MARLBOROUGH, Mass., Oct. 22, 2014 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX) generated sales of $1.846 billion during the third quarter ended September 30, 2014, compared to the company’s guidance range for the quarter of $1.790 to $1.840 billion. This represents 7 percent operational revenue growth (constant currency basis, excluding divested businesses) and 6 percent revenue growth on a reported basis, all compared to the prior year period. The company achieved adjusted earnings per share of $0.20 for the period, compared to $0.17 a year ago, which represents 20 percent growth, and GAAP earnings grew to $0.03 per share, compared to $0.00 a year ago.*
“We achieved excellent third quarter results, growing most of our divisions faster than the market while delivering strong, double-digit EPS growth,” said Mike Mahoney, president and chief executive officer, Boston Scientific Corporation. “We are particularly pleased with our global performance in Cardiovascular and Rhythm Management. Our momentum continues, and we are excited about the opportunities we have ahead to strengthen our global execution and bring more unique innovation to patients.”
Third quarter financial results and recent developments*:
- Achieved third quarter sales of $1.846 billion, representing 7 percent operational revenue growth and 6 percent revenue growth on a reported basis, all compared to the prior year period.
- Delivered third quarter adjusted earnings per share of $0.20, which represents 20 percent growth compared to the prior year period, and compared to the company’s guidance range of $0.18 to $0.20. Delivered third quarter GAAP income of $0.03 per share compared to the company’s guidance range of $0.08 to $0.10 per share.
- Achieved adjusted earnings per share of $0.61 for the nine months ended September 30, 2014, compared to $0.51 during the prior year period, which represents 19 percent growth, and GAAP earnings per share of $0.13 compared to a GAAP loss per share of $0.17 during the prior year period.
- Drove third quarter revenue growth of 8 percent in Cardiovascular, 7 percent in Rhythm Management, and 5 percent in MedSurg, all on a constant currency basis over the prior year period.
- Achieved third quarter revenue growth of 9 percent internationally over the prior year period, primarily driven by 11 percent growth in Europe and 19 percent growth in Emerging Markets, all on a constant currency basis. Emerging Markets revenue represented 10 percent of total company sales.
- Generated strong operating cash flow of $346 million in the third quarter.
- Received favorable FDA Advisory Committee Panel recommendation for the WATCHMAN Left Atrial Appendage Closure Device** by a vote of 6 to 5 (with 1 abstention) that the benefits of the device outweigh the potential risks.
- Closed the acquisition of the Interventional Division of Bayer AG for approximately $415 million, which is expected to drive growth in peripheral atherectomy and thrombectomy categories.
- Enrolled first patient in REPRISE III, a head-to-head randomized trans-aortic valve replacement (TAVR) clinical trial of 1,000 patients, designed to support U.S. regulatory approval of the Lotus Valve System.**
- Completed the first commercial cases in the U.S. and Europe using the Rhythmia Mapping System, a next-generation, catheter-based, 3D cardiac mapping and navigation solution designed to help diagnose and treat a variety of arrhythmias.
* Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.
**The WATCHMAN Device and the Lotus System are not available for sale in the U.S.
Worldwide sales for the third quarter: | |||||||||||||||
Three Months Ended | |||||||||||||||
September 30, | % Change | ||||||||||||||
in millions | 2014 | 2013 | As Reported Basis | Less: Impact of | Constant Currency Basis | ||||||||||
(restated) | |||||||||||||||
Interventional Cardiology | $ | 508 | $ | 472 | 8% | $ | (4) | 0% | 8% | ||||||
Peripheral Interventions | 215 | 200 | 8% | (2) | (1)% | 9% | |||||||||
Cardiovascular | 723 | 672 | 8% | (6) | (0)% | 8% | |||||||||
Cardiac Rhythm Management | 480 | 464 | 3% | (1) | (1)% | 4% | |||||||||
Electrophysiology | 54 | 34 | 57% | 1 | 0% | 57% | |||||||||
Rhythm Management | 534 | 498 | 7% | 0% | 7% | ||||||||||
Endoscopy | 336 | 317 | 6% | (2) | (1)% | 7% | |||||||||
Urology and Women’s Health | 137 | 131 | 5% | (1) | 0% | 5% | |||||||||
Neuromodulation | 115 | 115 | 0% | 1 | 0% | 0% | |||||||||
MedSurg | 588 | 563 | 4% | (2) | (1)% | 5% | |||||||||
Subtotal Core Businesses | 1,845 | 1,733 | 6% | (8) | (1)% | 7% | |||||||||
Divested Businesses | 1 | 2 | (16)% | 0% | (16)% | ||||||||||
Worldwide Net Sales | $ | 1,846 | $ | 1,735 | 6% | $ | (8) | 0% | 6% | ||||||
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely. | |||||||||||||||
The company restated worldwide sales for the three months ended September 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 third quarter of 2014 was $43 million, or $0.03 per share. These results included intangible asset impairment charges, acquisition- and divestiture-, restructuring-, and litigation-related net charges, and amortization expense, of $230 million (after-tax) or $0.17 per share. Adjusted net income for the third quarter of 2014, excluding these net charges, was $273 million, or $0.20 per share.
On a consolidated GAAP basis, net loss for the third quarter of 2013 was $5 million, or $0.00 per share. These results included acquisition- and divestiture-, restructuring-, and litigation-related net charges, debt extinguishment charges and amortization expense, of $235 million (after-tax) or $0.17 per share. Adjusted net income for the third quarter of 2013, excluding these net charges, was $230 million, or $0.17 per share.
Guidance for Full Year and Fourth Quarter 2014
The company now estimates revenue for the full year 2014 to be in a range of $7.370 to $7.420 billion (compared to prior guidance of $7.325 to $7.425 billion), which represents growth in a range of 3 to 4 percent on a reported basis and approximately 5 percent on an operational basis. The company now estimates income on a GAAP basis in a range of $0.22 to $0.24 per share (compared to prior guidance of $0.28 to $0.32), 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 $0.81 to $0.83 per share (compared to prior guidance of $0.79 to $0.83).
The company estimates sales for the fourth quarter of 2014 in a range of $1.875 to $1.925 billion. The company estimates earnings on a GAAP basis in a range of $0.09 to $0.11 per share. Adjusted earnings, excluding acquisition- and divestiture- and restructuring-related charges and amortization expense, are estimated in a range of $0.20 to $0.22 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 35 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 and operational revenue growth rates, GAAP earnings and adjusted earnings for the fourth quarter and full year 2014; our financial performance; clinical trials; product performance; our business plans; and our positioning for revenue and earnings growth. 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.
Risks and uncertainties that may cause such differences include, among other things: future economic, political, competitive, reimbursement and regulatory conditions; new product introductions and the market acceptance of those products; markets for our products; expected pricing environment; expected procedural volumes; clinical trial results; demographic trends; intellectual property rights; litigation; financial market conditions; the execution and effect of our restructuring program; the execution and effect of our business strategy, including our cost-savings and growth initiatives; and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict. 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 hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statement 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.
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