MARLBOROUGH, Mass.,
April 28, 2015 /PRNewswire/
-- Boston Scientific Corporation (NYSE: BSX) generated sales
of $1.768 billion during the first
quarter ended March 31, 2015,
compared to the company's guidance range for the quarter of
$1.740 to $1.800 billion. This
represents 6 percent operational revenue growth (constant currency
basis, excluding divested businesses) and flat revenue on a
reported basis, all compared to the prior year period. The
company achieved adjusted earnings per share of $0.21 for the period, compared to $0.20 a year ago, which represents 6 percent
growth, and reported a GAAP loss of $1
million, or $(0.00) per share,
compared to earnings per share of $0.10 a year ago.*
"We achieved strong results in the first quarter, and we
continue to build global momentum." said Mike Mahoney, president and chief executive
officer, Boston Scientific. "In particular, our Interventional
Cardiology business, including structural heart, delivered
excellent results. We are also excited about bringing new
innovation to patients with the recent Food and Drug Administration
approvals of the WATCHMAN™ Left Atrial Appendage Closure Device and
the EMBLEM™ Subcutaneous Implantable Defibrillator System."
First quarter financial results and recent
developments*:
- Achieved first quarter sales of $1.768
billion, representing 6 percent operational revenue growth
and flat revenue on a reported basis, all compared to the prior
year period.
- Delivered first quarter adjusted earnings per share of
$0.21, which represents 6 percent
growth compared to the prior year period, compared to the company's
guidance range of $0.19 to $0.21 per
share. Reported first quarter GAAP loss of $1 million, or $(0.00) per share, compared to the company's
guidance range of $0.07 to $0.11 per
share, primarily due to litigation-related charges.
- Delivered first quarter revenue growth of 10 percent in
Cardiovascular, 4 percent in Rhythm Management, and 4 percent in
MedSurg, all on a constant currency basis over the prior year
period.
- Achieved first quarter International constant currency revenue
growth of 7 percent over the prior year period, primarily driven by
6 percent growth in Europe and 7
percent growth in the Asia,
Middle East and Africa (AMEA) region.
- Received Food and Drug Administration (FDA) approval of the
WATCHMAN™ Left Atrial Appendage Closure Device and
completed first U.S. procedures.
- Received FDA and CE Mark approval of the EMBLEM™ Subcutaneous
Implantable Defibrillator System for patients at risk of sudden
cardiac arrest and began a limited market release in Europe.
- Entered into an agreement to acquire the American Medical
Systems urology portfolio, including the Men's Health and Prostate
Health businesses of Endo International plc.
- Entered into an agreement with C. R. Bard, Inc., to distribute
the Lutonix® Drug Coated Balloon in the U.S. for the treatment of
peripheral artery disease.
- Signed a strategic alliance with Frankenman Medical Equipment
Company to accelerate physician training and expand utilization of
less invasive medical technologies in China.
- Augmented the Endoscopy portfolio, with the launch of the next
generation SPYGLASS™ DS Direct Visualization System for
advanced diagnosis and treatment of pancreatico-biliary diseases,
and the acquisition of the Xlumena, Inc. stent delivery systems
intended for endoscopic ultrasound (EUS) guided transluminal
drainage of targeted areas within the gastrointestinal tract.
- Presented results from the MAJESTIC trial at the
37th Charing Cross International Symposium demonstrating
the Eluvia™ Drug-Eluting Vascular Stent System+ met its
primary safety and effectiveness endpoints, with more than 94
percent of lesions treated remaining open at nine months post
implantation.
* Growth rates are based on actual, non-rounded amounts and
may not recalculate precisely.
+Pending CE
Mark, not available for use or sale in the U.S.
Worldwide sales for the first quarter:
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
March
31,
|
|
%
Change
|
|
|
in
millions
|
2015
|
2014
|
|
As Reported
Basis
|
Less: Impact of
Foreign Currency
|
Constant Currency
Basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
$
|
495
|
|
$
|
497
|
|
|
(0)%
|
$
|
(42)
|
|
(8)%
|
8%
|
|
|
Peripheral Interventions
|
217
|
|
203
|
|
|
7%
|
(14)
|
|
(7)%
|
14%
|
|
|
Cardiovascular
|
712
|
|
700
|
|
|
2%
|
(56)
|
|
(8)%
|
10%
|
|
|
Cardiac
Rhythm Management
|
456
|
|
466
|
|
|
(2)%
|
(29)
|
|
(6)%
|
4%
|
|
|
Electrophysiology
|
58
|
|
58
|
|
|
(1)%
|
(3)
|
|
(7)%
|
6%
|
|
|
Rhythm
Management
|
514
|
|
524
|
|
|
(2)%
|
(32)
|
|
(6)%
|
4%
|
|
|
Endoscopy
|
305
|
|
314
|
|
|
(3)%
|
(21)
|
|
(7)%
|
4%
|
|
|
Urology
and Women's Health
|
123
|
|
125
|
|
|
(2)%
|
(6)
|
|
(5)%
|
3%
|
|
|
Neuromodulation
|
114
|
|
109
|
|
|
4%
|
(2)
|
|
(2)%
|
6%
|
|
|
MedSurg
|
542
|
|
548
|
|
|
(1)%
|
(29)
|
|
(5)%
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
1,768
|
|
1,772
|
|
|
(0)%
|
(117)
|
|
(6)%
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Divested
Businesses
|
—
|
|
2
|
|
|
N/A
|
—
|
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Net
Sales
|
$
|
1,768
|
|
$
|
1,774
|
|
|
(0)%
|
$
|
(117)
|
|
(6)%
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
|
Sales growth rates
that exclude the impact of sales from divested businesses and/or
changes in foreign currency exchange rates are not prepared in
accordance with U.S. GAAP. An explanation of the company's
use of these non-GAAP financial measures is included in the
exhibits attached to this news release.
|
|
On a consolidated GAAP basis, net loss for the first quarter of
2015 was $1 million, or $(0.00) per share. These results included
acquisition- and divestiture-, litigation-, and
restructuring-related net charges, pension termination charges, and
amortization expense, of $287 million
(after-tax) or $0.21 per share.
Adjusted net income for the first quarter of 2015, excluding these
net charges, was $286 million, or
$0.21 per share.
On a consolidated GAAP basis, net income for the first quarter
of 2014 was $133 million, or
$0.10 per share. These results
included intangible asset impairment charges, acquisition- and
divestiture-related net credits, litigation-related credits,
restructuring-related charges, discrete tax items, and amortization
expense, of $135 million (after-tax)
or $0.10 per share. Adjusted
net income for the first quarter of 2014, excluding these net
charges, was $268 million, or
$0.20 per share.
Guidance for Full Year and Second Quarter 2015
The company now estimates revenue for the full year 2015 to be
in a range of $7.225 to $7.375
billion (compared to prior guidance of $7.300 to $7.500 billion), which versus the prior
year period represents change in a range of negative 2 to flat on a
reported basis and a growth range of approximately 4 to 6 percent
on an operational basis. The company now estimates income on
a GAAP basis in a range of $0.32 to
$0.38 per share (compared to prior guidance of $0.42 to $0.48), and continues to estimate
adjusted earnings, excluding acquisition- and divestiture- ,
litigation-, and restructuring-related charges, pension termination
charges, and amortization expense, in a range of $0.88 to $0.92 per share.
The company estimates sales for the second quarter of 2015 in a
range of $1.800 to $1.850
billion. The company estimates earnings on a GAAP
basis in a range of $0.09 to $0.11
per share. Adjusted earnings, excluding acquisition- and
divestiture-, and restructuring-related charges, and amortization
expense, are estimated in a range of $0.20
to $0.22 per share.
Conference Call Information
Boston Scientific management will be discussing these results
with analysts on a conference call today at 8:00 a.m. (ET). The company will webcast
the call to interested parties through its website:
www.bostonscientific.com. Please see the website for details on how
to access the webcast. The webcast will be available for
approximately one year on the Boston Scientific website.
About Boston Scientific
Boston Scientific transforms
lives through innovative medical solutions that improve the health
of patients around the world. As a global medical technology
leader for more than 35 years, we advance science for life by
providing a broad range of high performance solutions that address
unmet patient needs and reduce the cost of healthcare. For
more information, visit www.bostonscientific.com and connect on
Twitter and Facebook.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements may be identified by
words like "anticipate," "expect," "project," "believe," "plan,"
"estimate," "intend" and similar words. These
forward-looking statements are based on our beliefs, assumptions
and estimates using information available to us at the time and are
not intended to be guarantees of future events or
performance. These forward-looking statements include,
among other things, statements regarding our expected net sales,
GAAP and operational revenue growth rates, GAAP earnings and
adjusted earnings for the second quarter and full year 2015; our
financial performance; our business plans; and our positioning for
revenue and earnings growth. If our underlying
assumptions turn out to be incorrect, or if certain risks or
uncertainties materialize, actual results could vary materially
from the expectations and projections expressed or implied by our
forward-looking statements. These risks and
uncertainties, in some cases, have affected and in the future could
affect our ability to implement our business strategy and may cause
actual results to differ materially from those contemplated by the
statements expressed in this press release. As a result,
readers are cautioned not to place undue reliance on any of our
forward-looking statements.
Risks and uncertainties that may cause such differences include,
among other things: future economic, political, competitive,
reimbursement and regulatory conditions; new product introductions
and the market acceptance of those products; markets for our
products; expected pricing environment; expected procedural
volumes; clinical trial results; demographic trends; intellectual
property rights; litigation; financial market conditions; the
execution and effect of our restructuring program; the execution
and effect of our business strategy, including our cost-savings and
growth initiatives; and future business decisions made by us and
our competitors. New risks and uncertainties may arise from
time to time and are difficult to predict. All of these
factors are difficult or impossible to predict accurately and many
of them are beyond our control. For a further list and
description of these and other important risks and uncertainties
that may affect our future operations, see Part I, Item IA
- Risk Factors in our most recent Annual Report on Form
10-K filed with the Securities and Exchange Commission, which we
may update in Part II, Item 1A - Risk Factors in
Quarterly Reports on Form 10-Q we have filed or will file
hereafter. We disclaim any intention or obligation to
publicly update or revise any forward-looking statement to reflect
any change in our expectations or in events, conditions, or
circumstances on which those expectations may be based, or that may
affect the likelihood that actual results will differ from those
contained in the forward-looking statements. This
cautionary statement is applicable to all forward-looking
statements contained in this press release.
Use of Non-GAAP Financial Information
A reconciliation
of the company's non-GAAP financial measures to the corresponding
GAAP measures, and an explanation of the company's use of these
non-GAAP financial measures, is included in the exhibits
attached to this news release.
|
CONTACT:
|
|
|
Media:
|
Kelly
Leadem
|
|
508-683-5543
(office)
|
|
Media
Relations
|
|
Boston Scientific
Corporation
|
|
kelly.leadem@bsci.com
|
|
|
|
Investors:
|
Susie Lisa,
CFA
|
|
508-683-5565
(office)
|
|
Investor
Relations
|
|
Boston Scientific
Corporation
|
|
investor_relations@bsci.com
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
CONDENSED
CONSOLIDATED GAAP RESULTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
in millions,
except per share data
|
2015
|
2014
|
|
|
|
|
|
Net sales
|
$
|
1,768
|
|
$
|
1,774
|
|
|
Cost of products
sold
|
520
|
|
537
|
|
|
Gross
profit
|
1,248
|
|
1,237
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling, general and
administrative expenses
|
668
|
|
666
|
|
|
Research and
development expenses
|
192
|
|
191
|
|
|
Royalty
expense
|
17
|
|
40
|
|
|
Amortization
expense
|
113
|
|
109
|
|
|
Intangible asset
impairment charges
|
—
|
|
55
|
|
|
Contingent
consideration expense (benefit)
|
27
|
|
(22)
|
|
|
Restructuring
charges
|
6
|
|
20
|
|
|
Gain on
divestiture
|
—
|
|
(12)
|
|
|
Pension termination
charges
|
8
|
|
—
|
|
|
Litigation-related
charges (credits)
|
193
|
|
(7)
|
|
|
|
1,224
|
|
1,040
|
|
|
Operating income
(loss)
|
24
|
|
197
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(60)
|
|
(54)
|
|
|
Other, net
|
(15)
|
|
3
|
|
|
Income (loss) before
income taxes
|
(51)
|
|
146
|
|
|
Income tax expense
(benefit)
|
(50)
|
|
13
|
|
|
Net income
(loss)
|
$
|
(1)
|
|
$
|
133
|
|
|
|
|
|
|
Net income (loss)
per common share - basic
|
$
|
(0.00)
|
|
$
|
0.10
|
|
|
Net income (loss)
per common share - assuming dilution
|
$
|
(0.00)
|
|
$
|
0.10
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
|
Basic
|
1,333.7
|
|
1,321.7
|
|
|
Assuming
dilution
|
1,333.7
|
|
1,349.2
|
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
March
31,
|
|
December
31,
|
|
in millions,
except share data
|
2015
|
|
2014
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
242
|
|
|
$
|
587
|
|
|
Trade accounts
receivable, net
|
1,161
|
|
|
1,183
|
|
|
Inventories
|
958
|
|
|
946
|
|
|
Deferred and prepaid
income taxes
|
339
|
|
|
447
|
|
|
Other current
assets
|
489
|
|
|
443
|
|
|
Total current
assets
|
3,189
|
|
|
3,606
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,458
|
|
|
1,507
|
|
|
Goodwill
|
5,896
|
|
|
5,898
|
|
|
Other intangible
assets, net
|
5,499
|
|
|
5,606
|
|
|
Other long-term
assets
|
430
|
|
|
425
|
|
|
|
|
$
|
16,472
|
|
|
$
|
17,042
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current debt
obligations
|
$
|
423
|
|
|
403
|
|
|
Accounts
payable
|
228
|
|
|
262
|
|
|
Accrued
expenses
|
1,512
|
|
|
1,950
|
|
|
Other current
liabilities
|
300
|
|
|
231
|
|
|
Total current
liabilities
|
2,463
|
|
|
2,846
|
|
|
|
|
|
|
|
|
Long-term
debt
|
3,845
|
|
|
3,859
|
|
|
Deferred income
taxes
|
963
|
|
|
1,214
|
|
|
Other long-term
liabilities
|
2,700
|
|
|
2,666
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred stock, $.01
par value - authorized 50,000,000
|
|
|
|
|
|
shares, none issued
and outstanding
|
|
|
|
|
Common stock, $.01
par value - authorized 2,000,000,000
|
16
|
|
|
16
|
|
|
|
shares - issued
1,587,583,586 shares as of March 31, 2015
|
|
|
|
|
|
and 1,575,018,236
shares as of December 31, 2014
|
|
|
|
|
Treasury stock, at
cost - 247,566,270 shares as of March 31,
|
(1,717)
|
|
|
(1,717)
|
|
|
|
2015 and 247,566,270
shares as of December 31, 2014
|
|
|
|
|
Additional paid-in
capital
|
16,750
|
|
|
16,703
|
|
|
Accumulated
deficit
|
(8,690)
|
|
|
(8,689)
|
|
|
Accumulated other
comprehensive income (loss), net of tax
|
142
|
|
|
144
|
|
|
Total stockholders'
equity
|
6,501
|
|
|
6,457
|
|
|
|
|
$
|
16,472
|
|
|
$
|
17,042
|
|
|
|
|
|
|
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
NON-GAAP NET INCOME
AND NET INCOME PER COMMON SHARE RECONCILIATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
|
in millions,
except per share data
|
Pre-Tax
|
Tax
Impact
(a)
|
After-Tax
|
Impact per
diluted share
|
|
|
GAAP net income
(loss)
|
$
|
(51)
|
|
$
|
50
|
|
$
|
(1)
|
|
$
|
(0.00)
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
Acquisition- and
divestiture-related net charges (b)
|
42
|
|
1
|
|
43
|
|
0.03
|
*
|
|
|
Restructuring and
restructuring-related net charges (c)
|
22
|
|
(4)
|
|
18
|
|
0.01
|
*
|
|
|
Pension termination
charges
|
8
|
|
(3)
|
|
5
|
|
0.00
|
*
|
|
|
Litigation-related
charges
|
193
|
|
(70)
|
|
123
|
|
0.10
|
*
|
|
|
Amortization
expense
|
113
|
|
(15)
|
|
98
|
|
0.07
|
*
|
|
|
Adjusted net
income
|
$
|
327
|
|
$
|
(41)
|
|
$
|
286
|
|
$
|
0.21
|
*
|
|
|
*
|
Assumes dilution of
24.0 million shares for the three months ended March 31, 2015 for
all or a portion of these non-GAAP adjustments.
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
|
in millions,
except per share data
|
Pre-Tax
|
Tax
Impact
(a)
|
After-Tax
|
Impact per diluted
share
|
|
|
GAAP net income
(loss)
|
$
|
146
|
|
$
|
(13)
|
|
$
|
133
|
|
$
|
0.10
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
Intangible asset
impairment charges
|
55
|
|
(6)
|
|
49
|
|
0.04
|
|
|
|
Acquisition- and
divestiture-related net credits (d)
|
(27)
|
|
(1)
|
|
(28)
|
|
(0.02)
|
|
|
|
Restructuring and
restructuring-related net charges (e)
|
28
|
|
(7)
|
|
21
|
|
0.01
|
|
|
|
Discrete tax
items
|
—
|
|
2
|
|
2
|
|
0.00
|
|
|
|
Litigation-related
credits
|
(7)
|
|
1
|
|
(6)
|
|
0.00
|
|
|
|
Amortization
expense
|
109
|
|
(12)
|
|
97
|
|
0.07
|
|
|
|
Adjusted net
income
|
$
|
304
|
|
$
|
(36)
|
|
$
|
268
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts are
tax effected at the company's effective tax rate, unless the amount
is a significant unusual or infrequently occurring item in
accordance with FASB Accounting Standards Codification section
740-270-30, "General Methodology and Use of Estimated Annual
Effective Tax Rate."
|
|
(b) In the first
quarter of 2015, pre-tax acquisition- and divestiture-related net
charges were $42 million, of which $4 million was recorded in cost
of products sold, $7 million was recorded in selling, general and
administrative expenses,$27 million was recorded as contingent
consideration expense, and $4 million was recorded as interest
expense.
|
|
(c) In the first
quarter of 2015, pre-tax restructuring charges were $6 million and
pre-tax restructuring- related charges were $16 million, of which
$8 million was recorded in cost of products sold and $8 million was
recorded in selling, general and administrative
expenses.
|
|
(d) In the first
quarter of 2014, pre-tax acquisition- and divestiture-related net
credits were $27 million, of which charges of $1 million were
recorded in cost of products sold, charges of $5 million were
recorded in selling, general and administrative expenses, $22
million was recorded as contingent consideration benefit, $12
million was recorded as gain on divestiture, and charges of $1
million were recorded within Other, net.
|
|
(e) In the first
quarter of 2014, pre-tax restructuring charges were $20 million and
pre-tax restructuring- related charges were $8 million, of which $2
million was recorded in cost of products sold and $6 million was
recorded in selling, general and administrative
expenses.
|
|
An explanation of the
company's use of these non-GAAP financial measures is provided at
the end of this document.
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
SEGMENT
INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
SEGMENT NET
SALES*
|
March
31,
|
|
|
in
millions
|
2015
|
2014
|
Change
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
$
|
541
|
|
$
|
501
|
|
8%
|
|
|
Peripheral
Interventions
|
232
|
|
204
|
|
14%
|
|
|
Cardiovascular
|
773
|
|
705
|
|
10%
|
|
|
|
|
|
|
|
|
Cardiac
Rhythm Management
|
483
|
|
464
|
|
4%
|
|
|
Electrophysiology
|
61
|
|
58
|
|
6%
|
|
|
Rhythm
Management
|
544
|
|
522
|
|
4%
|
|
|
|
|
|
|
|
|
Endoscopy
|
328
|
|
316
|
|
4%
|
|
|
Urology
and Women's Health
|
130
|
|
126
|
|
3%
|
|
|
Neuromodulation
|
116
|
|
109
|
|
6%
|
|
|
MedSurg
|
574
|
|
551
|
|
4%
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
1,891
|
|
1,778
|
|
6%
|
|
|
|
|
|
|
|
|
Divested
Businesses
|
—
|
|
2
|
|
N/A
|
|
|
Foreign
Currency
|
(123)
|
|
(6)
|
|
N/A
|
|
|
|
|
|
|
|
|
Worldwide Net
Sales
|
$
|
1,768
|
|
$
|
1,774
|
|
(0)%
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
SEGMENT OPERATING
INCOME*
|
March
31,
|
|
|
|
in
millions
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
Segment operating
income
|
|
|
|
|
|
Cardiovascular
|
$
|
236
|
|
$
|
171
|
|
|
|
|
Rhythm
Management
|
78
|
|
66
|
|
|
|
|
MedSurg
|
166
|
|
168
|
|
|
|
|
Operating income
allocated to reportable segments
|
480
|
|
405
|
|
|
|
|
Corporate expenses
and currency exchange
|
(82)
|
|
(50)
|
|
|
|
|
Goodwill and other
intangible asset impairment charges;
acquisition-, divestiture-, restructuring-, and
litigation-related
charges and credits; and pension termination charges
|
(261)
|
|
(49)
|
|
|
|
|
Amortization
expense
|
(113)
|
|
(109)
|
|
|
|
|
Operating income
(loss)
|
$
|
24
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
*We measure and
evaluate our reportable segments based on segment net sales and
operating income, excluding the impact of changes in foreign
currency and sales from divested businesses. Sales generated from
reportable segments and divested businesses, as well as operating
results of reportable segments and corporate expenses, are based on
internally-derived standard currency exchange rates, which may
differ from year to year, and do not include intersegment profits.
We exclude from segment operating income certain corporate-related
expenses and certain transactions or adjustments that our chief
operating decision maker considers to be non-recurring and/or
non-operational, such as amounts related to goodwill and other
intangible asset impairment charges; acquisition and divestiture-,
restructuring- and litigation-related charges and credits; pension
termination charges; and amortization expense. Although we
exclude these amounts from segment operating income, they are
included in reported consolidated operating income (loss) and
are included in the reconciliation above.
|
|
An explanation of the
company's use of these non-GAAP financial measures is provided at
the end of this document.
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
WORLDWIDE CARDIAC
RHYTHM MANAGEMENT (CRM) SALES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31
|
|
|
|
|
|
|
|
|
|
|
|
|
in
millions
|
|
U.S.
|
|
International
|
|
Worldwide
|
|
|
Q1
2015
|
Q1
2014
|
|
Q1
2015
|
Q1
2014
|
|
Q1
2015
|
Q1
2014
|
|
Defibrillator
systems
|
|
$
|
220
|
|
$
|
208
|
|
|
$
|
115
|
|
$
|
131
|
|
|
$
|
335
|
|
$
|
339
|
|
|
Pacemaker
systems
|
|
58
|
|
62
|
|
|
63
|
|
65
|
|
|
121
|
|
127
|
|
|
Total CRM
products
|
|
$
|
278
|
|
$
|
270
|
|
|
$
|
178
|
|
$
|
196
|
|
|
$
|
456
|
|
$
|
466
|
|
|
BOSTON SCIENTIFIC
CORPORATION
|
|
INTERNATIONAL NET
SALES
|
|
(Unaudited)
|
|
|
|
Q1 2015
International Net Sales as compared to Q1 2014
|
|
|
Estimated
|
|
As
Reported
|
Constant
|
Impact
of
|
|
Currency
|
Currency
|
Foreign
|
|
Basis
|
Basis
|
Currency
|
|
|
|
|
|
Percentage change
in net sales
|
(7)%
|
7%
|
(14)%
|
|
|
|
|
|
|
|
|
|
Q1 2015 Europe Net
Sales as compared to Q1 2014
|
|
|
Estimated
|
|
As
Reported
|
Constant
|
Impact
of
|
|
Currency
|
Currency
|
Foreign
|
|
Basis
|
Basis
|
Currency
|
|
|
|
|
|
Percentage change
in net sales
|
(11)%
|
6%
|
(17)%
|
|
|
|
|
|
|
|
|
|
Q1 2015 Asia,
Middle East and Africa (AMEA) Net Sales as compared to Q1
2014
|
|
|
Estimated
|
|
As
Reported
|
Constant
|
Impact
of
|
|
Currency
|
Currency
|
Foreign
|
|
Basis
|
Basis
|
Currency
|
|
|
|
|
|
Percentage change
in net sales
|
(3)%
|
7%
|
(10)%
|
|
|
|
|
An explanation of the company's use of these non-GAAP financial
measures is provided at the end of this document.
|
BOSTON SCIENTIFIC
CORPORATION
|
|
ESTIMATED NON-GAAP
NET INCOME PER COMMON SHARE RECONCILIATIONS
|
|
(Unaudited)
|
|
|
|
Q2 and Full Year
2015 Earnings Per Share Guidance
|
|
|
Q2 2015
Estimate
|
|
Full Year 2015
Estimate
|
|
Prior Full
Year
2015 Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
|
GAAP
results
|
$
|
0.09
|
|
$
|
0.11
|
|
|
$
|
0.32
|
|
$
|
0.38
|
|
|
$
|
0.42
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
Estimated acquisition
and divestiture-related net charges
|
0.01
|
|
0.01
|
|
|
0.07
|
|
0.06
|
|
|
0.06
|
|
0.06
|
|
|
Estimated
restructuring-related charges
|
0.03
|
|
0.03
|
|
|
0.08
|
|
0.08
|
|
|
0.09
|
|
0.08
|
|
|
Estimated
amortization expense
|
0.07
|
|
0.07
|
|
|
0.28
|
|
0.28
|
|
|
0.28
|
|
0.28
|
|
|
Estimated pension
termination charges
|
—
|
|
—
|
|
|
0.03
|
|
0.02
|
|
|
0.03
|
|
0.02
|
|
|
Litigation-related
charges
|
—
|
|
—
|
|
|
0.10
|
|
0.10
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
results
|
$
|
0.20
|
|
$
|
0.22
|
|
|
$
|
0.88
|
|
$
|
0.92
|
|
|
$
|
0.88
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
An explanation of the company's use of these non-GAAP financial
measures is provided at the end of this document.
Use of Non-GAAP Financial Measures
To supplement our financial statements presented on a GAAP
basis, we disclose certain non-GAAP financial measures, including
adjusted net income and adjusted net income per share that exclude
certain amounts, and revenue growth rates that exclude the impact
of sales from divested businesses and/or changes in foreign
currency exchange rates. These non-GAAP financial measures are not
in accordance with generally accepted accounting principles in
the United States.
The GAAP financial measure most directly comparable to adjusted
net income is GAAP net income and the GAAP financial measure most
directly comparable to adjusted net income per share is GAAP net
income per share. To calculate revenue growth rates that exclude
the impact of changes in foreign currency exchange rates, we
convert actual net sales from local currency to U.S. dollars using
constant foreign currency exchange rates in the current and prior
period. The GAAP financial measure most directly comparable to this
non-GAAP financial measure and the non-GAAP financial measure that
excludes sales from divested businesses is growth rate percentages
using net sales on a GAAP basis. Reconciliations of each of these
non-GAAP financial measures to the corresponding GAAP financial
measure are included in the accompanying schedules.
Management uses these supplemental non-GAAP financial measures
to evaluate performance period over period, to analyze the
underlying trends in our business, to assess our performance
relative to our competitors, and to establish operational goals and
forecasts that are used in allocating resources. In addition,
management uses these non-GAAP financial measures to further its
understanding of the performance of our operating segments. The
adjustments excluded from our non-GAAP financial measures are
consistent with those excluded from our operating segments'
measures of net sales and profit or loss. These adjustments are
excluded from the segment measures that are reported to our chief
operating decision maker that are used to make operating decisions
and assess performance.
We believe that presenting adjusted net income and adjusted net
income per share that exclude certain amounts, and revenue growth
rates that exclude the impact of sales from divested businesses
and/or changes in foreign currency exchange rates, in addition to
the corresponding GAAP financial measures, provides investors
greater transparency to the information used by management for its
financial and operational decision-making and allows investors to
see our results "through the eyes" of management. We further
believe that providing this information assists our investors in
understanding our operating performance and the methodology used by
management to evaluate and measure such performance.
The following is an explanation of each of the adjustments that
management excluded as part of these non-GAAP financial measures
for the three months ended March 31,
2015 and 2014, and for the forecasted three month period
ending June 30, 2015 and full year
ending December 31, 2015, as well as
reasons for excluding each of these individual items:
Adjusted Net Income and Adjusted Net Income per
Share:
|
Goodwill and other
intangible asset impairment charges - This amount represents
non-cash write-downs of certain intangible asset balances during
the first quarter of 2014. We remove the impact of non-cash
impairment charges from our operating performance to assist in
assessing our cash generated from operations. We believe this
is a critical metric for us in measuring our ability to generate
cash and invest in our growth. Therefore, these charges are
excluded from management's assessment of operating performance and
are also excluded for purposes of calculating these non-GAAP
financial measures to facilitate an evaluation of our current
operating performance and a comparison to our past operating
performance, particularly in terms of liquidity.
|
|
Acquisition and
divestiture-related charges (credits) - These adjustments consist
of (a) contingent consideration fair value adjustments; (b) gains
on previously held equity interests; (c) due diligence, exit costs
and other fees; and (d) separation costs and gains primarily
associated with the sale of our Neurovascular business in January
2011. The contingent consideration adjustments represent accounting
adjustments to state contingent consideration liabilities at their
estimated fair value. These adjustments can be highly variable
depending on the assessed likelihood and amount of future
contingent consideration payments. Due diligence, exit costs and
other fees include legal, tax, severance and other expenses
associated with prior and potential future acquisitions and
divestitures that can be highly variable and not representative of
on-going operations. Separation costs and gains on the sale of a
business unit primarily represent those associated with the
Neurovascular divestiture and are not representative of on-going
operations. Accordingly, management excluded these amounts
for purposes of calculating these non-GAAP financial measures to
facilitate an evaluation of our current operating performance and a
comparison to our past operating performance.
|
|
Restructuring and
restructuring-related costs (credits) - These adjustments
represent primarily severance and other direct costs associated
with our 2014 Restructuring program. These costs are excluded by
management in assessing our operating performance, as well as from
our operating segments' measures of profit and loss used for making
operating decisions and assessing performance. Accordingly,
management excluded these costs for purposes of calculating these
non-GAAP financial measures to facilitate an evaluation of our
current operating performance and a comparison to our past
operating performance.
|
|
Litigation-related
net charges (credits) - These adjustments include certain
significant product liability and other litigation-related charges
and credits. These amounts are excluded by management in assessing
our operating performance, as well as from our operating segments'
measures of profit and loss used for making operating decisions and
assessing performance. Accordingly, management excluded these
amounts for purposes of calculating these non-GAAP financial
measures to facilitate an evaluation of our current operating
performance and a comparison to our past operating
performance.
|
|
Discrete tax
items - These items represent adjustments of certain tax
positions, which were initially established in prior periods in
conjunction with the purchase accounting for an acquisition or as a
result of intangible asset impairment charges; acquisition-,
divestiture-, restructuring- or litigation-related charges or
credits. These adjustments do not reflect expected on-going
operating results. Accordingly, management excluded these amounts
for purposes of calculating these non-GAAP financial measures to
facilitate an evaluation of our current operating performance and a
comparison to our past operating performance.
|
|
Pension termination
charges - This item represents charges associated with the
termination of the Guidant Retirement Plan, a frozen defined
benefit plan. These charges are not expected to recur after
2015 and do not reflect expected on-going operating results.
Accordingly, management has excluded these amounts for purposes of
calculating these non-GAAP financial measures to facilitate an
evaluation of our current operating performance and a comparison to
our past operating performance.
|
|
Amortization
expense - Amortization expense is a non-cash expense and does
not impact our liquidity or compliance with the financial covenants
included in our credit facility or our term loan facility
agreements. Management removes the impact of amortization from our
operating performance to assist in assessing our cash generated
from operations. We believe this is a critical metric for
measuring our ability to generate cash and invest in our growth.
Therefore, amortization expense is excluded from management's
assessment of operating performance and is also excluded from our
operating segments' measures of profit and loss used for making
operating decisions and assessing performance. Accordingly,
management has excluded amortization expense for purposes of
calculating these non-GAAP financial measures to facilitate an
evaluation of our current operating performance, particularly in
terms of liquidity.
|
Revenue Growth Rates Excluding the Impact of Sales from
Divested Businesses and/or Changes in Foreign Currency Exchange
Rates
|
Sales from divested
businesses and/or changes in foreign currency exchange rates -
Sales from divested businesses are primarily associated with the
Neurovascular divestiture and are not representative of on-going
operations. The impact of changes in foreign currency
exchange rates is highly variable and difficult to predict.
Accordingly, management excludes the impact of sales from divested
businesses and/or changes in foreign currency exchange rates for
purposes of reviewing revenue growth rates to facilitate an
evaluation of our current operating performance and a comparison to
our past operating performance.
|
Adjusted net income and adjusted net income per share that
exclude certain amounts, and revenue growth rates that exclude the
impact of sales from divested businesses and/or changes in foreign
currency exchange rates, are not in accordance with U.S. GAAP and
should not be considered in isolation from or as a replacement for
the most directly comparable GAAP financial measures. Further,
other companies may calculate these non-GAAP financial measures
differently than we do, which may limit the usefulness of those
measures for comparative purposes.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/boston-scientific-announces-results-for-first-quarter-2015-300072913.html
SOURCE Boston Scientific Corporation