Full Press Release Details
NATICK, Mass. , Oct. 19 /PRNewswire-FirstCall/ -- Boston Scientific Corporation (NYSE: BSX ) today announced financial results for the third quarter ended September 30, 2010 , as well as guidance for net sales and earnings per share (EPS) for the fourth quarter and full year 2010.
Third quarter highlights (sales growth rates are at constant currency):
"During the quarter we made good progress toward the execution of both our strategic plan and the necessary financial discipline, which resulted in a strong operating performance despite the challenges facing our industry," said Ray Elliott , President and Chief Executive Officer of Boston Scientific. "These results reflect our recovery from the CRM ship hold and our successful focus on regaining share. We also made progress on our restructuring initiatives and the realignment and diversification of our product portfolio, two essential components of our plan for future growth."
Net sales for the third quarter of 2010 were $1.916 billion , as compared to net sales of $2.025 billion for the third quarter of 2009, a decrease of five percent on both a reported and constant currency basis.
Worldwide cardiac rhythm management (CRM) net sales for the third quarter -- on a reported basis -- were as follows:
| (in millions) | U.S. | International | Worldwide | |||||||
| Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | |||||
| Defibrillator systems | $ 280 | $ 314 | $ 126 | $ 131 | $ 406 | $ 445 | ||||
| Pacemaker systems | 82 | 90 | 62 | 73 | 144 | 163 | ||||
| Total CRM products | $ 362 | $ 404 | $ 188 | $ 204 | $ 550 | $ 608 |
Worldwide coronary stent system net sales for the third quarter -- on a reported basis -- were as follows:
| (in millions) | U.S. | International | Worldwide | |||||||
| Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | Q3 2010 | Q3 2009 | |||||
| Drug-eluting stent systems | $ 199 | $ 222 | $ 166 | $ 189 | $ 365 | $ 411 | ||||
| Bare-metal stent systems | 11 | 14 | 20 | 27 | 31 | 41 | ||||
| Total coronary stent systems | $ 210 | $ 236 | $ 186 | $ 216 | $ 396 | $ 452 |
On a GAAP basis, net income for the third quarter of 2010 was $190 million , or $0.12 per diluted share. These results included intangible asset impairment charges, restructuring-related charges, discrete tax items and amortization expense (after-tax) of $106 million , or $0.07 per share, which consisted of:
Adjusted net income for the third quarter of 2010, excluding these charges, was $296 million , or $0.19 per share.
On a GAAP basis, net loss for the third quarter of 2009 was $94 million , or $0.06 per share. These results included litigation- and restructuring-related net charges and amortization expense (after-tax) of $385 million , or $0.25 per share. Adjusted net income for the third quarter of 2009, excluding these net charges, was $291 million , or $0.19 per share.
"Once again our businesses generated excellent cash flow," said Elliott. "Going forward we expect our cash flow to provide the capital needed to fund investments in high-growth opportunities that will complement our existing product offerings, as well as consistently reduce our debt obligations."
Fourth Quarter and Updated Full Year 2010 Guidance
The Company estimates net sales for the fourth quarter of 2010 of between $1.925 billion and $2.000 billion , as compared to net sales of $2.079 billion for the fourth quarter of 2009. Adjusted earnings, excluding restructuring and restructuring-related costs and amortization expense, are estimated to range between $0.15 and $0.18 per share, as compared to adjusted earnings of $0.20 per share in the fourth quarter of 2009. The Company estimates earnings on a GAAP basis of between $0.05 and $0.09 per share, as compared to a net loss of $0.71 per share in the fourth quarter of 2009.
The Company now estimates net sales for the full year 2010 of between $7.729 billion and $7.804 billion , as compared to net sales of $8.188 billion for the full year 2009. Adjusted earnings, excluding goodwill and intangible asset impairment charges, acquisition-related credits, restructuring and restructuring-related costs, discrete tax items and amortization expense are estimated to range between $0.63 and $0.66 per share, as compared to adjusted earnings of $0.78 per share for the full year 2009. The Company estimates a net loss on a GAAP basis of between $0.81 and $0.77 per share, as compared to a net loss of $0.68 per share for the full year 2009.
Boston Scientific officials will be discussing these results with analysts on a conference call at 5:30 p.m. (ET) Tuesday, October 19. The Company will webcast the call to all 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 one year on the Boston Scientific website.
Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: www.bostonscientific.com .
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 earnings and adjusted earnings for the fourth quarter and full year 2010; our financial performance; new product approvals and sales; regulatory compliance and product removal actions; our market position; cash flow; write-down of goodwill and other asset impairments; our capacity to fund acquisitions and other investments; our ability to reduce our debt obligations; and our restructuring activities. 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.
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 measures, is included in the exhibits attached to this press release.
| CONTACT: | |
| Paul Donovan | |
| 508-650-8541 (office) | |
| 508-667-5165 (mobile) | |
| Media Relations | |
| Boston Scientific Corporation | |
| Larry Neumann | |
| 508-650-8696 (office) | |
| Investor Relations | |
| Boston Scientific Corporation |
| BOSTON SCIENTIFIC CORPORATION | ||||||
| CONDENSED CONSOLIDATED GAAP RESULTS OF OPERATIONS | ||||||
| (Unaudited) | ||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||
| in millions, except per share data | 2010 | 2009 | 2010 | 2009 | ||
| Net sales | $ 1,916 | $ 2,025 | $ 5,804 | $ 6,109 | ||
| Cost of products sold | 623 | 629 | 1,939 | 1,867 | ||
| Gross profit | 1,293 | 1,396 | 3,865 | 4,242 | ||
| Operating expenses: | ||||||
| Selling, general and administrative expenses | 634 | 665 | 1,897 | 1,987 | ||
| Research and development expenses | 230 | 258 | 714 | 778 | ||
| Royalty expense | 39 | 51 | 147 | 149 | ||
| Loss on program termination | 16 | |||||
| Amortization expense | 129 | 126 | 381 | 381 | ||
| Goodwill impairment charge | 1,817 | |||||
| Intangible asset impairment charges | 5 | 65 | 10 | |||
| Purchased research and development | 17 | |||||
| Acquisition-related milestone | (250) | |||||
| Restructuring charges | 5 | 9 | 98 | 44 | ||
| Litigation-related net charges | 236 | 523 | ||||
| 1,042 | 1,345 | 4,869 | 3,905 | |||
| Operating income (loss) | 251 | 51 | (1,004) | 337 | ||
| Other income (expense): | ||||||
| Interest expense | (91) | (91) | (286) | (285) | ||
| Other, net | 3 | (4) | (2) | (13) | ||
| Income (loss) before income taxes | 163 | (44) | (1,292) | 39 | ||
| Income tax (benefit) expense | (27) | 50 | 9 | (12) | ||
| Net income (loss) | $ 190 | $ (94) | $ (1,301) | $ 51 | ||
| Net income (loss) per common share -- basic | $ 0.13 | $ (0.06) | $ (0.86) | $ 0.03 | ||
| Net income (loss) per common share -- assuming dilution | $ 0.12 | $ (0.06) | $ (0.86) | $ 0.03 | ||
| Weighted-average shares outstanding | ||||||
| Basic | 1,519.8 | 1,509.3 | 1,517.0 | 1,507.0 | ||
| Assuming dilution | 1,529.3 | 1,509.3 | 1,517.0 | 1,514.4 |
| BOSTON SCIENTIFIC CORPORATION | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| September 30, 2010 | December 31, 2009 | ||
| in millions, except share data | |||
| (Unaudited) | |||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ 624 | $ 864 | |
| Trade accounts receivable, net | 1,317 | 1,375 | |
| Inventories | 923 | 920 | |
| Deferred income taxes | 480 | 572 | |
| Prepaid expenses and other current assets | 212 | 330 | |
| Total current assets | 3,556 | 4,061 | |
| Property, plant and equipment, net | 1,712 | 1,728 | |
| Goodwill | 10,592 | 12,404 | |
| Other intangible assets, net | 6,291 | 6,731 | |
| Other long-term assets | 335 | 253 | |
| $ 22,486 | $ 25,177 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Current debt obligations | $ 904 | $ 3 | |
| Accounts payable | 195 | 212 | |
| Accrued expenses | 1,604 | 2,609 | |
| Other current liabilities | 252 | 198 | |
| Total current liabilities | 2,955 | 3,022 | |
| Long-term debt | 5,133 | 5,915 | |
| Deferred income taxes | 1,924 | 1,875 | |
| Other long-term liabilities | 1,436 | 2,064 | |
| Commitments and contingencies | |||
| Stockholders' equity | |||
| Preferred stock, $ .01 par value - authorized 50,000,000 shares, none issued and outstanding | |||
| Common stock, $ .01 par value - authorized 2,000,000,000 shares, issued 1,519,963,601 shares as of September 30, 2010 and 1,510,753,934 shares as of December 31, 2009 | 15 | 15 | |
| Additional paid-in capital | 16,198 | 16,086 | |
| Accumulated deficit | (5,058) | (3,757) | |
| Other stockholders' deficit | (117) | (43) | |
| Total stockholders' equity | 11,038 | 12,301 | |
| $ 22,486 | $ 25,177 |
| BOSTON SCIENTIFIC CORPORATION | ||||||||||||
| NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| in millions, except per share data | Net income | Impact per diluted share | Net (loss) income | Impact per diluted share | Net (loss) income | Impact per diluted share | Net income | Impact per diluted share | ||||
| GAAP results | $ 190 | $ 0.12 | $ (94) | $ (0.06) | $ (1,301) | $ (0.86) | $ 51 | $ 0.03 | ||||
| Non-GAAP adjustments: | ||||||||||||
| Goodwill impairment charge | 1,817 | 1.20 | * | |||||||||
| Intangible asset impairment charges | 4 | 0.00 | 55 | 0.03 | * | 8 | 0.01 | |||||
| Acquisition-related (credits) charges | (216) | (0.14) | * | 17 | 0.01 | |||||||
| Divestiture-related gains | (2) | (0.00) | ||||||||||
| Restructuring-related charges | 14 | 0.01 | 21 | 0.01 | * | 99 | 0.06 | * | 69 | 0.05 | ||
| Litigation-related net charges | 257 | 0.17 | * | 497 | 0.33 | |||||||
| Discrete tax items | (21) | (0.01) | (21) | (0.01) | * | (74) | (0.05) | |||||
| Amortization expense | 109 | 0.07 | 107 | 0.07 | * | 304 | 0.20 | * | 312 | 0.20 | ||
| Adjusted results | $ 296 | $ 0.19 | $ 291 | $ 0.19 | $ 737 | $ 0.48 | $ 878 | $ 0.58 | ||||
| * Assumes dilution of 10.9 million shares for the three months ended September 30, 2009 and 9.2 million shares for the nine months ended September 30, 2010 for all or a portion of these non-GAAP adjustments. |
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | |||||||
| NON-GAAP NET INCOME AND NET INCOME PER COMMON SHARE RECONCILIATIONS (CONT.) | |||||||
| (Unaudited) | |||||||
| Three Months Ended | Nine Months Ended | ||||||
| (in millions) | September 30, | September 30, | |||||
| 2010 | 2009 | 2010 | 2009 | ||||
| Goodwill impairment charge: | |||||||
| Goodwill impairment charge | $ 1,817 | ||||||
| 1,817 | |||||||
| Income tax benefit (a) | |||||||
| Goodwill impairment charge, net of tax | $ 1,817 | ||||||
| Intangible asset impairment charges: | |||||||
| Intangible asset impairment charges | $ 5 | $ 65 | $ 10 | ||||
| Income tax benefit (a) | (1) | (10) | (2) | ||||
| Intangible asset impairment charges, net of tax | $ 4 | $ 55 | $ 8 | ||||
| Acquisition-related (credits) charges: | |||||||
| Purchased research and development | $ 17 | ||||||
| Acquisition-related milestone | $ (250) | ||||||
| (250) | 17 | ||||||
| Income tax expense (a) | 34 | ||||||
| Acquisition-related (credits) charges, net of tax | $ (216) | $ 17 | |||||
| Divestiture-related gains: | |||||||
| Gain on sale of investments (b) | $ (3) | ||||||
| Income tax expense (a) | 1 | ||||||
| Divestiture-related gains, net of tax | $ (2) | ||||||
| Restructuring-related charges: | |||||||
| Restructuring charges | $ 5 | $ 9 | $ 98 | $ 44 | |||
| Restructuring-related charges (c) | 13 | 19 | 41 | 50 | |||
| 18 | 28 | 139 | 94 | ||||
| Income tax benefit (a) | (4) | (7) | (40) | (25) | |||
| Restructuring-related charges, net of tax | $ 14 | $ 21 | $ 99 | $ 69 | |||
| Litigation-related net charges: | |||||||
| Litigation-related credits | $ (60) | $ (60) | |||||
| Litigation-related charges | 296 | 583 | |||||
| 236 | 523 | ||||||
| Income tax expense (benefit) (a) | 21 | (26) | |||||
| Litigation-related net charges, net of tax | $ 257 | $ 497 | |||||
| Discrete tax items: | |||||||
| Income tax benefit (a) | $ (21) | $ (21) | $ (74) | ||||
| Amortization expense: | |||||||
| Amortization expense | $ 129 | $ 126 | $ 381 | $ 381 | |||
| Income tax benefit (a) | (20) | (19) | (77) | (69) | |||
| Amortization expense, net of tax | $ 109 | $ 107 | $ 304 | $ 312 | |||
| (a) 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." | |||||||
| (b) Recorded to other, net. | |||||||
| (c) In the third quarter of 2010, recorded $12 million to cost of products sold and $1 million to selling, general and administrative expenses. In the third quarter of 2009, recorded $13 million to cost of products sold; $5 million to selling, general and administrative expenses; and $1 million to research and development expenses. In the first nine months of 2010, recorded $38 million to cost of products sold and $3 million to selling, general and administrative expenses. In the first nine months of 2009, recorded $36 million to cost of products sold; $11 million to selling, general and administrative expenses; and $3 million to research and development expenses. |
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | ||||||||
| WORLDWIDE SALES | ||||||||
| (Unaudited) | ||||||||
| Change | ||||||||
| Three Months Ended | As Reported | Constant | ||||||
| September 30, | Currency | Currency | ||||||
| in millions | 2010 | 2009 | Basis | Basis | ||||
| United States | $ 1,102 | $ 1,167 | (6) | % | (6) | % | ||
| EMEA | 395 | 438 | (10) | % | (3) | % | ||
| Japan | 234 | 243 | (4) | % | (12) | % | ||
| Inter-Continental | 185 | 175 | 6 | % | 1 | % | ||
| International | 814 | 856 | (5) | % | (5) | % | ||
| Subtotal | 1,916 | 2,023 | (5) | % | (5) | % | ||
| Divested Businesses | 0 | 2 | N/A | N/A | ||||
| Worldwide | $ 1,916 | $ 2,025 | (5) | % | (5) | % |
| Change | ||||||||
| Three Months Ended | As Reported | Constant | ||||||
| September 30, | Currency | Currency | ||||||
| in millions | 2010 | 2009 | Basis | Basis | ||||
| Cardiac Rhythm Management | $ 550 | $ 608 | (10) | % | (8) | % | ||
| Interventional Cardiology | 614 | 682 | (10) | % | (11) | % | ||
| Peripheral Interventions | 167 | 164 | 2 | % | 2 | % | ||
| Cardiovascular Group | 781 | 846 | (8) | % | (8) | % | ||
| Electrophysiology | 36 | 38 | (6) | % | (6) | % | ||
| Neurovascular | 79 | 85 | (7) | % | (8) | % | ||
| Endoscopy | 269 | 260 | 4 | % | 4 | % | ||
| Urology/ Women's Health | 122 | 114 | 7 | % | 6 | % | ||
| Endosurgery Group | 391 | 374 | 5 | % | 5 | % | ||
| Neuromodulation | 79 | 72 | 9 | % | 9 | % | ||
| Subtotal | 1,916 | 2,023 | (5) | % | (5) | % | ||
| Divested Businesses | 0 | 2 | N/A | N/A | ||||
| Worldwide | $ 1,916 | $ 2,025 | (5) | % | (5) | % |
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | ||||||||
| WORLDWIDE SALES | ||||||||
| (Unaudited) | ||||||||
| Change | ||||||||
| Nine Months Ended | As Reported | Constant | ||||||
| September 30, | Currency | Currency | ||||||
| in millions | 2010 | 2009 | Basis | Basis | ||||
| United States | $ 3,244 | $ 3,530 | (8) | % | (8) | % | ||
| EMEA | 1,305 | 1,353 | (4) | % | (2) | % | ||
| Japan | 707 | 726 | (3) | % | (8) | % | ||
| Inter-Continental | 544 | 491 | 11 | % | 1 | % | ||
| International | 2,556 | 2,570 | (1) | % | (3) | % | ||
| Subtotal | 5,800 | 6,100 | (5) | % | (6) | % | ||
| Divested Businesses | 4 | 9 | N/A | N/A | ||||
| Worldwide | $ 5,804 | $ 6,109 | (5) | % | (6) | % |
| Change | ||||||||
| Nine Months Ended | As Reported | Constant | ||||||
| September 30, | Currency | Currency | ||||||
| in millions | 2010 | 2009 | Basis | Basis | ||||
| Cardiac Rhythm Management | $ 1,615 | $ 1,806 | (11) | % | (11) | % | ||
| Interventional Cardiology | 1,961 | 2,155 | (9) | % | (11) | % | ||
| Peripheral Interventions | 498 | 493 | 1 | % | 0 | % | ||
| Cardiovascular Group | 2,459 | 2,648 | (7) | % | (9) | % | ||
| Electrophysiology | 111 | 112 | (1) | % | (2) | % | ||
| Neurovascular | 248 | 259 | (4) | % | (7) | % | ||
| Endoscopy | 794 | 737 | 8 | % | 7 | % | ||
| Urology/ Women's Health | 354 | 333 | 6 | % | 5 | % | ||
| Endosurgery Group | 1,148 | 1,070 | 7 | % | 6 | % | ||
| Neuromodulation | 219 | 205 | 6 | % | 6 | % | ||
| Subtotal | 5,800 | 6,100 | (5) | % | (6) | % | ||
| Divested Businesses | 4 | 9 | N/A | N/A | ||||
| Worldwide | $ 5,804 | $ 6,109 | (5) | % | (6) | % |
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | |||||
| NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS | |||||
| (Unaudited) | |||||
| Q3 2010 Net Sales as compared to Q3 2009 | |||||
| Change | Estimated Impact of Foreign Currency | ||||
| in millions | As Reported Currency Basis | Constant Currency Basis | |||
| United States | $ (65) | $ (65) | |||
| EMEA | (43) | (10) | $ (33) | ||
| Japan | (9) | (29) | 20 | ||
| Inter-Continental | 10 | 1 | 9 | ||
| International | (42) | (38) | (4) | ||
| Subtotal | (107) | (103) | (4) | ||
| Divested Businesses | (2) | (2) | 0 | ||
| Worldwide | $ (109) | $ (105) | $ (4) | ||
| Q3 2010 Net Sales as compared to Q3 2009 | |||||
| Change | Estimated Impact of Foreign Currency | ||||
| in millions | As Reported Currency Basis | Constant Currency Basis | |||
| Cardiac Rhythm Management | $ (58) | $ (47) | $ (11) | ||
| Interventional Cardiology | (68) | (73) | 5 | ||
| Peripheral Interventions | 3 | 3 | 0 | ||
| Cardiovascular Group | (65) | (70) | 5 | ||
| Electrophysiology | (2) | (2) | 0 | ||
| Neurovascular | (6) | (7) | 1 | ||
| Endoscopy | 9 | 9 | 0 | ||
| Urology/ Women's Health | 8 | 7 | 1 | ||
| Endosurgery Group | 17 | 16 | 1 | ||
| Neuromodulation | 7 | 7 | 0 | ||
| Subtotal | (107) | (103) | (4) | ||
| Divested Businesses | (2) | (2) | 0 | ||
| Worldwide | $ (109) | $ (105) | $ (4) |
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | |||||
| NON-GAAP CONSTANT CURRENCY NET SALES RECONCILIATIONS | |||||
| (Unaudited) | |||||
| Q3 2010 YTD Net Sales as compared to Q3 2009 | |||||
| Change | Estimated Impact of Foreign Currency | ||||
| in millions | As Reported Currency Basis | Constant Currency Basis | |||
| United States | $ (286) | $ (286) | |||
| EMEA | (48) | (21) | $ (27) | ||
| Japan | (19) | (59) | 40 | ||
| Inter-Continental | 53 | 3 | 50 | ||
| International | (14) | (77) | 63 | ||
| Subtotal | (300) | (363) | 63 | ||
| Divested Businesses | (5) | (5) | 0 | ||
| Worldwide | $ (305) | $ (368) | $ 63 | ||
| Q3 2010 YTD Net Sales as compared to Q3 2009 | |||||
| Change | Estimated Impact of Foreign Currency | ||||
| in millions | As Reported Currency Basis | Constant Currency Basis | |||
| Cardiac Rhythm Management | $ (191) | $ (192) | $ 1 | ||
| Interventional Cardiology | (194) | (230) | 36 | ||
| Peripheral Interventions | 5 | (2) | 7 | ||
| Cardiovascular Group | (189) | (232) | 43 | ||
| Electrophysiology | (1) | (2) | 1 | ||
| Neurovascular | (11) | (17) | 6 | ||
| Endoscopy | 57 | 50 | 7 | ||
| Urology/ Women's Health | 21 | 17 | 4 | ||
| Endosurgery Group | 78 | 67 | 11 | ||
| Neuromodulation | 14 | 13 | 1 | ||
| Subtotal | (300) | (363) | 63 | ||
| Divested Businesses | (5) | (5) | 0 | ||
| Worldwide | $ (305) | $ (368) | $ 63 |
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
| BOSTON SCIENTIFIC CORPORATION | |||||||
| ESTIMATED NON-GAAP NET INCOME PER COMMON SHARE RECONCILIATIONS | |||||||
| (Unaudited) | |||||||
| Q4 2010 Estimate | Full Year 2010 Estimate | ||||||
| (Low) | (High) | (Low) | (High) | ||||
| GAAP results | $ 0.05 | $ 0.09 | $ (0.81) | $ (0.77) | |||
| Goodwill impairment charge | 1.20 | 1.20 | |||||
| Intangible asset impairment charges | 0.03 | 0.03 | |||||
| Acquisition-related credit | (0.14) | (0.14) | |||||
| Estimated restructuring-related charges | 0.02 | 0.01 | 0.08 | 0.07 | |||
| Discrete tax items | (0.01) | (0.01) | |||||
| Estimated amortization expense | 0.08 | 0.08 | 0.28 | 0.28 | |||
| Adjusted results | $ 0.15 | $ 0.18 | $ 0.63 | $ 0.66 |
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
Use of Non-GAAP Financial Measures
To supplement Boston Scientific's condensed consolidated financial statements presented on a GAAP basis; the Company discloses certain non-GAAP measures that exclude certain amounts, including non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States .
The GAAP measure most comparable to non-GAAP net income is GAAP net income and the GAAP measure most comparable to non-GAAP net income per share is GAAP net income per share. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measure are included in the accompanying schedules.
To calculate regional and divisional revenue growth rates that exclude the impact of foreign exchange, the Company converts actual current-period net sales from local currency to U.S. dollars using constant foreign exchange rates. The GAAP measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue. A reconciliation of this non-GAAP financial measure to the corresponding GAAP measure is included in the accompanying schedules.
Use and Economic Substance of Non-GAAP Financial Measures Used by Boston Scientific
The following is an explanation of each of the adjustments that management excluded as part of its non-GAAP measures for the three and nine months ended September 30, 2010 and 2009 and for the forecasted three month period ending December 31, 2010 and full year ending December 31, 2010 , as well as reasons for excluding each of these individual items:
Material Limitations Associated with the Use of Non-GAAP Financial Measures
Non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange may have limitations as analytical tools, and these non-GAAP measures should not be considered in isolation from or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are:
Compensation for Limitations Associated with Use of Non-GAAP Financial Measures
Boston Scientific compensates for the limitations on its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company's performance. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit a critical one, of the Company's performance.
The Company provides detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure in the accompanying schedules, and Boston Scientific encourages investors to review these reconciliations.
Usefulness of Non-GAAP Financial Measures to Investors
SOURCE Boston Scientific Corporation