Earnings Per Share up 17 Percent, 18 Percent on Adjusted Basis
MURRAY HILL, N.J.--(BUSINESS WIRE)--Oct. 23, 2007--C. R. Bard,
Inc. (NYSE: BCR) today reported 2007 third quarter financial results.
Third quarter 2007 net sales were $544.8 million, an increase of 10
percent over the prior-year period. Excluding the impact of foreign
exchange, third quarter 2007 net sales increased 8 percent over the
prior-year period.
For the third quarter 2007, net sales in the U.S. were $378.2
million and net sales outside the U.S. were $166.6 million, up 9
percent and 11 percent, respectively, over the prior-year period.
Excluding the impact of foreign exchange, third quarter 2007 net sales
outside the U.S. increased 6 percent over the prior-year period.
For the third quarter 2007, income from continuing operations was
$102.1 million and diluted earnings per share from continuing
operations were 96 cents, up 16 percent and 17 percent, respectively,
as compared to third quarter 2006 results. Adjusting for items that
affect comparability between periods as detailed in the tables below,
third quarter 2007 income from continuing operations and related
diluted earnings per share were up 17 percent and 18 percent,
respectively, as compared to third quarter 2006 results. The
adjustment to the third quarter 2007 results included an item that
increased income from continuing operations by $3.7 million
(after-tax), or 3 cents per diluted share. Adjustments to the third
quarter 2006 results included items, the net effect of which increased
income from continuing operations by $3.6 million (after-tax), or 3
cents per diluted share.
Timothy M. Ring, chairman and chief executive officer, commented,
"We delivered strong third quarter earnings results through diligent
expense control as we continue to address the challenges in our
Surgical Specialties business. Looking forward, we remain confident in
the prospects for our product development pipeline and are optimistic
about the opportunities we see in business development."
C. R. Bard, Inc. (www.crbard.com), headquartered in Murray Hill,
NJ, is a leading multinational developer, manufacturer and marketer of
innovative, life-enhancing medical technologies in the fields of
vascular, urology, oncology and surgical specialty products.
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
which are based on management's current expectations, the accuracy of
which is necessarily subject to risks and uncertainties. These
statements are not historical in nature and use words such as
"anticipate", "estimate", "expect", "project", "intend", "forecast",
"plan", "believe", and other words of similar meaning in connection
with any discussion of future operating or financial performance. Many
factors may cause actual results to differ materially from anticipated
results including product developments, sales efforts, income tax
matters, the outcomes of contingencies such as legal proceedings, and
other economic, business, competitive and regulatory factors. The
company undertakes no obligation to update its forward-looking
statements. Please refer to the Cautionary Statement Regarding
Forward-Looking Information in our June 30, 2007 Form 10-Q for more
detailed information about these and other factors that may cause
actual results to differ materially from those expressed or implied.
C. R. Bard, Inc.
Consolidated Statements of Income
(in thousands except per share amounts, unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
------------------- -----------------------
2007 2006 2007 2006
--------- --------- ----------- -----------
Net sales $544,800 $497,500 $1,618,700 $1,459,900
Costs and expenses:
Cost of goods sold 213,700 193,500 636,800 566,400
Marketing, selling &
administrative expense 160,900 160,800 475,100 456,400
Research & development
expense 34,000 30,900 99,200 106,400
Interest expense 2,900 4,000 8,800 13,200
Other (income) expense,
net (8,900) 13,400 (25,100) (1,900)
--------- --------- ----------- -----------
Total costs and expenses 402,600 402,600 1,194,800 1,140,500
--------- --------- ----------- -----------
Income from continuing
operations before tax
provision 142,200 94,900 423,900 319,400
--------- --------- ----------- -----------
Income tax provision 40,100 7,100 122,700 69,000
--------- --------- ----------- -----------
Income from continuing
operations 102,100 87,800 301,200 250,400
--------- --------- ----------- -----------
Income (loss) from
discontinued operations,
net of tax - (200) - (300)
--------- --------- ----------- -----------
Net income $102,100 $ 87,600 $ 301,200 $ 250,100
========= ========= =========== ===========
Basic earnings per share
from continuing operations$ 0.99 $ 0.85 $ 2.92 $ 2.42
Basic earnings per share
from discontinued
operations - - - -
Basic earnings per share $ 0.99 $ 0.85 $ 2.92 $ 2.42
Diluted earnings per share
from continuing operations$ 0.96 $ 0.82 $ 2.83 $ 2.34
Diluted earnings per share
from discontinued
operations - - - -
Diluted earnings per share $ 0.96 $ 0.82 $ 2.83 $ 2.34
Wt. avg. common shares
outstanding - basic 102,700 103,200 103,100 103,500
Wt. avg. common shares
outstanding - diluted 105,900 106,600 106,400 106,900
Product Group Summary of Net Sales
(in thousands, unaudited)
Quarter Ended September 30,
-------------------------------------
Constant
2007 2006 Change Currency
--------- -------- ------ ---------
Vascular $ 134,100 $120,300 11% 9%
Urology 166,400 147,100 13% 11%
Oncology 140,900 124,700 13% 11%
Surgical Specialties 83,400 84,700 -2% -3%
Other 20,000 20,700 -3% -5%
--------- --------
As reported 544,800 497,500 10%
--------- --------
FX impact --- 8,300
--------- --------
Constant currency $ 544,800 $505,800 8%
========= ========
Nine Months Ended September 30,
--------------------------------------
Constant
2007 2006 Change Currency
---------- ---------- ------ --------
Vascular $ 397,700 $ 353,700 12% 9%
Urology 482,500 427,300 13% 11%
Oncology 410,600 352,700 16% 15%
Surgical Specialties 267,000 267,300 - -1%
Other 60,900 58,900 3% 2%
---------- ----------
As reported 1,618,700 1,459,900 11%
---------- ----------
FX impact --- 25,400
---------- ----------
Constant currency $1,618,700 $1,485,300 9%
========== ==========
Reconciliation of Earnings From Continuing Operations
(in millions except per share amounts, unaudited)
Quarter Ended September 30, 2007
------------------------------------------------------
Other Income Income Diluted
Research & (Income) Tax From Earnings
Development Expense, Provision Continuing Per
Expense Net (Benefit) Operations Share
------------ -------- --------- ---------- --------
GAAP basis $ 34.0 $ (8.9) $ 40.1 $102.1 $ 0.96
Items impacting
comparability
of results
between
periods:
----------------
Reduction in tax
provision - - 3.7 (3.7)
------------ -------- --------- ----------
Total - - 3.7 (3.7) (0.03)
------------ -------- --------- ---------- --------
Adjusted basis $ 34.0 $ (8.9) $ 43.8 $ 98.4 $ 0.93
============ ======== ========= ========== ========
Quarter Ended September 30, 2006
------------------------------------------------------
Other Income Income Diluted
Research & (Income) Tax From Earnings
Development Expense, Provision Continuing Per
Expense Net (Benefit) Operations Share
------------ -------- --------- ---------- --------
GAAP basis $ 30.9 $ 13.4 $ 7.1 $ 87.8 $ 0.82
Items impacting
comparability
of results
between
periods:
----------------
Settlement of
legal matter - (20.0) 7.4 12.6
Reduction in tax
provision - - 16.2 (16.2)
------------ -------- --------- ----------
Total - (20.0) 23.6 (3.6) (0.03)
------------ -------- --------- ---------- --------
Adjusted basis $ 30.9 $ (6.6) $ 30.7 $ 84.2 $ 0.79
============ ======== ========= ========== ========
Nine Months Ended September 30, 2007
------------------------------------------------------
Other Income Income Diluted
Research & (Income) Tax From Earnings
Development Expense, Provision Continuing Per
Expense Net (Benefit) Operations Share
------------ -------- --------- ---------- --------
GAAP basis $ 99.2 $(25.1) $122.7 $301.2 $ 2.83
Items impacting
comparability
of results
between
periods:
----------------
Reduction in tax
provision - - 3.7 (3.7)
Purchased
research &
development (1.6) - 0.1 1.5
------------ -------- --------- ----------
Total (1.6) - 3.8 (2.2) (0.02)
------------ -------- --------- ---------- --------
Adjusted basis $ 97.6 $(25.1) $126.5 $299.0 $ 2.81
============ ======== ========= ========== ========
Nine Months Ended September 30, 2006
------------------------------------------------------
Other Income Income Diluted
Research & (Income) Tax From Earnings
Development Expense, Provision Continuing Per
Expense Net (Benefit) Operations Share
------------ -------- --------- ---------- --------
GAAP basis $106.4 $ (1.9) $ 69.0 $250.4 $ 2.34
Items impacting
comparability
of results
between
periods:
----------------
Purchased
research &
development (16.8) - 4.1 12.7
Investment gains - 1.6 (0.6) (1.0)
Settlement of
legal matter - (20.0) 7.4 12.6
Reduction in tax
provision - - 16.2 (16.2)
------------ -------- --------- ----------
Total (16.8) (18.4) 27.1 8.1 0.08
------------ -------- --------- ---------- --------
Adjusted basis $ 89.6 $(20.3) $ 96.1 $258.5 $ 2.42
============ ======== ========= ========== ========
Notes to Consolidated Statements of Income
- For the third quarter ended September 30, 2007, a reduction in
the income tax provision impacted the comparability of results
between periods. This reduction was due to changes in certain
statutory tax rates outside the United States that resulted in
the revaluation of deferred taxes. This item increased income
from continuing operations by approximately $3.7 million
after-tax, or $0.03 diluted earnings per share from continuing
operations.
- For the third quarter ended September 30, 2006, the following
items impacted the comparability of results between periods:
(i) a charge of approximately $20.0 million pretax ($12.6
million after-tax) for the settlement of a legal matter; and
(ii) a reduction in the income tax provision of approximately
$16.2 million predominately related to the expiration of the
statute of limitations in the United States for the 2000 and
2001 tax years. The net effect of these items increased income
from continuing operations by $3.6 million after-tax, or $0.03
diluted earnings per share from continuing operations.
- For the nine months ended September 30, 2007, the following
items impacted the comparability of results between periods:
(i) a charge of approximately $1.6 million pretax ($1.5
million after-tax) for purchased research and development
included in research and development expense; and (ii) a
reduction in the income tax provision of approximately $3.7
million due to changes in certain statutory tax rates outside
the United States that resulted in the revaluation of deferred
taxes. The net effect of these items increased income from
continuing operations by $2.2 million after-tax, or $0.02
diluted earnings per share from continuing operations.
- For the nine months ended September 30, 2006, the following
items impacted the comparability of results between periods:
(i) investment gains of approximately $1.6 million pretax
($1.0 million after-tax); (ii) a charge of approximately $20.0
million pretax ($12.6 million after-tax) for the settlement of
a legal matter; (iii) charges of approximately $16.8 million
pretax ($12.7 million after-tax) for purchased research and
development included in research and development expense; and
(iv) a reduction in the income tax provision of approximately
$16.2 million predominately related to the expiration of the
statute of limitations in the United States for the 2000 and
2001 tax years. The net effect of these items decreased income
from continuing operations by $8.1 million after-tax, or $0.08
diluted earnings per share from continuing operations.
In the first quarter 2007, the company completed its previously
disclosed plan to withdraw from the synthetic bulking market and
discontinue the sale of the Tegress(TM) synthetic bulking product,
which was formerly reported in the Urology product group category.
Consequently, the company accounts for this withdrawal as a
discontinued operation for all periods referred to in this release.
This press release contains financial measures that are not
calculated in accordance with United States generally accepted
accounting principles (GAAP). These non-GAAP financial measures are
reconciled to their most directly comparable GAAP measures in the
above tables.
This press release includes net sales excluding the impact of
foreign exchange. The company analyzes net sales on a constant
currency basis to better measure the comparability of results between
periods. Because changes in foreign currency exchange rates have a
non-operating impact on net sales, the company believes that
evaluating growth in net sales on a constant currency basis provides
an additional and meaningful assessment of net sales to both
management and the company's investors.
In addition, this press release includes the following non-GAAP
measures: (1) research & development expense excluding payments for
purchased research and development; (2) other (income) expense, net
excluding investment gains and a charge for the previously disclosed
settlement of a legal matter; (3) income tax provision excluding
reductions relating to expired statutes of limitations in the United
States, reductions relating to changes in statutory tax rates and the
tax effect of the items set forth in (1) and (2) above; (4) income
from continuing operations excluding the items set forth in (1)
through (3) above; and (5) diluted earnings per share from continuing
operations excluding the items set forth in (1) through (3) above.
The company excluded the items described above because they may
cause certain statements of income categories not to be indicative of
ongoing operating results, and therefore affect the comparability of
results between periods. The company therefore believes that these
non-GAAP measures provide an additional and meaningful assessment of
the company's ongoing operating performance. Because the company has
historically reported these non-GAAP results to the investment
community, management also believes that the inclusion of these
non-GAAP measures provides consistency in its financial reporting and
facilitates investors' understanding of the company's historic
operating trends by providing an additional basis for comparisons to
prior periods. Management uses these non-GAAP measures: (1) to
establish financial and operational goals; (2) to monitor the
company's actual performance in relation to its business plan and
operating budgets; (3) to evaluate the company's core operating
performance and understand key trends within the business; and (4) as
part of several components it considers in determining incentive
compensation.
Management recognizes that the use of these non-GAAP measures has
limitations, including the fact that they may not be comparable with
similar non-GAAP financial measures used by other companies and that
management must exercise judgment in determining which types of
charges or other items should be excluded from the non-GAAP financial
information. Management compensates for these limitations by providing
full disclosure of each non-GAAP financial measure and a
reconciliation to the most directly comparable GAAP financial measure.
All non-GAAP financial measures are intended to supplement the
applicable GAAP disclosures and should not be considered in isolation
from, or as a replacement for, financial information prepared in
accordance with GAAP. For a reconciliation of these non-GAAP measures
to the most comparable GAAP measures, please see the above tables.
CONTACT: C. R. Bard, Inc.
Investor Relations:
Eric J. Shick, 908-277-8413
Vice President, Investor Relations
or
Media Relations:
Holly P. Glass, 703-754-2848
Vice President, Government and Public Affairs
SOURCE: C. R. Bard, Inc.
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