NATICK, Mass., Oct. 21 /PRNewswire-FirstCall/ -- Boston Scientific Corporation today announced financial results for the third quarter ended September 30, 2008, as well as guidance for net sales and earnings per share (EPS) for the fourth quarter of 2008.
"For the second consecutive quarter, we maintained our strong U.S. DES market share leadership of 45 percent, even though there are now four competing companies," said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "This clearly demonstrates the power of our unique two-drug platform. In our CRM business, we launched COGNIS and TELIGEN -- the world's smallest and thinnest high-energy CRT-D and ICD devices -- to a very positive reception from physicians. We have now received FDA approval for our TAXUS Atom and TAXUS(R) Liberte(R) stent systems, and we are looking forward to additional approvals, including our Apex(TM) balloon catheter, Carotid WALLSTENT(R) and Express(R) SD Renal Stent. We see these recent approvals as evidence of the ongoing progress we are making in quality and toward removing the new product approval restrictions placed on us by the FDA, which we believe will be completed in the near future. Also during the quarter, we continued to improve our operating cash flow, pay down debt and maintain a strong balance sheet."
Net sales for the third quarter of 2008 were $1.978 billion, including sales from divested businesses of $12 million, as compared to sales of $2.048 billion for the third quarter of 2007, including sales from divested businesses of $133 million.
Worldwide sales of the Company's drug-eluting coronary stent systems for the third quarter of 2008 were $396 million, as compared to $448 million for the third quarter of 2007. U.S. sales of these systems were $209 million, as compared to $240 million. International sales of these systems were $187 million, as compared to $208 million. Worldwide sales of coronary stent systems were $446 million for the third quarter of 2008, as compared to $507 million for the third quarter of 2007. U.S. sales of these systems were $228 million, as compared to $268 million. International sales of these systems were $218 million, as compared to $239 million.
Worldwide sales of the Company's CRM products for the third quarter of 2008 were $572 million, which included $423 million of implantable cardioverter defibrillator (ICD) sales, as compared to worldwide CRM sales of $517 million for the third quarter of 2007, which included $372 million of ICD sales. U.S. CRM product sales were $377 million, which included $291 million of ICD sales, as compared to $343 million, which included $261 million of ICD sales. International CRM sales were $195 million, which included $132 million of ICD sales, as compared to $174 million, which included $111 million of ICD sales.
Reported net loss for the third quarter of 2008 was $62 million, or $0.04 per share. Reported results included Johnson & Johnson-related litigation charges, acquisition- and divestiture-related net credits, restructuring-related charges, intangible asset impairments and amortization expense (after-tax) of $298 million, or approximately $0.20 per share, which consisted of the following:
Adjusted net income for the quarter, excluding these amounts, was $236 million, or $0.16 per share.
Reported net loss for the third quarter of 2007 was $272 million, or $0.18 per share. Reported results for the third quarter of 2007 included acquisition- and divestiture-related charges and amortization expense (after-tax) of $571 million, or approximately $0.38 per share. Adjusted net income for the third quarter of 2007, excluding these charges, was $299 million, or $0.20 per share.
Guidance for Fourth Quarter 2008
The Company estimates net sales for the fourth quarter of 2008 of between $1.965 billion and $2.080 billion. Adjusted EPS, excluding restructuring-related charges and amortization expense, is estimated to range between $0.18 and $0.23 per share. The Company estimates reported EPS on a GAAP basis of between $0.10 and $0.15 per share. Included in the Company's estimated reported EPS on a GAAP basis is $0.01 per share of restructuring-related charges and $0.07 per share of amortization expense.
Boston Scientific management will be discussing these results with analysts on a conference call at 8:00 a.m. (ET) Wednesday, October 22, 2008. 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 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 financial performance, our programs to increase shareholder value, new product approvals, acquisitions and divestitures, our growth strategy, competitive offerings and our market position. 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.
Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and, future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item IA- Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file thereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.
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.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
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 diluted 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 diluted share is GAAP net income per diluted 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
Management uses these supplemental non-GAAP measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company's operating segments. The adjustments excluded from the Company's non-GAAP measures are consistent with those excluded from its reportable segments' measure of profit or loss. These adjustments are excluded from the segment measures that are reported to the Company's chief operating decision maker and are used to make operating decisions and assess performance.
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 month periods ending September 30, 2008 and September 30, 2007 and for the forecasted three month period ending December 31, 2008, 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
The Company believes that presenting non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange in addition to the related GAAP measures provides investors greater transparency to the information used by Boston Scientific management for its financial and operational decision-making and allows investors to see Boston Scientific's results "through the eyes" of management. The Company further believes that providing this information better enables Boston Scientific's investors to understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance.
CONTACT: Paul Donovan, Media Relations, +1-508-650-8541 (office),
+1-508-667-5165 (mobile), or Larry Neumann, Investor Relations,
+1-508-650-8696 (office), both of Boston Scientific Corporation
Web site: http://www.bostonscientific.com/
