Full Press Release Details
MARLBOROUGH, Mass. , April 25, 2018 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX ) generated sales of $2.379 billion during the first quarter ended March 31, 2018. This represents growth of 10.1 percent on a reported basis, 6.2 percent on an operational 1 basis and 5.2 percent on an organic 2 basis, all compared to the prior year period. The company reported GAAP earnings of $298 million or $0.21 per share (EPS), compared to GAAP earnings of $290 million or $0.21 per share a year ago, and achieved adjusted earnings per share of $0.33 for the period, compared to $0.29 a year ago.
"Our consistently strong performance reflects our team's ongoing dedication to patients and customers," said Mike Mahoney , chairman and chief executive officer, Boston Scientific. "With our increasingly diversified portfolio and resilience in a rapidly-evolving global landscape, we are excited about our outlook."
First quarter financial results and recent developments:
Net sales for the first quarter by business and region:
| Change | |||||||||||||||||
| Three Months Ended March 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | Less: Impact of Significant Acquisitions | Organic Basis | ||||||||||||
| (in millions) | 2018 | 2017 | |||||||||||||||
| Endoscopy | $ | 418 | $ | 379 | 10.2% | 4.0% | 6.2% | —% | 6.2% | ||||||||
| Urology and Pelvic Health | 293 | 262 | 11.8% | 2.6% | 9.2% | —% | 9.2% | ||||||||||
| MedSurg* | 711 | 641 | 10.9% | 3.5% | 7.4% | —% | 7.4% | ||||||||||
| Cardiac Rhythm Management | 493 | 463 | 6.5% | 4.1% | 2.4% | —% | 2.4% | ||||||||||
| Electrophysiology | 75 | 64 | 17.2% | 5.7% | 11.5% | —% | 11.5% | ||||||||||
| Neuromodulation | 169 | 141 | 19.3% | 2.1% | 17.2% | —% | 17.2% | ||||||||||
| Rhythm and Neuro* | 736 | 668 | 10.2% | 3.8% | 6.4% | —% | 6.4% | ||||||||||
| Interventional Cardiology | 645 | 590 | 9.3% | 4.5% | 4.8% | 3.5% | 1.3% | ||||||||||
| Peripheral Interventions | 288 | 261 | 10.1% | 4.1% | 6.0% | —% | 6.0% | ||||||||||
| Cardiovascular | 933 | 851 | 9.5% | 4.3% | 5.2% | 2.5% | 2.7% | ||||||||||
| Net Sales | $ | 2,379 | $ | 2,160 | 10.1% | 3.9% | 6.2% | 1.0% | 5.2% | ||||||||
| *Prior period segment amounts revised in accordance with ASC 280, Segment Reporting, to reflect the reclassification of Neuromodulation from the MedSurg segment to the Rhythm and Neuro segment, effective January 1, 2018. | |||||||||||||||||
| Change | |||||||||||||||||
| Three Months Ended March 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | Less: Impact of Significant Acquisitions | Organic Basis | ||||||||||||
| (in millions) | 2018 | 2017 | |||||||||||||||
| U.S. | $ | 1,310 | $ | 1,249 | 4.8% | —% | 4.8% | —% | 4.8% | ||||||||
| EMEA** | 563 | 454 | 23.9% | 13.9% | 10.0% | 4.3% | 5.7% | ||||||||||
| APAC** | 415 | 371 | 12.0% | 6.2% | 5.8% | —% | 5.8% | ||||||||||
| Latin America and Canada | 91 | 84 | 9.2% | (0.3)% | 9.5% | 0.9% | 8.6% | ||||||||||
| Net Sales | $ | 2,379 | $ | 2,160 | 10.1% | 3.9% | 6.2% | 1.0% | 5.2% | ||||||||
| Emerging Markets | $ | 255 | $ | 208 | 22.6% | 5.4% | 17.2% | 0.5% | 16.7% | ||||||||
| **Regional totals reflect the reclassification of Middle East and Africa from the former AMEA region to Europe, effective January 1, 2018. | |||||||||||||||||
| Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | |||||||||||||||||
| Sales growth rates that exclude the impact of foreign currency fluctuations and/or the impact of recent acquisitions with significant sales are not prepared in accordance with U.S. GAAP. |
Guidance for Full Year and Second Quarter 2018
The company now estimates revenue for the full year 2018 to be in a range of $9.750 to $9.900 billion (compared to prior guidance of $9.650 to $9.800 billion ), which versus the prior year period represents a growth range of approximately 8 to 10 percent on a reported basis and growth of approximately 5 to 7 percent on an organic basis excluding the impact of foreign currency fluctuations and contribution of approximately 40 basis points from Symetis. The company now estimates income on a GAAP basis in a range of $0.90 to $0.94 per share (compared to prior guidance of $0.93 to $0.98 per share) and estimates adjusted earnings, excluding amortization expense, intangible asset impairment charges, acquisition-related, restructuring and restructuring-related net charges (credits), investment impairment charges and certain discrete tax items, in a range of $1.37 to $1.41 per share (compared to prior guidance of $1.35 to $1.39 per share).
The company estimates sales for the second quarter of 2018 to be in a range of $2.450 to $2.500 billion , which versus the prior year period represents a growth range of approximately 9 to 11 percent on a reported basis and a growth range of approximately 5 to 7 percent on an organic basis, excluding the impact of foreign currency fluctuations and contribution of approximately 70 basis points from Symetis. The company estimates earnings on a GAAP basis in a range of $0.21 to $0.23 per share and adjusted earnings, excluding amortization expense, acquisition-related and restructuring and restructuring-related net charges (credits), in a range of $0.33 to $0.35 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. EDT . 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," "aiming" 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, operational and organic revenue growth rates, GAAP earnings and adjusted earnings for the second quarter and full year 2018, 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.
Note : Amounts reported in millions within this press release are computed based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in dollars. Prior year balances were subject to rounding.
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 press release.
| CONTACT: | ||||
| Media: | Kate Haranis | Investors: | Susie Lisa, CFA | |
| 508-683-6585 (office) | 508-683-5565 (office) | |||
| Media Relations | Investor Relations | |||
| Boston Scientific Corporation | Boston Scientific Corporation | |||
| [email protected] | [email protected] |
| BOSTON SCIENTIFIC CORPORATION CONDENSED CONSOLIDATED GAAP RESULTS OF OPERATIONS (Unaudited) | |||||
| Three Months Ended March 31, | |||||
| in millions, except per share data | 2018 | 2017 | |||
| Net sales | $ | 2,379 | $ | 2,160 | |
| Cost of products sold | 672 | 650 | |||
| Gross profit | 1,707 | 1,510 | |||
| Operating expenses: | |||||
| Selling, general and administrative expenses | 860 | 794 | |||
| Research and development expenses | 261 | 235 | |||
| Royalty expense | 18 | 17 | |||
| Amortization expense | 141 | 143 | |||
| Intangible asset impairment charges | 1 | — | |||
| Contingent consideration expense (benefit) | 5 | (50) | |||
| Restructuring charges (credits) | 13 | 4 | |||
| Litigation-related net charges (credits) | — | 3 | |||
| 1,300 | 1,146 | ||||
| Operating income (loss) | 407 | 364 | |||
| Other income (expense): | |||||
| Interest expense | (61) | (57) | |||
| Other, net | (23) | (2) | |||
| Income (loss) before income taxes | 323 | 305 | |||
| Income tax expense (benefit) | 26 | 15 | |||
| Net income (loss) | $ | 298 | $ | 290 | |
| Net income (loss) per common share - basic | $ | 0.22 | $ | 0.21 | |
| Net income (loss) per common share - assuming dilution | $ | 0.21 | $ | 0.21 | |
| Weighted-average shares outstanding | |||||
| Basic | 1,376.5 | 1,365.4 | |||
| Assuming dilution | 1,396.8 | 1,390.2 |
| BOSTON SCIENTIFIC CORPORATION NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS (Unaudited) | |||||||||||||||||||||
| Three Months Ended March 31, 2018 | |||||||||||||||||||||
| in millions, except per share data | Cost of Products Sold | SG&A Expenses | R&D Expenses | Operating Income (Loss) | Pre-Tax Income (Loss) | Net Income (Loss) | Impact per Share | ||||||||||||||
| GAAP net income (loss) | $ | 672 | $ | 860 | $ | 261 | $ | 407 | $ | 323 | $ | 298 | $ | 0.21 | |||||||
| Non-GAAP adjustments: | |||||||||||||||||||||
| Amortization expense | — | — | — | 141 | 141 | 119 | 0.08 | ||||||||||||||
| Intangible asset impairment charges | — | — | — | 1 | 1 | 1 | 0.00 | ||||||||||||||
| Acquisition-related net charges (credits) | (6) | (7) | (7) | 25 | 25 | 20 | 0.01 | ||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (7) | (8) | — | 28 | 28 | 22 | 0.02 | ||||||||||||||
| Investment impairment charges | — | — | — | — | 5 | 5 | 0.00 | ||||||||||||||
| Tax Cuts and Jobs Act net charges | — | — | — | — | — | (9) | (0.01) | ||||||||||||||
| Adjusted net income | $ | 659 | $ | 846 | $ | 254 | $ | 603 | $ | 524 | $ | 455 | $ | 0.33 | |||||||
| Three Months Ended March 31, 2017 | |||||||||||||||||||||
| in millions, except per share data | Cost of Products Sold | SG&A Expenses | R&D Expenses | Operating Income (Loss) | Pre-Tax Income (Loss) | Net Income (Loss) | Impact per Share | ||||||||||||||
| GAAP net income (loss) | $ | 650 | $ | 794 | $ | 235 | $ | 364 | $ | 305 | $ | 290 | $ | 0.21 | |||||||
| Non-GAAP adjustments: | |||||||||||||||||||||
| Amortization expense | — | — | — | 143 | 143 | 122 | 0.09 | ||||||||||||||
| Acquisition-related net charges (credits) | (3) | (11) | (3) | (33) | (33) | (32) | (0.02) | ||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (12) | (3) | — | 19 | 19 | 15 | 0.01 | ||||||||||||||
| Litigation-related net charges (credits) | — | — | — | 3 | 3 | 2 | 0.00 | ||||||||||||||
| Adjusted net income | $ | 635 | $ | 780 | $ | 232 | $ | 496 | $ | 437 | $ | 397 | $ | 0.29 | |||||||
| An explanation of the company's use of these non-GAAP financial measures is provided at the end of this document. |
| BOSTON SCIENTIFIC CORPORATION PRIOR YEAR RECLASSIFIED SALES INFORMATION BY BUSINESS AND REGION (Unaudited) | ||||||||||||||
| NET SALES BY BUSINESS | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| (in millions) | June 30, 2017 | September 30, 2017 | December 31, 2017 | December 31, 2017 | ||||||||||
| Endoscopy | $ | 400 | $ | 403 | $ | 436 | $ | 1,619 | ||||||
| Urology and Pelvic Health | 280 | 274 | 308 | 1,124 | ||||||||||
| MedSurg* | 680 | 676 | 745 | 2,742 | ||||||||||
| Cardiac Rhythm Management | 480 | 463 | 488 | 1,895 | ||||||||||
| Electrophysiology | 67 | 71 | 77 | 278 | ||||||||||
| Neuromodulation | 154 | 154 | 186 | 635 | ||||||||||
| Rhythm and Neuro* | 700 | 689 | 751 | 2,808 | ||||||||||
| Interventional Cardiology | 603 | 589 | 636 | 2,419 | ||||||||||
| Peripheral Interventions | 273 | 268 | 277 | 1,081 | ||||||||||
| Cardiovascular | 876 | 857 | 913 | 3,500 | ||||||||||
| Net Sales | $ | 2,257 | $ | 2,222 | $ | 2,408 | $ | 9,048 | ||||||
| *Prior period segment amounts revised in accordance with ASC 280, Segment Reporting, to reflect the reclassification of Neuromodulation from the MedSurg segment to the Rhythm and Neuro segment, effective January 1, 2018. | ||||||||||||||
| NET SALES BY REGION | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| (in millions) | June 30, 2017 | September 30, 2017 | December 31, 2017 | December 31, 2017 | ||||||||||
| U.S. | $ | 1,291 | $ | 1,257 | $ | 1,364 | $ | 5,162 | ||||||
| EMEA** | 482 | 474 | 529 | 1,940 | ||||||||||
| APAC** | 393 | 401 | 423 | 1,587 | ||||||||||
| Latin America and Canada | 90 | 91 | 94 | 358 | ||||||||||
| Net Sales | $ | 2,257 | $ | 2,222 | $ | 2,408 | $ | 9,048 | ||||||
| **Regional totals reflect the reclassification of Middle East and Africa from the former AMEA region to Europe, effective January 1, 2018. |
| BOSTON SCIENTIFIC CORPORATION ESTIMATED REVENUE NON-GAAP GROWTH RATES AND NON-GAAP NET INCOME PER SHARE RECONCILIATIONS (Unaudited) | ||||||||
| Q2 and Full Year 2018 Estimated Revenue Growth Rates | ||||||||
| Q2 2018 Estimate | Full Year 2018 Estimate | Prior Full Year 2018 Estimate | ||||||
| (Low) | (High) | (Low) | (High) | (Low) | (High) | |||
| Estimated GAAP sales growth | 9% | 11% | 8% | 10% | 7% | 8% | ||
| Less: Estimated impact of foreign currency fluctuations and significant acquisitions | 4% | 4% | 3% | 3% | 2% | 2% | ||
| Estimated sales growth, organic* | 5% | 7% | 5% | 7% | 5% | 6% | ||
| *Excludes contribution of approximately 70 basis points for the second quarter and 40 basis points for the full year from Symetis. Prior Full Year 2018 Estimate excluded contribution of 30 basis points from Symetis. |
| Q2 and Full Year 2018 Earnings per Share Guidance | ||||||||||||||||||||
| Q2 2018 Estimate | Full Year 2018 Estimate | Prior Full Year 2018 Estimate | ||||||||||||||||||
| (Low) | (High) | (Low) | (High) | (Low) | (High) | |||||||||||||||
| GAAP results | $ | 0.21 | $ | 0.23 | $ | 0.90 | $ | 0.94 | $ | 0.93 | $ | 0.98 | ||||||||
| Estimated amortization expense | 0.08 | 0.08 | 0.35 | 0.35 | 0.33 | 0.33 | ||||||||||||||
| Estimated acquisition-related net charges (credits) | 0.02 | 0.02 | 0.05 | 0.05 | 0.02 | 0.02 | ||||||||||||||
| Estimated restructuring and restructuring-related net charges (credits) | 0.02 | 0.02 | 0.08 | 0.08 | 0.07 | 0.06 | ||||||||||||||
| Intangible asset impairment charges | — | — | 0.00 | 0.00 | — | — | ||||||||||||||
| Investment impairment charges | — | — | 0.00 | 0.00 | — | — | ||||||||||||||
| Tax Cuts and Jobs Act net charges | — | — | (0.01) | (0.01) | — | — | ||||||||||||||
| Adjusted results | $ | 0.33 | $ | 0.35 | $ | 1.37 | $ | 1.41 | $ | 1.35 | $ | 1.39 |
| Prior Guidance Estimate - Q1 2018 Earnings per Share | ||||||||||
| Q1 2018 Estimate | ||||||||||
| (Low) | (High) | |||||||||
| GAAP results | $ | 0.19 | $ | 0.22 | ||||||
| Estimated amortization expense | 0.08 | 0.08 | ||||||||
| Estimated acquisition-related net charges (credits) | 0.01 | 0.01 | ||||||||
| Estimated restructuring and restructuring-related net charges (credits) | 0.02 | 0.01 | ||||||||
| Adjusted results | $ | 0.30 | $ | 0.32 |
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures, including adjusted net income (earnings) and adjusted net income (earnings) per share that exclude certain amounts, operational net sales, which exclude the impact of foreign currency fluctuations and organic net sales, which exclude the impact of foreign currency fluctuations and 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 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 calculate adjusted net income (earnings) and adjusted net income (earnings) per share we exclude certain charges (credits) from GAAP net income, including amortization expense, intangible asset impairment charges, acquisition-related net charges (credits), restructuring and restructuring-related net charges (credits), litigation-related net charges (credits), certain investment impairment charges and certain discrete tax items, including net income tax charges resulting from the enactment of the Tax Cuts and Jobs Act in December 2017 . 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." Please refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our most recent Annual Report filed on Form 10-K filed with the Securities and Exchange Commission for an explanation of each of these adjustments and the reasons for excluding each item.
The GAAP financial measures most directly comparable to adjusted net income and adjusted net income per share is GAAP net income and GAAP net income per share.
To calculate operational net sales, which exclude the impact of foreign currency fluctuations, we convert actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior period. To calculate organic net sales, we remove the impact of recent acquisitions with significant sales from operational net sales. The GAAP financial measure most directly comparable to operational net sales and organic net sales is 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.
SOURCE Boston Scientific Corporation