Full Press Release Details
MARLBOROUGH, Mass. , Feb. 5, 2020 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX ) generated sales of $2.905 billion during the fourth quarter of 2019. This represents growth of 13.4 percent on a reported basis, 14.1 percent on an operational 1 basis and 7.3 percent on an organic 2 basis, all compared to the prior year period. The company reported GAAP earnings of $3.996 billion or $2.83 per share (EPS), compared to GAAP earnings of $386 million or $0.27 per share a year ago and achieved adjusted earnings per share of $0.46 for the period, compared to $0.39 a year ago. Reported GAAP earnings include a significant net income tax benefit explained in the Use of Non-GAAP Financial Measures section below.
For the full year 2019, the company generated sales of $10.735 billion . This represents growth of 9.3 percent on a reported basis, 11.1 percent on an operational 1 basis and 7.3 percent on an organic 2 basis, all compared to the prior year period. The company reported GAAP earnings of $3.33 per share, inclusive of the net income tax benefit mentioned above, compared to $1.19 in 2018 and delivered full year adjusted earnings per share of $1.58 , compared to $1.47 in 2018. Full year 2018 GAAP and adjusted earnings per share included a $0.07 net tax benefit. 3
"We delivered strong revenue and adjusted EPS growth for the quarter and the year by developing innovative products, executing on our category leadership strategy and mitigating challenges," said Mike Mahoney , chairman and chief executive officer, Boston Scientific. "We're confident that we have the pipeline, leadership team and focused execution to deliver on our goals to address unmet clinical needs and work to improve the lives of millions of patients."
Fourth quarter financial results and recent developments:
| 1. Operational revenue growth excludes the impact of foreign currency fluctuations. |
| 2 . Organic revenue growth excludes the impact of foreign currency fluctuations and sales from the recent acquisitions of NxThera, Inc., Claret Medical, Inc., Augmenix, Inc., Vertiflex, Inc. and BTG plc (BTG), each with no prior year comparable sales. Organic revenue growth also excludes the impact of the divestiture of our global embolic microspheres portfolio, a transaction entered into in connection with obtaining the antitrust clearances required to complete the BTG transaction. |
| 3. The full year 2018 net tax benefit of $0.07 includes our previously disclosed second quarter $0.06 benefit from settling the IRS Stipulation of Settled Issues for the 2001 through 2010 tax years, offset by a fourth quarter $0.05 charge for our previously announced tax reinvestment strategy. In addition, the net benefit includes a $0.06 benefit in the fourth quarter for the settlement with the IRS of our 2011 through 2013 tax years. |
| 4. 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 in our Medical Devices business. Periodically, we assess our list of Emerging Markets; effective January 1, 2019, we updated our list of Emerging Market countries. We have revised prior year amounts to the current year's presentation. The revision had an immaterial impact on prior year Emerging Markets sales. |
| 5. 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). As part of our acquisition of BTG on August 19, 2019, we acquired an Interventional Medicine business, which is now included in our Peripheral Interventions operating segment's 2019 revenues from the date of acquisition. |
| 6. As part of our acquisition of BTG on August 19, 2019, we acquired a specialty pharmaceuticals business (Specialty Pharmaceuticals). Subsequent to acquisition, Specialty Pharmaceuticals is now a stand-alone operating segment presented alongside our Medical Device reportable segments. Specialty Pharmaceuticals net sales are substantially U.S. based. Our chief operating decision maker (CODM) reviews financial information of our globally managed Specialty Pharmaceuticals operating segment at the worldwide level without further disaggregation into regional results. As such, Specialty Pharmaceuticals net sales are presented globally, and our Medical Devices reportable segments regional net sales results do not include Specialty Pharmaceuticals. |
Net sales for the fourth quarter by business and region:
| Change | |||||||||||||||||
| Three Months Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | Less: Impact of Recent Acquisitions / Divestitures | Organic Basis | ||||||||||||
| (in millions) | 2019 | 2018 | |||||||||||||||
| Endoscopy | $ | 499 | $ | 458 | 8.8% | (0.8)% | 9.6% | 0.0% | 9.6% | ||||||||
| Urology and Pelvic Health | 379 | 342 | 11.1% | (0.6)% | 11.7% | 0.0% | 11.7% | ||||||||||
| MedSurg | 878 | 800 | 9.8% | (0.8)% | 10.6% | 0.0% | 10.6% | ||||||||||
| Cardiac Rhythm Management | 473 | 488 | (3.3)% | (0.7)% | (2.6)% | 0.0% | (2.6)% | ||||||||||
| Electrophysiology | 84 | 81 | 3.0% | (0.7)% | 3.7% | 0.0% | 3.7% | ||||||||||
| Neuromodulation | 261 | 220 | 18.7% | (0.5)% | 19.2% | 11.4% | 7.8% | ||||||||||
| Rhythm and Neuro | 817 | 790 | 3.5% | (0.6)% | 4.1% | 3.1% | 1.0% | ||||||||||
| Interventional Cardiology | 748 | 668 | 12.1% | (0.7)% | 12.8% | 0.0% | 12.8% | ||||||||||
| Peripheral Interventions | 403 | 302 | 33.2% | (0.6)% | 33.8% | 30.2% | 3.6% | ||||||||||
| Cardiovascular | 1,151 | 970 | 18.7% | (0.6)% | 19.3% | 9.3% | 10.0% | ||||||||||
| Medical Devices 5 | 2,847 | 2,561 | 11.2% | (0.7)% | 11.9% | 4.6% | 7.3% | ||||||||||
| Specialty Pharmaceuticals 6 | 58 | n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||
| Net Sales | $ | 2,905 | $ | 2,561 | 13.4% | (0.7)% | 14.1% | 6.8% | 7.3% |
| Change | |||||||||||||
| Three Months Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | ||||||||||
| (in millions) | 2019 | 2018 | |||||||||||
| U.S. | $ | 1,654 | $ | 1,459 | 13.4% | 0.0% | 13.4% | ||||||
| EMEA | 597 | 557 | 7.2% | (2.5)% | 9.7% | ||||||||
| APAC | 495 | 445 | 11.3% | (0.2)% | 11.5% | ||||||||
| Latin America and Canada | 101 | 101 | 0.6% | (2.3)% | 2.9% | ||||||||
| Medical Devices 5 | 2,847 | 2,561 | 11.2% | (0.7)% | 11.9% | ||||||||
| Specialty Pharmaceuticals 6 | 58 | n/a | n/a | n/a | n/a | ||||||||
| Net Sales | $ | 2,905 | $ | 2,561 | 13.4% | (0.7)% | 14.1% | ||||||
| Emerging Markets 4 | $ | 325 | $ | 285 | 14.1% | (2.1)% | 16.2% | ||||||
| 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 aforementioned acquisitions / divestitures are not prepared in accordance with U.S. GAAP. |
Net sales for the full year by business and region:
| Change | |||||||||||||||||
| Year Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | Less: Impact of Recent Acquisitions / Divestitures | Organic Basis | ||||||||||||
| (in millions) | 2019 | 2018 | |||||||||||||||
| Endoscopy | $ | 1,894 | $ | 1,762 | 7.5% | (1.7)% | 9.2% | 0.0% | 9.2% | ||||||||
| Urology and Pelvic Health | 1,413 | 1,245 | 13.4% | (1.3)% | 14.7% | 6.3% | 8.4% | ||||||||||
| MedSurg | 3,307 | 3,007 | 10.0% | (1.5)% | 11.5% | 2.7% | 8.8% | ||||||||||
| Cardiac Rhythm Management | 1,939 | 1,951 | (0.6)% | (1.8)% | 1.2% | 0.0% | 1.2% | ||||||||||
| Electrophysiology | 329 | 311 | 5.5% | (2.0)% | 7.5% | 0.0% | 7.5% | ||||||||||
| Neuromodulation | 873 | 779 | 12.0% | (1.1)% | 13.1% | 6.3% | 6.8% | ||||||||||
| Rhythm and Neuro | 3,140 | 3,041 | 3.3% | (1.6)% | 4.9% | 1.6% | 3.3% | ||||||||||
| Interventional Cardiology | 2,816 | 2,590 | 8.7% | (2.3)% | 11.0% | 1.0% | 10.0% | ||||||||||
| Peripheral Interventions | 1,392 | 1,187 | 17.3% | (1.8)% | 19.1% | 11.3% | 7.8% | ||||||||||
| Cardiovascular | 4,208 | 3,777 | 11.4% | (2.1)% | 13.5% | 4.2% | 9.3% | ||||||||||
| Medical Devices 5 | 10,654 | 9,823 | 8.5% | (1.7)% | 10.2% | 2.9% | 7.3% | ||||||||||
| Specialty Pharmaceuticals 6 | 81 | n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||
| Net Sales | $ | 10,735 | $ | 9,823 | 9.3% | (1.8)% | 11.1% | 3.8% | 7.3% |
| Change | |||||||||||||
| Year Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | ||||||||||
| (in millions) | 2019 | 2018 | |||||||||||
| U.S. | $ | 6,097 | $ | 5,538 | 10.1% | 0.0% | 10.1% | ||||||
| EMEA | 2,264 | 2,176 | 4.0% | (5.4)% | 9.4% | ||||||||
| APAC | 1,898 | 1,727 | 9.9% | (2.4)% | 12.3% | ||||||||
| Latin America and Canada | 395 | 383 | 3.3% | (4.0)% | 7.3% | ||||||||
| Medical Devices 5 | 10,654 | 9,823 | 8.5% | (1.7)% | 10.2% | ||||||||
| Specialty Pharmaceuticals 6 | 81 | n/a | n/a | n/a | n/a | ||||||||
| Net Sales | $ | 10,735 | $ | 9,823 | 9.3% | (1.8)% | 11.1% | ||||||
| Emerging Markets 4 | $ | 1,252 | $ | 1,097 | 14.1% | (5.4)% | 19.5% | ||||||
| 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 aforementioned acquisitions / divestitures are not prepared in accordance with U.S. GAAP. |
Guidance for Full Year and First Quarter 2020
The company estimates revenue growth for the full year 2020, versus the prior year period, to be in a range of approximately 10 to 12 percent on a reported basis and a growth range of approximately 6.5 to 8.5 percent on an organic basis. Full year organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 350 basis points from the acquisitions of Vertiflex and BTG, each with less than a full year of related net sales in the prior period, as well as the impact of the divestiture of our global embolic microspheres portfolio as part of the acquisition of BTG. The company estimates income on a GAAP basis in a range of $0.95 to $1.00 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $1.74 to $1.79 per share.
The company estimates revenue growth for the first quarter of 2020, versus the prior year period, to be in a range of approximately 10 to 12 percent on a reported basis and a growth range of approximately 5 to 7 percent on an organic basis. First quarter sales guidance contemplates a preliminary negative sales impact estimate of $10 million to $40 million due to the potential effect of the coronavirus on procedure volumes in China and supply chain disruption. First quarter organic guidance excludes the impact of foreign currency fluctuations and contribution of approximately 600 basis points from the acquisitions of Vertiflex and BTG, each with no prior year comparable sales, as well as the impact of the divestiture of our global embolic microspheres portfolio as part of the acquisition of BTG. The company estimates earnings on a GAAP basis in a range of $0.16 to $0.19 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $0.37 to $0.40 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," "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 first quarter and full year 2020, 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.
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 December 31, | Year Ended December 31, | ||||||||||||
| in millions, except per share data | 2019 | 2018 | 2019 | 2018 | |||||||||
| Net sales | $ | 2,905 | $ | 2,561 | $ | 10,735 | $ | 9,823 | |||||
| Cost of products sold | 851 | 729 | 3,116 | 2,813 | |||||||||
| Gross profit | 2,054 | 1,832 | 7,620 | 7,011 | |||||||||
| Operating expenses: | |||||||||||||
| Selling, general and administrative expenses | 1,092 | 953 | 3,941 | 3,569 | |||||||||
| Research and development expenses | 309 | 288 | 1,174 | 1,113 | |||||||||
| Royalty expense | 17 | 18 | 65 | 70 | |||||||||
| Amortization expense | 201 | 162 | 699 | 599 | |||||||||
| Intangible asset impairment charges | — | — | 105 | 35 | |||||||||
| Contingent consideration expense (benefit) | (26) | (10) | (35) | (21) | |||||||||
| Restructuring charges (credits) | 28 | 16 | 38 | 36 | |||||||||
| Litigation-related charges (credits) | 223 | 85 | 115 | 103 | |||||||||
| 1,843 | 1,513 | 6,102 | 5,504 | ||||||||||
| Operating income (loss) | 210 | 319 | 1,518 | 1,506 | |||||||||
| Other income (expense): | |||||||||||||
| Interest expense | (179) | (64) | (473) | (241) | |||||||||
| Other, net | (37) | 40 | (358) | 156 | |||||||||
| Income (loss) before income taxes | (6) | 296 | 687 | 1,422 | |||||||||
| Income tax expense (benefit) | (4,002) | (90) | (4,013) | (249) | |||||||||
| Net income (loss) | $ | 3,996 | $ | 386 | $ | 4,700 | $ | 1,671 | |||||
| Net income (loss) per common share - basic | $ | 2.87 | $ | 0.28 | $ | 3.38 | $ | 1.21 | |||||
| Net income (loss) per common share - assuming dilution | $ | 2.83 | $ | 0.27 | $ | 3.33 | $ | 1.19 | |||||
| Weighted-average shares outstanding | |||||||||||||
| Basic | 1,394.3 | 1,384.2 | 1,391.5 | 1,381.0 | |||||||||
| Assuming dilution | 1,413.1 | 1,406.2 | 1,410.6 | 1,401.4 |
| BOSTON SCIENTIFIC CORPORATION | ||||||||||||||||||||||||||||
| NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended December 31, 2019 | ||||||||||||||||||||||||||||
| 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) | $ | 851 | $ | 1,092 | $ | 309 | $ | 210 | $ | (6) | $ | 3,996 | $ | 2.83 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | — | — | 201 | 201 | 184 | 0.13 | |||||||||||||||||||||
| Intangible asset impairment charges | — | — | — | — | — | 5 | 0.00 | |||||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | (54) | (62) | (10) | 101 | 121 | 282 | 0.20 | |||||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (13) | (3) | — | 44 | 44 | 37 | 0.03 | |||||||||||||||||||||
| Litigation-related net charges (credits) | — | — | — | 223 | 223 | 169 | 0.12 | |||||||||||||||||||||
| Investment impairment charges | — | — | — | — | 1 | 1 | 0.00 | |||||||||||||||||||||
| EU MDR implementation charges | (3) | — | (1) | 4 | 4 | 3 | 0.00 | |||||||||||||||||||||
| Debt extinguishment charges | — | — | — | — | 86 | 67 | 0.05 | |||||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | (4,102) | (2.90) | |||||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 2 | 0.00 | |||||||||||||||||||||
| Adjusted net income | $ | 781 | $ | 1,026 | $ | 297 | $ | 783 | $ | 674 | $ | 643 | $ | 0.46 | ||||||||||||||
| Three Months Ended December 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) | $ | 729 | $ | 953 | $ | 288 | $ | 319 | $ | 296 | $ | 386 | $ | 0.27 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | — | — | 162 | 162 | 140 | 0.10 | |||||||||||||||||||||
| Acquisition-related net charges (credits) | (18) | (32) | (9) | 50 | 22 | 84 | 0.06 | |||||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (14) | (7) | (1) | 37 | 37 | 30 | 0.02 | |||||||||||||||||||||
| Litigation-related net charges (credits) | — | — | — | 85 | 85 | 65 | 0.05 | |||||||||||||||||||||
| Investment impairment charges | — | — | — | — | — | (2) | 0.00 | |||||||||||||||||||||
| Discrete tax items | — | — | — | — | (7) | (151) | (0.11) | |||||||||||||||||||||
| Adjusted net income | $ | 697 | $ | 915 | $ | 278 | $ | 653 | $ | 596 | $ | 552 | $ | 0.39 | ||||||||||||||
| An explanation of the company's use of these non-GAAP financial measures is provided at the end of this document. |
| BOSTON SCIENTIFIC CORPORATION | ||||||||||||||||||||||||||||
| NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| Year Ended December 31, 2019 | ||||||||||||||||||||||||||||
| 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) | $ | 3,116 | $ | 3,941 | $ | 1,174 | $ | 1,518 | $ | 687 | $ | 4,700 | $ | 3.33 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | — | — | 699 | 699 | 628 | 0.44 | |||||||||||||||||||||
| Intangible asset impairment charges | — | — | — | 105 | 105 | 102 | 0.07 | |||||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | (114) | (162) | (35) | 275 | 626 | 672 | 0.48 | |||||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (32) | (12) | — | 82 | 82 | 68 | 0.05 | |||||||||||||||||||||
| Litigation-related net charges (credits) | — | — | — | 115 | 115 | 72 | 0.05 | |||||||||||||||||||||
| Investment impairment charges | — | — | — | — | 4 | 3 | 0.00 | |||||||||||||||||||||
| EU MDR implementation charges | (4) | — | (1) | 6 | 6 | 5 | 0.00 | |||||||||||||||||||||
| Debt extinguishment charges | — | — | — | — | 86 | 67 | 0.05 | |||||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | (4,102) | (2.91) | |||||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 18 | 0.01 | |||||||||||||||||||||
| Adjusted net income | $ | 2,966 | $ | 3,766 | $ | 1,138 | $ | 2,800 | $ | 2,409 | $ | 2,234 | $ | 1.58 | ||||||||||||||
| Year Ended December 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) | $ | 2,813 | $ | 3,569 | $ | 1,113 | $ | 1,506 | $ | 1,422 | $ | 1,671 | $ | 1.19 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||
| Amortization expense | — | — | — | 599 | 599 | 520 | 0.37 | |||||||||||||||||||||
| Intangible asset impairment charges | — | — | — | 35 | 35 | 31 | 0.02 | |||||||||||||||||||||
| Acquisition-related net charges (credits) | (41) | (84) | (60) | 164 | (46) | 5 | 0.00 | |||||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | (47) | (11) | (1) | 96 | 96 | 77 | 0.05 | |||||||||||||||||||||
| Litigation-related net charges (credits) | — | — | — | 103 | 103 | 79 | 0.06 | |||||||||||||||||||||
| Investment impairment charges | — | — | — | — | 7 | 6 | 0.00 | |||||||||||||||||||||
| Discrete tax items | — | — | — | — | (7) | (328) | (0.23) | |||||||||||||||||||||
| Adjusted net income | $ | 2,724 | $ | 3,474 | $ | 1,052 | $ | 2,503 | $ | 2,209 | $ | 2,060 | $ | 1.47 | ||||||||||||||
| An explanation of the company's use of these non-GAAP financial measures is provided at the end of this document. |
| BOSTON SCIENTIFIC CORPORATION |
| ESTIMATED REVENUE NON-GAAP GROWTH RATES AND NON-GAAP NET INCOME PER SHARE RECONCILIATIONS |
| (Unaudited) |
Q1 and Full Year 2020 Estimated Revenue Growth Rates
| Q1 2020 Estimate | Full Year 2020 Estimate | ||||
| (Low) | (High) | (Low) | (High) | ||
| Estimated GAAP sales growth | 10% | 12% | 10% | 12% | |
| Less: Estimated impact of foreign currency fluctuations | (1)% | (1)% | 0% | 0% | |
| Estimated sales growth, operational | 11% | 13% | 10% | 12% | |
| Less: Estimated impact of the aforementioned acquisitions and divestitures | 6% | 6% | 3.5% | 3.5% | |
| Estimated sales growth, organic* | 5% | 7% | 6.5% | 8.5% | |
| *Q1 2020 contemplates a preliminary negative sales impact estimate of $10 million to $40 million due to the potential effect of the coronavirus on procedure volumes in China and supply chain disruption. |
Q1 and Full Year 2020 Earnings per Share Guidance
| Q1 2020 Estimate | Full Year 2020 Estimate | ||||||||||||
| (Low) | (High) | (Low) | (High) | ||||||||||
| GAAP results | $ | 0.16 | $ | 0.19 | $ | 0.95 | $ | 1.00 | |||||
| Estimated amortization expense | 0.12 | 0.12 | 0.50 | 0.50 | |||||||||
| Estimated acquisition / divestitures-related net charges (credits) | 0.06 | 0.06 | 0.18 | 0.18 | |||||||||
| Estimated other adjustments | 0.03 | 0.03 | 0.11 | 0.11 | |||||||||
| Adjusted results | $ | 0.37 | $ | 0.40 | $ | 1.74 | $ | 1.79 |
Prior Guidance Estimate - Q4 2019 and Full Year 2019 Revenue Growth Rates
| Q4 2019 Estimate | Prior Full Year 2019 Estimate | ||||
| (Low) | (High) | (Low) | (High) | ||
| Estimated GAAP sales growth | 13% | 15% | 9% | 9.5% | |
| Less: Estimated impact of foreign currency fluctuations | (1)% | (1)% | (2)% | (2)% | |
| Estimated sales growth, operational | 14% | 16% | 11% | 11.5% | |
| Less: Estimated impact of the aforementioned acquisitions and divestitures | 6% | 7% | 3.5% | 4% | |
| Estimated sales growth, organic | 8% | 9% | 7.5% | 7.5% |
Prior Guidance Estimate - Q4 2019 and Full Year 2019 Earnings per Share
| Q4 2019 Estimate | Prior Full Year 2019 Estimate | ||||||||||||
| (Low) | (High) | (Low) | (High) | ||||||||||
| GAAP results | $ | 0.22 | $ | 0.25 | $ | 0.72 | $ | 0.75 | |||||
| Estimated amortization expense | 0.13 | 0.13 | 0.44 | 0.44 | |||||||||
| Estimated acquisition / divestitures-related net charges (credits) | 0.06 | 0.06 | 0.33 | 0.33 | |||||||||
| Estimated other adjustments | 0.01 | 0.01 | 0.06 | 0.06 | |||||||||
| Adjusted results | $ | 0.42 | $ | 0.45 | $ | 1.55 | $ | 1.58 |
Use of Non-GAAP Financial Measures
To supplement our unaudited condensed 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 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 (earnings) and adjusted net income (earnings) per share we exclude certain charges (credits) from GAAP net income. 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 for an explanation of each of these adjustments and the reasons for excluding each item. The following is an explanation of each incremental or revised adjustment type that management excluded as part of these non-GAAP financial measures, since our most recent Annual Report on Form 10-K, as well as the reason for excluding each item:
The GAAP financial measures most directly comparable to adjusted net income and adjusted net income per share are GAAP net income and GAAP net income per share.
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 period. To calculate organic net sales growth rates, we remove the impact of recent aforementioned acquisitions with no prior period related net sales from operational net sales. In addition, to calculate organic net sales growth rates, we remove from prior year, sales from product lines that we divested. 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