MARLBOROUGH, Mass.,
April 27, 2016 /PRNewswire/ -- Boston Scientific
Corporation (NYSE: BSX) generated sales of $1.964 billion during the first quarter ended
March 31, 2016, compared to the company's guidance range for
the quarter of $1.890 to $1.940
billion. This represents 13 percent operational revenue
growth (calculated on a constant currency basis) and an increase of
11 percent on a reported basis, all compared to the prior year
period. The company achieved adjusted earnings per share of
$0.28 for the period, compared to
$0.21 a year ago, and reported GAAP
earnings of $202 million, or
$0.15 per share, compared to earnings
of $(0.00) a year ago.
"Four of our seven businesses achieved double-digit organic
revenue growth this quarter, as the high performance of our global
team has accelerated our growth profile as a company," said
Mike Mahoney, president and chief
executive officer, Boston Scientific. "This strong start enables us
to raise our outlook for the year. We continue to execute on our
product launches, expand into faster growth markets and deliver
solutions that address unmet clinical needs."
First quarter financial results and recent
developments:
- Reported first quarter sales of $1.964
billion, representing an increase of 11 percent on a
reported basis and 13 percent operational revenue growth, all
compared to the prior year period.
- Grew organic revenue 8 percent in the first quarter over the
prior year period. Organic revenue growth excludes the impact of
changes in foreign currency exchange rates and sales from the
acquisition of the American Medical Systems (AMS) male urology
portfolio.
- Delivered adjusted earnings per share of $0.28 compared to the company's guidance range of
$0.23 to $0.25 per share, and
reported GAAP earnings of $0.15 per
share compared to the company's guidance range of $0.11 to $0.13 per share.
- Achieved first quarter operational revenue growth of 28 percent
in MedSurg (11 percent organic), 14 percent in Cardiovascular and a
decline of 2 percent in Rhythm Management, all over the prior year
period.
- Delivered strong operational revenue growth across all three
major regions: 14 percent growth (7 percent organic) in the U.S.,
11 percent growth (6 percent organic) in Europe and 15 percent growth (14 percent
organic) in AMEA (Asia,
Middle East and Africa), all over the prior year period.
Achieved 23 percent operational revenue growth (21 percent organic)
in Emerging Markets.
- Received a national coverage decision from the Centers for
Medicare and Medicaid Services that is consistent with the U.S.
Food and Drug Administration (FDA) label and will cover the
WATCHMAN™ Left Atrial Appendage Closure Device as a
non-pharmacological treatment option for stroke risk reduction in
patients with non-valvular atrial fibrillation.
- Received approvals for several products deemed safe for use in
a magnetic resonance imaging (MRI) environment when conditions of
use are met, including FDA approval for the ImageReady™
MR-Conditional Pacing System, CE Mark for the new EMBLEM™ MRI
Subcutaneous Implantable Defibrillator (S-ICD) System and
MR-conditional labeling for all previously implanted EMBLEM S-ICD
Systems. The ImageReady System includes ACCOLADE™ MRI and ESSENTIO™
MRI pacemakers and the new INGEVITY™ MRI pacing leads. The company
also initiated a global trial called ENABLE MRI to evaluate the
safety of currently approved implanted cardiac defibrillation (ICD)
and cardiac resynchronization therapy (CRT) systems
for patients in an MRI environment.
- Received FDA approval for the ACUITY™ X4 Quadripolar Left
Ventricular Leads. The addition of the quadripolar leads to the
Rhythm Management portfolio enables the company to now offer a full
X4 CRT system, consisting of both the device and the leads, to the
U.S. market.
- Launched the AXIOS™ Stent and Electrocautery Enhanced Delivery
System to help physicians manage two serious complications from
pancreatitis (pancreatic pseudosysts and certain types of
walled-off pancreatic necrosis) using a minimally invasive,
endoscopic approach.
- Received CE Mark for, and began European commercialization of,
the Eluvia™ Drug-Eluting Vascular Stent System,* the first
polymer-based drug-eluting stent designed to treat peripheral
lesions above the knee. Initiated the IMPERIAL trial to support
regulatory approvals of the Eluvia System in the U.S. and
Asia.
- Received FDA approval for the Blazer™ Open-Irrigated
Radiofrequency Ablation Catheter, designed for use in ablation
procedures to restore a normal heart rhythm for patients with Type
I atrial flutter, marking the first time that the company will
offer an open-irrigated catheter to the U.S. market. The company
also received CE Mark for the IntellaTip MiFi™ Open-Irrigated
Catheter** for use in all cardiac ablation procedures.
- Presented compelling data at the American College of
Cardiology's 65th annual Scientific Sessions across the company's
Cardiovascular and Rhythm Management franchises, including the
WATCHMAN Device, the SYNERGY™ Bioabsorbable Polymer Drug-Eluting
Stent System, the Lotus™ Transcatheter Aortic Valve Replacement
(TAVR) System* and the communications capabilities between the
company's leadless pacemaker*** and the EMBLEM S-ICD System.
* In the U.S., the Eluvia Stent System and Lotus Valve System
are investigational devices limited under U.S. federal law to
investigational use only and not available for sale.
** In the U.S., the IntellaTip Mifi Open Irrigated Catheter is
not available for use or sale.
*** The leadless pacemaker is a concept device or technology.
Not available for use or sale.
Net sales for the first quarter:
|
|
|
|
|
Change
|
|
|
|
Three Months
Ended
March 31,
|
|
As
Reported
Basis
|
|
Less: Impact
of
Foreign Currency
|
|
Constant
Currency
Basis
|
|
in
millions
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
$
|
548
|
|
$
|
495
|
|
|
11
|
|
%
|
|
$
|
(19)
|
|
(2)
|
|
%
|
|
13
|
|
%
|
|
|
Peripheral Interventions
|
242
|
|
217
|
|
|
12
|
|
%
|
|
(7)
|
|
(2)
|
|
%
|
|
14
|
|
%
|
|
|
Cardiovascular
|
790
|
|
712
|
|
|
11
|
|
%
|
|
(26)
|
|
(3)
|
|
%
|
|
14
|
|
%
|
|
|
Cardiac
Rhythm Management
|
433
|
|
456
|
|
|
(5)
|
|
%
|
|
(11)
|
|
(2)
|
|
%
|
|
(3)
|
|
%
|
|
|
Electrophysiology
|
59
|
|
58
|
|
|
3
|
|
%
|
|
(2)
|
|
(2)
|
|
%
|
|
5
|
|
%
|
|
|
Rhythm
Management
|
492
|
|
514
|
|
|
(4)
|
|
%
|
|
(13)
|
|
(2)
|
|
%
|
|
(2)
|
|
%
|
|
|
Endoscopy
|
333
|
|
305
|
|
|
9
|
|
%
|
|
(9)
|
|
(2)
|
|
%
|
|
11
|
|
%
|
|
|
Urology
and Pelvic Health
|
228
|
|
123
|
|
|
85
|
|
%
|
|
(8)
|
|
(2)
|
|
%
|
|
87
|
|
%
|
*
|
|
Neuromodulation
|
121
|
|
114
|
|
|
6
|
|
%
|
|
(2)
|
|
(2)
|
|
%
|
|
8
|
|
%
|
|
|
MedSurg
|
682
|
|
542
|
|
|
26
|
|
%
|
|
(19)
|
|
(2)
|
|
%
|
|
28
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
$
|
1,964
|
|
$
|
1,768
|
|
|
11
|
|
%
|
|
$
|
(58)
|
|
(2)
|
|
%
|
|
13
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Excluding the
sales of acquired AMS male urology portfolio products, organic
Urology and Pelvic Health grew 12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
Sales growth rates
that exclude the impact of changes in foreign currency exchange
rates and/or the impact of recent acquisitions with significant
sales 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 income for the first quarter
of 2016 was $202 million, or
$0.15 per share. These results
included acquisition- and divestiture-, litigation-, and
restructuring and restructuring- related net charges and
amortization expense, of $176 million
(after-tax) or $0.13 per share.
Adjusted net income for the first quarter of 2016, excluding these
net charges, was $378 million, or
$0.28 per share.
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 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.
Guidance for Full Year and Second Quarter 2016
The company now estimates revenue for the full year 2016 to be
in a range of $8.075 to $8.225
billion (compared to prior guidance of $7.900 to $8.100 billion), which versus the prior
year period represents growth of approximately 8 to 10 percent on a
reported basis, growth of approximately 9 to 11 percent on an
operational basis and growth of approximately 6 to 8 percent on an
organic basis. The company now estimates income on a GAAP basis in
a range of $0.64 to $0.69 per share
(compared to prior guidance of $0.62 to
$0.67 per share), and now estimates adjusted earnings,
excluding acquisition- and divestiture-, litigation-, and
restructuring and restructuring-related net charges, and
amortization expense, in a range of $1.06 to
$1.10 per share (compared to $1.03 to
$1.07 per share).
The company estimates sales for the second quarter of 2016 to be
in a range of $2.010 to $2.060
billion, which versus the prior year period represents
growth of approximately 9 to 12 percent on a reported basis, growth
of approximately 11 to 13 percent on an operational basis and
growth of approximately 6 percent to 8 percent on an organic basis.
The company estimates earnings on a GAAP basis in a range of
$0.14 to $0.17 per share. Adjusted
earnings, excluding acquisition- and divestiture- and restructuring
and restructuring-related net charges and amortization expense, are
estimated in a range of $0.25 to
$0.27 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, organic and operational revenue growth rates, GAAP earnings
and adjusted earnings for the second quarter and full year 2016;
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; the closing and integration of acquisitions; 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:
|
Tom
Keppeler
|
|
508-683-6585
(office)
|
|
Media
Relations
|
|
Boston Scientific
Corporation
|
|
tom.keppeler@bsci.com
|
|
|
Investors:
|
Susan 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
|
2016
|
2015
|
|
|
|
Net sales
|
$
|
1,964
|
|
$
|
1,768
|
|
Cost of products
sold
|
573
|
|
520
|
|
Gross
profit
|
1,391
|
|
1,248
|
|
|
|
|
Operating
expenses:
|
|
|
Selling, general and
administrative expenses
|
716
|
|
668
|
|
Research and
development expenses
|
210
|
|
192
|
|
Royalty
expense
|
19
|
|
17
|
|
Amortization
expense
|
136
|
|
113
|
|
Contingent
consideration expense (benefit)
|
4
|
|
27
|
|
Restructuring
charges
|
3
|
|
6
|
|
Litigation-related
charges (credits)
|
10
|
|
193
|
|
Pension termination
charges
|
—
|
|
8
|
|
|
1,098
|
|
1,224
|
|
Operating income
(loss)
|
293
|
|
24
|
|
|
|
|
Other income
(expense):
|
|
|
Interest
expense
|
(59)
|
|
(60)
|
|
Other, net
|
(6)
|
|
(15)
|
|
Income
(loss) before income taxes
|
228
|
|
(51)
|
|
Income tax expense
(benefit)
|
26
|
|
(50)
|
|
Net income
(loss)
|
$
|
202
|
|
$
|
(1)
|
|
|
|
|
Net income (loss)
per common share - basic
|
$
|
0.15
|
|
$
|
(0.00)
|
|
Net income (loss)
per common share - assuming dilution
|
$
|
0.15
|
|
$
|
(0.00)
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
Basic
|
1,350.4
|
|
1,333.7
|
|
Assuming
dilution
|
1,369.9
|
|
1,333.7
|
|
BOSTON SCIENTIFIC
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
As
of
|
|
March
31,
|
|
December
31,
|
in millions,
except share data
|
2016
|
|
2015
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
338
|
|
|
$
|
319
|
|
Trade accounts
receivable, net
|
1,291
|
|
|
1,275
|
|
Inventories
|
1,022
|
|
|
1,016
|
|
Deferred and prepaid
income taxes
|
76
|
|
|
496
|
|
Other current
assets
|
437
|
|
|
365
|
|
Total current
assets
|
3,164
|
|
|
3,471
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,464
|
|
|
1,490
|
|
Goodwill
|
6,477
|
|
|
6,473
|
|
Other intangible
assets, net
|
6,062
|
|
|
6,194
|
|
Other long-term
assets
|
551
|
|
|
505
|
|
TOTAL
ASSETS
|
$
|
17,718
|
|
|
$
|
18,133
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current debt
obligations
|
$
|
253
|
|
|
$
|
3
|
|
Accounts
payable
|
232
|
|
|
209
|
|
Accrued
expenses
|
1,792
|
|
|
1,970
|
|
Other current
liabilities
|
331
|
|
|
248
|
|
Total current
liabilities
|
2,608
|
|
|
2,430
|
|
|
|
|
|
Long-term
debt
|
5,424
|
|
|
5,674
|
|
Deferred income
taxes
|
295
|
|
|
735
|
|
Other long-term
liabilities
|
2,934
|
|
|
2,974
|
|
|
|
|
|
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 shares -
|
|
|
|
issued
1,602,133,758 shares as of March 31, 2016 and
|
|
|
|
1,594,213,786 shares
as of December 31, 2015
|
16
|
|
|
16
|
|
Treasury stock, at
cost - 247,566,270 shares as of March 31, 2016
|
|
|
|
and 247,566,270
shares as of December 31, 2015
|
(1,717)
|
|
|
(1,717)
|
|
Additional paid-in
capital
|
16,848
|
|
|
16,860
|
|
Accumulated
deficit
|
(8,725)
|
|
|
(8,927)
|
|
Accumulated other
comprehensive income (loss), net of tax
|
35
|
|
|
88
|
|
Total stockholders'
equity
|
6,457
|
|
|
6,320
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
17,718
|
|
|
$
|
18,133
|
|
BOSTON SCIENTIFIC
CORPORATION
|
NON-GAAP NET INCOME
AND NET INCOME PER COMMON SHARE RECONCILIATIONS
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31, 2016
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax Impact (a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
228
|
|
|
$
|
(26)
|
|
|
$
|
202
|
|
|
$
|
0.15
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition- and
divestiture-related net charges (b)
|
|
42
|
|
|
2
|
|
|
44
|
|
|
0.03
|
|
|
Restructuring and
restructuring-related net charges (c)
|
|
13
|
|
|
(4)
|
|
|
9
|
|
|
0.01
|
|
|
Litigation-related
net charges
|
|
10
|
|
|
(4)
|
|
|
6
|
|
|
0.00
|
|
|
Amortization
expense
|
|
136
|
|
|
(19)
|
|
|
117
|
|
|
0.09
|
|
|
Adjusted net
income
|
|
$
|
429
|
|
|
$
|
(51)
|
|
|
$
|
378
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
in millions,
except per share data
|
|
Pre-Tax
|
|
Tax Impact (a)
|
|
After-Tax
|
|
Impact per
Share
|
|
GAAP net income
(loss)
|
|
$
|
(51)
|
|
|
$
|
50
|
|
|
$
|
(1)
|
|
|
$
|
(0.00)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition- and
divestiture-related net charges (d)
|
|
42
|
|
|
1
|
|
|
43
|
|
|
0.03
|
|
*
|
Restructuring and
restructuring-related net charges (e)
|
|
22
|
|
|
(4)
|
|
|
18
|
|
|
0.01
|
|
*
|
Litigation-related
net charges
|
|
193
|
|
|
(70)
|
|
|
123
|
|
|
0.10
|
|
*
|
Pension termination
charges
|
|
8
|
|
|
(3)
|
|
|
5
|
|
|
0.00
|
|
*
|
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
|
|
|
|
|
|
|
|
|
|
|
(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 2016, pre-tax acquisition- and divestiture-related net
charges were $42 million, of which $24 million was recorded in cost
of products sold, $14 million was recorded in selling, general and
administrative expenses, and $4 million was recorded as contingent
consideration expense.
|
|
(c) In the first
quarter of 2016, pre-tax restructuring charges were $3 million and
pre-tax restructuring-related charges were $10 million, of which $6
million was recorded in cost of products sold and $4 million was
recorded in selling, general and administrative
expenses.
|
|
(d) 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 in interest
expense.
|
|
(e) 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.
|
|
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)
|
|
SEGMENT NET
SALES*
|
|
Three Months
Ended
March 31,
|
|
in
millions
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
Interventional Cardiology
|
|
$
|
613
|
|
|
$
|
541
|
|
|
13
|
|
%
|
|
Peripheral
Interventions
|
|
264
|
|
|
232
|
|
|
14
|
|
%
|
|
Cardiovascular
|
|
877
|
|
|
773
|
|
|
14
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Cardiac
Rhythm Management
|
|
471
|
|
|
483
|
|
|
(3)
|
|
%
|
|
Electrophysiology
|
|
64
|
|
|
61
|
|
|
5
|
|
%
|
|
Rhythm
Management
|
|
535
|
|
|
544
|
|
|
(2)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Endoscopy
|
|
365
|
|
|
328
|
|
|
11
|
|
%
|
|
Urology
and Pelvic Health
|
|
243
|
|
|
130
|
|
|
87
|
|
%
|
|
Neuromodulation
|
|
125
|
|
|
116
|
|
|
8
|
|
%
|
|
MedSurg
|
|
733
|
|
|
574
|
|
|
28
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Subtotal Core
Businesses
|
|
2,145
|
|
|
1,891
|
|
|
13
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency
|
|
(181)
|
|
|
(123)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
$
|
1,964
|
|
|
$
|
1,768
|
|
|
11
|
|
%
|
|
|
|
|
|
|
|
|
|
|
Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
INCOME*
|
|
Three Months
Ended
March 31,
|
|
in
millions
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Segment operating
income
|
|
|
|
|
|
Cardiovascular
|
|
$
|
299
|
|
|
$
|
236
|
|
|
Rhythm
Management
|
|
90
|
|
|
78
|
|
|
MedSurg
|
|
239
|
|
|
166
|
|
|
Operating income
allocated to reportable segments
|
|
628
|
|
|
480
|
|
|
Corporate expenses
and currency exchange
|
|
(134)
|
|
|
(82)
|
|
|
Acquisition and
divestiture-, litigation-, restructuring- and restructuring-related
net charges, and pension termination charges
|
|
(65)
|
|
|
(261)
|
|
|
Amortization
expense
|
|
(136)
|
|
|
(113)
|
|
|
Operating income
(loss)
|
|
$
|
293
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
*We measure and
evaluate our reportable segments based on segment net sales and
operating income, excluding the impact of changes in foreign
currency. Sales generated from reportable segments, 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
intangible asset impairment charges; acquisition and divestiture-,
restructuring- and litigation-related net 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.
|
BOSTON SCIENTIFIC
CORPORATION
|
WORLDWIDE CARDIAC
RHYTHM MANAGEMENT (CRM) SALES BY COMPONENT
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
(in
millions)
|
|
2016
|
|
2015
|
Defibrillator
systems
|
|
311
|
|
|
335
|
|
Pacemaker
systems
|
|
122
|
|
|
121
|
|
CRM
products
|
|
$
|
433
|
|
|
$
|
456
|
|
|
|
|
|
|
|
|
|
|
BOSTON SCIENTIFIC
CORPORATION
|
SEGMENT AND REGIONAL
NET SALES
|
(Unaudited)
|
|
Q1 2016 Segment
Net Sales as compared to Q1 2015
|
|
|
MedSurg
|
Cardiovascular
|
Rhythm
Management
|
Total
BSC
|
Percentage change
in net sales, as reported
|
26
|
%
|
11
|
%
|
(4)
|
%
|
11
|
%
|
Less: Impact of
Foreign Currency Fluctuations
|
(2)
|
%
|
(3)
|
%
|
(2)
|
%
|
(2)
|
%
|
Percentage change
in net sales, constant currency
|
28
|
%
|
14
|
%
|
(2)
|
%
|
13
|
%
|
Less: Impact of AMS
acquisition
|
17
|
%
|
—
|
%
|
—
|
%
|
5
|
%
|
Percentage change
in net sales, organic
|
11
|
%
|
14
|
%
|
(2)
|
%
|
8
|
%
|
|
|
Q1 2016 Regional
Net Sales as compared to Q1 2015
|
|
|
U.S.
|
Europe
|
AMEA
|
Emerging
Markets*
|
Percentage change
in net sales, as reported
|
14
|
%
|
8
|
%
|
12
|
%
|
8
|
%
|
Less: Impact of
Foreign Currency Fluctuations
|
—
|
%
|
(3)
|
%
|
(3)
|
%
|
(15)
|
%
|
Percentage change
in net sales, constant currency
|
14
|
%
|
11
|
%
|
15
|
%
|
23
|
%
|
Less: Impact of AMS
acquisition
|
7
|
%
|
5
|
%
|
1
|
%
|
2
|
%
|
Percentage change
in net sales, organic
|
7
|
%
|
6
|
%
|
14
|
%
|
21
|
%
|
|
*We define
Emerging Markets as including certain countries that we believe
have strong growth potential based on their economic conditions,
healthcare sectors, and our global capabilities. Currently, we
include 20 countries in our definition of Emerging
Markets.
|
|
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 REVENUE
NON-GAAP GROWTH RATES AND NON-GAAP NET INCOME PER COMMON SHARE
RECONCILIATIONS
|
(Unaudited)
|
|
Q2 and Full Year
2016 Estimated Revenue Growth Rates
|
|
|
Q2 2016
Estimate
|
|
Full Year 2016
Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
Estimated GAAP
sales growth
|
9
|
%
|
12
|
%
|
|
8
|
%
|
10
|
%
|
Less: Estimated
Impact of Foreign Currency Fluctuations
|
(2)
|
%
|
(1)
|
%
|
|
(1)
|
%
|
(1)
|
%
|
Estimated sales
growth, constant currency
|
11
|
%
|
13
|
%
|
|
9
|
%
|
11
|
%
|
Less: Impact of AMS
acquisition
|
5
|
%
|
5
|
%
|
|
3
|
%
|
3
|
%
|
Estimated sales
growth, organic
|
6
|
%
|
8
|
%
|
|
6
|
%
|
8
|
%
|
|
|
Q2 and Full Year
2016 EPS Guidance
|
|
|
Q2 2016
Estimate
|
|
Full Year 2016
Estimate
|
|
Prior Full
Year
2016 Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
GAAP
results
|
$
|
0.14
|
|
$
|
0.17
|
|
|
$
|
0.64
|
|
$
|
0.69
|
|
|
$
|
0.62
|
|
$
|
0.67
|
|
|
|
|
|
|
|
|
|
|
Estimated acquisition
and divestiture-related net charges
|
0.01
|
|
0.01
|
|
|
0.06
|
|
0.05
|
|
|
0.05
|
|
0.04
|
|
Estimated
restructuring and restructuring-related charges
|
0.01
|
|
0.00
|
|
|
0.02
|
|
0.02
|
|
|
0.02
|
|
0.02
|
|
Estimated
amortization expense
|
0.09
|
|
0.09
|
|
|
0.34
|
|
0.34
|
|
|
0.34
|
|
0.34
|
|
Litigation-related
charges
|
0.00
|
|
0.00
|
|
|
0.00
|
|
0.00
|
|
|
0.00
|
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Adjusted
results
|
$
|
0.25
|
|
$
|
0.27
|
|
|
$
|
1.06
|
|
$
|
1.10
|
|
|
$
|
1.03
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
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 changes in foreign currency exchange rates and/or the impact of
recent acquisitions with significant sales. 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
constant currency growth rate and/or growth rates excluding the
impacts of recent acquisitions with significant sales 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. With
the exception of the impact of recent acquisitions with significant
sales, 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 changes in foreign currency
exchange rates and/or the impact of recent acquisitions with
significant sales, 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 and six months ended March 31, 2016 and 2015,
and for the forecasted three month period ending June 30, 2016 and full year ending
December 31, 2016, as well as reasons for excluding each of
these individual items:
Adjusted Net Income and Adjusted Net Income per
Share:
- Acquisition- and divestiture-related net charges (credits) -
These adjustments may consist of (a) contingent consideration fair
value adjustments; (b) gains on previously held investments; (c)
purchased and/or funded in-process research and development
expenses incurred outside of a business combination; and (d) due
diligence, other fees, inventory step up amortization, and
integration and exit costs. 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, other fees, inventory step-up amortization, and
integration and exit costs include legal, tax, severance and other
expenses associated with prior and potential future acquisitions
that can be highly variable and not representative of ongoing
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 net charges (credits) -
These adjustments represent 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.
- 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 ongoing 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 - We record intangible assets at
historical cost and amortize them over their estimated useful
lives. 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 and a comparison to
our past operating performance.
Revenue Growth Rates Excluding the Impact of Changes in
Foreign Currency Exchange Rates and/or the Impact of Recent
Acquisitions with Significant Sales
- The impact of changes in foreign currency exchange rates is
highly variable and difficult to predict. The impact of recent
acquisitions with significant sales in the current period and no
prior period equivalent may distort our presentation of organic
growth. Accordingly, management excludes the impact of
changes in foreign currency exchange rates and/or the impacts of
recent acquisitions with significant sales 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 changes in foreign currency exchange rates and/or the
impacts of recent acquisitions with significant sales, 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-2016-300258017.html
SOURCE Boston Scientific Corporation