C. R. Bard, Inc. (NYSE:BCR) today reported 2015 third quarter
financial results. Third quarter 2015 net sales were $865.7
million, an increase of 4 percent over the prior-year period
on an as-reported basis. Excluding the impact of foreign exchange,
third quarter 2015 net sales increased 8 percent over the
prior-year period.
For the third quarter 2015, net sales in the U.S. were $606.5
million, an increase of 7 percent over the prior-year period. Net
sales outside the U.S. were $259.2 million, a decrease of 2 percent
from the prior-year period on an as-reported basis. Excluding the
impact of foreign exchange, third quarter 2015 net sales outside
the U.S. increased 10 percent over the prior-year period.
For the third quarter 2015, net loss was ($86.0 million) and
diluted loss per share was ($1.16), reflecting a charge for
estimated costs related to product liability matters. Adjusting for
this charge and certain other items that affect comparability of
results between periods as detailed in the tables below, third
quarter 2015 net income was $154.5 million and diluted earnings per
share, after adjusting for certain items that affect comparability
between periods and excluding amortization of intangibles, was
$2.28, an increase of 4 percent and 6 percent, respectively, as
compared to third quarter 2014 results.
Timothy M. Ring, chairman and chief executive officer,
commented, “Nearly three years ago, we projected that executing our
strategic investment plan would help us return to the top end of
our sector from an organic revenue growth perspective in 2015, and
that has happened. We are pleased with the strong results across
the organization, and we remain focused on our plan to continue to
deliver above-market revenue growth in a profitable manner over the
long-term to enhance shareholder value.”
C. R. Bard, Inc. (www.crbard.com),
headquartered in Murray Hill, NJ, is a leading multinational
developer, manufacturer and marketer of innovative, life-enhancing
medical technologies in the fields of vascular, urology, oncology
and surgical specialty products.
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which are based on management’s current expectations, the
accuracy of which is necessarily subject to risks and
uncertainties. These statements are not historical in nature and
use words such as “anticipate”, “estimate”, “expect”, “project”,
“intend”, “forecast”, “plan”, “believe”, and other words of similar
meaning in connection with any discussion of future operating or
financial performance. Many factors may cause actual results to
differ materially from anticipated results including product
developments, sales efforts, income tax matters, the outcomes of
contingencies such as legal proceedings, and other economic,
business, competitive and regulatory factors. The company
undertakes no obligation to update its forward-looking statements.
Please refer to the Cautionary Statement Regarding Forward-Looking
Information in our June 30, 2015 Form 10-Q for more detailed
information about these and other factors that may cause actual
results to differ materially from those expressed or implied.
C. R. Bard, Inc. Consolidated Statements of
Operations
(dollars and shares in thousands except
per share amounts, unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
2015
2014
2015
2014
Net sales $ 865,700 $ 830,000 $ 2,545,200 $ 2,456,400 Costs
and expenses Cost of goods sold 336,300 308,900 981,200 939,100
Marketing, selling and administrative expense 247,100 242,000
732,800 724,000 Research and development expense 65,200 73,100
189,800 222,800 Interest expense 11,200 11,200 33,700 33,600 Other
(income) expense, net 258,300 14,500
416,300 265,800 Total costs and expenses
918,100 649,700 2,353,800
2,185,300 (Loss) income from operations before income taxes
(52,400 ) 180,300 191,400 271,100
Income tax provision 33,600 49,000
192,300 110,800 Net (loss) income $
(86,000 ) $ 131,300 $ (900 ) $ 160,300 Basic (loss) earnings
per share available to common shareholders $ (1.16 ) $ 1.73 $ (0.01
) $ 2.08 Diluted (loss) earnings per share available to
common shareholders $ (1.16 ) $ 1.69 $ (0.01 ) $ 2.04 Wt.
avg. common shares outstanding - basic 74,100 74,800 74,200 75,700
Wt. avg. common and common equivalent shares outstanding -
diluted 74,100 76,300 74,200 77,200
Product Group
Summary of Net Sales (dollars in thousands, unaudited)
Quarter Ended
September 30, Nine Months Ended September 30, Constant Constant
2015 2014 Change Currency 2015 2014
Change Currency Vascular $ 250,500 $ 231,500 8 % 13 % $ 731,000 $
683,700 7 % 12 % Urology 212,300 209,600 1 % 5 % 627,100 618,100 1
% 4 % Oncology 239,300 229,700 4 % 8 % 699,100 673,400 4 % 7 %
Surgical Specialties 139,800 135,600 3 % 6 % 419,500 410,100 2 % 5
% Other 23,800 23,600 1 % 4 % 68,500
71,100 -4 % -1 % Net sales $ 865,700 $ 830,000
4 % $ 2,545,200 $ 2,456,400 4 % Foreign
exchange impact (28,500 ) (78,700 )
Constant Currency $ 865,700 $ 801,500 8 % $ 2,545,200 $
2,377,700 7 %
Non-GAAP Reconciliation of
(Loss) Earnings (dollars in millions except per share amounts,
unaudited) Quarter
Ended September 30, 2015 Diluted (Loss) Earnings Marketing, per
Share Cost of Selling and Research & Other Net Available Goods
Administrative Development (Income) Income (Loss) to Common Sold
Expense Expense Expense, Net Taxes Income Shareholders (1)
GAAP Basis $ 336.3 $ 247.1 $ 65.2 $ 258.3 $ 33.6 $ (86.0 ) $ (1.16
)
Items that affect
comparability of
results between
periods:
Acquisition-related items (0.9 ) (0.8 ) - (0.8 ) 0.6 1.9 Litigation
charges - - - (241.1 ) 12.9 228.2 Restructuring and productivity
initiative costs - - -
(14.6 ) 4.2 10.4 Total
(0.9 ) (0.8 ) - (256.5 ) 17.7 240.5 3.14
Adjusted Basis $ 335.4 $ 246.3 $
65.2 $ 1.8 $ 51.3 $ 154.5 Amortization
of intangible assets $ 30.4 $ 10.2 $ 20.2 0.26
Adjusted Earnings $ 174.7 $ 2.28 Quarter Ended
September 30, 2014 Diluted Earnings Marketing, per Share Cost of
Selling and Research & Other Available Goods Administrative
Development (Income) Income Net to Common Sold Expense Expense
Expense, Net Taxes Income Shareholders GAAP Basis $ 308.9 $
242.0 $ 73.1 $ 14.5 $ 49.0 $ 131.3 $ 1.69
Items that affect
comparability of
results between
periods:
Acquisition-related items 2.6 (0.3 ) (1.0 ) (0.1 ) 0.3 (1.5 ) Asset
impairment - - (6.2 ) - 2.3 3.9 Litigation charges - - - (13.2 )
(1.2 ) 14.4 Restructuring and productivity initiative costs
- - - (1.7 ) 0.6
1.1 Total 2.6 (0.3 ) (7.2 ) (15.0 ) 2.0
17.9 0.23 Adjusted Basis
$ 311.5 $ 241.7 $ 65.9 $ (0.5 ) $ 51.0
$ 149.2 Amortization of intangible assets $ 26.5 $ 8.8 $
17.7 0.23 Adjusted Earnings $ 166.9 $
2.15 Nine Months Ended September 30, 2015 Diluted
(Loss) Earnings Marketing, per Share Cost of Selling and Research
& Other Net Available Goods Administrative Development (Income)
Income (Loss) to Common Sold Expense Expense Expense, Net Taxes
Income Shareholders (1) GAAP Basis $ 981.2 $ 732.8 $ 189.8 $
416.3 $ 192.3 $ (0.9 ) $ (0.01 )
Items that affect
comparability of
results between
periods:
Acquisition-related items 7.0 (2.0 ) (1.5 ) (1.3 ) 1.3 (3.5 )
Litigation charges, net - - - (595.1 ) 26.3 568.8 Gore proceeds - -
- 210.5 (78.8 ) (131.7 ) Restructuring and productivity initiative
costs - - - (27.0
) 8.5 18.5 Total 7.0 (2.0 ) (1.5
) (412.9 ) (42.7 ) 452.1 5.90
Adjusted Basis $ 988.2 $ 730.8 $ 188.3
$ 3.4 $ 149.6 $ 451.2 Amortization of
intangible assets $ 88.6 $ 29.8 $ 58.8 0.77
Adjusted Earnings $ 510.0 $ 6.66 Nine Months
Ended September 30, 2014 Diluted Earnings Marketing, per Share Cost
of Selling and Research & Other Available Goods Administrative
Development (Income) Income Net to Common Sold Expense Expense
Expense, Net Taxes Income Shareholders GAAP Basis $ 939.1 $
724.0 $ 222.8 $ 265.8 $ 110.8 $ 160.3 $ 2.04
Items that affect
comparability of
results between
periods:
Acquisition-related items 1.1 (0.7 ) (22.6 ) (2.2 ) 1.5 22.9 Asset
impairment - - (6.2 ) - 2.3 3.9 Litigation charges, net - - -
(275.9 ) 21.2 254.7 Gain on sale of investment - - - 7.1 (2.2 )
(4.9 ) Restructuring and productivity initiative costs - - - (1.7 )
0.6 1.1 Tax item - - -
- 10.9 (10.9 ) Total 1.1
(0.7 ) (28.8 ) (272.7 ) 34.3 266.8 3.40
Adjusted Basis $ 940.2 $ 723.3 $ 194.0
$ (6.9 ) $ 145.1 $ 427.1 Amortization of
intangible assets $ 79.7 $ 26.6 $ 53.1 0.68
Adjusted Earnings $ 480.2 $ 6.12
(1) For both the quarter and nine months
ended September 30, 2015, diluted loss per share on a GAAP basis
does not include common share equivalents of approximately 1.3
million. Common share equivalents primarily from share-based
compensation plans were not included in these periods because their
effect would have been antidilutive. As a result, total per share
amounts may not add.
Notes to Non-GAAP
Reconciliation of (Loss) Earnings
- For the third quarter 2015, the
following items affected the comparability of results between
periods: (i) charges of $2.5 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) charges of
$241.1 million pre-tax related to estimated costs for product
liability matters; and (iii) charges of $14.6 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items increased net loss by $240.5 million, or $3.14 diluted loss
per share available to common shareholders. Amortization of
intangible assets was $30.4 million pre-tax, which decreased net
income on an adjusted basis by $20.2 million, or $0.26 diluted
earnings per share available to common shareholders.
- For the third quarter 2014, the
following items affected the comparability of results between
periods: (i) a net benefit of $1.2 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of $6.2
million pre-tax related to an asset impairment; (iii) charges of
$13.2 million pre-tax for litigation-related defense costs in
connection with the District Court’s pre-trial orders that the
company prepare 500 individual cases for trial (the “WHP Pre-Trial
Orders”); and (iv) charges of $1.7 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items decreased net income by $17.9 million, or $0.23 diluted
earnings per share available to common shareholders. Amortization
of intangible assets was $26.5 million pre-tax, which decreased net
income on an adjusted basis by $17.7 million, or $0.23 diluted
earnings per share available to common shareholders.
- For the nine months ended September 30,
2015, the following items affected the comparability of results
between periods: (i) a net benefit of $2.2 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) charges of
$595.1 million pre-tax related to estimated costs for product
liability matters (net of recoveries), which includes $15.1 million
of litigation-related defense costs in connection with the WHP
Pre-Trial Orders and other litigation-related charges; (iii) a gain
of $210.5 million pre-tax related to a patent infringement
litigation against W.L. Gore & Associates, Inc. (“Gore”); and
(iv) charges of $27.0 million pre-tax for restructuring and
productivity initiatives. The net effect of these items increased
net loss by $452.1 million, or $5.90 diluted loss per share
available to common shareholders. Amortization of intangible assets
was $88.6 million pre-tax, which decreased net income on an
adjusted basis by $58.8 million, or $0.77 diluted earnings per
share available to common shareholders.
- For the nine months ended September 30,
2014, the following items affected the comparability of results
between periods: (i) net charges of $24.4 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of $6.2
million pre-tax related to an asset impairment; (iii) charges of
$275.9 million pre-tax related to estimated costs for product
liability matters (net of recoveries), which includes $17.4 million
of litigation-related defense costs in connection with the WHP
Pre-Trial Orders; (iv) a gain of $7.1 million pre-tax related to
the sale of an equity investment; (v) charges of $1.7 million
pre-tax for restructuring and productivity initiatives; and (vi) a
decrease of $10.9 million in the income tax provision associated
with the completion of IRS examinations for the tax years 2008
through 2010. The net effect of these items decreased net income by
$266.8 million, or $3.40 diluted earnings per share available to
common shareholders. Amortization of intangible assets was $79.7
million pre-tax, which decreased net income on an adjusted basis by
$53.1 million, or $0.68 diluted earnings per share available to
common shareholders.This press release contains financial measures
that are not calculated in accordance with United States generally
accepted accounting principles (GAAP). These non-GAAP measures are
reconciled to their most directly comparable GAAP measures in the
above tables.This press release includes net sales excluding the
impact of foreign exchange. The company analyzes net sales on a
constant currency basis to better measure the comparability of
results between periods. Because changes in foreign currency
exchange rates have a non-operating impact on net sales, the
company believes that evaluating growth in net sales on a constant
currency basis provides an additional and meaningful assessment of
net sales to both management and the company’s investors.In
addition, this press release includes the following non-GAAP
measures: (1) cost of goods sold excluding the impact of
acquisition-related items; (2) marketing, selling and
administrative expense excluding charges for acquisition-related
items; (3) research and development expense excluding charges for
acquisition-related items and an asset impairment; (4) other
(income) expense, net, excluding acquisition-related items,
litigation charges, net of recoveries (which includes
litigation-related defense costs in connection with the WHP
Pre-Trial Orders) and other litigation-related charges, Gore
proceeds, restructuring and productivity initiative costs, and gain
on sale of investment; (5) income tax provision excluding a
decrease associated with the completion of IRS examinations and the
tax effect of the items set forth in (1) through (4) above; (6) net
income excluding the items set forth in (1) through (5) above; and
(7) diluted earnings per share available to common shareholders
excluding the items set forth in (1) through (5) above and
amortization of intangible assets.The company excluded the items
described above because they may cause certain statements of
operations categories not to be indicative of ongoing operating
results, and therefore affect the comparability of results between
periods. The company therefore believes that these non-GAAP
measures provide an additional and meaningful assessment of the
company’s ongoing operating performance. Because the company has
historically reported non-GAAP results to the investment community,
management also believes that the inclusion of these non-GAAP
measures provides consistency in its financial reporting and
facilitates investors’ understanding of the company’s historic
operating trends by providing an additional basis for comparisons
to prior periods. Management uses these non-GAAP measures: (1) to
establish financial and operational goals; (2) to monitor the
company’s actual performance in relation to its business plan and
operating budgets; (3) to evaluate the company’s core operating
performance and understand key trends within the business; and (4)
as part of several components it considers in determining incentive
compensation.Management recognizes that the use of these non-GAAP
measures has limitations, including the fact that they may not be
comparable with similar non-GAAP measures used by other companies
and that management must exercise judgment in determining which
types of charges or other items should be excluded from the
non-GAAP information. Management compensates for these limitations
by providing full disclosure of each non-GAAP measure and a
reconciliation to the most directly comparable GAAP measure. All
non-GAAP measures are intended to supplement the applicable GAAP
disclosures and should not be considered in isolation from, or as a
replacement for, financial information prepared in accordance with
GAAP. For a reconciliation of these non-GAAP measures to the most
comparable GAAP measures, please see the above tables.
Notes to (Loss) Earnings per Share (dollars and
shares in thousands, except per share amounts, unaudited)
Quarter Ended Nine Months Ended September 30,
September 30, 2015 2014 2015 2014
(Loss) Earnings per Share Numerator: GAAP Basis - basic and diluted
Net (loss) income $ (86,000 ) $ 131,300 $ (900 ) $ 160,300 Less:
Income allocated to participating securities (1) -
2,200 - 2,600 Net (loss) income
available to common shareholders $ (86,000 ) $ 129,100 $ (900 ) $
157,700 Earnings per Share Numerator: Adjusted Earnings Net
income $ 174,700 $ 166,900 $ 510,000 $ 480,200 Less: Income
allocated to participating securities (1) 2,600
2,900 7,500 8,000 Net income available
to common shareholders $ 172,100 $ 164,000 $ 502,500
$ 472,200 Earnings per Share Denominator: Wt. avg. common
shares outstanding - basic 74,100 74,800 74,200 75,700 Wt. avg.
common and common equivalent shares outstanding(2): GAAP Basis -
diluted 74,100 76,300 74,200 77,200 Wt. avg. common and common
equivalent shares outstanding: Adjusted Basis - diluted 75,400
76,300 75,500 77,200 (Loss) Earnings per Share: GAAP Basis
Basic (loss) earnings per share available to common shareholders $
(1.16 ) $ 1.73 $ (0.01 ) $ 2.08 Diluted (loss) earnings per share
available to common shareholders $ (1.16 ) $ 1.69 $ (0.01 ) $ 2.04
Earnings per Share: Adjusted Earnings Diluted earnings per
share available to common shareholders $ 2.28 $ 2.15 $ 6.66
$ 6.12
(1) Basic and diluted earnings per share
available to common shareholders is calculated using a numerator,
which represents the total of income less income allocated to
participating securities.
(2) For both the quarter and nine months
ended September 30, 2015, diluted loss per share on a GAAP basis
does not include common share equivalents of approximately 1.3
million. Common share equivalents primarily from share-based
compensation plans were not included in these periods because their
effect would have been antidilutive.
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C. R. Bard, Inc.Investor Relations:Todd W.
GarnerVice President, Investor
Relations908-277-8065orMedia
Relations:Scott T. LowryVice President and
Treasurer908-277-8365
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