FRANKLIN LAKES, N.J., Jan. 26 /PRNewswire-FirstCall/ -- BD (Becton, Dickinson and Company) today reported record quarterly revenues of $1.414 billion for the first fiscal quarter ended December 31, 2005, representing an increase of 10 percent over the prior year period. This quarter’s growth rate reflects an overall estimated 1 percent unfavorable impact from foreign currency translation, which affected all segments.
“Our strong performance this quarter, and over the last five years, demonstrates that our strategy to drive growth through innovation, expand our margins by improving operating effectiveness and generate strong cash flow is working,” said Edward J. Ludwig, Chairman, President and Chief Executive Officer. “This strong performance enables us to continue to return value to shareholders and provides us the capacity to invest for the future. We are doing this primarily by increasing the pace of R&D spending and, as appropriate, through strategic investments, such as our recent agreement to acquire GeneOhm Sciences to drive our molecular diagnostics strategy.”
Analysis of First Quarter Fiscal Year 2006 and 2005 Earnings
The following analysis of diluted earnings per share from continuing operations for the first quarter of fiscal 2006 and 2005 identifies specified items that affect comparability of results between periods.
(Table 1) Three Months Ended December 31, FY2006 FY2005 % Incr. Diluted EPS from Continuing Operations $0.85 $0.74 15% Specified Items: Insurance Settlement(1) (0.02) Tax Examinations(2) - (0.04) Tax Rate Impact(3) - (0.02) (0.02) (0.06) Diluted EPS from Continuing Operations Excluding Specified Items $0.83 $0.68 22% (1) Represents the effect on diluted earnings per share from continuing operations of proceeds from insurance settlement concluded in the first fiscal quarter 2006. (2) Represents the effect on diluted earnings per share from continuing operations of the reversal of tax reserves in connection with the conclusion of tax examinations in four non-U.S. jurisdictions. (3) Represents the effect on diluted earnings per share from continuing operations of tax-related events that caused the first fiscal quarter 2005 tax rate to vary from the then expected effective tax rate for fiscal 2005.
Based on the foregoing analysis, diluted earnings per share from continuing operations, excluding specified items, for the first fiscal quarter of 2006 of 83 cents increased by 22 percent over diluted earnings per share from continuing operations, excluding specified items, of 68 cents for the first fiscal quarter of 2005.
Segment Results
In the BD Medical segment, worldwide revenues for the quarter were $771 million, representing an increase of 11 percent over the prior year period. Strong sales in the Pharmaceutical Systems and Diabetes Care units contributed to growth. U.S. sales of safety-engineered products totaled $132 million, compared with $126 million in the prior year’s quarter. Included in BD Medical revenues were international sales of safety-engineered products of $22 million, compared with $18 million in the prior year’s quarter.
In the BD Diagnostics segment, worldwide revenues for the quarter were $444 million, representing an increase of 7 percent over the prior year period. The Diagnostic Systems unit of the segment reported revenue growth of 8 percent, due primarily to strong sales of flu diagnostic tests, which totaled $27 million, compared with $18 million in the prior year’s period. Solid sales growth from the BD ProbeTec(TM) and BD Phoenix(TM) instrument platforms also contributed to growth. The Preanalytical Systems unit of the segment reported revenue growth of 7 percent. U.S. sales of safety-engineered products totaled $96 million, compared with $86 million in the prior year’s quarter. International sales of safety-engineered products totaled $52 million, compared with $42 million in the prior year’s quarter.
In the BD Biosciences segment, worldwide revenues for the quarter were $200 million, representing an increase of 10 percent over the prior year period. Research instruments and reagent sales continued to be the primary growth contributors, driven by increased demand for both research analyzers and sorters.
Geographic Results
First quarter revenues in the U.S. were $681 million, representing an increase of 9 percent over the prior year period. Revenues outside the U.S. were $733 million, representing an increase of 10 percent over the prior year period, and reflect an estimated 2 percent unfavorable impact from foreign currency translation.
Planned Acquisition of GeneOhm Sciences, Inc.
On January 10, 2006 BD announced that it had signed an agreement to acquire GeneOhm Sciences, Inc. (“the acquisition”), a privately held company that has pioneered the development of molecular diagnostic testing for the rapid detection of bacterial organisms, including those known to cause healthcare-associated infections (HAIs). The acquisition is subject to regulatory approval and is expected to close by the end of March 2006. As a result of the acquisition, the Company expects its diluted earnings per share from continuing operations would be reduced by an estimated 1 cent for the second quarter and 7 cents for the full fiscal year 2006 (see Table 2 below). In addition, the Company would reflect an in-process research and development charge, which would further reduce estimated diluted earnings per share from continuing operations by approximately 20 to 25 cents.
Fiscal 2006 Outlook for Full Year and Second Quarter - Refer to Table 2 Below
The Company estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 9-11 percent for the full fiscal year 2006 over diluted earnings per share from continuing operations, excluding specified items, of $2.88 for the fiscal year 2005.
The Company also estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 6-7 percent for the second fiscal quarter of 2006 over diluted earnings per share from continuing operations of 71 cents for the second fiscal quarter of 2005.
For the six-month period ending March 31, 2006, the Company estimates that diluted earnings per share from continuing operations, excluding specified items and the in-process research and development charge, and including the expected dilutive impact on operating results from the anticipated acquisition, will increase approximately 14-15 percent over diluted earnings per share from continuing operations, excluding specified items, of $1.38 for the prior year period.
Consistent with our initial fiscal year guidance on November 3, 2005, second half fiscal year 2006 diluted earnings per share from continuing operations, excluding the expected dilutive impact on operating results from the anticipated acquisition, are expected to increase approximately 9-11 percent over diluted earnings per share from continuing operations, excluding specified items, of $1.50 for the prior year period.
The following analysis of estimated diluted earnings per share from continuing operations for the second fiscal quarter and full fiscal year identifies specified items that affect the comparability of results between periods. (Table 2) Three Months Ended Six Months Ended March 31, March 31, FY2006 FY2005 %Incr. FY2006 FY2005 %Incr. (Estimated) (Estimated) Diluted EPS from Continuing Operations: Excluding GeneOhm Operations $0.79-$0.80 $0.71 11-13% $1.64-$1.65 $1.45 13-14% Specified Items: Insurance Settle- ments(1) (0.03) - (0.05) - Tax Examinations(2) - - - (0.04) Tax Rate Impact(3) - - - (0.02) Rounding - - - (0.01) (0.03) - (0.05) (0.07) Diluted EPS from Continuing Operations: Excluding Specified Items and GeneOhm Operations 0.76-0.77 0.71 7-8% 1.59-1.60 1.38 15-16% GeneOhm Operations(4) (0.01) - (0.01) - Diluted EPS from Continuing Operations: Excluding Specified Items and Including GeneOhm Operations $0.75-$0.76 $0.71 6%-7% $1.58-$1.59 $1.38 14%-15% Six Months Ended Twelve Months Ended September 30, September 30, FY2006 FY2005 %Incr. FY2006 FY2005 %Incr. (Estimated) (Estimated) Diluted EPS from Continuing Operations: Excluding GeneOhm Operations $1.63-$1.66 $1.21 35-37% $3.27-$3.31 $2.66 23-24% Specified Items: Insurance Settle- ments(1) - - (0.05) - Tax Examinations(2) - - - (0.04) Tax Rate Impact(3) - 0.02 - - Repatriation Tax Charge(5) - 0.27 - 0.27 Rounding - - - (0.01) - 0.29 (0.05) 0.22 Diluted EPS from Continuing Operations: Excluding Specified Items and GeneOhm Operations 1.63-1.66 1.50 9-11% 3.22-3.26 2.88 12-13% GeneOhm Operations(4) (0.06) - (0.07) - Diluted EPS from Continuing Operations: Excluding Specified Items and Including GeneOhm Operations $1.57-$1.60 $1.50 5-7% $3.15-$3.19 $2.88 9%-11% (1) Represents the effect on estimated diluted earnings per share from continuing operations of estimated proceeds from insurance settlements. Full fiscal year 2006 estimate of approximately 5 cents reflects a settlement of $7 million completed in the first quarter (2 cents per diluted earnings per share from continuing operations) and approximately $12 million (3 cents per diluted earnings per share from continuing operations) from settlements anticipated to be completed in the second quarter. (2) Represents the effect on estimated diluted earnings per share from continuing operations of the reversal of tax reserves in the first fiscal quarter of 2005 in connection with the conclusion of tax examinations in four non-U.S. jurisdictions. (3) Represents the effect on diluted earnings per share from continuing operations of tax-related events that caused the quarterly tax rate to vary from the then expected effective tax rate for fiscal year 2005. (4) Does not include expected in-process research and development charge, resulting in an estimated impact of between 20 and 25 cents on diluted earnings per share from continuing operations, which would be recorded upon closing of the acquisition. (5) Included in diluted earnings per share from continuing operations for the fourth quarter of fiscal 2005 is 27 cents per diluted share substantially related to the impact on taxes of the planned repatriation of $1.3 billion of foreign earnings under the provisions of the American Jobs Creation Act. Conference Call Information
A conference call regarding BD’s first quarter results and its expectations for the second quarter and full fiscal year will be broadcast live on BD’s website, www.bd.com/investors, at 10:00 a.m. (ET) Thursday, January 26, 2006. The conference call will be available for replay on BD’s website, www.bd.com/investors, or at 1-800-937-5460 (domestic) and 1-203-369-3865 (international) through the close of business on February 1, 2006.
This news release contains certain non-GAAP financial measures. A reconciliation of these and other measures to the comparable GAAP measures is included in this release, the attached financial tables, and BD’s Current Report on Form 8-K dated January 26, 2006.
About BD
BD, a leading global medical technology company that makes and sells medical devices, instrumented systems and reagents, is dedicated to improving people’s health throughout the world. BD is focused on improving drug therapy, enhancing the quality and speed of diagnosing infectious diseases, and advancing research and discovery of new drugs and vaccines. The Company’s capabilities are instrumental in combating many of the world’s most pressing diseases. Founded in 1897 and headquartered in Franklin Lakes, New Jersey, BD employs more than 25,000 people in approximately 50 countries throughout the world. The Company serves healthcare institutions, life science researchers, clinical laboratories, industry and the general public. For more information, please visit www.bd.com.
This press release, including the section entitled “Fiscal 2006 Outlook for Full Year and Second Quarter,” contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding BD’s performance, including future revenues, earnings per share and income, or events or developments that BD expects to occur or anticipates occurring in the future. All such statements are based upon current expectations of BD and involve a number of business risks and uncertainties. Actual results could vary materially from anticipated results described, implied or projected in any forward-looking statement. With respect to forward-looking statements contained herein, factors that could cause actual results to vary materially from any forward-looking statement include, but are not limited to: competitive factors; pricing and market share pressures; changes in interest or foreign currency exchange rates; difficulties inherent in product development and delays in product introductions; changes in regional, national or foreign economic conditions; increases in energy costs and their effect on, among other things, the cost of producing BD’s products; fluctuations in costs and availability of raw materials and in BD’s ability to maintain favorable supplier arrangements and relationships; uncertainties of litigation (as described in BD’s filings with the Securities and Exchange Commission); changes in healthcare or other governmental regulation; and issuance of new or revised accounting standards, as well as other factors discussed in this press release and in BD’s filings with the Securities and Exchange Commission. We do not intend to update any forward-looking statements to reflect events or circumstances after the date hereof except as required by applicable laws or regulations.
BECTON DICKINSON AND COMPANY CONSOLIDATED INCOME STATEMENTS (Unaudited; Amounts in thousands, except per-share data) Three Months Ended December 31, 2005 2004 % Change REVENUES $1,414,061 $1,288,369 9.8 Cost of products sold 675,741 634,501 6.5 Selling and administrative 367,874 341,088 7.9 Research and development 69,325 62,083 11.7 TOTAL OPERATING COSTS AND EXPENSES 1,112,940 1,037,672 7.3 OPERATING INCOME 301,121 250,697 20.1 Interest expense (16,760) (14,327) 17.0 Interest income 14,671 5,205 NM Other expense, net (1,163) (2,861) (59.3) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 297,869 238,714 24.8 Income tax provision 80,009 44,316 80.5 INCOME FROM CONTINUING OPERATIONS 217,860 194,398 12.1 INCOME FROM DISCONTINUED OPERATIONS NET OF INCOME TAX PROVISION OF $ -- AND $623, RESPECTIVELY - 953 NM NET INCOME $ 217,860 $ 195,351 11.5 EARNINGS PER SHARE Basic: Income from continuing operations $ 0.88 $ 0.77 14.3 Income from discontinued operations $ - $ - - Net income (1) $ 0.88 $ 0.78 12.8 Diluted: Income from continuing operations $ 0.85 $ 0.74 14.9 Income from discontinued operations $ - $ - - Net income (1) $ 0.85 $ 0.75 13.3 AVERAGE SHARES OUTSTANDING Basic 248,046 251,232 Diluted 255,851 261,970 NM - Not Meaningful (1) Total per share amounts may not add due to rounding. BECTON DICKINSON AND COMPANY SUPPLEMENTAL INFORMATION Three Months Ended December 31, (Unaudited; Amounts in thousands, except per-share data) 2005 As Insurance Excluding Reported Settlement(1) Items Selling and administrative 367,874 7,000 374,874 as a % of revenues 26.0% 26.5% Operating Income 301,121 (7,000) 294,121 as a % of revenues 21.3% 20.8% Income taxes 80,009 (2,660) 77,349 effective tax rate 26.9% 26.6% Income from continuing operations 217,860 (4,340) 213,520 as a % of revenues 15.4% 15.1% Diluted earnings per share Income from continuing operations $0.85 $(0.02) $0.83 (1) Represents proceeds from insurance settlement concluded in the first fiscal quarter 2006. 2004 Tax As Tax Rate Excluding Reported Examinations(3) Impact(4) Items Income taxes 44,316 11,265 5,150 60,731 effective tax rate 18.6% 25.4% Income from continuing operations 194,398 (11,265) (5,150) 177,983 as a % of revenues 15.1% 13.8% Diluted earnings per share Income from continuing operations $0.74 $(0.04) $(0.02) $0.68 Diluted earnings per share(2) $0.75 $(0.04) $(0.02) $0.68 (2) Total per share amounts may not add due to rounding. (3) Relates to the reversal of tax reserves in connection with the conclusion of tax examinations in four non-U.S. jurisdictions. (4) Represents the effect on diluted earnings per share from continuing operations of tax-related events that caused the first fiscal quarter 2005 tax rate to vary from the then expected effective tax rate for fiscal 2005. BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY SEGMENT AND GEOGRAPHIC AREA (Unaudited; Amounts in thousands) Three Months Ended December 31, 2005 2004 % Change BD MEDICAL United States $366,583 $329,654 11.2 International 404,117 364,168 11.0 TOTAL $770,700 $693,822 11.1 BD DIAGNOSTICS United States $229,088 $218,708 4.7 International 214,766 195,075 10.1 TOTAL $443,854 $413,783 7.3 BD BIOSCIENCES United States $85,314 $75,697 12.7 International 114,193 105,067 8.7 TOTAL $199,507 $180,764 10.4 TOTAL REVENUES United States $680,985 $624,059 9.1 International 733,076 664,310 10.4 TOTAL $1,414,061 $1,288,369 9.8 BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended December 31, (Unaudited; Amounts in thousands) United States 2005 2004 % Change BD MEDICAL Medical Surgical Systems $222,266 $215,506 3.1 Diabetes Care 110,401 88,461 24.8 Pharmaceutical Systems 28,400 20,049 41.7 Ophthalmic Systems 5,516 5,638 (2.2) TOTAL $366,583 $329,654 11.2 BD DIAGNOSTICS Preanalytical Systems $122,789 $114,763 7.0 Diagnostic Systems 106,299 103,945 2.3 TOTAL $229,088 $218,708 4.7 BD BIOSCIENCES Discovery Labware $27,700 $24,094 15.0 Immunocytometry Systems 40,437 34,694 16.6 Pharmingen 17,177 16,909 1.6 TOTAL $85,314 $75,697 12.7 TOTAL UNITED STATES $680,985 $624,059 9.1 BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended December 31, (continued) (Unaudited; Amounts in thousands) International % Change FX FX 2005 2004 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $205,897 $194,058 6.1 5.2 0.9 Diabetes Care 73,295 70,217 4.4 6.6 (2.2) Pharmaceutical Systems 115,363 90,636 27.3 33.8 (6.5) Ophthalmic Systems 9,562 9,257 3.3 7.8 (4.5) TOTAL $404,117 $364,168 11.0 12.7 (1.7) BD DIAGNOSTICS Preanalytical Systems $99,374 $93,758 6.0 7.6 (1.6) Diagnostic Systems 115,392 101,317 13.9 18.1 (4.2) TOTAL $214,766 $195,075 10.1 13.1 (3.0) BD BIOSCIENCES Discovery Labware $22,009 $22,869 (3.8) (0.1) (3.7) Immunocytometry Systems 72,415 65,406 10.7 14.7 (4.0) Pharmingen 19,769 16,792 17.7 22.2 (4.5) TOTAL $114,193 $105,067 8.7 12.7 (4.0) TOTAL INTERNATIONAL $733,076 $664,310 10.4 12.8 (2.4) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended December 31, (continued) (Unaudited; Amounts in thousands) Total % Change FX FX 2005 2004 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $428,163 $409,564 4.5 4.1 0.4 Diabetes Care 183,696 158,678 15.8 16.8 (1.0) Pharmaceutical Systems 143,763 110,685 29.9 35.2 (5.3) Ophthalmic Systems 15,078 14,895 1.2 4.0 (2.8) TOTAL $770,700 $693,822 11.1 12.0 (0.9) BD DIAGNOSTICS Preanalytical Systems $222,163 $208,521 6.5 7.2 (0.7) Diagnostic Systems 221,691 205,262 8.0 10.1 (2.1) TOTAL $443,854 $413,783 7.3 8.7 (1.4) BD BIOSCIENCES Discovery Labware $49,709 $46,963 5.8 7.6 (1.8) Immunocytometry Systems 112,852 100,100 12.7 15.3 (2.6) Pharmingen 36,946 33,701 9.6 11.8 (2.2) TOTAL $199,507 $180,764 10.4 12.7 (2.3) TOTAL REVENUES $1,414,061 $1,288,369 9.8 11.0 (1.2)
BD (Becton, Dickinson and Company)
CONTACT: Patricia A. Spinella, Investor Relations, +1-201-847-5453;Colleen T. White, Corporate Communications, +1-201-847-5369, both for BD(Becton, Dickinson and Company)
Web site: http://www.bd.com/
