported record quarterly revenues of $1.288 billion for the fiscal first quarter ended December 31, 2004, representing an increase of 9 percent from the same period a year ago. At constant foreign exchange rates, revenues increased 6 percent for the quarter. Revenue growth in all segments benefited from favorable foreign currency translation, particularly with respect to the Euro. "We're off to a strong start for fiscal 2005 with all business segments contributing solid results. Our global revenue growth, disciplined cost control and supply chain productivity continue to deliver earnings increases," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "This strong performance is enabling us to increase our investments in innovation and growth for the future." Reported diluted earnings per share for the first quarter were 75 cents. On October 4, 2004, BD announced that a plan had been initiated to offer Clontech, a unit of the BD Biosciences segment, for sale; therefore, the results of operations from Clontech have been classified as "discontinued operations." Income from discontinued operations for the first quarter of $1.0 million is less than 1 cent per diluted share; however, due to rounding, diluted earnings per share from continuing operations were 74 cents. Analyses of First Quarter Fiscal Year 2005 and 2004 Earnings The following analyses of diluted earnings per share from continuing operations have been provided to reconcile to pro forma diluted earnings per share from continuing operations for the first quarters of fiscal 2005 and 2004. (Q1 FY2005) (Q1 FY2004)
Three Months Ended December 31, 2004 2003 % Increase
Diluted EPS from
Continuing Operations: $0.74 $0.48 54%
Pro Forma Adjustments:
Tax Examinations(1) (0.04) -
Tax Rate Impact(2) (0.02) -
Share-Based Compensation Expense(3) 0.03 -
BGM Charge(4) - 0.11
(0.03) 0.11
Rounding - (0.01)
Pro Forma Diluted EPS from
Continuing Operations: $0.71 $0.58 22%
(1) Included in diluted earnings per share from continuing operations for
the first quarter of fiscal 2005 is approximately 4 cents per diluted
share due to the reversal of tax reserves in connection with the
conclusion of tax examinations in four non-U.S. jurisdictions.
(2) Represents the effect on diluted earnings per share from continuing
operations of tax-related events that caused the quarter's tax rate to
vary from the expected effective tax rate for the year. The expected
effective tax rate for the year, without taking into account the tax
impact of the items described in notes (1) and (3) herein, is 25.5%.
(3) Included in diluted earnings per share from continuing operations is
approximately 3 cents per diluted share related to share-based
compensation expense recorded in connection with the early adoption of
FASB Statement No.123 (revised), and the restricted stock awards
granted under the new long-term incentive program, both of which
occurred this quarter and are described below.
(4) Included in the first quarter of fiscal 2004 diluted earnings per
share from continuing operations is a charge of 11 cents per diluted
share related to the voluntary recall and write-off of certain blood
glucose strip inventory and other actions taken with respect to our
blood glucose monitoring products.
Based on the foregoing analyses, pro forma diluted earnings per share from continuing operations of 71 cents for the fiscal first quarter of 2005 increased by 22 percent over pro forma diluted earnings per share from continuing operations of 58 cents for the fiscal first quarter of 2004. Share-Based Compensation As planned, effective October 1, 2004, the Company adopted FASB Statement No.123 (revised) relating to the expensing of share-based incentive awards. Diluted earnings per share from continuing operations for the first quarter included 3 cents of share-based compensation expense associated with the adoption and the restricted stock awards granted under the new long-term incentive program, which consisted of a mix of performance-based restricted stock awards, time-vested restricted stock awards and stock options or stock appreciation rights. We estimate that total share-based compensation expense for the fiscal year 2005 will be about 17 cents per diluted share. Segment Results In the BD Medical segment, worldwide revenues for the quarter were $694 million, representing an increase of 11 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 $126 million compared with $114 million in the prior year's quarter. Included in BD Medical revenues were international sales of safety-engineered products of $18 million, compared with $14 million in the prior year's quarter. Also contributing to the growth of the segment were strong sales in the Diabetes Care unit. In the BD Diagnostics segment, worldwide revenues for the quarter were $414 million, representing an increase of 3 percent over the prior year period. Revenue growth of 13 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 $86 million, compared with $76 million in the prior year's quarter. Included in Preanalytical Systems revenues were international sales of safety-engineered products of $42 million, compared with $29 million in the prior year's quarter. As anticipated, and despite strong sales from the BD ProbeTec™ ET and BD Phoenix™ instruments, revenues in the Diagnostic Systems unit of the segment declined 5 percent from the prior year's quarter. The first quarter of fiscal 2004 benefited from exceptionally strong sales of flu tests in Japan and the U.S., which did not recur in this year's fiscal first quarter. In the BD Biosciences segment, worldwide revenues from continuing operations for the quarter were $181 million, representing an increase of 15 percent over the prior year period. Instrument revenue growth was primarily driven by sales of the recently launched BD FACSCanto™ analyzer. Continued strong market acceptance of the BD FACSAria™ cell sorter also contributed to sales. First quarter sales of flow cytometry reagents were also strong in both the clinical and research markets. Geographic Results First quarter revenues in the U.S. of $624 million represented an increase of 7 percent over the prior year period. Revenues outside the U.S. of $664 million represented an increase of 11 percent over the prior year period, or 5 percent at constant foreign exchange rates. Fiscal 2005 Outlook for Second Quarter and Full Year The following analyses of estimated diluted earnings per share from continuing operations have been provided to reconcile to estimated pro forma diluted earnings per share from continuing operations for the fiscal 2005 second quarter and full year. Quarter 2 Full Year
Estimated FY2005 FY2004 % FY2005 FY2004 %
Increase Increase
Diluted EPS from
Continuing Operations: $0.64- $2.76-
$0.65(1) $0.62 3%-5% $2.81(1) $2.21 25%-27%
Pro Forma Adjustments:
Tax Examinations(2) - - (0.04) -
Tax Rate Impact(3) 0.020 - - -
Share-Based
Compensation
Expense(4) 0.045 - 0.17 -
BGM Charges(5) - - - 0.11
Litigation
Settlement(5) - - - 0.24
0.065 - 0.13 0.35
Pro Forma Diluted EPS
from Continuing
Operations: $0.70- $2.89-
$0.72 $0.62 13-16% $2.94 $2.56 13%-15%
(1) Fiscal 2005 second quarter and full year estimated diluted earnings
per share from continuing operations do not include the impact on
taxes that would result if the Company were to repatriate certain
undistributed earnings of foreign subsidiaries under the American Jobs
Creation Act of 2004.
(2) Represents diluted earnings per share from continuing operations due
to the reversal of tax reserves in the first quarter in connection
with the conclusion of tax examinations in four non-U.S.
jurisdictions.
(3) Represents the effect on diluted earnings per share from continuing
operations of tax-related events that causes the quarter's tax rate to
vary from the expected effective tax rate for the year. The expected
effective tax rate for the year, without taking into account the tax
impact of the items described in notes (1), (2) and (4) herein, is
25.5%.
(4) Represents the effect on diluted earnings per share from continuing
operations relating to share-based compensation expense associated
with the early adoption of FASB Statement No.123 (revised),
and the restricted stock awards granted under the new long-term
incentive program.
(5) Included in full year fiscal 2004 diluted earnings per share from
continuing operations was a third quarter charge of 24 cents per
diluted share related to the settlement of the Retractable
Technologies, Inc. litigation, in addition to the previously noted
first quarter BGM charge of 11 cents per diluted share.
The Company estimates that second quarter 2005 pro forma diluted earnings per share from continuing operations will increase in the range of 13 to 16 percent as compared with fiscal second quarter 2004 diluted earnings per share from continuing operations of 62 cents. The Company also estimates pro forma diluted earnings per share from continuing operations for fiscal 2005 will increase in the range of 13 to 15 percent compared with fiscal 2004 pro forma diluted earnings per share from continuing operations of $2.56. 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, http://www.bd.com/investors, at 10:00 a.m. (ET) Wednesday, January 26, 2005. The conference call will be available for replay on BD's website, http://www.bd.com/investors, or at 1-800-475-6701 (domestic) and 1-320-365-3844 (international) through the close of business on February 2, 2005. 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, 2004, BD reported total revenues of $4.935 billion. This press release, including the section entitled "Fiscal 2005 Outlook for Second Quarter and 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; increases in energy costs and their effect on, among other things, the cost of producing the Company'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) 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. BECTON DICKINSON AND COMPANY
CONSOLIDATED INCOME STATEMENTS
(Unaudited; Amounts in thousands, except per-share data)
Three Months Ended December 31,
2004 2003 % Change
REVENUES $1,288,369 $1,185,120 8.7
Cost of products sold 634,501 (1) 634,255 (2) 0.0
Selling and administrative 341,088 (1) 324,097 5.2
Research and development 62,083 (1) 58,288 6.5
TOTAL OPERATING COSTS
AND EXPENSES 1,037,672 1,016,640 2.1
OPERATING INCOME 250,697 168,480 48.8
Interest expense, net (9,122) (8,928) 2.2
Other expense, net (2,861) (911) NM
INCOME FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 238,714 158,641 50.5
Income tax provision 44,316 33,716 31.4
INCOME FROM CONTINUING
OPERATIONS 194,398 124,925 55.6
INCOME FROM DISCONTINUED
OPERATIONS NET OF INCOME
TAXES OF $623 IN 2005 AND
$281 IN 2004, RESPECTIVELY 953 477 NM
NET INCOME $195,351 $125,402 55.8
EARNINGS PER SHARE
Basic:
Income from continuing
operations $0.77 $0.49 57.1
Income from discontinued
operations $- (3) $- -
Net income $0.78 $0.50 56.0
Diluted:
Income from continuing
operations $0.74 $0.48 54.2
Income from discontinued
operations $- (3) $- -
Net income $0.75 $0.48 56.3
AVERAGE SHARES OUTSTANDING
Basic 251,232 252,132
Diluted 261,970 261,872
NM - Not Meaningful
(1) Includes share-based compensation expense relating to the adoption of
SFAS No. 123 (revised).
(2) Includes a $45,024 charge associated with blood glucose monitoring
(BGM) products.
(3) Includes income of less than $0.01 of diluted earnings per share,
however due to rounding, basic and diluted EPS is $0.01 higher than
basic and diluted earnings per share from continuing operations.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended December 31,
(Unaudited; Amounts in thousands, except per-share data)
2004 (Q1 FY2005)
Share- Tax
Based Tax Rate
As Compen- Exami- Impact Excluding
Reported sation(1) nations(2) (3) Items
Cost of products sold $634,501 $(1,548) $- $- $632,953
as a % of revenues 49.2% 49.1%
Gross profit 653,868 1,548 - - 655,416
as a % of revenues 50.8% 50.9%
Selling and
administrative 341,088 (9,108) - - 331,980
as a % of revenues 26.5% 25.8%
Research and
development 62,083 (934) - - 61,149
as a % of revenues 4.8% 4.7%
Operating Income 250,697 11,590 - - 262,287
as a % of revenues 19.5% 20.4%
Income taxes 44,316 3,096 11,265 5,150 63,827
effective tax rate 18.6% 25.5%
Income from continuing
operations 194,398 8,494 (11,265) (5,150) 186,477
as a % of revenues 15.1% 14.5%
Diluted earnings per share
Income from continuing
operations 0.74 0.03 (0.04) (0.02) 0.71
Income from discontinued
operations (4) - - - - -
Diluted earnings per share 0.75 0.03 (0.04) (0.02) 0.72
(1) Relates to the adoption of SFAS No. 123 (revised), "Share-Based
Payment". Fiscal 2004 amounts have not been restated.
(2) Relates to the reversal of tax reserves in connection with the
conclusion of tax examinations in four non-U.S. jurisdictions.
(3) Represents the effect on diluted earnings per share from continuing
operations of tax-related events that caused the quarter's tax rate to
vary from the expected effective tax rate for the year. The expected
effective tax rate for the year, without taking into account the tax
impact of items described in notes (1) and (2) herein, is 25.5%.
(4) Includes income of less than $0.01 of diluted earnings per share,
however due to rounding, basic and diluted EPS is $0.01 higher than
basic and diluted earnings per share from continuing operations.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended December 31,
(Unaudited; Amounts in thousands, except per-share data)
2003 (Q1 FY2004)
BGM
As Charges Excluding
Reported (5) Charges
Gross Profit $550,865 $45,024 $595,889
as a % of revenues 46.5% 50.3%
Operating Income 168,480 45,024 213,504
as a % of revenues 14.2% 18.0%
Income from continuing operations 124,925 27,915 152,840
as a % of revenues 10.5% 12.9%
Diluted earnings per share
Income from continuing operations 0.48 0.11 0.58
Income from discontinued operations(4) - - -
Diluted earnings per share 0.48 0.11 0.59
(4) Includes income of less than $0.01 of diluted earnings per share,
however due to rounding, basic and diluted EPS is $0.01 higher than
basic and diluted earnings per share from continuing operations.
(5) Relates to the fiscal 2004 charge associated with blood glucose
monitoring (BGM) products.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Three Months Ended December 31,
2004 2003 % Change
BD MEDICAL
United States $329,654 $303,748 8.5
International 364,168 323,120 12.7
TOTAL $693,822 $626,868 10.7
BD DIAGNOSTICS
United States $218,708 $212,917 2.7
International 195,075 188,028 3.7
TOTAL $413,783 $400,945 3.2
BD BIOSCIENCES
United States $75,697 $68,176 11.0
International 105,067 89,131 17.9
TOTAL $180,764 $157,307 14.9
TOTAL REVENUES
United States $624,059 $584,841 6.7
International 664,310 600,279 10.7
TOTAL $1,288,369 $1,185,120 8.7
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,
(Unaudited; Amounts in thousands)
United States
2004 2003 % Change
BD MEDICAL
Medical Surgical Systems $215,506 $198,519 8.6
Diabetes Care 88,461 74,849 18.2
Pharmaceutical Systems 20,049 24,355 (17.7)
Ophthalmic Systems 5,638 6,025 (6.4)
TOTAL $329,654 $303,748 8.5
BD DIAGNOSTICS
Preanalytical Systems $114,763 $106,627 7.6
Diagnostic Systems 103,945 106,290 (2.2)
TOTAL $218,708 $212,917 2.7
BD BIOSCIENCES
Discovery Labware $24,094 $23,415 2.9
Immunocytometry Systems 34,694 28,768 20.6
Pharmingen 16,909 15,993 5.7
TOTAL $75,697 $68,176 11.0
TOTAL UNITED STATES $624,059 $584,841 6.7
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
FX FX
2004 2003 Reported Neutral Impact
BD MEDICAL
Medical Surgical Systems $194,058 $176,324 10.1 4.6 5.5
Diabetes Care 70,217 58,177 20.7 14.1 6.6
Pharmaceutical Systems 90,636 80,844 12.1 4.9 7.2
Ophthalmic Systems 9,257 7,775 19.1 11.5 7.6
TOTAL $364,168 $323,120 12.7 6.6 6.1
BD DIAGNOSTICS
Preanalytical Systems $93,758 $78,353 19.7 13.1 6.6
Diagnostic Systems 101,317 109,675 (7.6) (12.4) 4.8
TOTAL $195,075 $188,028 3.7 (1.8) 5.5
BD BIOSCIENCES
Discovery Labware $22,869 $21,468 6.5 0.7 5.8
Immunocytometry Systems 65,406 53,318 22.7 15.9 6.8
Pharmingen 16,792 14,345 17.1 11.1 6.0
TOTAL $105,067 $89,131 17.9 11.5 6.4
TOTAL INTERNATIONAL $664,310 $600,279 10.7 4.7 6.0
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
FX FX
2004 2003 Reported Neutral Impact
BD MEDICAL
Medical Surgical Systems $409,564 $374,843 9.3 6.7 2.6
Diabetes Care 158,678 133,026 19.3 16.4 2.9
Pharmaceutical Systems 110,685 105,199 5.2 (0.4) 5.6
Ophthalmic Systems 14,895 13,800 7.9 3.7 4.2
TOTAL $693,822 $626,868 10.7 7.5 3.2
BD DIAGNOSTICS
Preanalytical Systems $208,521 $184,980 12.7 9.9 2.8
Diagnostic Systems 205,262 215,965 (5.0) (7.4) 2.4
TOTAL $413,783 $400,945 3.2 0.6 2.6
BD BIOSCIENCES
Discovery Labware $46,963 $44,883 4.6 1.8 2.8
Immunocytometry Systems 100,100 82,086 21.9 17.6 4.3
Pharmingen 33,701 30,338 11.1 8.3 2.8
TOTAL $180,764 $157,307 14.9 11.3 3.6
TOTAL REVENUES $1,288,369 $1,185,120 8.7 5.7 3.0
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended,
(Unaudited; Amounts in thousands)
2004 International Safety Revenues
International Safety Revenues
December 31, March 31, June 30, September 30,
Segment 2003 2004 2004 2004 Total
Medical $14,484 $16,794 $15,952 $16,040 $63,270
Diagnostics 29,431 34,388 36,925 39,300 140,044
Total $43,915 $51,182 $52,877 $55,340 $203,314
2004 U.S. Safety Revenues (revised) (*)
U.S. Safety Revenues (revised)
December 31, March 31, June 30, September 30,
Segment 2003 2004 2004 2004 Total
Medical $114,360 $109,901 $113,179 $121,511 $458,951
Diagnostics 75,626 75,354 80,157 85,377 316,514
Total $189,986 $185,255 $193,336 $206,888 $775,465
U.S. Safety Revenues (previously reported)
December 31, March 31, June 30, September 30,
Segment 2003 2004 2004 2004 Total
Medical $112,488 $107,418 $110,220 $118,076 $448,202
Diagnostics 75,626 75,354 80,157 85,377 316,514
Total $188,114 $182,772 $190,377 $203,453 $764,716
(*) Restated to reflect a refinement of products classified as Safety.
Other Information
Included in the Ten-Year Summary of Selected Financial Data on page 22 of
the Company's 2004 Annual Report, is the caption "Income from Continuing
Operations Before Income Taxes". For the Company's fiscal year 2001, the
amount referenced of $535.2 million included footnote reference (C) which
reads "Excludes the cumulative effect of accounting changes". The
correct footnote reference should be (A) which reads "Includes cumulative
effect of accounting change of $36.8 ($.14 per basic and diluted share)."
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