News & Events
BD Announces Results for First Fiscal 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, 2006) -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported record quarterly revenues of $1.414 billion for the first fiscal quarter ended December 31, 2005, representing an increase of 10 percent over the prior year period. This quarter's growth rate reflects an overall estimated 1 percent unfavorable impact from foreign currency translation, which affected all segments. "Our strong performance this quarter, and over the last five years, demonstrates that our strategy to drive growth through innovation, expand our margins by improving operating effectiveness and generate strong cash flow is working," said Edward J. Ludwig, Chairman, President and Chief Executive Officer. "This strong performance enables us to continue to return value to shareholders and provides us the capacity to invest for the future. We are doing this primarily by increasing the pace of R&D spending and, as appropriate, through strategic investments, such as our recent agreement to acquire GeneOhm Sciences to drive our molecular diagnostics strategy." Analysis of First Quarter Fiscal Year 2006 and 2005 Earnings The following analysis of diluted earnings per share from continuing operations for the first quarter of fiscal 2006 and 2005 identifies specified items that affect comparability of results between periods. (Table 1) Three Months Ended December 31,
FY2006 FY2005 % Incr.
Diluted EPS from Continuing Operations $0.85 $0.74 15%
Specified Items:
Insurance Settlement(1) (0.02)
Tax Examinations(2) - (0.04)
Tax Rate Impact(3) - (0.02)
(0.02) (0.06)
Diluted EPS from Continuing Operations
Excluding Specified Items $0.83 $0.68 22%
(1) Represents the effect on diluted earnings per share from continuing
operations of proceeds from insurance settlement concluded in the
first fiscal quarter 2006.
(2) Represents the effect on diluted earnings per share from continuing
operations of 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 first fiscal quarter
2005 tax rate to vary from the then expected effective tax rate for
fiscal 2005.
Based on the foregoing analysis, diluted earnings per share from continuing operations, excluding specified items, for the first fiscal quarter of 2006 of 83 cents increased by 22 percent over diluted earnings per share from continuing operations, excluding specified items, of 68 cents for the first fiscal quarter of 2005. Segment Results In the BD Medical segment, worldwide revenues for the quarter were $771 million, representing an increase of 11 percent over the prior year period. Strong sales in the Pharmaceutical Systems and Diabetes Care units contributed to growth. U.S. sales of safety-engineered products totaled $132 million, compared with $126 million in the prior year's quarter. Included in BD Medical revenues were international sales of safety-engineered products of $22 million, compared with $18 million in the prior year's quarter. In the BD Diagnostics segment, worldwide revenues for the quarter were $444 million, representing an increase of 7 percent over the prior year period. The Diagnostic Systems unit of the segment reported revenue growth of 8 percent, due primarily to strong sales of flu diagnostic tests, which totaled $27 million, compared with $18 million in the prior year's period. Solid sales growth from the BD ProbeTec(TM) and BD Phoenix(TM) instrument platforms also contributed to growth. The Preanalytical Systems unit of the segment reported revenue growth of 7 percent. U.S. sales of safety-engineered products totaled $96 million, compared with $86 million in the prior year's quarter. International sales of safety-engineered products totaled $52 million, compared with $42 million in the prior year's quarter. In the BD Biosciences segment, worldwide revenues for the quarter were $200 million, representing an increase of 10 percent over the prior year period. Research instruments and reagent sales continued to be the primary growth contributors, driven by increased demand for both research analyzers and sorters. Geographic Results First quarter revenues in the U.S. were $681 million, representing an increase of 9 percent over the prior year period. Revenues outside the U.S. were $733 million, representing an increase of 10 percent over the prior year period, and reflect an estimated 2 percent unfavorable impact from foreign currency translation. Planned Acquisition of GeneOhm Sciences, Inc. On January 10, 2006 BD announced that it had signed an agreement to acquire GeneOhm Sciences, Inc. ("the acquisition"), a privately held company that has pioneered the development of molecular diagnostic testing for the rapid detection of bacterial organisms, including those known to cause healthcare-associated infections (HAIs). The acquisition is subject to regulatory approval and is expected to close by the end of March 2006. As a result of the acquisition, the Company expects its diluted earnings per share from continuing operations would be reduced by an estimated 1 cent for the second quarter and 7 cents for the full fiscal year 2006 (see Table 2 below). In addition, the Company would reflect an in-process research and development charge, which would further reduce estimated diluted earnings per share from continuing operations by approximately 20 to 25 cents. Fiscal 2006 Outlook for Full Year and Second Quarter - Refer to Table 2 Below The Company estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 9-11 percent for the full fiscal year 2006 over diluted earnings per share from continuing operations, excluding specified items, of $2.88 for the fiscal year 2005. The Company also estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 6-7 percent for the second fiscal quarter of 2006 over diluted earnings per share from continuing operations of 71 cents for the second fiscal quarter of 2005. For the six-month period ending March 31, 2006, the Company estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 14-15 percent over diluted earnings per share from continuing operations, excluding specified items, of $1.38 for the prior year period. Consistent with our initial fiscal year guidance on November 3, 2005, second half fiscal year 2006 diluted earnings per share from continuing operations, excluding the expected dilutive impact on operating results from the anticipated acquisition, are expected to increase approximately 9-11 percent over diluted earnings per share from continuing operations, excluding specified items, of $1.50 for the prior year period. The following analysis of estimated diluted earnings per share from
continuing operations for the second fiscal quarter and full fiscal year
identifies specified items that affect the comparability of results between
periods.
(Table 2) Three Months Ended Six Months Ended
March 31, March 31,
FY2006 FY2005 %Incr. FY2006 FY2005 %Incr.
(Estimated) (Estimated)
Diluted EPS from
Continuing Operations:
Excluding GeneOhm
Operations $0.79-$0.80 $0.71 11-13% $1.64-$1.65 $1.45 13-14%
Specified Items:
Insurance Settle-
ments(1) (0.03) - (0.05) -
Tax Examinations(2) - - - (0.04)
Tax Rate Impact(3) - - - (0.02)
Rounding - - - (0.01)
(0.03) - (0.05) (0.07)
Diluted EPS from
Continuing Operations:
Excluding Specified
Items and GeneOhm
Operations 0.76-0.77 0.71 7-8% 1.59-1.60 1.38 15-16%
GeneOhm
Operations(4) (0.01) - (0.01) -
Diluted EPS from
Continuing Operations:
Excluding Specified
Items and Including
GeneOhm Operations $0.75-$0.76 $0.71 6%-7% $1.58-$1.59 $1.38 14%-15%
Six Months Ended Twelve Months Ended
September 30, September 30,
FY2006 FY2005 %Incr. FY2006 FY2005 %Incr.
(Estimated) (Estimated)
Diluted EPS from
Continuing Operations:
Excluding GeneOhm
Operations $1.63-$1.66 $1.21 35-37% $3.27-$3.31 $2.66 23-24%
Specified Items:
Insurance Settle-
ments(1) - - (0.05) -
Tax Examinations(2) - - - (0.04)
Tax Rate Impact(3) - 0.02 - -
Repatriation Tax
Charge(5) - 0.27 - 0.27
Rounding - - - (0.01)
- 0.29 (0.05) 0.22
Diluted EPS from
Continuing Operations:
Excluding Specified
Items and GeneOhm
Operations 1.63-1.66 1.50 9-11% 3.22-3.26 2.88 12-13%
GeneOhm
Operations(4) (0.06) - (0.07) -
Diluted EPS from
Continuing Operations:
Excluding Specified
Items and Including
GeneOhm Operations $1.57-$1.60 $1.50 5-7% $3.15-$3.19 $2.88 9%-11%
(1) Represents the effect on estimated diluted earnings per share from
continuing operations of estimated proceeds from insurance
settlements. Full fiscal year 2006 estimate of approximately 5 cents
reflects a settlement of $7 million completed in the first
quarter (2 cents per diluted earnings per share from continuing
operations) and approximately $12 million (3 cents per diluted
earnings per share from continuing operations) from settlements
anticipated to be completed in the second quarter.
(2) Represents the effect on estimated diluted earnings per share from
continuing operations of the reversal of tax reserves in the first
fiscal quarter of 2005 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 quarterly tax rate to
vary from the then expected effective tax rate for fiscal year 2005.
(4) Does not include expected in-process research and development charge,
resulting in an estimated impact of between 20 and 25 cents on diluted
earnings per share from continuing operations, which would be recorded
upon closing of the acquisition.
(5) Included in diluted earnings per share from continuing operations for
the fourth quarter of fiscal 2005 is 27 cents per diluted share
substantially related to the impact on taxes of the planned
repatriation of $1.3 billion of foreign earnings under the provisions
of the American Jobs Creation Act.
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 26, 2006. The conference call will be available for replay on BD's website, www.bd.com/investors, or at 1-800-937-5460 (domestic) and 1-203-369-3865 (international) through the close of business on February 1, 2006. 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, the attached financial tables, and BD's Current Report on Form 8-K dated January 26, 2006. About BD BD, a leading global medical technology company that makes and sells medical devices, instrumented 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 more than 25,000 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 2006 Outlook for Full Year and Second Quarter," 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 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); 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,
2005 2004 % Change
REVENUES $1,414,061 $1,288,369 9.8
Cost of products sold 675,741 634,501 6.5
Selling and administrative 367,874 341,088 7.9
Research and development 69,325 62,083 11.7
TOTAL OPERATING COSTS
AND EXPENSES 1,112,940 1,037,672 7.3
OPERATING INCOME 301,121 250,697 20.1
Interest expense (16,760) (14,327) 17.0
Interest income 14,671 5,205 NM
Other expense, net (1,163) (2,861) (59.3)
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES 297,869 238,714 24.8
Income tax provision 80,009 44,316 80.5
INCOME FROM CONTINUING
OPERATIONS 217,860 194,398 12.1
INCOME FROM DISCONTINUED
OPERATIONS
NET OF INCOME TAX
PROVISION OF $ --
AND $623, RESPECTIVELY - 953 NM
NET INCOME $ 217,860 $ 195,351 11.5
EARNINGS PER SHARE
Basic:
Income from continuing
operations $ 0.88 $ 0.77 14.3
Income from discontinued
operations $ - $ - -
Net income (1) $ 0.88 $ 0.78 12.8
Diluted:
Income from continuing
operations $ 0.85 $ 0.74 14.9
Income from discontinued
operations $ - $ - -
Net income (1) $ 0.85 $ 0.75 13.3
AVERAGE SHARES OUTSTANDING
Basic 248,046 251,232
Diluted 255,851 261,970
NM - Not Meaningful
(1) Total per share amounts may not add due to rounding.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL INFORMATION
Three Months Ended December 31,
(Unaudited; Amounts in thousands,
except per-share data)
2005
As Insurance Excluding
Reported Settlement(1) Items
Selling and administrative 367,874 7,000 374,874
as a % of revenues 26.0% 26.5%
Operating Income 301,121 (7,000) 294,121
as a % of revenues 21.3% 20.8%
Income taxes 80,009 (2,660) 77,349
effective tax rate 26.9% 26.6%
Income from continuing operations 217,860 (4,340) 213,520
as a % of revenues 15.4% 15.1%
Diluted earnings per share
Income from continuing operations $0.85 $(0.02) $0.83
(1) Represents proceeds from insurance settlement concluded in the first
fiscal quarter 2006.
2004
Tax
As Tax Rate Excluding
Reported Examinations(3) Impact(4) Items
Income taxes 44,316 11,265 5,150 60,731
effective tax rate 18.6% 25.4%
Income from continuing
operations 194,398 (11,265) (5,150) 177,983
as a % of revenues 15.1% 13.8%
Diluted earnings per
share
Income from continuing
operations $0.74 $(0.04) $(0.02) $0.68
Diluted earnings per
share(2) $0.75 $(0.04) $(0.02) $0.68
(2) Total per share amounts may not add due to rounding.
(3) Relates to the reversal of tax reserves in connection with the
conclusion of tax examinations in four non-U.S. jurisdictions.
(4) Represents the effect on diluted earnings per share from continuing
operations of tax-related events that caused the first fiscal quarter
2005 tax rate to vary from the then expected effective tax rate for
fiscal 2005.
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY SEGMENT AND GEOGRAPHIC AREA
(Unaudited; Amounts in thousands)
Three Months Ended December 31,
2005 2004 % Change
BD MEDICAL
United States $366,583 $329,654 11.2
International 404,117 364,168 11.0
TOTAL $770,700 $693,822 11.1
BD DIAGNOSTICS
United States $229,088 $218,708 4.7
International 214,766 195,075 10.1
TOTAL $443,854 $413,783 7.3
BD BIOSCIENCES
United States $85,314 $75,697 12.7
International 114,193 105,067 8.7
TOTAL $199,507 $180,764 10.4
TOTAL REVENUES
United States $680,985 $624,059 9.1
International 733,076 664,310 10.4
TOTAL $1,414,061 $1,288,369 9.8
BECTON DICKINSON AND COMPANY
SUPPLEMENTAL REVENUE INFORMATION
REVENUES BY BUSINESS SEGMENTS AND UNITS
Three Months Ended December 31,
(Unaudited; Amounts in thousands)
United States
2005 2004 % Change
BD MEDICAL
Medical Surgical Systems $222,266 $215,506 3.1
Diabetes Care 110,401 88,461 24.8
Pharmaceutical Systems 28,400 20,049 41.7
Ophthalmic Systems 5,516 5,638 (2.2)
TOTAL $366,583 $329,654 11.2
BD DIAGNOSTICS
Preanalytical Systems $122,789 $114,763 7.0
Diagnostic Systems 106,299 103,945 2.3
TOTAL $229,088 $218,708 4.7
BD BIOSCIENCES
Discovery Labware $27,700 $24,094 15.0
Immunocytometry Systems 40,437 34,694 16.6
Pharmingen 17,177 16,909 1.6
TOTAL $85,314 $75,697 12.7
TOTAL UNITED STATES $680,985 $624,059 9.1
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
2005 2004 Reported Neutral Impact
BD MEDICAL
Medical Surgical
Systems $205,897 $194,058 6.1 5.2 0.9
Diabetes Care 73,295 70,217 4.4 6.6 (2.2)
Pharmaceutical
Systems 115,363 90,636 27.3 33.8 (6.5)
Ophthalmic Systems 9,562 9,257 3.3 7.8 (4.5)
TOTAL $404,117 $364,168 11.0 12.7 (1.7)
BD DIAGNOSTICS
Preanalytical Systems $99,374 $93,758 6.0 7.6 (1.6)
Diagnostic Systems 115,392 101,317 13.9 18.1 (4.2)
TOTAL $214,766 $195,075 10.1 13.1 (3.0)
BD BIOSCIENCES
Discovery Labware $22,009 $22,869 (3.8) (0.1) (3.7)
Immunocytometry
Systems 72,415 65,406 10.7 14.7 (4.0)
Pharmingen 19,769 16,792 17.7 22.2 (4.5)
TOTAL $114,193 $105,067 8.7 12.7 (4.0)
TOTAL INTERNATIONAL $733,076 $664,310 10.4 12.8 (2.4)
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
2005 2004 Reported Neutral Impact
BD MEDICAL
Medical Surgical
Systems $428,163 $409,564 4.5 4.1 0.4
Diabetes Care 183,696 158,678 15.8 16.8 (1.0)
Pharmaceutical
Systems 143,763 110,685 29.9 35.2 (5.3)
Ophthalmic Systems 15,078 14,895 1.2 4.0 (2.8)
TOTAL $770,700 $693,822 11.1 12.0 (0.9)
BD DIAGNOSTICS
Preanalytical Systems $222,163 $208,521 6.5 7.2 (0.7)
Diagnostic Systems 221,691 205,262 8.0 10.1 (2.1)
TOTAL $443,854 $413,783 7.3 8.7 (1.4)
BD BIOSCIENCES
Discovery Labware $49,709 $46,963 5.8 7.6 (1.8)
Immunocytometry
Systems 112,852 100,100 12.7 15.3 (2.6)
Pharmingen 36,946 33,701 9.6 11.8 (2.2)
TOTAL $199,507 $180,764 10.4 12.7 (2.3)
TOTAL REVENUES $1,414,061 $1,288,369 9.8 11.0 (1.2)
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