DUBLIN, Aug. 24, 2021 /CNW/ -- Medtronic plc
(NYSE:MDT) today announced financial results for its first quarter
of fiscal year 2022, which ended July 30,
2021.
Key Highlights
- Revenue of $8.0 Billion
Increased 23% Reported and 19% Organic
- GAAP Diluted EPS of $0.56;
Non-GAAP Diluted EPS of $1.41
- Company Reiterates FY22 Revenue Guidance; Raises Lower End
of FY22 EPS Guidance by 5
cents
"FY22 is off to a strong start - Q1 reflects solid execution
& continued procedure recovery"
Chairman & CEO Geoff
Martha
The company reported first quarter worldwide revenue of
$7.987 billion, an increase of 23% as
reported and 19% on an organic basis, which excludes the
$245 million benefit of foreign
currency translation. Revenue growth rates have not been adjusted
for the negative impact of the extra selling week in the first
quarter of last fiscal year. The company's first quarter results
reflect a strong recovery from the impact of the COVID-19 pandemic
on elective procedures that the company experienced in
2020. Unless otherwise stated, all revenue growth rates in
this press release are stated on an organic basis, which excludes
the impact of foreign currency translation.
As reported, first quarter GAAP net income and diluted earnings
per share (EPS) were $763 million and
$0.56, respectively, increases of 57%
and 56%, respectively. As detailed in the financial schedules
included at the end of this release, first quarter non-GAAP net
income and non-GAAP diluted EPS were $1.908
billion and $1.41,
respectively, increases of 128% and 127%, respectively.
First quarter U.S. revenue of $4.101
billion represented 51% of company revenue and increased
22%. Non-U.S. developed market revenue of $2.601 billion represented 33% of company revenue
and increased 20% as reported and 11% organic. Emerging Markets
revenue of $1.286 billion represented
16% of company revenue and increased 31% as reported and 25%
organic.
"Fiscal 2022 is off to a strong start with our first quarter
results coming in ahead of our expectations, reflecting solid
execution and continued procedure volume recovery, with most of our
businesses at or above pre-COVID levels," said Geoff Martha, Medtronic chairman and chief
executive officer. "In addition, we drove market share gains across
a number of our businesses, including three of our largest:
Cardiac Rhythm Management, Surgical Innovations, and Cranial &
Spinal Technologies. Looking ahead, we have some big opportunities
in front of us, with near-term milestones in both our renal
denervation and surgical robotics businesses. These opportunities,
combined with the broader investments we're making in our pipeline,
set us up well to accelerate our top line growth."
Cardiovascular Portfolio
The Cardiovascular Portfolio
includes the Cardiac Rhythm & Heart Failure (CRHF), Structural
Heart & Aortic (SHA), and Coronary & Peripheral Vascular
(CPV) divisions. Cardiovascular first quarter revenue of
$2.890 billion increased 19% as
reported and 15% organic, driven by low-twenties organic growth in
SHA, mid-teens organic growth in CRHF, and high-single digit growth
in CPV.
- Cardiac Rhythm & Heart Failure first quarter revenue
of $1.483 billion increased 19% as
reported and 15% organic. Adjusting for the discontinuation of
HVAD™ System sales, CRHF revenue increased 19% organic. Cardiac
Rhythm Management revenue increased in the high-teens, driven by
low-double digit growth in Defibrillation Solutions and
low-twenties growth in Cardiac Pacing Therapies, including
low-thirties growth in Leadless Pacemakers on the continued global
adoption of the Micra™ transcatheter pacing system. Cardiac
Ablation Solutions revenue increased in the low-thirties on strong
adoption of Arctic Front Advance™ cryoballoon catheters and
consoles. Cardiovascular Diagnostics revenue grew in the low-double
digits.
- Structural Heart & Aortic first quarter revenue of
$787 million increased 26% as
reported and 21% organic. Structural Heart grew in the
high-thirties, driven by mid-thirties growth in transcatheter
aortic valves (TAVR), including high-forties TAVR growth in
the United States. Cardiac Surgery
increased in the high-teens. Aortic declined in the low-single
digits, as the financial impact of the previously announced global
recall of the Valiant Navion™ thoracic stent graft system offset
low-twenties growth in abdominal aortic aneurysm (AAA) stent
grafts.
- Coronary & Peripheral Vascular first quarter
revenue of $620 million increased 11%
as reported and 7% organic. Coronary & Renal Denervation (CRDN)
declined in the low-single digits, given the impact of previously
announced coronary tenders in China. Excluding China, CRDN revenue grew in the high-single
digits. Peripheral Vascular Health increased in the low-twenties,
with mid-teens growth in IN.PACT™ drug-coated balloons and
mid-fifties endoVenous growth on strong sales of VenaSeal™ and
ClosureFast™ superficial vein products and Abre™ venous
stents.
Medical Surgical Portfolio
The Medical Surgical
Portfolio includes the Surgical Innovations (SI) and the
Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical
Surgical first quarter revenue of $2.322
billion increased 29% as reported and 25% organic, with
high-thirties organic growth in SI and mid-single digit organic
growth in RGR.
- Surgical Innovations first quarter revenue of
$1.554 billion increased 44% as
reported and 39% organic. The division had low-forties growth in
Vessel Sealing and high-thirties growth in Advanced Stapling,
driven by the continued adoption of the company's LigaSure™,
Sonicision™, and Tri-Staple™ technologies. Hernia & Wound
Management increased in the mid-thirties, with strength in sutures
and hernia product lines.
- Respiratory, Gastrointestinal & Renal first quarter
revenue of $768 million increased 7%
as reported and 3% organic. Patient Monitoring increased in the
mid-twenties, with mid-thirties growth in the company's Nellcor™
pulse oximetry products. Respiratory Interventions decreased in the
mid-twenties, with sales of ventilators declining in the
low-forties as demand returns to pre-pandemic levels.
Gastrointestinal revenue increased in the high-twenties on
low-fifties growth in Esophageal & Gastric. Renal Care
Solutions increased in the mid-single digits with strong growth in
acute therapies.
Neuroscience Portfolio
The Neuroscience Portfolio
includes the Cranial & Spinal Technologies (CST), Specialty
Therapies, and Neuromodulation divisions. Neuroscience first
quarter revenue of $2.204 billion
increased 29% as reported and 26% organic, with high-thirties
growth in Neuromodulation and Specialty Therapies and high-teens
growth in CST, all on an organic basis.
- Cranial & Spinal Technologies first quarter revenue
of $1.123 billion increased 19% as
reported and 17% organic. Spine & Biologics grew in the
low-double digits and Neurosurgery increased in the low-twenties,
as spine surgeons continue to adopt the Medtronic ecosystem of
spine implants and enabling technology, including Mazor™ robotics,
StealthStation™ navigation, O-arm™ imaging, and Midas Rex™ powered
surgical instruments.
- Specialty Therapies first quarter revenue of
$641 million increased 42% as
reported and 37% organic. Neurovascular increased in the
high-single digits and ENT increased in the mid-thirties. Pelvic
Health increased 134%, driven by continued strong adoption of the
InterStim™ Micro sacral neuromodulation system.
- Neuromodulation first quarter revenue of $440 million increased 40% as reported and 37%
organic. Brain Modulation increased in the high-thirties, driven by
the launch of the Percept™ PC deep brain stimulation system. Pain
Therapies increased in the low-forties, with Targeted Drug Delivery
revenue more than doubling on the backlog recovery of replacement
procedures, and Pain Stim revenue growing in the mid-twenties on
strong uptake of Intellis™ with DTM™ SCS therapy. Interventional
grew in the low-twenties.
Diabetes
Diabetes first quarter revenue of
$572 million increased 2% as reported
and declined 3% organic. Diabetes quarterly revenue performance was
driven by high-single digit growth in durable pumps, including
strong growth in international markets on the continued launch of
the MiniMed™ 780G system. This was offset by mid-teens declines in
U.S. sales of consumables and continuous glucose monitoring (CGM)
products.
Guidance
The company today reiterated its revenue
growth guidance and raised the lower end of its EPS guidance range
for fiscal year 2022.
The company continues to expect revenue growth in its fiscal
year 2022 to approximate 9% on an organic basis. If current
exchange rates hold, revenue growth in fiscal year 2022 would be
positively affected by approximately $100 to $200
million.
The company increased its fiscal year 2022 diluted non-GAAP EPS
guidance from the prior range of $5.60 to $5.75 to
the new range of $5.65 to
$5.75, including an estimated 5 to
10 cent positive impact from foreign
currency exchange versus a 10 to 15
cent positive impact previously.
"We're reiterating our revenue guidance for the year while
increasing the lower end of our EPS range on the back of our first
quarter results," said Karen
Parkhill, Medtronic chief financial officer. "We remain
focused on accelerating our long-term revenue growth and generating
strong returns for our shareholders. In addition to growing our
dividend, we are increasing our investments at the front end of
major product launches, growing our R&D spend broadly across
the company, and executing disciplined tuck-in acquisitions."
Webcast Information
Medtronic will host a webcast
today, August 24, at 8:00 a.m. EDT (7:00 a.m.
CDT) to provide information about its businesses for the
public, investors, analysts, and news media. This webcast can be
accessed by clicking on the Investor Events link at
investorrelations.medtronic.com and this earnings release will
be archived at news.medtronic.com. Medtronic will be live tweeting
during the webcast on its 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.
Medtronic plans to report its fiscal year 2022 second, third,
and fourth quarter results on November 23,
2021, February 22, 2022, and
May 26, 2022, respectively.
Confirmation and additional details will be provided closer to the
specific event.
Financial Schedules
The first quarter financial
schedules and non-GAAP reconciliations can be viewed below.
To view a printable PDF of the financial schedules and non-GAAP
reconciliations, click here. To view the first quarter earnings
presentation, click here.
MEDTRONIC
PLC
WORLD WIDE
REVENUE(1)
(Unaudited)
|
|
|
|
FIRST
QUARTER(2)
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
Growth
|
Cardiovascular(3)
|
$
|
2,890
|
|
|
$
|
2,433
|
|
|
18.8
|
%
|
|
$
|
96
|
|
|
$
|
2,794
|
|
|
14.8
|
%
|
Cardiac Rhythm &
Heart Failure
|
1,483
|
|
|
1,247
|
|
|
18.9
|
|
|
46
|
|
|
1,437
|
|
|
15.2
|
|
Structural Heart &
Aortic
|
787
|
|
|
627
|
|
|
25.5
|
|
|
28
|
|
|
759
|
|
|
21.1
|
|
Coronary &
Peripheral Vascular
|
620
|
|
|
558
|
|
|
11.1
|
|
|
22
|
|
|
598
|
|
|
7.2
|
|
Medical
Surgical
|
2,322
|
|
|
1,801
|
|
|
28.9
|
|
|
77
|
|
|
2,245
|
|
|
24.7
|
|
Surgical
Innovations
|
1,554
|
|
|
1,080
|
|
|
43.9
|
|
|
54
|
|
|
1,500
|
|
|
38.9
|
|
Respiratory,
Gastrointestinal, & Renal
|
768
|
|
|
720
|
|
|
6.7
|
|
|
23
|
|
|
745
|
|
|
3.5
|
|
Neuroscience
|
2,204
|
|
|
1,712
|
|
|
28.7
|
|
|
47
|
|
|
2,157
|
|
|
26.0
|
|
Cranial & Spinal
Technologies
|
1,123
|
|
|
944
|
|
|
19.0
|
|
|
19
|
|
|
1,104
|
|
|
16.9
|
|
Specialty
Therapies
|
641
|
|
|
453
|
|
|
41.5
|
|
|
19
|
|
|
622
|
|
|
37.3
|
|
Neuromodulation
|
440
|
|
|
314
|
|
|
40.1
|
|
|
10
|
|
|
430
|
|
|
36.9
|
|
Diabetes
|
572
|
|
|
562
|
|
|
1.8
|
|
|
26
|
|
|
546
|
|
|
(2.8)
|
|
TOTAL
|
$
|
7,987
|
|
|
$
|
6,507
|
|
|
22.7
|
%
|
|
$
|
245
|
|
|
$
|
7,742
|
|
|
19.0
|
%
|
|
(1) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(2) Fiscal year 2021
was a 53-week fiscal year, with the extra week occurring in the
first fiscal month of the first quarter. While it is difficult to
calculate the impact of the extra week, the Company estimates the
extra week benefited the first quarter of fiscal year 2021 revenue
by approximately $360 to $390 million.
|
(3) In the fourth
quarter of fiscal year 2021, the Company realigned its divisions
within Cardiovascular. As a result, fiscal year 2021 results have
been recast to adjust for this realignment.
|
(4) The currency
impact to revenue measures the change in revenue between current
and prior year periods using constant exchange
rates.
|
MEDTRONIC
PLC
U.S.(1)(2) REVENUE
(Unaudited)
|
|
|
|
FIRST
QUARTER
|
|
REPORTED
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
Cardiovascular(3)
|
$
|
1,420
|
|
|
$
|
1,206
|
|
|
17.7
|
%
|
Cardiac Rhythm &
Heart Failure
|
770
|
|
|
672
|
|
|
14.6
|
|
Structural Heart &
Aortic
|
347
|
|
|
274
|
|
|
26.6
|
|
Coronary &
Peripheral Vascular
|
303
|
|
|
260
|
|
|
16.5
|
|
Medical
Surgical
|
990
|
|
|
722
|
|
|
37.1
|
|
Surgical
Innovations
|
620
|
|
|
400
|
|
|
55.0
|
|
Respiratory,
Gastrointestinal, & Renal
|
370
|
|
|
322
|
|
|
14.9
|
|
Neuroscience
|
1,446
|
|
|
1,136
|
|
|
27.3
|
|
Cranial & Spinal
Technologies
|
795
|
|
|
692
|
|
|
14.9
|
|
Specialty
Therapies
|
360
|
|
|
242
|
|
|
48.8
|
|
Neuromodulation
|
291
|
|
|
202
|
|
|
44.1
|
|
Diabetes
|
245
|
|
|
287
|
|
|
(14.6)
|
|
TOTAL
|
$
|
4,101
|
|
|
$
|
3,351
|
|
|
22.4
|
%
|
|
(1) U.S. includes the
United States and U.S. territories.
|
(2) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(3) In the fourth
quarter of fiscal year 2021, the Company realigned its divisions
within Cardiovascular. As a result, fiscal year 2021 results have
been recast to adjust for this realignment.
|
MEDTRONIC
PLC
WORLD WIDE
REVENUE: GEOGRAPHIC (1)(2)
(Unaudited)
|
|
|
|
FIRST
QUARTER(3)
|
|
REPORTED
|
|
|
|
CONSTANT
CURRENCY
|
(in
millions)
|
FY22
|
|
FY21
|
|
Growth
|
|
Currency
Impact(4)
|
|
FY22
|
|
Growth
|
U.S.
|
$
|
1,420
|
|
$
|
1,206
|
|
17.7
|
%
|
|
$
|
—
|
|
$
|
1,420
|
|
17.7
|
%
|
Non-U.S.
Developed
|
1,003
|
|
853
|
|
17.6
|
|
|
72
|
|
931
|
|
9.1
|
|
Emerging
Markets
|
467
|
|
374
|
|
24.9
|
|
|
24
|
|
443
|
|
18.4
|
|
Cardiovascular
|
2,890
|
|
2,433
|
|
18.8
|
|
|
96
|
|
2,794
|
|
14.8
|
|
U.S.
|
990
|
|
722
|
|
37.1
|
|
|
—
|
|
990
|
|
37.1
|
|
Non-U.S.
Developed
|
869
|
|
719
|
|
20.9
|
|
|
57
|
|
812
|
|
12.9
|
|
Emerging
Markets
|
463
|
|
359
|
|
29.0
|
|
|
19
|
|
444
|
|
23.7
|
|
Medical
Surgical
|
2,322
|
|
1,801
|
|
28.9
|
|
|
77
|
|
2,245
|
|
24.7
|
|
U.S.
|
1,446
|
|
1,136
|
|
27.3
|
|
|
—
|
|
1,446
|
|
27.3
|
|
Non-U.S.
Developed
|
465
|
|
376
|
|
23.7
|
|
|
30
|
|
435
|
|
15.7
|
|
Emerging
Markets
|
293
|
|
199
|
|
47.2
|
|
|
17
|
|
276
|
|
38.7
|
|
Neuroscience
|
2,204
|
|
1,712
|
|
28.7
|
|
|
47
|
|
2,157
|
|
26.0
|
|
U.S.
|
245
|
|
287
|
|
(14.6)
|
|
|
—
|
|
245
|
|
(14.6)
|
|
Non-U.S.
Developed
|
263
|
|
226
|
|
16.4
|
|
|
23
|
|
240
|
|
6.2
|
|
Emerging
Markets
|
63
|
|
48
|
|
31.3
|
|
|
3
|
|
60
|
|
25.0
|
|
Diabetes
|
572
|
|
562
|
|
1.8
|
|
|
26
|
|
546
|
|
(2.8)
|
|
U.S.
|
4,101
|
|
3,351
|
|
22.4
|
|
|
—
|
|
4,101
|
|
22.4
|
|
Non-U.S.
Developed
|
2,601
|
|
2,175
|
|
19.6
|
|
|
182
|
|
2,419
|
|
11.2
|
|
Emerging
Markets
|
1,286
|
|
981
|
|
31.1
|
|
|
63
|
|
1,223
|
|
24.7
|
|
TOTAL
|
$
|
7,987
|
|
$
|
6,507
|
|
22.7
|
%
|
|
$
|
245
|
|
$
|
7,742
|
|
19.0
|
%
|
|
(1) U.S. includes the
United States and U.S. territories. Non-U.S. developed markets
include Japan, Australia, New Zealand, Korea, Canada, and the
countries of Western Europe. Emerging Markets include the countries
of the Middle East, Africa, Latin America, Eastern Europe, and the
countries of Asia that are not included in the non-U.S. developed
markets, as previously defined.
|
(2) The data in this
schedule has been intentionally rounded to the nearest million and,
therefore, may not sum.
|
(3) Fiscal year 2021
was a 53-week fiscal year, with the extra week occurring in the
first fiscal month of the first quarter. While it is difficult to
calculate the impact of the extra week, the Company estimates the
extra week benefited the first quarter of fiscal year 2021 revenue
by approximately $360 to $390 million.
|
(4) The currency
impact to revenue measures the change in revenue between current
and prior year periods using constant exchange rates.
|
MEDTRONIC
PLC
CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
Three months
ended
|
(in millions,
except per share data)
|
July 30,
2021
|
|
July 31,
2020
|
Net
sales
|
$
|
7,987
|
|
|
$
|
6,507
|
|
Costs and
expenses:
|
|
|
|
Cost of products
sold
|
2,598
|
|
|
2,505
|
|
Research and
development expense
|
750
|
|
|
621
|
|
Selling, general, and
administrative expense
|
2,547
|
|
|
2,417
|
|
Amortization of
intangible assets
|
436
|
|
|
440
|
|
Restructuring charges,
net
|
11
|
|
|
53
|
|
Certain litigation
charges, net
|
26
|
|
|
(88)
|
|
Other operating
expense (income), net
|
760
|
|
|
(114)
|
|
Operating
profit
|
859
|
|
|
673
|
|
Other non-operating
income, net
|
(111)
|
|
|
(82)
|
|
Interest
expense
|
137
|
|
|
171
|
|
Income before
income taxes
|
833
|
|
|
584
|
|
Income tax
provision
|
64
|
|
|
93
|
|
Net
income
|
769
|
|
|
491
|
|
Net income
attributable to noncontrolling interests
|
(6)
|
|
|
(4)
|
|
Net income
attributable to Medtronic
|
$
|
763
|
|
|
$
|
487
|
|
Basic earnings per
share
|
$
|
0.57
|
|
|
$
|
0.36
|
|
Diluted earnings
per share
|
$
|
0.56
|
|
|
$
|
0.36
|
|
Basic weighted
average shares outstanding
|
1,344.5
|
|
|
1,341.9
|
|
Diluted weighted
average shares outstanding
|
1,356.4
|
|
|
1,350.0
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
Three months ended
July 30, 2021
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
Attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
7,987
|
|
|
$
|
2,598
|
|
|
67.5
|
%
|
|
$
|
859
|
|
|
10.8
|
%
|
|
$
|
833
|
|
|
$
|
763
|
|
|
$
|
0.56
|
|
|
7.7
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(33)
|
|
|
0.4
|
|
|
81
|
|
|
1.0
|
|
|
81
|
|
|
65
|
|
|
0.05
|
|
|
21.0
|
|
Acquisition-related
items (3)
|
—
|
|
|
(5)
|
|
|
0.1
|
|
|
109
|
|
|
1.4
|
|
|
109
|
|
|
87
|
|
|
0.06
|
|
|
20.2
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
0.3
|
|
|
26
|
|
|
21
|
|
|
0.02
|
|
|
19.2
|
|
(Gain)/loss on minority
investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31)
|
|
|
(29)
|
|
|
(0.02)
|
|
|
—
|
|
Medical device
regulations (5)
|
—
|
|
|
(11)
|
|
|
0.1
|
|
|
21
|
|
|
0.3
|
|
|
21
|
|
|
17
|
|
|
0.01
|
|
|
19.0
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
436
|
|
|
5.5
|
|
|
436
|
|
|
366
|
|
|
0.27
|
|
|
15.8
|
|
MCS impairments /
costs (6)
|
—
|
|
|
(58)
|
|
|
0.7
|
|
|
726
|
|
|
9.1
|
|
|
726
|
|
|
564
|
|
|
0.42
|
|
|
22.3
|
|
Certain tax
adjustments, net (7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
0.04
|
|
|
—
|
|
Non-GAAP
|
$
|
7,987
|
|
|
$
|
2,491
|
|
|
68.8
|
%
|
|
$
|
2,258
|
|
|
28.3
|
%
|
|
$
|
2,201
|
|
|
$
|
1,908
|
|
|
$
|
1.41
|
|
|
13.2
|
%
|
Currency
impact
|
(245)
|
|
|
(56)
|
|
|
(0.3)
|
|
|
(47)
|
|
|
0.3
|
|
|
|
|
|
|
(0.03)
|
|
|
|
Currency
Adjusted
|
$
|
7,742
|
|
|
$
|
2,435
|
|
|
68.5
|
%
|
|
$
|
2,211
|
|
|
28.6
|
%
|
|
|
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
July 31, 2020
|
(in millions,
except per share data)
|
Net
Sales
|
|
Cost of
Products
Sold
|
|
Gross
Margin
Percent
|
|
Operating
Profit
|
|
Operating
Profit
Percent
|
|
Income
Before
Income
Taxes
|
|
Net Income
Attributable
to Medtronic
|
|
Diluted EPS
|
|
Effective
Tax Rate
|
GAAP
|
$
|
6,507
|
|
|
$
|
2,505
|
|
|
61.5
|
%
|
|
$
|
673
|
|
|
10.3
|
%
|
|
$
|
584
|
|
|
$
|
487
|
|
|
$
|
0.36
|
|
|
15.9
|
%
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(27)
|
|
|
0.4
|
|
|
128
|
|
|
2.0
|
|
|
128
|
|
|
106
|
|
|
0.08
|
|
|
17.2
|
|
Acquisition-related
items (8)
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(95)
|
|
|
(1.5)
|
|
|
(95)
|
|
|
(67)
|
|
|
(0.05)
|
|
|
29.5
|
|
Certain litigation
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(88)
|
|
|
(1.4)
|
|
|
(88)
|
|
|
(70)
|
|
|
(0.05)
|
|
|
20.5
|
|
(Gain)/loss on minority
investments (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10)
|
|
|
(10)
|
|
|
(0.01)
|
|
|
—
|
|
Medical device
regulations (5)
|
—
|
|
|
(10)
|
|
|
0.2
|
|
|
18
|
|
|
0.3
|
|
|
18
|
|
|
16
|
|
|
0.01
|
|
|
11.1
|
|
Amortization of
intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
440
|
|
|
6.8
|
|
|
440
|
|
|
370
|
|
|
0.27
|
|
|
15.9
|
|
Certain tax
adjustments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
Non-GAAP
|
$
|
6,507
|
|
|
$
|
2,466
|
|
|
62.1
|
%
|
|
$
|
1,076
|
|
|
16.5
|
%
|
|
$
|
977
|
|
|
$
|
836
|
|
|
$
|
0.62
|
|
|
14.0
|
%
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million or
$0.01 for EPS figures, and, therefore, may not sum.
|
(2) Associated costs
include costs incurred as a direct result of the restructuring
program, such as salaries for employees supporting the program and
consulting expenses.
|
(3) The charges
primarily include acquisitions of, and certain license payments
for, unapproved technology, business combination costs, and changes
in fair value of contingent consideration.
|
(4) We exclude
unrealized and realized gains and losses on our minority
investments as we do not believe that these components of income or
expense have a direct correlation to our ongoing or future business
operations.
|
(5) The charges
represent incremental costs of complying with the new European
Union medical device regulations for previously registered products
and primarily include charges for contractors supporting the
project and other direct third-party expenses.
|
(6) The charges
relate to the Company's June 3, 2021 decision to stop the
distribution and sale of the Medtronic HVAD System within the
Mechanical Circulatory Support Operating Unit (MCS). Medtronic is
committed to serving the needs of the approximately 4,000 patients
currently implanted with the HVAD System. The charges include $515
million of non-cash impairments, primarily related to $409 million
of intangible asset impairments, as well as $211 million for
commitments and obligations in connection with our decision,
including customer support obligations, restructuring, and other
associated costs.
|
(7) The charges are
associated with a change in the company's permanently reinvestment
assertion on certain historical earnings and the amortization on
previously established deferred tax assets from intercompany
intellectual property transactions.
|
(8) The charges
primarily include business combination costs, certain license
payments for unapproved technology, changes in fair value of
contingent consideration, and a change in amounts accrued for
certain contingent liabilities for recent acquisitions.
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
Three months ended
July 30, 2021
|
(in
millions)
|
Net
Sales
|
|
SG&A
Expense
|
|
SG&A
Expense as
a % of Net
Sales
|
|
R&D
Expense
|
|
R&D
Expense as
a % of Net
Sales
|
|
Other
Operating
Expense,
net
|
|
Other
Operating
Expense, net
as a % of Net
Sales
|
|
Other Non-
Operating
Income, net
|
GAAP
|
$
|
7,987
|
|
|
$
|
2,547
|
|
|
31.9
|
%
|
|
$
|
750
|
|
|
9.4
|
%
|
|
$
|
760
|
|
|
9.5
|
%
|
|
$
|
(111)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
associated costs (2)
|
—
|
|
|
(37)
|
|
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition-related
items (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(90)
|
|
|
(1.1)
|
|
|
(14)
|
|
|
(0.2)
|
|
|
—
|
|
Medical device
regulations (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(0.1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
MCS impairments / costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(668)
|
|
|
(8.4)
|
|
|
—
|
|
Gain/(loss) on minority
investments (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
Non-GAAP
|
$
|
7,987
|
|
|
$
|
2,510
|
|
|
31.4
|
%
|
|
$
|
651
|
|
|
8.2
|
%
|
|
$
|
78
|
|
|
1.0
|
%
|
|
$
|
(80)
|
|
Currency
impact
|
(245)
|
|
|
(69)
|
|
|
0.1
|
|
|
(7)
|
|
|
0.1
|
|
|
(66)
|
|
|
(0.8)
|
|
|
1
|
|
Currency
Adjusted
|
$
|
7,742
|
|
|
$
|
2,440
|
|
|
31.5
|
%
|
|
$
|
644
|
|
|
8.3
|
%
|
|
$
|
12
|
|
|
0.2
|
%
|
|
$
|
(79)
|
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
(2) Associated costs
include costs incurred as a direct result of the restructuring
program, such as salaries for employees supporting the program and
consulting expenses.
|
(3) The charges
primarily include acquisitions of, and certain license payments
for, unapproved technology, business combination costs, and changes
in fair value of contingent consideration.
|
(4) The charges
represent incremental costs of complying with the new European
Union medical device regulations for previously registered products
and primarily include charges for contractors supporting the
project and other direct third-party expenses.
|
(5) The charges
relate to the Company's June 3, 2021 decision to stop the
distribution and sale of the Medtronic HVAD System within the
Mechanical Circulatory Support Operating Unit (MCS). Medtronic is
committed to serving the needs of the approximately 4,000 patients
currently implanted with the HVAD System. The charges include $515
million of non-cash impairments, primarily related to $409 million
of intangible asset impairments, as well as $211 million for
commitments and obligations in connection with our decision,
including customer support obligations, restructuring, and other
associated costs.
|
(6) We exclude
unrealized and realized gains and losses on our minority
investments as we do not believe that these components of income or
expense have a direct correlation to our ongoing or future business
operations.
|
|
|
MEDTRONIC
PLC
GAAP TO NON-GAAP
RECONCILIATIONS(1)
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Fiscal
year
|
(in
millions)
|
July 30,
2021
|
|
July 31,
2020
|
|
2021
|
Net cash provided
by operating activities
|
$
|
1,292
|
|
|
$
|
278
|
|
|
$
|
6,240
|
|
Additions to property,
plant, and equipment
|
(378)
|
|
|
(334)
|
|
|
(1,355)
|
|
Free Cash Flow
(2)
|
$
|
914
|
|
|
$
|
(56)
|
|
|
$
|
4,885
|
|
|
See description of
non-GAAP financial measures at the end of the earnings press
release.
|
(1) The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
(2) Free cash flow
represents operating cash flows less property, plant, and equipment
additions.
|
MEDTRONIC
PLC
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
|
|
|
(in millions)
|
|
July 30,
2021
|
|
April 30,
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,004
|
|
|
$
|
3,593
|
|
Investments
|
|
7,591
|
|
|
7,224
|
|
Accounts receivable,
less allowances and credit losses of $257 and $241,
respectively
|
|
5,431
|
|
|
5,462
|
|
Inventories,
net
|
|
4,288
|
|
|
4,313
|
|
Other current
assets
|
|
2,120
|
|
|
1,955
|
|
Total current
assets
|
|
22,434
|
|
|
22,548
|
|
Property, plant, and
equipment
|
|
12,808
|
|
|
12,700
|
|
Accumulated
depreciation
|
|
(7,646)
|
|
|
(7,479)
|
|
Property, plant,
and equipment, net
|
|
5,162
|
|
|
5,221
|
|
Goodwill
|
|
41,720
|
|
|
41,961
|
|
Other intangible
assets, net
|
|
16,890
|
|
|
17,740
|
|
Tax
assets
|
|
3,187
|
|
|
3,169
|
|
Other
assets
|
|
2,409
|
|
|
2,443
|
|
Total
assets
|
|
$
|
91,802
|
|
|
$
|
93,083
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current debt
obligations
|
|
$
|
6
|
|
|
$
|
11
|
|
Accounts
payable
|
|
1,864
|
|
|
2,106
|
|
Accrued
compensation
|
|
1,901
|
|
|
2,482
|
|
Accrued income
taxes
|
|
341
|
|
|
435
|
|
Other accrued
expenses
|
|
3,652
|
|
|
3,475
|
|
Total current
liabilities
|
|
7,764
|
|
|
8,509
|
|
Long-term
debt
|
|
25,958
|
|
|
26,378
|
|
Accrued
compensation and retirement benefits
|
|
1,521
|
|
|
1,557
|
|
Accrued income
taxes
|
|
2,262
|
|
|
2,251
|
|
Deferred tax
liabilities
|
|
1,054
|
|
|
1,028
|
|
Other
liabilities
|
|
1,579
|
|
|
1,756
|
|
Total
liabilities
|
|
40,137
|
|
|
41,481
|
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Ordinary shares— par
value $0.0001, 2.6 billion shares authorized, 1,344,671,106 and
1,345,400,671 shares issued and outstanding,
respectively
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
26,184
|
|
|
26,319
|
|
Retained
earnings
|
|
28,511
|
|
|
28,594
|
|
Accumulated other
comprehensive loss
|
|
(3,209)
|
|
|
(3,485)
|
|
Total shareholders'
equity
|
|
51,486
|
|
|
51,428
|
|
Noncontrolling
interests
|
|
178
|
|
|
174
|
|
Total
equity
|
|
51,664
|
|
|
51,602
|
|
Total liabilities
and equity
|
|
$
|
91,802
|
|
|
$
|
93,083
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
MEDTRONIC
PLC
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
Three months
ended
|
(in
millions)
|
|
July 30,
2021
|
|
July 31,
2020
|
Operating
Activities:
|
|
|
|
|
Net income
|
|
$
|
769
|
|
|
$
|
491
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
671
|
|
|
669
|
|
Provision for doubtful
accounts
|
|
15
|
|
|
37
|
|
Deferred income
taxes
|
|
(11)
|
|
|
3
|
|
Stock-based
compensation
|
|
69
|
|
|
70
|
|
MCS asset impairment
and inventory write-down
|
|
515
|
|
|
—
|
|
Other, net
|
|
116
|
|
|
68
|
|
Change in operating
assets and liabilities, net of acquisitions and
divestitures:
|
|
|
|
|
Accounts receivable,
net
|
|
(40)
|
|
|
(142)
|
|
Inventories
|
|
(75)
|
|
|
(235)
|
|
Accounts payable and
accrued liabilities
|
|
(416)
|
|
|
(541)
|
|
Other operating assets
and liabilities
|
|
(321)
|
|
|
(142)
|
|
Net cash provided
by operating activities
|
|
1,292
|
|
|
278
|
|
Investing
Activities:
|
|
|
|
|
Additions to property,
plant, and equipment
|
|
(378)
|
|
|
(334)
|
|
Purchases of
investments
|
|
(2,654)
|
|
|
(2,045)
|
|
Sales and maturities
of investments
|
|
2,324
|
|
|
2,403
|
|
Other investing
activities, net
|
|
(76)
|
|
|
(16)
|
|
Net cash provided
by (used in) investing activities
|
|
(784)
|
|
|
8
|
|
Financing
Activities:
|
|
|
|
|
Change in current debt
obligations, net
|
|
—
|
|
|
(16)
|
|
Proceeds from
short-term borrowings (maturities greater than 90 days)
|
|
—
|
|
|
2,789
|
|
Payments on long-term
debt
|
|
(1)
|
|
|
(11)
|
|
Dividends to
shareholders
|
|
(846)
|
|
|
(778)
|
|
Issuance of ordinary
shares
|
|
111
|
|
|
26
|
|
Repurchase of ordinary
shares
|
|
(315)
|
|
|
—
|
|
Other financing
activities
|
|
(4)
|
|
|
(51)
|
|
Net cash provided
by (used in) financing activities
|
|
(1,055)
|
|
|
1,959
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(42)
|
|
|
114
|
|
Net change in cash
and cash equivalents
|
|
(589)
|
|
|
2,359
|
|
Cash and cash
equivalents at beginning of period
|
|
3,593
|
|
|
4,140
|
|
Cash and cash
equivalents at end of period
|
|
$
|
3,004
|
|
|
$
|
6,499
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
Income
taxes
|
|
$
|
249
|
|
|
$
|
72
|
|
Interest
|
|
63
|
|
|
72
|
|
|
The data in this
schedule has been intentionally rounded to the nearest million,
and, therefore, may not sum.
|
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 90,000 people worldwide, serving physicians,
hospitals and patients in more than 150 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 within the meaning of the
Private Securities Litigation Reform Act of 1995, which are subject
to risks and uncertainties, including risks related to 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 the company's periodic reports on file
with the U.S. Securities and Exchange Commission including the most
recent Annual Report on Form 10-K of the company, as filed with the
U.S. Securities and Exchange Commission. In some cases, you can
identify these statements by forward-looking words or expressions,
such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "intend," "looking ahead," "may," "plan," "possible,"
"potential," "project," "should," "going to," "will," and similar
words or expressions, the negative or plural of such words or
expressions and other comparable terminology. 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, including to reflect
future events or circumstances.
NON-GAAP FINANCIAL MEASURES
This press release
contains financial measures, including adjusted net income,
adjusted diluted EPS, and organic revenue, which are considered
"non-GAAP" financial measures under applicable SEC rules and
regulations. References to quarterly figures increasing, decreasing
or remaining flat are in comparison to fiscal year 2021.
Medtronic management believes that non-GAAP financial
measures provide information useful to investors in understanding
the company's underlying operational performance and trends and to
facilitate comparisons with the performance of other companies in
the med tech industry. Non-GAAP net income and diluted EPS 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 U.S. generally
accepted accounting principles (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 organic revenue growth guidance excludes the impact
of foreign currency fluctuations, as well as significant
acquisitions or divestitures. Forward-looking diluted 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. 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, the company believes 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.
Contacts:
|
|
|
|
Erika
Winkels
|
Ryan
Weispfenning
|
Public
Relations
|
Investor
Relations
|
+1-763-526-8478
|
+1-763-505-4626
|
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SOURCE Medtronic plc