NATICK, Mass., July 28, 2011 /PRNewswire/ --Boston Scientific Corporation (NYSE: BSX) today announces financial results for the second quarter ended June 30, 2011, as well as net sales and earnings per share (EPS) guidance for the third quarter and updated guidance for the full year 2011. The Company exceeded its EPS guidance range for the quarter and is raising EPS guidance for the remainder of the year.
Delivering strong execution of its POWER business strategy, the Company also announces the prepayment of the remaining $750 million of its term loan borrowings, which reduced its gross debt to $4.2 billion, consistent with the target capital structure, with no further debt maturities until 2014; a new $1.0 billion share repurchase program; and a productivity-enhancing restructuring program as anticipated during the Companys Investor Day held in November 2010. Yesterday, the Company announced an additional $150 million investment in China to drive growth and increase market share through local manufacturing, physician training and an expanded commercial footprint.
Second quarter and other highlights:
- Achieved second quarter sales of $1.975 billion, at the higher end of the Company's previous guidance range, and reported GAAP earnings of $0.10 per share, a 66 percent increase over the second quarter of 2010, and adjusted EPS of $0.17, a 42 percent increase over the second quarter of 2010, both exceeding previous guidance
- Received FDA approval and launched in the U.S. the ION Paclitaxel-Eluting Platinum Chromium Coronary Stent System, the Companys third-generation drug-eluting stent (DES) technology, driving its U.S. DES market share to 50 percent and maintaining its worldwide DES market leadership at 36 percent
- Launched the Companys next-generation ENERGEN and PUNCTUA cardiac resynchronization therapy defibrillator (CRT-D) systems and implantable cardioverter defibrillator (ICD) systems -- the world's smallest and thinnest high-energy devices to treat heart failure and sudden cardiac death -- in Europe and other international markets
- Increased Neuromodulation sales 16 percent, Peripheral Interventions sales 7 percent, Endoscopy sales 6 percent and Urology sales 6 percent, all on a worldwide constant currency basis, on the strength of new product introductions and continued adoption
- Reduced gross debt to $4.2 billion, consistent with the target capital structure, with the prepayment of the remaining $750 million of term loan borrowings during the quarter on the strength of $390 million of cash generated from operations ($468 million on an adjusted free cash flow basis), bringing total debt prepayment to over $1.8 billion during the past year
- Achieved investment grade status with Fitch Ratings and moved to positive outlook by Moodys Investor Services
- Announced a new program to repurchase up to $1.0 billion shares of common stock, which is in addition to the approximately 37 million shares remaining under a previous share repurchase program
- Announced a restructuring program aimed at increasing productivity, which is expected to generate gross annual savings of $225 million to $275 million exiting 2013, composed primarily of activities under the Companys corporate Zero-Based Budgeting Initiative and components of its Emerging Markets Initiative, and
- Announced an additional five-year, $150 million investment in China to leverage critical growth drivers, which include developing local manufacturing capabilities and building a Boston Scientific training center. In addition, the Company expects to increase its employee base in China from approximately 200 to more than 1,200 during the period. These initiatives are expected to drive an expansion of Boston Scientifics current sales force to approximately 700 employees and the creation of a fully staffed manufacturing infrastructure. During the second quarter, Boston Scientific received registration approval for the PROMUS Element Everolimus-Eluting Platinum Chromium Coronary Stent from the State Food and Drug Administration of the Peoples Republic of China. The Company expects to launch the product in the fourth quarter of 2011.
Our POWER strategy is gaining traction and beginning to deliver tangible results, stated Ray Elliott, President and Chief Executive Officer of Boston Scientific Corporation. In addition to solid second quarter financial results, we have now announced the prepayment of our remaining term loan borrowings, a share buyback program, a productivity-focused restructuring program and an additional investment in China, all of which are key steps on the path to achieving our goals. Thats great news for our employees, shareholders and customers! We remain confident that Boston Scientific is POWERed for long-term, sustainable growth.
Net sales for the second quarter of 2011 were $1.975 billion, as compared to net sales of $1.928 billion for the second quarter of 2010, an increase of 2 percent. Excluding the impact of changes in foreign currency exchange rates and sales from divested businesses, net sales remained flat as compared to the prior period.
