-
Q4 Revenue of $7.9 Billion
Grew 5% as Reported; 5% at Constant Currency
-
Q4 GAAP Diluted EPS of $0.84;
Q4 Non-GAAP Diluted EPS of $1.33
-
FY17 Revenue of $29.7 Billion
Grew 3% as Reported; Approximately 5% on a Constant Currency,
Constant Week Basis
-
FY17 GAAP Diluted EPS of
$2.89; FY17 Non-GAAP Diluted EPS of $4.60
-
FY17 Cash Flow from Operations
of $6.9 Billion; FY17 Free Cash Flow of $5.6 Billion
DUBLIN - May 25,
2107 - Medtronic plc (NYSE: MDT) today announced financial
results for its fourth quarter and fiscal year 2017, which ended
April 28, 2017.
The company reported fourth quarter worldwide
revenue of $7.916 billion, compared to the $7.567 billion reported
in the fourth quarter of fiscal year 2016, an increase of 5 percent
on both a reported and constant currency basis. Foreign currency
translation had a negative $37 million impact on fourth quarter
revenue. As reported, fourth quarter GAAP net income and diluted
earnings per share (EPS) were $1.163 billion and $0.84,
respectively. As detailed in the financial schedules included
through the link at the end of this release, fourth quarter
non-GAAP net income and diluted earnings per share (EPS) were
$1.836 billion and $1.33, an increase of 2 percent and 5 percent,
respectively.
Fourth quarter U.S. revenue of $4.403 billion
represented 56 percent of company revenue and increased 4 percent.
Non-U.S. developed market revenue of $2.452 billion represented 31
percent of company revenue and increased 2 percent, or 4 percent on
a constant currency basis. Emerging market revenue of $1.061
billion represented 13 percent of company revenue and increased 11
percent, or 10 percent on a constant currency basis.
Medtronic's fiscal year 2017 revenue of $29.710
billion increased 3 percent, or approximately 5 percent on a
constant currency, constant week basis. Foreign currency
translation had a negative $34 million impact on fiscal year 2017
revenue. The first quarter of fiscal year 2017 contained 13 weeks,
one less week than the first quarter of fiscal year 2016. The extra
week occurs every six years as a result of the company's 52-53 week
fiscal year calendar. While it is difficult to calculate an exact
impact from the extra week, the company estimates that it resulted
in an approximate $450 million benefit to revenue and $0.08 to
$0.10 benefit to non-GAAP diluted earnings per share (EPS) in the
first quarter of the prior fiscal year. As reported, fiscal year
2017 net earnings were $4.028 billion or $2.89 per diluted share.
As detailed in the link at the end of this release, fiscal year
2017 non-GAAP earnings and diluted EPS were $6.395 billion and
$4.60, representing increases of approximately 8 to 9 percent and
approximately 11 to 12 percent, respectively, on a constant
currency, constant week basis.
"Our fourth quarter results were a strong finish
to the fiscal year, with balanced, diversified growth across our
groups and regions," said Omar Ishrak, Medtronic chairman and chief
executive officer. "Fiscal year 2017 was a solid year overall for
Medtronic. We delivered record revenue, made progress in each of
our growth strategies, executed on our Covidien cost synergy
commitments, generated strong free cash flow growth, and deployed
our capital in line with our stated priorities, balancing the
return of cash to our shareholders together with disciplined
reinvestment in our businesses."
Cardiac and Vascular
Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm
& Heart Failure (CRHF), Coronary & Structural Heart (CSH),
and Aortic & Peripheral Vascular (APV) divisions. CVG worldwide
fourth quarter revenue of $2.848 billion increased 4 percent, or 5
percent on a constant currency basis. CVG revenue performance was
driven by strong, balanced growth across all three divisions.
- CRHF fourth quarter revenue of $1.544 billion
increased 3 percent, or 4 percent on a constant currency basis,
with mid-single digit growth on a constant currency basis in
Arrhythmia Management driven by the continued global adoption of
the Reveal LINQ® insertable cardiac monitor, as well as high-teens
growth in AF Solutions on a constant currency basis. Heart Failure
growth was driven in part by the company's first quarter
acquisition of HeartWare International, Inc.
- CSH fourth quarter revenue of $847 million
increased 4 percent on both a reported and constant currency basis,
led by mid-thirties growth on a constant currency basis in
transcatheter aortic valves as a result of strong customer adoption
of the CoreValve® Evolut® R platform, including the 34mm launch in
the U.S. and Europe.
- APV fourth quarter revenue of $457 million
increased 5 percent, or 6 percent on a constant currency basis,
driven by mid-single digit growth in Aortic and high-single digit
growth in Peripheral, both on a constant currency basis. Aortic
growth was led by the continued strength of the Endurant® IIs
aortic stent graft and solid adoption of the Heli-FX® EndoAnchor®
System. Peripheral was driven by low-twenties growth of the
clinically differentiated IN.PACT® Admiral® drug-coated balloon and
high-single digit growth in atherectomy.
Minimally Invasive Therapies
Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical
Solutions and the Patient Monitoring & Recovery (PMR)
divisions. MITG worldwide fourth quarter revenue of $2.605 billion
increased 6 percent on both a reported and constant currency basis.
MITG had a strong quarter with high-single digit growth in Surgical
Solutions and mid-single digit growth in PMR.
- Surgical Solutions fourth quarter revenue of
$1.459 billion increased 7 percent, or 8 percent on a constant
currency basis, driven by new products in Advanced Stapling and
Advanced Energy, including endo stapling specialty reloads, the
Valleylab(TM) FT10 energy platform, and LigaSure(TM) vessel sealing
instruments. The division also benefitted from the second quarter
acquisition of Smith & Nephew's gynecology business.
- PMR fourth quarter revenue of $1.146 billion
increased 4 percent on both a reported and constant currency basis,
with the above market growth driven by the re-commercialization of
the Puritan Bennett(TM) 980 ventilator and the Capnostream(TM) 20
capnography monitor, growth in capnography disposables, as well as
strength in Nellcor(TM) pulse oximetry products.
Restorative Therapies
Group
The Restorative Therapies Group (RTG) includes the Spine, Brain
Therapies, Specialty Therapies, and Pain Therapies divisions. RTG
worldwide fourth quarter revenue of $1.951 billion increased 4
percent, or 5 percent on a constant currency basis. Group results
were driven by high-single digit growth in Brain Therapies and
Specialty Therapies and low-single digit growth in Spine,
offsetting declines in Pain Therapies.
- Spine fourth quarter revenue of $676 million
increased 3 percent on both a reported and constant currency basis,
demonstrating sustained improvement. Bone Morphogenetic Protein
(BMP) grew in the low-double digits on a constant currency basis.
Core Spine grew in the low-single digits on a constant currency
basis, driven in part by the focus on "Speed-to-Scale" new product
launches and strength in Other Biologics.
- Brain Therapies revenue of $585 million increased
9 percent on both a reported and constant currency basis, with
strength in Neurovascular and Neurosurgery. Neurovascular grew in
the mid-teens on a constant currency basis, driven by strength in
sales of the Axium(TM) Prime Extra Soft detachable coils and
Solitaire(TM) revascularization devices. Neurosurgery grew in the
low-double digits on a constant currency basis, driven by strong
sales of the O-arm® O2 surgical imaging system. Brain Modulation
grew in the low-single digits on a constant currency basis on sales
of the company's market-leading MR conditional Activa® DBS
portfolio.
- Specialty Therapies revenue of $396 million
increased 7 percent on both a reported and constant currency basis.
All three businesses contributed to growth, with Advanced Energy
growing in the low-double digits, Pelvic Health growing in the
high-single digits, and ENT growing in the mid-single digits, all
on a constant currency basis.
- Pain Therapies revenue of $294 million decreased
2 percent on both a reported and constant currency basis. Pain
Therapies had mid-single digit constant currency declines in Spinal
Cord Stimulation, as the business faced competitive pressures,
partially offset by low-single digit constant currency growth in
Drug Pumps and Interventional.
Diabetes
Group
The Diabetes Group includes the Intensive Insulin Management (IIM),
Diabetes Service & Solutions (DSS), and Non-Intensive Diabetes
Therapies (NDT) divisions. Diabetes Group worldwide fourth quarter
revenue of $512 million increased 3 percent, or 4 percent on a
constant currency basis.
- IIM grew in the high-single digits on a constant
currency basis, with low-double digit growth in the U.S. driven by
strong interest in the MiniMed® 630G system and the Priority Access
Program for the MiniMed® 670G system, the world's first hybrid
closed loop insulin delivery system. In addition, the division
delivered high-single digit constant currency growth in
international markets due to strong growth of continuous glucose
monitor (CGM) sensors and the continued strength of the MiniMed®
640G system.
- NDT declined in the low-single digits on a
constant currency basis. The division grew in the mid-single digits
in the U.S. on sales to primary care physicians of the iPro®2
Professional CGM technology with Pattern Snapshot.
- DSS declined in the low-single digits on a
constant currency basis. While results were flat on a constant
currency basis in international markets, the business did see
strong adoption of the Guardian® Connect mobile CGM system. In the
U.S., the division had mid-single digit declines due to more
stringent payer requirements and lower order sizes.
Guidance
The company today provided its initial fiscal year 2018 revenue and
EPS growth guidance.
In fiscal year 2018, the company expects constant
currency revenue growth to be in the range of 4 to 5 percent. While
the impact of foreign currency is fluid, if current exchange rates
remain similar for the remainder of the fiscal year, the company's
revenue would be positively affected by approximately $75 million
to $175 million for the fiscal year, including an approximate
negative $10 to negative $60 million impact in the first fiscal
quarter.
In fiscal year 2018, the company expects diluted
non-GAAP EPS growth to be in the range of 9 to 10 percent on a
constant currency basis. Assuming current exchange rates remain
similar for the rest of the year, the company's non-GAAP EPS would
be negatively affected by approximately $0.05 to $0.10, including
an approximate $0.03 to $0.05 impact in the first fiscal
quarter.
The company reiterated its long-term expectation
of mid-single digit revenue growth and double digit EPS growth,
both on a constant currency basis. In addition, the company noted
that the fiscal year 2018 outlook and guidance does not include the
impact of the previously announced divestiture of a portion of its
Patient Monitoring and Recovery division to Cardinal Health, which
the company continues to expect to close in the second fiscal
quarter. The company intends to update its guidance upon close of
the transaction.
"We are creating distinct competitive advantages
and capitalizing on the long-term trends in healthcare: namely, the
desire to improve clinical outcomes; the growing demand for
expanded access to care; and the optimization of cost and
efficiency within healthcare systems. These trends, along with an
aging population in most countries, produce secular growth
tailwinds that we believe represent sustainable, long-term
opportunities for Medtronic," said Ishrak. "As we look forward, we
have a number of catalysts that make us optimistic about our
ability to deliver on our commitments and expand patient access
around the world to our products and services. Our leadership team
and employees continue to focus on driving excellence and impact in
all that we do, and we look forward to the fiscal year ahead."
Webcast
Information
Medtronic will host a webcast today, May 25, at 8:00 a.m. EDT (7:00
a.m. CDT) to provide information about its businesses for the
public, analysts, and news media. This quarterly webcast can be
accessed by clicking on the Investor Events link at
investorrelations.medtronic.com and this earnings release will be
archived at newsroom.medtronic.com. Medtronic will be live tweeting
during the webcast on our Newsroom Twitter account, @Medtronic.
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 at
investorrelations.medtronic.com.
Financial
Schedules
To view the fourth quarter financial schedules and non-GAAP
reconciliations, click here. To view the fourth quarter earnings
presentation, click here. Both documents can also be accessed by
visiting newsroom.medtronic.com.
About
Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin,
Ireland, is among the world's largest medical technology, services
and solutions companies - alleviating pain, restoring health and
extending life for millions of people around the world. Medtronic
employs more than 88,000 people worldwide, serving physicians,
hospitals and patients in approximately 160 countries. The company
is focused on collaborating with stakeholders around the world to
take healthcare Further, Together.
FORWARD LOOKING
STATEMENTS
This press release contains forward-looking
statements related to product and service growth drivers, market
position and opportunities, the transforming healthcare
environment, strategies for and sustainability of growth, benefits
from collaborations and acquisitions, availability of and plans for
cash, the creation of shareholder value and shareholder returns,
product launches, 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, challenges
with respect to third-party collaborations and integration of
acquired businesses, effectiveness of growth and restructuring
strategies, challenges relating to our worldwide operations,
challenges or unforeseen risks in implementing our growth
strategies, government regulation, fluctuations in foreign currency
exchange rates, future revenue and earnings growth, and general
economic conditions and other risks and uncertainties described in
Medtronic's periodic reports and other filings with the U.S.
Securities and Exchange Commission (the "SEC"). Anticipated results
only reflect information available to Medtronic at this time and
may differ from actual 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.
NON-GAAP FINANCIAL
MEASURES
This press release contains financial
measures and guidance, including free cash flow figures (defined as
operating cash flows less property, plant and equipment additions),
revenue and growth rates on a constant currency and constant week
basis, net income, and diluted EPS, all of which are considered
"non-GAAP" financial measures under applicable SEC rules and
regulations. Unless otherwise noted, all revenue amounts given in
this press release are stated in accordance with U.S. generally
accepted accounting principles (GAAP). References to quarterly or
annual figures increasing or decreasing are in comparison to the
fourth quarter of fiscal year 2016 and full fiscal year 2016,
respectively.
Medtronic management
believes that in order to properly understand its short-term and
long-term financial trends, including period over period
comparisons of the company's operations, investors may find it
useful to exclude the effect of certain charges or gains that
contribute to or reduce earnings but that result from transactions
or events that management believes may or may not recur with
similar materiality or impact to operations in future periods
(Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial
measures to facilitate management's review of the operational
performance of the company and as a basis for strategic planning.
Non-GAAP financial measures should be considered supplemental to
and not a substitute for financial information prepared in
accordance with GAAP, and investors are cautioned that Medtronic
may calculate non-GAAP financial measures in a way that is
different from other companies. 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.
Medtronic calculates
forward-looking non-GAAP financial measures based on internal
forecasts that omit certain amounts that would be included in GAAP
financial measures. For instance, forward-looking revenue growth
and EPS projections exclude the impact of foreign currency exchange
fluctuations. Forward-looking non-GAAP EPS guidance also excludes
other potential charges or gains that would be recorded as non-GAAP
adjustments to earnings during the fiscal year, such as
amortization of intangible assets and acquisition-related, certain
tax and litigation, and restructuring charges or gains. Medtronic
does not attempt to provide reconciliations of forward-looking
non-GAAP EPS guidance to projected GAAP EPS guidance because the
combined impact and timing of recognition of these potential
charges or gains is inherently uncertain and difficult to predict
and is unavailable without unreasonable efforts. In addition, we
believe such reconciliations would imply a degree of precision and
certainty that could be confusing to investors. Such items could
have a substantial impact on GAAP measures of financial
performance.
-end-
View FY17 Fourth Quarter
Financial Schedules & Non-GAAP
Reconciliations
View FY17 Fourth Quarter Earnings
Presentation
Contacts:
Fernando Vivanco
Public Relations
+1-763-505-3780
Ryan Weispfenning
Investor Relations
+1-763-505-4626
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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
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