C. R. Bard, Inc. (NYSE:BCR) today reported 2016 third quarter
financial results. Third quarter 2016 net sales were $941.9
million, an increase of 9 percent over the prior-year period
on an as-reported basis. Excluding the impact of foreign exchange,
third quarter 2016 net sales increased 10 percent over the
prior-year period.
For the third quarter 2016, net sales in the U.S. were $646.0
million, an increase of 7 percent over the prior-year period. Net
sales outside the U.S. were $295.9 million, an increase of 14
percent from the prior-year period on an as-reported basis.
Excluding the impact of foreign exchange, third quarter 2016 net
sales outside the U.S. increased 17 percent over the prior-year
period.
For the third quarter 2016, net income was $96.4 million and
diluted earnings per share were $1.27, an increase of 212 percent
and 209 percent, respectively, as compared to third quarter 2015
results. Adjusting for amortization of intangibles and certain
items that affect the comparability of results between periods, as
detailed in the tables below, third quarter 2016 net income was
$199.5 million and diluted earnings per share were $2.64, an
increase of 14 percent and 16 percent, respectively, as compared to
third quarter 2015 results.
Timothy M. Ring, chairman and chief executive officer,
commented, “The results this quarter demonstrate the continued
strength of the economic engine of our business. We continue to
increase investments in geographies, products, platforms, and
programs that we believe can drive revenue growth longer term.
During this period of increased investment in 2016, we have also
been able to deliver attractive bottom-line returns for
shareholders. We have increased our full-year financial guidance
every quarter this year, and we are doing so again today. We expect
a strong finish to what has been a very strong year for us so
far.”
In conjunction with the third quarter results, the company is
again increasing 2016 financial guidance. For the full year 2016,
net sales are forecasted to increase between 8 percent and 9
percent on an as-reported basis. Excluding the impact of foreign
exchange, full year 2016 net sales are forecasted to increase
between 9 percent and 10 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 $10.23 and $10.28, representing growth of
13 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 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
tables below and related notes.
Non-GAAP measures included in our guidance were not reconciled
to the appropriate GAAP financial measures because the GAAP
measures are not accessible on a forward-looking basis. Items that
impact our non-GAAP financial measures may include
acquisition-related items, asset impairments, litigation charges,
restructuring and productivity initiative costs, tax items and
amortization of certain intangible assets, such as in connection
with future acquisitions. These items cannot all be reasonably
predicted and may directly impact our non-GAAP net income and our
non-GAAP diluted earnings per share, although changes with respect
to certain of these items may offset other changes. In addition,
certain of these items are dependent on various factors.
Accordingly, a reconciliation of the non-GAAP financial measure
guidance to the corresponding GAAP measures is not available
without unreasonable effort.
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, 2016 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,
2016
2015
2016
2015
Net sales $ 941,900 $ 865,700 $ 2,746,900 $ 2,545,200 Costs
and expenses Cost of goods sold 352,200 336,300 1,023,600 981,200
Marketing, selling and administrative expense 272,600 247,100
821,700 732,800 Research and development expense 74,200 65,200
213,800 189,800 Interest expense 14,900 11,200 39,600 33,700 Other
(income) expense, net 115,800 258,300
185,400 416,300 Total costs and
expenses 829,700 918,100
2,284,100 2,353,800 Income (loss) from
operations before income taxes 112,200 (52,400
) 462,800 191,400 Income tax
provision 15,800 33,600 91,000
192,300 Net income (loss) $ 96,400
$ (86,000 ) $ 371,800 $ (900 ) Basic earnings
(loss) per share available to common shareholders $ 1.30 $
(1.16 ) $ 5.00 $ (0.01 ) Diluted earnings (loss) per
share available to common shareholders $ 1.27 $ (1.16 ) $
4.92 $ (0.01 ) Wt. avg. common shares outstanding -
basic 74,100 74,100 74,000 74,200 Wt. avg. common and common
equivalent shares outstanding - diluted 75,300 74,100 75,200 74,200
Product Group Summary of Net Sales (dollars in
thousands, unaudited) Quarter Ended September 30,
Nine Months Ended September 30,
Constant Constant
2016
2015 Change Currency
2016
2015 Change Currency Vascular $ 258,100 $ 250,500 3 % 4 % $ 752,900
$ 731,000 3 % 4 % Urology 242,100 212,300 14 % 15 % 698,800 627,100
11 % 13 % Oncology 258,400 239,300 8 % 9 % 752,700 699,100 8 % 9 %
Surgical Specialties 158,800 139,800 14 % 14 % 470,100 419,500 12 %
13 % Other 24,500 23,800 3 % 6 %
72,400 68,500 6 % 8 % Net sales $
941,900 $ 865,700 9 % $ 2,746,900 $ 2,545,200
8 % Foreign exchange impact (7,300 )
(26,900 ) Constant Currency $ 941,900 $
858,400 10 % $ 2,746,900 $ 2,518,300 9 %
Non-GAAP Reconciliation of Earnings (Loss) (dollars
in millions except per share amounts, unaudited)
Quarter Ended September 30, 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 $ 352.2 $ 272.6 $
74.2 $ 115.8 $ 15.8 $ 96.4 $ 1.27 Amortization of intangible assets
(32.7 ) - - - 11.1 21.6
Items that affect
comparability of results between periods:
Acquisition-related items (1.9 ) (2.6 ) (0.3 ) (0.2 ) 1.5 3.5
Litigation charges - - - (110.6 ) 33.1 77.5 Restructuring and
productivity initiative costs - - - (4.6 ) 1.5 3.1 Tax item
- - - - 2.6
(2.6 ) Total (34.6 ) (2.6 ) (0.3 ) (115.4 )
49.8 103.1 1.36
Adjusted Basis $ 317.6 $ 270.0 $ 73.9 $ 0.4
$ 65.6 $ 199.5 $ 2.64
Quarter Ended September 30, 2015 Diluted (Loss) Earnings Marketing,
per Share Cost of Selling and Research & Other Available Goods
Administrative Development (Income) Income Net (Loss) to Common
Sold Expense Expense Expense, Net Taxes Income Shareholders(2)
GAAP Basis $ 336.3 $ 247.1 $ 65.2 $ 258.3 $ 33.6 $ (86.0 ) $
(1.16 ) Amortization of intangible assets (30.4 ) - - - 10.2 20.2
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
(31.3 ) (0.8 ) - (256.5 ) 27.9 260.7 3.41
Adjusted Basis $ 305.0 $ 246.3
$ 65.2 $ 1.8 $ 61.5 $ 174.7 $
2.28 Nine Months Ended September 30, 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 GAAP Basis $ 1,023.6 $ 821.7 $ 213.8 $ 185.4 $
91.0 $ 371.8 $ 4.92 Amortization of intangible assets (97.9 ) - - -
33.2 64.7
Items that affect
comparability of results between periods:
Acquisition-related items 0.7 (8.7 ) (2.2 ) (3.2 ) 5.6 7.8 Asset
impairment (1.2 ) - - - - 1.2 Litigation charges - - - (159.5 )
51.2 108.3 Restructuring and productivity initiative costs - - -
(26.3 ) 8.8 17.5 Tax item - - -
- 2.6 (2.6 ) Total
(98.4 ) (8.7 ) (2.2 ) (189.0 ) 101.4 196.9 2.61
Adjusted Basis $ 925.2 $
813.0 $ 211.6 $ (3.6 ) $ 192.4 $ 568.7
$ 7.53 Nine Months Ended September 30, 2015
Diluted (Loss) Earnings Marketing, per Share Cost of Selling and
Research & Other Available Goods Administrative Development
(Income) Income Net (Loss) to Common Sold Expense Expense Expense,
Net Taxes Income Shareholders(2) GAAP Basis $ 981.2 $ 732.8
$ 189.8 $ 416.3 $ 192.3 $ (0.9 ) $ (0.01 ) Amortization of
intangible assets (88.6 ) - - - 29.8 58.8
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 (81.6 ) (2.0 )
(1.5 ) (412.9 ) (12.9 ) 510.9 6.67
Adjusted Basis $ 899.6 $ 730.8 $
188.3 $ 3.4 $ 179.4 $ 510.0 $ 6.66
(1) Total per share amounts do not add due to rounding.
(2) For 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 this period because their effect would have been
antidilutive. As a result, total per share amounts do not add.
Notes to Non-GAAP
Reconciliation of Earnings (Loss)
- For the third quarter 2016,
amortization of intangible assets was $32.7 million pre-tax and the
following items affected the comparability of results between
periods: (i) charges of $5.0 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) charges of
$110.6 million pre-tax related to estimated costs for product
liability matters; (iii) charges of $4.6 million pre-tax for
restructuring and productivity initiatives; and (iv) a decrease of
$2.6 million in the income tax provision as a result of the
completion of certain IRS examinations. The net effect of these
items decreased net income by $103.1 million, or $1.36 diluted
earnings per share available to common shareholders.
- For the third quarter 2015,
amortization of intangible assets was $30.4 million pre-tax and 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 $260.7 million, or $3.41 diluted loss
per share available to common shareholders.
- For the nine months ended September 30,
2016, amortization of intangible assets was $97.9 million pre-tax
and the following items affected the comparability of results
between periods: (i) net charges of $13.4 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of $1.2
million pre-tax related to an asset impairment; (iii) charges of
$159.5 million pre-tax related to estimated costs for product
liability matters; (iv) charges of $26.3 million pre-tax for
restructuring and productivity initiatives; and (v) a decrease of
$2.6 million in the income tax provision as a result of the
completion of certain IRS examinations. The net effect of these
items decreased net income by $196.9 million, or $2.61 diluted
earnings per share available to common shareholders.
- For the nine months ended September 30,
2015, amortization of intangible assets was $88.6 million pre-tax
and 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 District
Court’s pre-trial orders that the company prepare 500 individual
cases for trial (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 $510.9 million, or
$6.67 diluted loss per share available to common shareholders.
------------------------------------------------------------------------
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, the impact of acquisition-related items and an
asset impairment; (2) marketing, selling and administrative expense
excluding the impact of acquisition-related items; (3) research and
development expense excluding the impact of 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, Gore
proceeds, and restructuring and productivity initiative costs; (5)
income tax provision excluding a decrease as a result of the
completion of IRS examinations and 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 Non-GAAP Reconciliation of
Earnings (Loss) per Share
(dollars and shares in thousands, except
per share amounts, unaudited)
Quarter Ended Nine Months Ended September 30,
September 30,
2016
2015
2016
2015 Earnings (loss) per Share Numerator: GAAP Basis - basic
and diluted Net income (loss) $ 96,400 $ (86,000 ) $ 371,800 $ (900
) Less: Income allocated to participating securities (1) 400
- 1,800 - Net
income (loss) available to common shareholders $ 96,000 $
(86,000 ) $ 370,000 $ (900 ) Earnings per Share
Numerator: Adjusted Earnings Net income $ 199,500 $ 174,700 $
568,700 $ 510,000 Less: Income allocated to participating
securities (1) 1,000 2,600 2,800
7,500 Net income available to common
shareholders $ 198,500 $ 172,100 $ 565,900 $
502,500 Earnings per Share Denominator: Wt. avg.
common shares outstanding - basic 74,100 74,100 74,000 74,200 Wt.
avg. common and common equivalent shares outstanding (2): GAAP
Basis - diluted 75,300 74,100 75,200 74,200 Wt. avg. common and
common equivalent shares outstanding: Adjusted Basis - diluted
75,300 75,400 75,200 75,500 Earnings (loss) per Share: GAAP
Basis Basic earnings (loss) per share available to common
shareholders $ 1.30 $ (1.16 ) $ 5.00 $ (0.01 )
Diluted earnings (loss) per share available to common shareholders
$ 1.27 $ (1.16 ) $ 4.92 $ (0.01 ) Earnings per
Share: Adjusted Earnings Diluted earnings per share available to
common shareholders $ 2.64 $ 2.28 $ 7.53 $
6.66
(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 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 this period because their effect would have been
antidilutive.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161025006580/en/
C. R. Bard, Inc.Investor Relations:Todd W.
Garner, 908-277-8065Vice President, Investor
RelationsorMedia Relations:Scott T. Lowry,
908-277-8365Vice President and Treasurer
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