-
Preliminary Q4 Worldwide
Revenue of Approximately $7.3 Billion Grew 7% on a Comparable,
Constant Currency Basis; 60% as Reported
-
Preliminary Q4 U.S. Revenue of
Approximately $4.1 Billion Grew 8% on a Comparable Basis; 67% as
Reported
-
Preliminary FY15 GAAP Revenue
of Approximately $20.3 Billion Grew 19% as Reported, or 6% on a Comparable, Constant Currency Basis
-
Company Tightens Fourth Quarter
Adjusted EPS Expectations
DUBLIN - May 19, 2015 -
Medtronic plc (NYSE: MDT) today announced its preliminary revenue
results for the fourth quarter and fiscal year 2015, which ended
April 24, 2015. As this is the first quarter where the
company is reporting results that include its recent acquisition of
Covidien, full financial results are expected to be reported on
June 2, 2015, two weeks later than the company's normal reporting
date.
Unless otherwise noted, all comparisons and growth
rates in this press release are stated on a comparable, constant
currency basis, which includes Covidien plc in the prior year
comparison and aligns Covidien's prior year monthly revenue to
Medtronic's fiscal quarters. Aligning historic Covidien
revenue to Medtronic's fiscal quarters is different than the pro
forma revenue information previously included within certain SEC
filings, which combined revenues from the closest historical
reported quarters of both companies. Management believes that
referring to comparable, constant currency growth rates is a more
useful way to evaluate the underlying performance of Medtronic's
revenue. For additional revenue detail and the reconciliation
of these revenue amounts and growth rates to the most directly
comparable GAAP financial measures, please refer to the link at the
end of this release.
The company announced preliminary fourth quarter
worldwide revenue of approximately $7.302 billion, compared to
$7.257 billion on a comparable basis in the fourth quarter of
fiscal year 2014, an increase of 7 percent after adjusting for an
approximately $482 million negative foreign currency impact.
As reported, revenue increased 60 percent when compared to
the $4.566 billion reported by Medtronic, Inc. in the fourth
quarter of fiscal year 2014.
Fourth quarter U.S. revenue of approximately
$4.055 billion increased 8 percent, or 67 percent as
reported. Fourth quarter non-U.S. developed market revenue of
approximately $2.320 billion increased 5 percent, or 48 percent as
reported. Fourth quarter emerging market revenue of
approximately $927 million increased 11 percent, or 62 percent as
reported, and represented approximately 13 percent of company
revenue.
As reported, Medtronic's fiscal year 2015 revenue
of approximately $20.259 billion, increased 19 percent, or 6
percent on a comparable, constant currency basis.
"I am very encouraged by our strong preliminary
fourth quarter revenue performance especially as it is the first
quarter that reflects the combined results of Medtronic and
Covidien," said Omar Ishrak, Medtronic chairman and chief executive
officer. "In addition to making solid progress on our integration
of Covidien, these preliminary revenue results reflect disciplined
execution across our three core strategies of therapy innovation,
globalization, and economic value."
Cardiac and Vascular
Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm
& Heart Failure, Coronary & Structural Heart, and Aortic
& Peripheral Vascular divisions. CVG had worldwide
revenue in the quarter of approximately $2.596 billion,
representing an increase of 10 percent on both a comparable,
constant currency basis and as reported. CVG revenue
performance was driven by strong balanced growth across all three
divisions.
Fourth quarter CVG U.S. revenue of approximately
$1.301 billion increased 15 percent, or 28 percent as
reported. Fourth quarter CVG non-U.S. developed market
revenue of approximately $903 million increased 5 percent, or
decreased 7 percent as reported. Fourth quarter CVG emerging
market revenue of approximately $392 million increased 11 percent,
or 4 percent as reported.
Cardiac Rhythm & Heart Failure (CRHF) revenue
of approximately $1.398 billion grew 11 percent, or 4 percent as
reported. CRHF performance this quarter was driven by
low-teens growth in Low Power, mid-single digit growth in High
Power and strong growth of over 30 percent in AF Solutions.
Geographically, the CRHF division benefitted from mid-teens
growth in the U.S. and Japan. Low Power results were driven
by the continued ongoing acceptance of the Reveal LINQTM insertable
cardiac monitor and solid performance in the U.S. Pacing business,
which grew in the upper-single digits. High Power results
were driven by mid-single digit growth in the U.S. and double-digit
growth in Japan. The VivaTM XT CRT-D
with its AdaptivCRT® algorithm and
Attain®
PerformaTM Quadripolar
Lead continue to show strong market acceptance. AF Solutions
results were driven by continued robust growth of our Arctic Front
Advance® CryoAblation
System.
Coronary & Structural Heart (CSH) revenue of
approximately $792 million increased 9 percent, or 1 percent as
reported. CSH performance was driven by upper-teens growth in
Structural Heart and low-single digit growth in Coronary.
Structural Heart grew in the upper-teens globally and approximately
30 percent in the U.S. driven by Transcatheter Valves, which grew
approximately 50 percent globally based on the ongoing success of
CoreValve® in the U.S.,
and the launch of the CoreValve®
EvolutTM R
recapturable system in international markets. Coronary
benefitted from mid-single digit Drug Eluting Stent (DES) growth
driven by the recent launch of Resolute OnyxTM in
Europe and the continued acceptance of Resolute
Integrity® DES in the
U.S. The business also had low-double digit growth in
balloons as a result of the recent launch of the company's
differentiated EuphoraTM SC balloon
dilatation catheter.
Aortic & Peripheral Vascular (APV) revenue of
approximately $406 million increased 9 percent, or 69 percent as
reported. APV performance was driven by very strong mid-teens
growth in the Peripheral business, which is comprised of the legacy
Medtronic peripheral business and a portion of the legacy Covidien
Peripheral business, and low-single digit growth in Aortic.
Growth in the Peripheral business was driven by the
IN.PACT®
Admiral® drug-coated
balloon, which was launched at the beginning of the fiscal fourth
quarter. The company estimates it now has the leading
position in the U.S. Drug Coated Balloon market. This
leadership position was attained without the benefit of having a
full quarter of a combined Medtronic and legacy Covidien peripheral
salesforce. Peripheral was also driven by strong double-digit
growth in Chronic Venous Insufficiency (CVI) reflecting the
continued acceptance of ClosureFastTM in
Japan.
Minimally Invasive Therapies
Group
The Minimally Invasive Therapies Group (MITG), formerly referred to
as the Covidien Group following completion of the Covidien
acquisition, includes both the Surgical Solutions division and the
Patient Monitoring & Recovery division, formerly referred to as
Medical Care Solutions by Covidien prior to the acquisition.
The group had worldwide sales in the quarter of approximately
$2.385 billion, representing an increase of 6 percent.
Incremental revenue from acquisitions contributed just over 1
percent to consolidated growth. MITG revenue performance was
driven by strong double-digit growth in Surgical Solutions and
low-single digit growth in Patient Monitoring & Recovery.
Fourth quarter MITG revenue in the U.S. of
approximately $1.228 billion increased 6 percent. Fourth
quarter MITG non-U.S. developed market revenue of approximately
$852 million increased 4 percent. Fourth quarter MITG
emerging market revenue of approximately $305 million increased 11
percent.
Surgical Solutions revenue of approximately $1.293
billion increased 10 percent. Surgical Solutions performance
this quarter was driven by high-single digit growth in Advanced
Surgical and low-single digit growth in General Surgical.
Advanced Surgical results were driven by balanced low-double digit
growth in both Stapling and Energy coupled with growth of over 40
percent in Early Technologies, which benefitted significantly from
acquisitions. Stapling growth reflected continued strong
market adoption in the U.S. of new product introductions including
the Endo GIATM Reinforced
Reload. Energy results were driven by continued robust
procedural growth in Vessel Sealing. Early Technologies
results included strong growth across all three product lines: GI
Solutions, Advanced Ablation, and Interventional Lung
Solutions.
Patient Monitoring & Recovery (PMR) revenue of
approximately $1.092 billion increased 2 percent. Patient
Monitoring grew in the mid-single digits, and both Airway &
Ventilation and Nursing Care grew in the low-single digits,
offsetting low-single digit declines in Patient Care. The
strong U.S. flu season drove pulse oximetry sales.
Restorative Therapies
Group
The Restorative Therapies Group (RTG) includes the Spine,
Neuromodulation, Surgical Technologies, and Neurovascular
divisions. The group had worldwide revenue in the quarter of
approximately $1.854 billion, representing an increase of 5
percent, or 7 percent as reported. Group revenue performance
was driven by growth in Surgical Technologies, Neuromodulation, and
Neurovascular, partially offset by declines in Spine.
Fourth quarter RTG U.S. revenue of approximately
$1.233 billion increased 4 percent, or 8 percent as reported.
Fourth quarter RTG non-U.S. developed market revenue of
approximately $426 million increased 4 percent, or declined 4
percent as reported. Fourth quarter RTG emerging market
revenue of approximately $195 million increased 12 percent, or 25
percent as reported.
Spine revenue of approximately $743 million
declined 2 percent, or 5 percent as reported. Core Spine and
Interventional revenue both declined in the low-single digits,
offsetting low-single digit growth in Bone Morphogenetic Protein
(BMP). The Core Spine business is focused on differentiating
itself from the competition over the long-term through its leading
technology and procedural innovation, enhanced by its Surgical
Synergy(TM) program of enabling technologies, including imaging,
navigation, and powered surgical instruments.
Neuromodulation revenue of approximately $518
million grew 6 percent, or 1 percent as reported.
Neuromodulation performance was driven by mid-teens growth in
Gastro/Uro and double-digit growth in Deep Brain Stimulation (DBS).
Pain Stim was flat in the quarter, in-line with the
market. Geographically, the Neuromodulation business
benefitted from strong growth of over 30 percent in emerging
markets, low-single digit growth in the U.S., and mid-single digit
growth in Europe.
Surgical Technologies revenue of approximately
$461 million grew 9 percent, or 5 percent as reported.
Surgical Technologies' performance was driven by solid, balanced
growth across all three businesses. Neurosurgery grew in the
mid-single digits reflecting record worldwide O-arm®
surgical imaging unit sales, continued strength in
StealthStation® navigation
service revenue, and the contribution of Visualase®
MRI-guided laser ablation. ENT low-double digit growth
reflected continued strong StraightShot® M5
Microdebrider and NuVent(TM) sinus balloon penetration offset
partially by a divestiture in the Surgical Technolgies division,
which occurred in the third quarter of fiscal year 2015.
Advanced Energy grew in the upper-teens driven by the
continued adoption of PEAK PlasmaBlade®.
Geographically, the business had low-teens growth in the U.S.
on the strength of new products.
Neurovascular revenue of approximately $132
million increased 23 percent. The business, formerly part of
legacy Covidien, posted strong double-digit growth across coils,
stents, flow diversion, and access product lines. Robust
growth in neurovascular stents was driven by the
SolitaireTM FR
revascularization device following the publication of several
positive clinical studies in the New England Journal of Medicine,
including SWIFT PRIME. Flow diversion growth benefitted from
the third quarter U.S. launch of the PipelineTM Flex
embolization device.
Diabetes Group
The Diabetes Group includes the Intensive Insulin Management,
Non-Intensive Diabetes Therapies, and Diabetes Services &
Solutions divisions. The group had worldwide revenue in the
quarter of approximately $467 million, representing an increase of
8 percent, or 2 percent as reported.
Fourth quarter Diabetes U.S. revenue of
approximately $293 million increased 8 percent on both a
comparable, constant currency basis and as reported. Fourth
quarter Diabetes non-U.S. developed market revenue of approximately
$139 million increased 8 percent, or decreased 9 percent as
reported. Fourth quarter Diabetes emerging market revenue of
approximately $35 million increased 5 percent, or decreased 5
percent as reported.
Diabetes Group revenue in the quarter was driven
by continued strong adoption in the U.S. of the MiniMed®
530G System with Enlite® CGM sensor
and its proprietary Threshold Suspend technology. Growth was
also driven by the continued international launch of the
next-generation MiniMed® 640G System
with a new insulin pump design, user interface, the Enhanced
Enlite® CGM sensor
and SmartGuardTM technology,
a proprietary algorithm that can automatically suspend insulin
delivery when sensor glucose levels are predicted to approach a low
limit and resume insulin delivery once sensor glucose levels
recover. The Intensive Insulin Management division continued
to progress toward the development of an artificial pancreas
system, with a minority investment in, and licensing of the DreaMed
algorithm for a next generation closed loop system. The group
continues to grow its Diabetes Services & Solutions
division as evidenced by the recently announced partnership with
IBM Watson Health and its minority investment in Glooko. The
recent Diabeter acquisition also marks an important first move into
the diabetes integrated care service space in the pediatric Type 1
population.
Fourth Quarter Earnings
Expectations and Fiscal Year 2016 Perspective
Based on preliminary revenue and operating results, the company
today updated its expectation that fourth quarter adjusted cash
earnings per share would be at the upper half of the previously
communicated range of $1.08 to $1.13. However, it is
important to note that adjusted cash earnings per share for the
fourth quarter exclude a number of significant charges, including,
but not limited to, amortization of intangible assets, net
restructuring charges, acquisition related items, the impact of
inventory purchase price step-up, and certain tax adjustments.
"As we look ahead to fiscal year 2016, we feel
increasingly confident about our business outlook on an operational
basis." said Gary Ellis, Medtronic executive vice president and
chief financial officer. "However, foreign exchange continues
to represent a significant headwind to many multinational
companies, including Medtronic. While recently the U.S.
dollar has weakened, it is important to note that the foreign
exchange rates in our fourth quarter were below the rates assumed
in the outlook we forecasted on our third quarter earnings call in
February."
Webcast Information
Medtronic will report its fourth quarter and full-year financial
results on Tuesday, June 2, 2015, and intends to provide its
initial fiscal year 2016 EPS guidance and revenue outlook at that
time. A news release will be issued at approximately 6:15
a.m. Central Daylight Time and will be available at
newsroom.medtronic.com. Medtronic will host a webcast at 7:00
a.m. Central Daylight Time to provide information about its
businesses for the public, analysts, and news media. The
webcast can be accessed by clicking on the Investors link on the
Medtronic website at www.medtronic.com/newsroom on June 2,
2015. Within 24 hours of the webcast, a replay of the
webcast and transcript of the company's prepared remarks will be
available by clicking on the Investor Events link through the
Investors section of the Medtronic website.
Revenue Schedules
To view the preliminary fourth quarter and fiscal year revenue
schedules, click here or visit
www.medtronic.com/newsroom.
About Medtronic
Medtronic plc, headquartered in Dublin, Ireland, is the global
leader in medical technology - alleviating pain, restoring health,
and extending life for millions of people around the world.
This press release contains
forward-looking statements related to product growth drivers,
market position, strategies for growth, and Medtronic's future
results of operations, which are subject to risks and
uncertainties, such as competitive factors, difficulties and delays
inherent in the development, manufacturing, marketing and sale of
medical products, government regulation and general economic
conditions and other risks and uncertainties described in
Medtronic's periodic reports on file with the U.S. Securities and
Exchange Commission (the "SEC"). Actual results may differ
materially from anticipated results. Medtronic does not
undertake to update its forward-looking statements or any of the
information contained in this press release. Certain
information in this press release includes calculations or figures
that have been prepared internally and have not been reviewed or
audited by our independent registered public accounting firm,
including but not limited to, certain information in the financial
schedules accompanying this press release. Use of different
methods for preparing, calculating or presenting information may
lead to differences and such differences may be material.
The financial results presented
in this news release are preliminary and may change. This
preliminary financial information has been prepared by management,
and the company's independent accountants have not completed their
audit or review of such financial information. There can be
no assurance that the company's actual results for the periods
presented herein will not differ from the preliminary financial
data presented herein and such changes could be material.
This preliminary financial data should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP and is not necessarily indicative of the results to be
achieved for any future periods.
Unless otherwise noted, all
revenue amounts given in this news release are on a GAAP basis, and
all comparisons and growth rates made in this news release are
stated on a "comparable, constant currency basis" and not an as
reported basis. References to quarterly figures increasing or
decreasing are in comparison to the fourth quarter of fiscal year
2014. References to annual figures increasing or decreasing
are in comparison to fiscal year 2014.
NON-GAAP FINANCIAL
MEASURES
This press release contains
financial measures, including revenue on a comparable, constant
currency basis and comparable, constant currency growth rates which
are considered "non-GAAP" financial measures under applicable SEC
rules and regulations.
These non-GAAP financial measures
should be considered supplemental to and not a substitute for
financial information prepared in accordance with generally
accepted accounting principles (GAAP). The company's definition of
these non-GAAP measures may not be the same or similar to measures
presented by other companies.
Medtronic management believes
that in order to properly understand its short-term and long-term
financial trends, investors may find it useful to consider the
impact of aligning historical Covidien revenues to Medtronic's
fiscal calendar and excluding specified items that can be highly
variable or difficult to predict. The company generally uses these
non-GAAP financial measures to facilitate management's review of
the operational performance of the company and as a basis for
strategic planning. Management believes that the resulting non-GAAP
financial measures provide useful information to investors
regarding the underlying business trends and performance of the
company's ongoing operations and is useful for period over period
comparisons of such operations. These non-GAAP financial measures
reflect an additional way of viewing aspects of the company's
operations that, when viewed with GAAP results and the
reconciliations to corresponding GAAP financial measures, may
provide a more complete understanding of factors and trends
affecting Medtronic's business.
Because non-GAAP financial
measures exclude the effect of items that will increase or decrease
the company's reported results of operations, management strongly
encourages investors to review the company's consolidated financial
statements and publicly filed reports in their entirety.
Reconciliations of the non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the
financial schedules accompanying this press release.
-end-
View FY15 Fourth Quarter Preliminary Revenue
Schedules
Contacts:
Cindy Resman
Public Relations
+1-763-505-0291
Jeff Warren
Investor Relations
+1-763-505-2696
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medtronic plc via Globenewswire
HUG#1922316
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