Full Press Release Details
MARLBOROUGH, Mass. , April 28, 2021 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX ) generated net sales of $2.752 billion during the first quarter of 2021. This represents growth of 8.2 percent on a reported basis, 5.6 percent on an operational 1 basis and 5.9 percent on an organic 2 basis, all compared to the prior year period. The company reported GAAP net income available to common stockholders of $327 million or $0.23 per share (EPS), compared to GAAP net income of $11 million or $0.01 per share a year ago, and achieved adjusted EPS of $0.37 for the period, compared to $0.28 a year ago.
"We are pleased by the trajectory of our recovery," said Mike Mahoney , chairman and chief executive officer, Boston Scientific. "Our global team remains committed to helping patients and our customers by delivering a robust portfolio of innovative solutions, and that commitment will continue to fuel our future growth."
First quarter financial results and recent developments:
| 1. Operational net sales growth excludes the impact of foreign currency fluctuations. |
| 2. Organic net sales growth excludes the impact of foreign currency fluctuations and net sales from the recent acquisition of Preventice Solutions, Inc. (Preventice). Organic net sales growth rates also exclude the intrauterine health franchise, which we divested in Q2 2020 and the Specialty Pharmaceuticals business, which we divested in Q1 2021. |
| 3. We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Periodically, we assess our list of Emerging Markets countries, and effective January 1, 2021, modified our list to include the following countries: Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia, Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Taiwan, Thailand, Turkey and Vietnam. We have revised prior year amounts to conform to the current year's presentation. The revision had an immaterial impact on previously reported Emerging Markets net sales. |
| 4. We have three historical reportable segments comprised of Medical Surgical (MedSurg), Rhythm and Neuro, and Cardiovascular, which represent an aggregation of our operating segments that generate revenues from the sale of medical devices (Medical Devices). |
| 5. On March 1, 2021, we completed the sale of the Specialty Pharmaceuticals business. Our consolidated net sales include Specialty Pharmaceuticals up to the date of the closing of the transaction. Specialty Pharmaceuticals net sales were substantially U.S. based and presented as a stand-alone operating segment alongside our Medical Device Reportable segments. |
| 6. Consistent with Section 515B of the FD&C Act, devices designated as Breakthrough Devices will receive prioritized review (Section II.F). |
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 Recent Acquisitions / Divestitures | Organic Basis | ||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||
| Endoscopy | $ | 499 | $ | 442 | 12.9% | 3.0% | 9.9% | —% | 9.9% | ||||||||
| Urology and Pelvic Health | 361 | 332 | 8.7% | 1.9% | 6.8% | (2.0)% | 8.8% | ||||||||||
| MedSurg | 860 | 774 | 11.1% | 2.5% | 8.6% | (0.9)% | 9.5% | ||||||||||
| Cardiac Rhythm Management | 469 | 437 | 7.4% | 2.9% | 4.4% | 3.9% | 0.5% | ||||||||||
| Electrophysiology | 83 | 74 | 11.9% | 4.2% | 7.7% | —% | 7.7% | ||||||||||
| Neuromodulation | 198 | 191 | 3.5% | 1.8% | 1.7% | —% | 1.7% | ||||||||||
| Rhythm and Neuro | 750 | 703 | 6.8% | 2.8% | 4.0% | 2.4% | 1.6% | ||||||||||
| Interventional Cardiology | 696 | 633 | 9.9% | 2.7% | 7.1% | —% | 7.1% | ||||||||||
| Peripheral Interventions | 433 | 392 | 10.3% | 2.6% | 7.7% | —% | 7.7% | ||||||||||
| Cardiovascular | 1,129 | 1,026 | 10.0% | 2.7% | 7.4% | —% | 7.4% | ||||||||||
| Medical Devices 4 | 2,739 | 2,502 | 9.5% | 2.7% | 6.8% | 0.4% | 6.4% | ||||||||||
| Specialty Pharmaceuticals 5 | 13 | 41 | (67.5)% | 0.5% | (68.0)% | (23.6)% | (44.4)% | ||||||||||
| Net Sales | $ | 2,752 | $ | 2,543 | 8.2% | 2.6% | 5.6% | (0.3)% | 5.9% |
| Change | |||||||||||||
| Three Months Ended March 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | ||||||||||
| (in millions) | 2021 | 2020 | |||||||||||
| U.S. | $ | 1,577 | $ | 1,452 | 8.6% | —% | 8.6% | ||||||
| EMEA | 604 | 552 | 9.4% | 7.5% | 1.9% | ||||||||
| APAC | 473 | 409 | 15.6% | 6.5% | 9.1% | ||||||||
| Latin America and Canada | 85 | 89 | (3.8)% | (1.6)% | (2.2)% | ||||||||
| Medical Devices 4 | 2,739 | 2,502 | 9.5% | 2.7% | 6.8% | ||||||||
| Specialty Pharmaceuticals 5 | 13 | 41 | (67.5)% | 0.5% | (68.0)% | ||||||||
| Net Sales | $ | 2,752 | $ | 2,543 | 8.2% | 2.6% | 5.6% | ||||||
| Emerging Markets 3 | $ | 317 | $ | 273 | 16.0% | 2.8% | 13.2% | ||||||
| Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | |||||||||||||
| Growth rates that exclude the impact of foreign currency fluctuations and/or the impact of recent aforementioned acquisitions / divestitures are not prepared in accordance with U.S. GAAP. |
Guidance for Full Year and Second Quarter 2021
The company now estimates net sales growth for the full year 2021, versus the prior year period, to be in a range of approximately 16 to 19 percent on a reported basis, and approximately 15 to 18 percent on an organic basis. Full year organic net sales guidance excludes the impact of foreign currency fluctuations and the acquisition of Preventice Solutions, Inc., with no prior period related net sales, as well as the intrauterine health franchise, which we divested in Q2 2020 and the Specialty Pharmaceuticals business, which we divested in Q1 2021. The company now estimates earnings on a GAAP basis in a range of $0.81 to $0.88 per share and estimates adjusted earnings, excluding certain charges (credits), of $1.53 to $1.60 per share.
The company estimates net sales growth for the second quarter of 2021, versus the prior year period, to be in a range of approximately 46 to 50 percent on a reported basis and approximately 44 to 48 percent on an organic basis. Second quarter organic net sales guidance excludes the impact of foreign currency fluctuations and the acquisition of Preventice, with no prior period related net sales, as well as the intrauterine health franchise, which we divested in Q2 2020 and the Specialty Pharmaceuticals business, which we divested in Q1 2021. The company estimates earnings on a GAAP basis in a range of $0.16 to $0.18 per share and adjusted earnings, excluding certain charges (credits), of $0.36 to $0.38 per share.
Conference Call Information
Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. ET . The company will webcast the call to interested parties through its website: www.bostonscientific.com . Please see the website for details on how to access the webcast. The webcast will be available for approximately one year on the Boston Scientific website.
About Boston Scientific Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world. As a global medical technology leader for more than 40 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.com and connect on Twitter and Facebook .
Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our expected net sales; GAAP, operational and organic revenue growth rates; GAAP earnings and adjusted earnings for the second quarter and full year 2021; our financial performance; our business plans and product performance; and the impact of the COVID-19 pandemic on the company's results of operations. 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 factors, in some cases, have affected and in the future (together with other factors) 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.
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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||
| Three Months Ended March 31, | ||||||
| in millions, except per share data | 2021 | 2020 | ||||
| Net sales | $ | 2,752 | $ | 2,543 | ||
| Cost of products sold | 894 | 806 | ||||
| Gross profit | 1,858 | 1,737 | ||||
| Operating expenses: | ||||||
| Selling, general and administrative expenses | 1,019 | 978 | ||||
| Research and development expenses | 276 | 300 | ||||
| Royalty expense | 12 | 12 | ||||
| Amortization expense | 185 | 201 | ||||
| Intangible asset impairment charges | — | 198 | ||||
| Contingent consideration net expense (benefit) | (6) | (108) | ||||
| Restructuring net charges (credits) | 5 | 10 | ||||
| Litigation-related net charges (credits) | 4 | — | ||||
| Gain on disposal of business | (6) | — | ||||
| 1,488 | 1,591 | |||||
| Operating income (loss) | 370 | 146 | ||||
| Other income (expense): | ||||||
| Interest expense | (82) | (88) | ||||
| Other, net | 37 | (36) | ||||
| Income (loss) before income taxes | 325 | 22 | ||||
| Income tax (benefit) expense | (16) | 12 | ||||
| Net income (loss) | $ | 341 | $ | 11 | ||
| Preferred stock dividends | (14) | — | ||||
| Net income (loss) available to common stockholders | $ | 327 | $ | 11 | ||
| Net income (loss) per common share - basic | $ | 0.23 | $ | 0.01 | ||
| Net income (loss) per common share - assuming dilution | $ | 0.23 | $ | 0.01 | ||
| Weighted-average shares outstanding | ||||||
| Basic | 1,418.7 | 1,397.4 | ||||
| Assuming dilution | 1,430.8 | 1,413.5 |
| BOSTON SCIENTIFIC CORPORATION NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS (Unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||
| (in millions, except per share data) | Gross Profit | Operating Expenses | Operating Income (Loss) | Other Income (Expense) | Income (Loss) Before Income Taxes | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Available to Common Stockholders | Impact per Share (1) | |||||||||||||||||||
| Reported | $ | 1,858 | $ | 1,488 | $ | 370 | $ | (45) | $ | 325 | $ | 341 | $ | (14) | $ | 327 | $ | 0.23 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | (185) | 185 | — | 185 | 167 | — | 167 | 0.12 | |||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | 14 | (37) | 50 | (198) | (148) | (153) | — | (153) | (0.11) | |||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 18 | (31) | 49 | — | 49 | 44 | — | 44 | 0.03 | |||||||||||||||||||
| Litigation-related net charges (credits) | — | (4) | 4 | — | 4 | 4 | — | 4 | 0.00 | |||||||||||||||||||
| Investment portfolio net losses (gains) | — | — | — | 146 | 146 | 112 | — | 112 | 0.08 | |||||||||||||||||||
| EU MDR implementation costs | 7 | (3) | 11 | — | 11 | 10 | — | 10 | 0.01 | |||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | 17 | — | 17 | 0.01 | |||||||||||||||||||
| Discrete tax items | — | — | — | — | — | (3) | — | (3) | (0.00) | |||||||||||||||||||
| Adjusted | $ | 1,897 | $ | 1,228 | $ | 669 | $ | (97) | $ | 572 | $ | 538 | $ | (14) | $ | 524 | $ | 0.37 | ||||||||||
| (1) For the three months ended March 31, 2021, the effect of assuming the conversion of Mandatory Convertible Preferred Stock (MCPS) into shares of common stock was anti-dilutive, and therefore excluded from the calculation of EPS. Accordingly, GAAP net income and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited consolidated statements of operations, for purposes of calculating net income available to common stockholders. | ||||||||||||||||||||||||||||
| Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||||
| (in millions, except per share data) | Gross Profit | Operating Expenses | Operating Income (Loss) | Other Income (Expense) | Income (Loss) Before Income Taxes | Net Income (Loss) | Preferred Stock Dividends | Net Income (Loss) Available to Common Stockholders | Impact per Share | |||||||||||||||||||
| Reported | $ | 1,737 | $ | 1,591 | $ | 146 | $ | (124) | $ | 22 | $ | 11 | $ | — | $ | 11 | $ | 0.01 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | (201) | 201 | — | 201 | 180 | — | 180 | 0.13 | |||||||||||||||||||
| Intangible asset impairment charges | — | (198) | 198 | — | 198 | 168 | — | 168 | 0.12 | |||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | 37 | 69 | (32) | 9 | (23) | (36) | — | (36) | (0.03) | |||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 15 | (15) | 30 | — | 30 | 25 | — | 25 | 0.02 | |||||||||||||||||||
| EU MDR implementation costs | 4 | (1) | 5 | — | 5 | 5 | — | 5 | 0.00 | |||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | 26 | — | 26 | 0.02 | |||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 13 | — | 13 | 0.01 | |||||||||||||||||||
| Adjusted | $ | 1,794 | $ | 1,245 | $ | 549 | $ | (115) | $ | 434 | $ | 391 | $ | — | $ | 391 | $ | 0.28 | ||||||||||
| An explanation of the company's use of these non-GAAP financial measures is provided at the end of this document. |
| BOSTON SCIENTIFIC CORPORATION |
| Q2 and FY 2021 GUIDANCE RECONCILIATIONS |
| (Unaudited) |
| Q2 2021 Estimate | Full Year 2021 Estimate | ||||
| (Low) | (High) | (Low) | (High) | ||
| Estimated GAAP sales growth | 46% | 50% | 16% | 19% | |
| Less: Estimated impact of foreign currency fluctuations | 4% | 4% | 2% | 2% | |
| Estimated sales growth, operational | 42% | 46% | 14% | 17% | |
| Less: Estimated impact of recent acquisitions / divestitures | (2)% | (2)% | (1)% | (1)% | |
| Estimated sales growth, organic | 44% | 48% | 15% | 18% |
Earnings per Share
| Q2 2021 Estimate | Full Year 2021 Estimate | ||||||||||||
| (Low) | (High) | (Low) | (High) | ||||||||||
| GAAP results | $ | 0.16 | $ | 0.18 | $ | 0.81 | $ | 0.88 | |||||
| Estimated amortization expense | 0.11 | 0.11 | 0.45 | 0.45 | |||||||||
| Estimated acquisition / divestitures-related net charges (credits) | 0.03 | 0.03 | (0.04) | (0.04) | |||||||||
| Estimated restructuring and restructuring-related net charges (credits) | 0.04 | 0.04 | 0.13 | 0.13 | |||||||||
| Estimated other adjustments | 0.03 | 0.03 | 0.19 | 0.19 | |||||||||
| Adjusted results | $ | 0.36 | $ | 0.38 | $ | 1.53 | $ | 1.60 |
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share (EPS) 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 aforementioned acquisitions and divestitures. 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 (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share we exclude certain charges (credits) from GAAP net income and GAAP net income available to common stockholders. Amounts are presented after-tax 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 or any Quarterly Report on Form 10-Q that we file thereafter 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 (loss), adjusted net income (loss) available to common stockholders and adjusted net income (loss) per share are GAAP net income (loss), GAAP net income (loss) available to common stockholders and GAAP net income (loss) per common share - assuming dilution, respectively.
To calculate operational net sales growth rates, 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 periods. To calculate organic net sales growth rates, we also remove the impact of recent aforementioned acquisitions and divestitures with less than a full period of comparable 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