Full Press Release Details
MARLBOROUGH, Mass. , Feb. 3, 2021 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX ) generated net sales of $2.708 billion during the fourth quarter of 2020. This represents a decline of (6.8) percent on a reported basis, (8.3) percent on an operational 1 basis and (8.0) percent on an organic 2 basis, all compared to the prior year period. Included within organic results is a negative 370 basis point impact associated with the conversion of U.S. WATCHMAN™ customers to a consignment inventory model and transition to the next-generation WATCHMAN FLX™ Left Atrial Appendage Closure (LAAC) Device. The company reported GAAP net income available to common stockholders of $138 million or $0.10 per share (EPS), compared to GAAP net income of $3.996 billion or $2.83 per share a year ago and achieved adjusted EPS of $0.23 for the period, compared to $0.46 a year ago. In the fourth quarter of 2019, reported GAAP net income included a net income tax benefit of $4.102 billion or $2.90 per share related to an intra-entity asset transfer of intellectual property.
For the full year 2020, the company generated net sales of $9.913 billion . This represents a decline of (7.7) percent on a reported basis, (7.8) percent on an operational 1 basis and (11.3) percent on an organic 2 basis, all compared to the prior year period. Included within organic results is a negative 170 basis point impact associated with the WATCHMAN™ conversion. The company reported a GAAP net loss available to common stockholders of $(173) million or $(0.12) per share, compared to GAAP net income of $4.700 billion or $3.33 per share a year ago, and delivered full year adjusted EPS of $0.96 , compared to $1.58 a year ago. Full year 2019 GAAP EPS included a net income tax benefit of $2.91 per share related to the intra-entity asset transfer of intellectual property discussed above.
"As we look to 2021 and beyond, we are well-positioned given the strength of our global team and our diversified portfolio," said Mike Mahoney , chairman and chief executive officer, Boston Scientific. "I'm excited about our outlook for growth—from our category leadership positions to our innovative pipeline and commercial execution—and I am incredibly proud of how Boston Scientific delivered on our mission to transform lives amid the challenges of 2020."
Fourth quarter financial results and recent developments:
| 1. Operational revenue growth excludes the impact of foreign currency fluctuations. |
| 2 . Organic net sales growth rates exclude the impact of foreign currency fluctuations and net sales from the recent acquisitions of Vertiflex, Inc. and BTG plc (BTG), each with no prior year comparable net sales. Organic net sales growth rates also exclude 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, as well as prior period net sales associated with our intrauterine health franchise, which we divested in Q2 2020. |
| 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. |
| 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). 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 revenues from the date of acquisition. |
| 5. 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. In Q4 2020, we signed a definitive agreement to sell Specialty Pharmaceuticals. The sale is expected to close in the first half of 2021, pending customary closing conditions. |
| 6. Agent is an investigational device. Limited by Federal law for investigational use only. Not available for sale. |
| 7. Synergy Megatron indicated for use in coronary arteries 3.5mm to 5.0mm in diameter. |
| 8. Millipede is an investigational device. Limited by Federal law for investigational use only. Not available for sale. |
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) | 2020 | 2019 | |||||||||||||||
| Endoscopy | $ | 515 | $ | 499 | 3.4% | 1.9% | 1.5% | 0.0% | 1.5% | ||||||||
| Urology and Pelvic Health | 376 | 379 | (0.8)% | 1.0% | (1.8)% | (2.3)% | 0.6% | ||||||||||
| MedSurg | 892 | 878 | 1.5% | 1.5% | 0.1% | (1.0)% | 1.1% | ||||||||||
| Cardiac Rhythm Management | 451 | 473 | (4.6)% | 1.8% | (6.4)% | 0.0% | (6.4)% | ||||||||||
| Electrophysiology | 85 | 84 | 1.1% | 2.8% | (1.8)% | 0.0% | (1.8)% | ||||||||||
| Neuromodulation | 232 | 261 | (11.2)% | 0.8% | (12.0)% | 0.0% | (12.0)% | ||||||||||
| Rhythm and Neuro | 767 | 817 | (6.1)% | 1.6% | (7.7)% | 0.0% | (7.7)% | ||||||||||
| Interventional Cardiology | 585 | 748 | (21.9)% | 1.5% | (23.4)% | 0.0% | (23.4)% | ||||||||||
| Peripheral Interventions | 429 | 403 | 6.5% | 1.7% | 4.8% | 0.0% | 4.8% | ||||||||||
| Cardiovascular | 1,014 | 1,151 | (12.0)% | 1.6% | (13.5)% | 0.0% | (13.5)% | ||||||||||
| Medical Devices 4 | 2,673 | 2,847 | (6.1)% | 1.5% | (7.7)% | (0.3)% | (7.4)% | ||||||||||
| Specialty Pharmaceuticals 5 | 36 | 58 | (38.5)% | 0.3% | (38.8)% | 0.0% | (38.8)% | ||||||||||
| Net Sales | $ | 2,708 | $ | 2,905 | (6.8)% | 1.5% | (8.3)% | (0.3)% | (8.0)% |
| Change | |||||||||||||
| Three Months Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | ||||||||||
| (in millions) | 2020 | 2019 | |||||||||||
| U.S. | $ | 1,502 | $ | 1,654 | (9.2)% | 0.0% | (9.2)% | ||||||
| EMEA | 590 | 597 | (1.1)% | 4.8% | (5.9)% | ||||||||
| APAC | 489 | 495 | (1.1)% | 4.6% | (5.6)% | ||||||||
| Latin America and Canada | 91 | 101 | (10.5)% | (7.2)% | (3.2)% | ||||||||
| Medical Devices 4 | 2,673 | 2,847 | (6.1)% | 1.5% | (7.7)% | ||||||||
| Specialty Pharmaceuticals 5 | 36 | 58 | (38.5)% | 0.3% | (38.8)% | ||||||||
| Net Sales | $ | 2,708 | $ | 2,905 | (6.8)% | 1.5% | (8.3)% | ||||||
| Emerging Markets 3 | $ | 293 | $ | 325 | (9.9)% | (1.0)% | (8.9)% | ||||||
| Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | |||||||||||||
| Net 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) | 2020 | 2019 | |||||||||||||||
| Endoscopy | $ | 1,780 | $ | 1,894 | (6.0)% | 0.3% | (6.3)% | 0.0% | (6.3)% | ||||||||
| Urology and Pelvic Health | 1,286 | 1,413 | (9.0)% | 0.0% | (9.0)% | (1.7)% | (7.3)% | ||||||||||
| MedSurg | 3,066 | 3,307 | (7.3)% | 0.2% | (7.5)% | (0.7)% | (6.7)% | ||||||||||
| Cardiac Rhythm Management | 1,704 | 1,939 | (12.1)% | 0.2% | (12.4)% | 0.0% | (12.4)% | ||||||||||
| Electrophysiology | 287 | 329 | (12.8)% | 0.8% | (13.5)% | 0.0% | (13.5)% | ||||||||||
| Neuromodulation | 761 | 873 | (12.8)% | 0.1% | (13.0)% | 2.8% | (15.7)% | ||||||||||
| Rhythm and Neuro | 2,752 | 3,140 | (12.4)% | 0.3% | (12.7)% | 0.8% | (13.4)% | ||||||||||
| Interventional Cardiology | 2,299 | 2,816 | (18.4)% | (0.1)% | (18.2)% | 0.0% | (18.2)% | ||||||||||
| Peripheral Interventions | 1,577 | 1,392 | 13.3% | 0.2% | 13.1% | 15.6% | (2.5)% | ||||||||||
| Cardiovascular | 3,876 | 4,208 | (7.9)% | 0.0% | (7.9)% | 5.2% | (13.1)% | ||||||||||
| Medical Devices 4 | 9,694 | 10,654 | (9.0)% | 0.1% | (9.1)% | 2.1% | (11.2)% | ||||||||||
| Specialty Pharmaceuticals 5 | 219 | 81 | n/a | n/a | n/a | n/a | n/a | ||||||||||
| Net Sales | $ | 9,913 | $ | 10,735 | (7.7)% | 0.1% | (7.8)% | 3.5% | (11.3)% |
| Change | |||||||||||||
| Year Ended December 31, | Reported Basis | Less: Impact of Foreign Currency Fluctuations | Operational Basis | ||||||||||
| (in millions) | 2020 | 2019 | |||||||||||
| U.S. | $ | 5,508 | $ | 6,097 | (9.7)% | 0.0% | (9.7)% | ||||||
| EMEA | 2,097 | 2,264 | (7.4)% | 1.0% | (8.4)% | ||||||||
| APAC | 1,781 | 1,898 | (6.2)% | 1.0% | (7.1)% | ||||||||
| Latin America and Canada | 307 | 395 | (22.2)% | (7.0)% | (15.2)% | ||||||||
| Medical Devices 4 | 9,694 | 10,654 | (9.0)% | 0.1% | (9.1)% | ||||||||
| Specialty Pharmaceuticals 5 | 219 | 81 | n/a | n/a | n/a | ||||||||
| Net Sales | $ | 9,913 | $ | 10,735 | (7.7)% | 0.1% | (7.8)% | ||||||
| Emerging Markets 3 | $ | 1,093 | $ | 1,252 | (12.7)% | (3.5)% | (9.2)% | ||||||
| Amounts may not add due to rounding. Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | |||||||||||||
| Net 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 First Quarter and Full Year 2021
The company estimates revenue growth for the first quarter of 2021, versus the prior year period, to be in a range of approximately 0 to 6 percent on a reported basis and a growth range of approximately (3) to 3 percent on an organic basis. First quarter organic guidance excludes the impact of foreign currency fluctuations and the divestiture of our intrauterine health franchise, which we divested in Q2 2020, and includes net sales of the Specialty Pharmaceuticals business, assuming the previously announced divestiture closes on April 1, 2021 . First quarter guidance excludes the previously announced acquisition of Preventice Solutions, Inc. which is projected to close by mid-2021, subject to customary closing conditions. The company estimates earnings on a GAAP basis in a range of $0.05 to $0.11 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $0.28 to $0.34 per share.
The company estimates revenue growth for the full year 2021, versus the prior year period, to be in a range of approximately 13 to 19 percent on a reported basis and a growth range of approximately 12 to 18 percent on an organic basis. Full year organic guidance excludes the impact of foreign currency fluctuations and the divestiture of our intrauterine health franchise, which we divested in Q2 2020, and includes net sales of the Specialty Pharmaceuticals business through the first quarter of 2021 assuming the previously announced divestiture closes on April 1, 2021 . Full year guidance excludes the previously announced acquisition of Preventice Solutions, Inc. which is projected to close by mid-2021, subject to customary closing conditions. The company estimates income on a GAAP basis in a range of $0.72 to $0.82 per share and estimates adjusted earnings, excluding certain charges (credits) in a range of $1.50 to $1.60 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 first quarter and full year 2021, our financial performance, our business plans and product performance, and the impact of the COVID-19 outbreak 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 December 31, | Year Ended December 31, | ||||||||||||
| in millions, except per share data | 2020 | 2019 | 2020 | 2019 | |||||||||
| Net sales | $ | 2,708 | $ | 2,905 | $ | 9,913 | $ | 10,735 | |||||
| Cost of products sold | 1,000 | 851 | 3,465 | 3,116 | |||||||||
| Gross profit | 1,708 | 2,054 | 6,448 | 7,620 | |||||||||
| Operating expenses: | |||||||||||||
| Selling, general and administrative expenses | 1,027 | 1,092 | 3,787 | 3,941 | |||||||||
| Research and development expenses | 286 | 309 | 1,143 | 1,174 | |||||||||
| Royalty expense | 14 | 17 | 45 | 65 | |||||||||
| Amortization expense | 194 | 201 | 789 | 699 | |||||||||
| Goodwill impairment charges | 131 | — | 131 | — | |||||||||
| Intangible asset impairment charges | 8 | — | 460 | 105 | |||||||||
| Contingent consideration expense (benefit) | 2 | (26) | (100) | (35) | |||||||||
| Restructuring charges (credits) | 36 | 28 | 52 | 38 | |||||||||
| Litigation-related charges (credits) | 18 | 223 | 278 | 115 | |||||||||
| 1,716 | 1,843 | 6,586 | 6,102 | ||||||||||
| Operating income (loss) | (8) | 210 | (138) | 1,518 | |||||||||
| Other income (expense): | |||||||||||||
| Interest expense | (96) | (179) | (361) | (473) | |||||||||
| Other, net | 352 | (37) | 362 | (358) | |||||||||
| Income (loss) before income taxes | 248 | (6) | (138) | 687 | |||||||||
| Income tax expense (benefit) | 96 | (4,002) | 2 | (4,013) | |||||||||
| Net income (loss) | $ | 152 | $ | 3,996 | $ | (140) | $ | 4,700 | |||||
| Preferred stock dividends | (14) | — | (33) | — | |||||||||
| Net income (loss) available to common stockholders | $ | 138 | $ | 3,996 | $ | (173) | $ | 4,700 | |||||
| Net income (loss) per common share - basic | $ | 0.10 | $ | 2.87 | $ | (0.12) | $ | 3.38 | |||||
| Net income (loss) per common share - assuming dilution | $ | 0.10 | $ | 2.83 | $ | (0.12) | $ | 3.33 | |||||
| Weighted-average shares outstanding | |||||||||||||
| Basic | 1,427.7 | 1,394.3 | 1,416.7 | 1,391.5 | |||||||||
| Assuming dilution | 1,440.6 | 1,413.1 | 1,416.7 | 1,410.6 |
| BOSTON SCIENTIFIC CORPORATION NON-GAAP NET INCOME AND NET INCOME PER SHARE RECONCILIATIONS (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended December 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 (1) | ||||||||||||||||||
| Reported | $ | 1,708 | $ | 1,716 | $ | (8) | $ | 256 | $ | 248 | $ | 152 | $ | (14) | $ | 138 | $ | 0.10 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||
| Amortization expense | — | (194) | 194 | — | 194 | 169 | — | 169 | 0.12 | ||||||||||||||||||
| Goodwill and other intangible asset impairment charges | — | (139) | 139 | — | 139 | 139 | — | 139 | 0.10 | ||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | 25 | (24) | 48 | — | 48 | 16 | — | 16 | 0.01 | ||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 17 | (77) | 94 | — | 94 | 80 | — | 80 | 0.06 | ||||||||||||||||||
| Litigation-related net charges (credits) | — | (18) | 18 | — | 18 | 6 | — | 6 | 0.00 | ||||||||||||||||||
| Investment impairment net charges (credits) | — | — | — | (363) | (363) | (280) | — | (280) | (0.19) | ||||||||||||||||||
| EU MDR implementation costs | 7 | (2) | 9 | — | 9 | 8 | — | 8 | 0.01 | ||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | 14 | — | 14 | 0.01 | ||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 48 | — | 48 | 0.03 | ||||||||||||||||||
| Adjusted | $ | 1,757 | $ | 1,261 | $ | 495 | $ | (108) | $ | 388 | $ | 351 | $ | (14) | $ | 337 | $ | 0.23 | |||||||||
| (1) For the three months ended December 31, 2020, 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 condensed consolidated statements of operations, for purposes of calculating net income available to common stockholders. | |||||||||||||||||||||||||||
| Three Months Ended December 31, 2019 | |||||||||||||||||||||||||||
| 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 | $ | 2,054 | $ | 1,843 | $ | 210 | $ | (216) | $ | (6) | $ | 3,996 | $ | — | $ | 3,996 | $ | 2.83 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||
| Amortization expense | — | (201) | 201 | — | 201 | 184 | — | 184 | 0.13 | ||||||||||||||||||
| Intangible asset impairment charges | — | — | — | — | — | 5 | — | 5 | 0.00 | ||||||||||||||||||
| Acquisition / divestiture-related net charges (credits) | 54 | (47) | 101 | 19 | 121 | 282 | — | 282 | 0.20 | ||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 13 | (31) | 44 | — | 44 | 37 | — | 37 | 0.03 | ||||||||||||||||||
| Litigation-related net charges (credits) | — | (223) | 223 | — | 223 | 169 | — | 169 | 0.12 | ||||||||||||||||||
| Investment impairment net charges (credits) | — | — | — | 1 | 1 | 1 | — | 1 | 0.00 | ||||||||||||||||||
| EU MDR implementation costs | 3 | (1) | 4 | — | 4 | 3 | — | 3 | 0.00 | ||||||||||||||||||
| Debt extinguishment charges | — | — | — | 86 | 86 | 67 | — | 67 | 0.05 | ||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | (4,102) | — | (4,102) | (2.90) | ||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 2 | — | 2 | 0.00 | ||||||||||||||||||
| Adjusted | $ | 2,124 | $ | 1,341 | $ | 783 | $ | (110) | $ | 674 | $ | 643 | $ | — | $ | 643 | $ | 0.46 | |||||||||
| 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, 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 (1) | ||||||||||||||||||
| Reported | $ | 6,448 | $ | 6,586 | $ | (138) | $ | 1 | $ | (138) | $ | (140) | $ | (33) | $ | (173) | $ | (0.12) | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||
| Amortization expense | — | (789) | 789 | — | 789 | 701 | — | 701 | 0.49 | ||||||||||||||||||
| Goodwill and other intangible asset impairment charges | — | (591) | 591 | — | 591 | 523 | — | 523 | 0.37 | ||||||||||||||||||
| Acquisition / divestitures-related net charges (credits) | 122 | (75) | 198 | (1) | 196 | 115 | — | 115 | 0.08 | ||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 64 | (107) | 171 | — | 171 | 146 | — | 146 | 0.10 | ||||||||||||||||||
| Litigation-related net charges (credits) | — | (278) | 278 | — | 278 | 261 | — | 261 | 0.18 | ||||||||||||||||||
| Investment impairment net charges (credits) | — | — | — | (429) | (429) | (331) | — | (331) | (0.23) | ||||||||||||||||||
| EU MDR implementation costs | 21 | (7) | 29 | — | 29 | 25 | — | 25 | 0.02 | ||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | 41 | — | 41 | 0.03 | ||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 69 | — | 69 | 0.05 | ||||||||||||||||||
| Adjusted | $ | 6,655 | $ | 4,738 | $ | 1,917 | $ | (429) | $ | 1,488 | $ | 1,411 | $ | (33) | $ | 1,378 | $ | 0.96 | |||||||||
| (1) For the year ended December 31, 2020, 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 loss and adjusted net income were reduced by cumulative Preferred stock dividends, as presented in our unaudited condensed consolidated statements of operations, for purposes of calculating EPS. We have assumed dilution of 13.8 million common stock equivalents related to employee stock options for all or a portion of the non-GAAP adjustments, which were anti-dilutive for GAAP purposes due to our net loss position. | |||||||||||||||||||||||||||
| Year Ended December 31, 2019 | |||||||||||||||||||||||||||
| 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 | $ | 7,620 | $ | 6,102 | $ | 1,518 | $ | (831) | $ | 687 | $ | 4,700 | $ | — | $ | 4,700 | $ | 3.33 | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||||||
| Amortization expense | — | (699) | 699 | — | 699 | 628 | — | 628 | 0.44 | ||||||||||||||||||
| Intangible asset impairment charges | — | (105) | 105 | — | 105 | 102 | — | 102 | 0.07 | ||||||||||||||||||
| Acquisition / divestiture-related net charges (credits) | 114 | (161) | 275 | 350 | 626 | 672 | — | 672 | 0.48 | ||||||||||||||||||
| Restructuring and restructuring-related net charges (credits) | 32 | (50) | 82 | — | 82 | 68 | — | 68 | 0.05 | ||||||||||||||||||
| Litigation-related net charges (credits) | — | (115) | 115 | — | 115 | 72 | — | 72 | 0.05 | ||||||||||||||||||
| Investment impairment net charges (credits) | — | — | — | 4 | 4 | 3 | — | 3 | 0.00 | ||||||||||||||||||
| EU MDR implementation costs | 4 | (1) | 6 | — | 6 | 5 | — | 5 | 0.00 | ||||||||||||||||||
| Debt extinguishment charges | — | — | — | 86 | 86 | 67 | — | 67 | 0.05 | ||||||||||||||||||
| Deferred tax expenses (benefits) | — | — | — | — | — | (4,102) | — | (4,102) | (2.91) | ||||||||||||||||||
| Discrete tax items | — | — | — | — | — | 18 | — | 18 | 0.01 | ||||||||||||||||||
| Adjusted | $ | 7,769 | $ | 4,970 | $ | 2,800 | $ | (390) | $ | 2,409 | $ | 2,234 | $ | — | $ | 2,234 | $ | 1.58 | |||||||||
| 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 2021 Estimated Revenue Growth Rates
| Q1 2021 Estimate | Full Year 2021 Estimate | ||||
| (Low) | (High) | (Low) | (High) | ||
| Estimated GAAP sales growth | —% | 6% | 13% | 19% | |
| Less: Estimated impact of foreign currency fluctuations | 4% | 4% | 3% | 3% | |
| Estimated sales growth, operational | (4)% | 2% | 10% | 16% | |
| Less: Estimated impact of recent acquisitions / divestitures | (1)% | (1)% | (2)% | (2)% | |
| Estimated sales growth, organic | (3)% | 3% | 12% | 18% |
Q1 and Full Year 2021 Earnings per Share Guidance
| Q1 2021 Estimate | Full Year 2021 Estimate | ||||||||||||
| (Low) | (High) | (Low) | (High) | ||||||||||
| GAAP results | $ | 0.05 | $ | 0.11 | $ | 0.72 | $ | 0.82 | |||||
| Estimated amortization expense | 0.11 | 0.11 | 0.43 | 0.43 | |||||||||
| Estimated acquisition / divestitures-related net charges (credits) | 0.03 | 0.03 | 0.08 | 0.08 | |||||||||
| Estimated restructuring and restructuring-related net charges (credits) | 0.06 | 0.06 | 0.15 | 0.15 | |||||||||
| Estimated other adjustments | 0.03 | 0.03 | 0.12 | 0.12 | |||||||||
| Adjusted results | $ | 0.28 | $ | 0.34 | $ | 1.50 | $ | 1.60 |
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 (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." The following is an explanation of each adjustment type that management excluded as part of these non-GAAP financial measures, as well as the reason 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 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