Boston Scientific Corporation Announces Results For Second Quarter Ended June 30, 2014
MARLBOROUGH, Mass., July 24, 2014 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX) generated sales of $1.873 billion during the second quarter ended June 30, 2014, compared to the company's guidance range for the quarter of $1.840 to $1.890 billion. This represents 4 percent operational revenue growth (constant currency basis, excluding divested businesses) and 4 percent revenue growth on a reported basis, all compared to the prior year period. The company achieved adjusted earnings per share of $0.21 for the period, compared to $0.18 a year ago, and GAAP earnings of $4 million, or approximately $0.00 per share, compared to $0.10 a year ago.
"We had a strong second quarter, delivering balanced growth across our divisions," stated Mike Mahoney, president and chief executive officer, Boston Scientific Corporation. "In particular, we are pleased with the improvement in both our Interventional Cardiology and Cardiac Rhythm Management divisions. We remain confident in both our strategy and in our outlook for the year."
Second quarter financial results and recent developments:
- Achieved second quarter sales of $1.873 billion, representing 4 percent operational revenue growth and 4 percent revenue growth on a reported basis, all compared to the prior year period.
- Delivered adjusted earnings per share of $0.21 compared to the company's guidance range of $0.18 to $0.20, and GAAP income of $0.00 per share compared to the company's guidance range of $0.06 to $0.08 per share.
- Achieved revenue growth of 7 percent in Rhythm Management, 5 percent in MedSurg, and 2 percent in Cardiovascular, all on a constant currency basis over the prior year period.
- Achieved revenue growth of 5 percent internationally over the prior year period, primarily driven by 7 percent growth in Europe and 14 percent growth in Emerging Markets, all on a constant currency basis. Emerging Markets revenues represented 10 percent of total company sales.
- Generated strong operating cash flow of $286 million.
- Announced a definitive agreement to acquire the Interventional Division of Bayer AG, which is expected to drive growth in peripheral atherectomy and thrombectomy categories.
- Launched the Promus PREMIER Everolimus-Eluting Platinum Chromium Coronary Stent System in Japan.
- Received CE Mark for the RANGER Paclitaxel-Coated PTA Balloon Catheter for the treatment of patients with peripheral artery disease (PAD), and began the European commercial launch in July.
- Received CE Mark for the 25 mm LOTUS Transcatheter Aortic Valve Implantation (TAVI) System, and began the European commercial launch.
- Received FDA approval of the REBEL Platinum Chromium Coronary Stent System, a next generation bare-metal stent for the treatment of coronary artery disease (CAD).
- Received CE Mark for the AGENT Paclitaxel-Coated PTCA Balloon Catheter for the treatment of patients with in-stent restenosis (ISR) and de novo small vessel coronary disease.
- Began the full commercial launch of the POLARIS Imaging System, to support our portfolio of intravascular ultrasound (IVUS) catheters, including coronary, peripheral and intra-cardiac echo (ICE) products.
Worldwide sales for the second quarter:
Three Months Ended | ||||||||||||||
June 30, | % Change | |||||||||||||
in millions | 2014 | 2013 | As | Less: Impact of | Constant | |||||||||
(restated) | ||||||||||||||
Interventional Cardiology | $ | 528 | $ | 520 | 2% | $ | 1 | 1% | 1% | |||||
Peripheral Interventions | 211 | 204 | 3% | 1 | 0% | 3% | ||||||||
Cardiovascular | 739 | 724 | 2% | 2 | 0% | 2% | ||||||||
Cardiac Rhythm Management | 497 | 475 | 5% | 3 | 1% | 4% | ||||||||
Electrophysiology | 56 | 36 | 55% | 1 | 1% | 54% | ||||||||
Rhythm Management | 553 | 511 | 8% | 4 | 1% | 7% | ||||||||
Endoscopy | 333 | 320 | 4% | (1) | 0% | 4% | ||||||||
Urology and Women's Health | 133 | 124 | 7% | 0% | 7% | |||||||||
Neuromodulation | 114 | 111 | 3% | 0% | 3% | |||||||||
MedSurg | 580 | 555 | 5% | (1) | 0% | 5% | ||||||||
Subtotal Core Businesses | 1,872 | 1,790 | 5% | 5 | 1% | 4% | ||||||||
Divested Businesses | 1 | 19 | (93)% | 0% | (93)% | |||||||||
Worldwide Net Sales | $ | 1,873 | $ | 1,809 | 4% | $ | 5 | 0% | 4% | |||||
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | ||||||||||||||
The company restated worldwide sales for the three months ended June 30, 2013 to reflect the realignment of certain product lines from Endoscopy to Peripheral Interventions as of January 1, 2014. | ||||||||||||||
Sales growth rates that exclude the impact of sales from divested businesses and/or changes in foreign currency exchange rates are not prepared in accordance with U.S. GAAP. An explanation of the company's use of these non-GAAP financial measures is included in the exhibits attached to this news release. | ||||||||||||||
On a consolidated GAAP basis, net income for the second quarter of 2014 was $4 million, or $0.00 per share. These results included intangible asset impairment charges, acquisition- and divestiture-related net credits, litigation-, and restructuring-related net charges, discrete tax items, and amortization expense, of $281 million (after-tax) or $0.21 per share. Adjusted net income for the second quarter of 2014, excluding these net charges, was $285 million, or $0.21 per share.
On a consolidated GAAP basis, net income for the second quarter of 2013 was $130 million, or $0.10 per share. These results included intangible asset impairment charges, acquisition- and divestiture-related net credits, restructuring-related charges, and amortization expense, of $117 million (after-tax) or $0.08 per share. Adjusted net income for the second quarter of 2013, excluding these net charges, was $247 million, or $0.18 per share.
Guidance for Full Year and Third Quarter 2014
The company now estimates revenue for the full year 2014 to be in a range of $7.325 to $7.425 billion (compared to prior guidance of $7.300 to $7.500 billion), which represents growth in a range of 3 to 4 percent on a reported basis and 3 to 5 percent on an operational basis. The company now estimates income on a GAAP basis in a range of $0.28 to $0.32 per share (compared to prior guidance of $0.36 to $0.41), and adjusted earnings, excluding intangible asset impairment charges, acquisition- and divestiture-, litigation-, and restructuring-related charges and credits, discrete tax items, and amortization expense, in a range of $0.79 to $0.83 per share (compared to prior guidance of $0.77 to $0.82).
The company estimates sales for the third quarter of 2014 in a range of $1.790 to $1.840 billion. The company estimates earnings on a GAAP basis in a range of $0.08 to $0.10 per share. Adjusted earnings, excluding acquisition- and divestiture- and restructuring-related charges and amortization expense, are estimated in a range of $0.18 to $0.20 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 30 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.
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