C. R. Bard, Inc. (NYSE:BCR) today reported 2016 first quarter
financial results. First quarter 2016 net sales were $873.5
million, an increase of 7 percent over the prior-year period
on an as-reported basis. Excluding the impact of foreign exchange,
first quarter 2016 net sales increased 8 percent over the
prior-year period.
For the first quarter 2016, net sales in the U.S. were $625.4
million, an increase of 9 percent over the prior-year period. Net
sales outside the U.S. were $248.1 million, an increase of 1
percent over the prior-year period on an as-reported basis.
Excluding the impact of foreign exchange, first quarter 2016 net
sales outside the U.S. increased 7 percent over the prior-year
period.
For the first quarter 2016, net income was $116.2 million and
diluted earnings per share were $1.54, a decrease of 17 percent and
15 percent, respectively, as compared to first quarter 2015
results. Adjusting for amortization of intangibles and certain
items that affect comparability between periods, as detailed in the
tables below, first quarter 2016 net income was $177.0 million and
diluted earnings per share were $2.34, an increase of 10 percent
and 11 percent, respectively, as compared to first quarter 2015
results.
Timothy M. Ring, chairman and chief executive officer,
commented, “Our strong results in the first quarter reflect
continued momentum from the returns we have seen from our strategic
investment plan. We continue to be in investment mode as we focus
on shifting the mix of the portfolio to faster growth areas,
including product and technology platforms, delivery platforms and
increasing our presence in emerging markets.”
In conjunction with the first quarter results, the company is
also increasing 2016 financial guidance. For the full year 2016,
net sales are forecasted to increase between 6 percent and 8
percent on an as-reported basis. Excluding the impact of foreign
exchange, full year 2016 net sales are forecasted to increase
between 7 percent and 8.5 percent over 2015. Full year 2016 diluted
earnings per share, after adjusting for amortization of intangibles
and certain items that affect comparability between periods are
projected to be between $10.05 and $10.18, representing growth
between 11 percent and 12 percent compared to full year 2015
results.
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”, “objective” 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 December 31, 2015 Form 10-K 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 Income
(dollars and shares in thousands except per share amounts,
unaudited) Quarter Ended March
31,
2016 2015 Net sales $ 873,500
$ 819,700 Costs and expenses Cost of goods sold 320,400 311,200
Marketing, selling and administrative expense 270,600 235,700
Research and development expense 68,300 60,600 Interest expense
11,300 11,300 Other (income) expense, net 60,000
16,300 Total costs and expenses 730,600
635,100 Income from operations before income taxes 142,900
184,600 Income tax provision 26,700
44,800 Net income $ 116,200 $ 139,800 Basic earnings
per share available to common shareholders $ 1.56 $ 1.85
Diluted earnings per share available to common shareholders $ 1.54
$ 1.82 Wt. avg. common shares outstanding - basic 74,000
74,400 Wt. avg. common and common equivalent shares
outstanding - diluted 75,200 75,800
Product Group Summary of Net
Sales (dollars in thousands, unaudited)
Quarter Ended March 31, Constant 2016 2015 Change
Currency Vascular $ 239,500 $ 231,900 3 % 5 % Urology 216,700
205,600 5 % 7 % Oncology 241,900 224,600 8 % 10 % Surgical
Specialties 151,400 135,900 11 % 13 % Other 24,000
21,700 11 % 12 % Net sales $ 873,500 $ 819,700
7 % Foreign exchange impact (14,300 ) Constant
Currency $ 873,500 $ 805,400 8 %
Non-GAAP Reconciliation of Earnings (dollars in millions
except per share amounts, unaudited)
Quarter Ended March 31, 2016 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(1) GAAP Basis $ 320.4 $ 270.6 $ 68.3 $ 60.0 $
26.7 $ 116.2 $ 1.54
Items that
affect comparability of
results between
periods:
Amortization of intangible assets (32.4) - - - 11.0 21.4
Acquisition-related items 4.3 (4.1) (1.5) (3.2) 2.5 2.0 Litigation
charges - - - (48.9) 18.1 30.8 Restructuring and productivity
initiative costs - - - (9.8) 3.2 6.6 Total (28.1) (4.1)
(1.5) (61.9) 34.8 60.8 0.81
Adjusted Basis $ 292.3 $ 266.5 $ 66.8 $ (1.9) $ 61.5
$ 177.0 $ 2.34 Quarter Ended March 31, 2015 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 $ 311.2 $ 235.7 $ 60.6 $ 16.3 $ 44.8
$ 139.8 $ 1.82
Items that affect
comparability of
results between
periods:
Amortization of intangible assets (28.9) - - - 9.7 19.2
Acquisition-related items 9.9 (0.2) - (0.5) 0.2 (9.4) Litigation
charges - - - (10.3) 0.9 9.4 Restructuring and productivity
initiative costs - - - (3.9) 1.3 2.6 Total (19.0)
(0.2) - (14.7) 12.1 21.8 0.28
Adjusted Basis $ 292.2 $ 235.5 $ 60.6 $ 1.6 $ 56.9 $
161.6 $ 2.10 (1) Total per share amounts do not add due to
rounding.
Notes to Non-GAAP Reconciliation of
Earnings
- For the three months ended March 31,
2016, the following items affected the comparability of results
between periods: (i) amortization of intangible assets of $32.4
million pre-tax; (ii) net charges of $4.5 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (iii) a charge of
$48.9 million pre-tax related to estimated costs for product
liability matters; and (iv) charges of $9.8 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items decreased net income by $60.8 million, or $0.81 diluted
earnings per share available to common shareholders.
- For the three months ended March 31,
2015, the following items affected the comparability of results
between periods: (i) amortization of intangible assets of $28.9
million pre-tax; (ii) a net benefit of $9.2 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (iii) litigation
charges of $10.3 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 other litigation-related matters; and (iv)
charges of $3.9 million pre-tax for restructuring and productivity
initiatives. The net effect of these items decreased net income by
$21.8 million, or $0.28 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 amortization of
intangible assets and 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; (4) other (income)
expense, net, excluding acquisition-related items, litigation
charges (which includes litigation-related defense costs in
connection with the WHP Pre-Trial Orders) and other
litigation-related matters, and restructuring and productivity
initiative costs; (5) income tax provision excluding the tax effect
of the items set forth in (1) through (4) above; and (6) net income
excluding the items set forth in (1) through (5) above.
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 Earnings per Share
(dollars and shares in thousands, except
per share amounts, unaudited)
Quarter Ended March 31, 2016 2015 Earnings per Share
Numerator: GAAP Basis - basic and diluted Net income $ 116,200 $
139,800 Less: Income allocated to participating securities (1)
600 2,100 Net income available to common shareholders
$ 115,600 $ 137,700 Earnings per Share Numerator: Adjusted
Basis Net income $ 177,000 $ 161,600 Less: Income allocated to
participating securities (1) 800 2,400 Net income
available to common shareholders $ 176,200 $ 159,200
Earnings per Share Denominator: Wt. avg. common shares outstanding
- basic 74,000 74,400 Wt. avg. common and common equivalent
shares outstanding - diluted 75,200 75,800 Earnings per
Share: GAAP Basis Basic earnings per share available to common
shareholders $ 1.56 $ 1.85 Diluted earnings per share
available to common shareholders $ 1.54 $ 1.82 Earnings per
Share: Adjusted Basis Diluted earnings per share available to
common shareholders $ 2.34 $ 2.10 (1) Basic and diluted
earnings per share available to common shareholders is calculated
using a numerator, which represents the total of net income less
income allocated to participating securities.
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Investor Relations:Todd W. GarnerVice
President, Investor Relations908-277-8065Media
Relations:Scott T. LowryVice President and
Treasurer908-277-8365
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