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Bard Announces Second Quarter Results

Diluted EPS of $1.29, $1.39 on Adjusted Basis

MURRAY HILL, N.J., Jul 22, 2010 (BUSINESS WIRE) -- C. R. Bard, Inc. (NYSE: BCR) today reported 2010 second quarter financial results. Second quarter 2010 net sales were $673.9 million, an increase of 8 percent over the prior-year period. Excluding the impact of foreign exchange, second quarter 2010 net sales increased 7 percent over the prior-year period.

For the second quarter 2010, net sales in the U.S. were $464.9 million and net sales outside the U.S. were $209.0 million, an increase of 7 percent and 9 percent, respectively, over the prior-year period. Excluding the impact of foreign exchange, second quarter 2010 net sales outside the U.S. increased 6 percent over the prior-year period.

For the second quarter 2010, net income attributable to common shareholders was $124.6 million and diluted earnings per share available to common shareholders were $1.29, an increase of 11 percent and 16 percent, respectively, as compared to second quarter 2009 results. Adjusting for items that affect comparability between periods as detailed in the tables below, second quarter 2010 net income attributable to common shareholders was $134.0 million and diluted earnings per share available to common shareholders were $1.39, an increase of 8 percent and 13 percent, respectively, as compared to second quarter 2009 results.

Timothy M. Ring, chairman and chief executive officer, commented, "Bard delivered strong EPS growth this quarter, fueled by a record gross margin performance, while accelerating organic investment in R&D. We are dedicated to driving revenue growth by offering our customers products that are clinically and economically differentiated. Looking ahead, we see ample opportunity to expand our investment in the development and acquisition of market-leading technologies."

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 March 31, 2010 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
(dollars and shares in thousands except per share amounts, unaudited)
Quarter Ended Six Months Ended
June 30, June 30,

2010

2009

2010

2009

Net sales $ 673,900 $ 624,600 $ 1,324,700 $ 1,221,000
Costs and expenses
Cost of goods sold 251,700 238,600 504,400 462,900
Marketing, selling and administrative expense 189,500 169,900 369,200 334,200
Research and development expense 45,100 41,700 85,700 78,100
Interest expense 2,800 3,000 5,700 6,000
Other (income) expense, net 2,100 7,600 2,000 16,900
Total costs and expenses 491,200 460,800 967,000 898,100
Income from operations before income taxes 182,700 163,800 357,700 322,900
Income tax provision 58,000 51,400 111,800 97,300
Net income 124,700 112,400 245,900 225,600
Net income attributable to noncontrolling interest 100 200 400 900
Net income attributable to common shareholders $ 124,600 $ 112,200 $ 245,500 $ 224,700
Basic earnings per share available to common shareholders $ 1.31 $ 1.13 $ 2.56 $ 2.25
Diluted earnings per share available to common shareholders $ 1.29 $ 1.11 $ 2.53 $ 2.22
Wt. avg. common shares outstanding - basic 94,400 98,500 94,900 98,900
Wt. avg. common and common equivalent shares outstanding - diluted 95,600 99,600 96,100 100,300
Product Group Summary of Net Sales
(dollars in thousands, unaudited)
Quarter Ended June 30, Six Months Ended June 30,
Constant Constant
2010 2009 Change Currency 2010 2009 Change Currency
Vascular $ 187,500 $ 169,100 11 % 10 % $ 359,900 $ 326,500 10 % 8 %
Urology 179,700 174,700 3 % 2 % 354,000 337,500 5 % 3 %
Oncology 178,300 167,200 7 % 5 % 352,300 328,200 7 % 5 %
Surgical Specialties 106,200 91,900 16 % 15 % 215,400 186,000 16 % 14 %
Other 22,200 21,700 2 % 2 % 43,100 42,800 1 % -
Net sales $ 673,900 $ 624,600 8 % $ 1,324,700 $ 1,221,000 8 %
Foreign exchange impact 6,300 21,400
Constant Currency $ 673,900 $ 630,900 7 % $ 1,324,700 $ 1,242,400 7 %
Reconciliation of Earnings
(dollars in millions except per share amounts, unaudited)
Quarter Ended June 30, 2010
Diluted
Net Earnings
Marketing, Income per Share
Cost of Selling and Research & Other Attributable Available
Goods Administrative Development (Income) Income to Common to Common
Sold Expense Expense Expense, Net Taxes Shareholders Shareholders
GAAP Basis $ 251.7 $ 189.5 $ 45.1 $ 2.1 $ 58.0 $ 124.6 $ 1.29

Items that affect comparability of

results between periods:

Acquisition related items (1.8 ) (2.5 ) (0.5 ) (1.6 ) 0.8 5.6
Write-down of receivables - (3.8 ) - - - 3.8
Total (1.8 ) (6.3 ) (0.5 ) (1.6 ) 0.8 9.4 0.10
Adjusted Basis $ 249.9 $ 183.2 $ 44.6 $ 0.5 $ 58.8 $ 134.0 $ 1.39
Quarter Ended June 30, 2009
Diluted
Net Earnings
Marketing, Income per Share
Cost of Selling and Research & Other Attributable Available
Goods Administrative Development (Income) Income to Common to Common
Sold Expense Expense Expense, Net Taxes Shareholders Shareholders
GAAP Basis $ 238.6 $ 169.9 $ 41.7 $ 7.6 $ 51.4 $ 112.2 $ 1.11

Items that affect comparability of

results between periods:

Asset disposition (1.2 ) - - (4.5 ) 0.5 5.2
Acquisition related items (0.1 ) (0.8 ) (2.3 ) - 0.1 3.1
Restructuring charge - - - (5.6 ) 1.9 3.7
Total (1.3 ) (0.8 ) (2.3 ) (10.1 ) 2.5 12.0 0.12
Adjusted Basis $ 237.3 $ 169.1 $ 39.4 $ (2.5 ) $ 53.9 $ 124.2 $ 1.23
Six Months Ended June 30, 2010
Diluted
Net Earnings
Marketing, Income per Share
Cost of Selling and Research & Other Attributable Available
Goods Administrative Development (Income) Income to Common to Common
Sold Expense Expense Expense, Net Taxes Shareholders Shareholders
GAAP Basis $ 504.4 $ 369.2 $ 85.7 $ 2.0 $ 111.8 $ 245.5 $ 2.53

Items that affect comparability of

results between periods:

Acquisition related items (2.2 ) (3.7 ) (0.5 ) (1.6 ) 0.9 7.1
Write-down of receivables - (3.8 ) - - - 3.8
Total (2.2 ) (7.5 ) (0.5 ) (1.6 ) 0.9 10.9 0.11
Adjusted Basis $ 502.2 $ 361.7 $ 85.2 $ 0.4 $ 112.7 $ 256.4 $ 2.64
Six Months Ended June 30, 2009
Diluted
Net Earnings
Marketing, Income per Share
Cost of Selling and Research & Other Attributable Available
Goods Administrative Development (Income) Income to Common to Common
Sold Expense Expense Expense, Net Taxes Shareholders Shareholders
GAAP Basis $ 462.9 $ 334.2 $ 78.1 $ 16.9 $ 97.3 $ 224.7 $ 2.22

Items that affect comparability of

results between periods:

Asset disposition (1.2 ) - - (4.5 ) 0.5 5.2
Acquisition related items (0.1 ) (0.8 ) (2.3 ) - 0.1 3.1
Restructuring charge - - - (15.4 ) 5.2 10.2
Total (1.3 ) (0.8 ) (2.3 ) (19.9 ) 5.8 18.5 0.18
Adjusted Basis $ 461.6 $ 333.4 $ 75.8 $ (3.0 ) $ 103.1 $ 243.2 $ 2.40

Notes to Reconciliation of Earnings

  • For the second quarter 2010, the following items affected the comparability of results between periods: (i) charges of $6.4 million pre-tax for acquisition related items including purchased research and development, transaction costs, which consisted primarily of legal and valuation costs, purchase accounting adjustments and integration costs; and (ii) a charge of $3.8 million pre-tax for the write-down of public hospital receivables in Greece. The net effect of these items decreased net income attributable to common shareholders by $9.4 million, or $0.10 diluted earnings per share available to common shareholders.
  • For the second quarter 2009, the following items affected the comparability of results between periods: (i) a charge of $5.7 million pre-tax for an asset disposition; (ii) charges of $3.2 million pre-tax for acquisition related items including purchased research and development, transaction costs, which consisted primarily of legal and valuation costs, and purchase accounting adjustments; and (iii) a charge of $5.6 million pre-tax for restructuring. The net effect of these items decreased net income attributable to common shareholders by $12.0 million, or $0.12 diluted earnings per share available to common shareholders.
  • For the six months ended June 30, 2010 the following items affected the comparability of results between periods: (i) charges of $8.0 million pre-tax for acquisition related items including purchased research and development, transaction costs, which consisted primarily of legal and valuation costs, purchase accounting adjustments and integration costs; and (ii) a charge of $3.8 million pre-tax for the write-down of public hospital receivables in Greece. The net effect of these items decreased net income attributable to common shareholders by $10.9 million, or $0.11 diluted earnings per share available to common shareholders.
  • For the six months ended June 30, 2009, the following items affected the comparability of results between periods: (i) a charge of $5.7 million pre-tax for an asset disposition; (ii) charges of $3.2 million pre-tax for acquisition related items including purchased research and development, transaction costs, which consisted primarily of legal and valuation costs, and purchase accounting adjustments; and (iii) a charge of $15.4 million pre-tax for restructuring. The net effect of these items decreased net income attributable to common shareholders by $18.5 million, or $0.18 diluted earnings per share available to common shareholders.

    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) cost of goods sold excluding charges for an asset disposition and acquisition related items; (2) marketing, selling and administrative expense excluding charges for acquisition related items and the write-down of public hospital receivables in Greece; (3) research and development expense excluding acquisition related items; (4) other (income) expense, net, excluding charges for an asset disposition, acquisition related items and restructuring; (5) income tax provision excluding the tax effect of the items set forth in (1) through (4) above; (6) net income attributable to common shareholders excluding the items set forth in (1) through (5) above; and (7) diluted earnings per share available to common shareholders excluding the items set forth in (1) through (5) 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.
Notes to Earnings per Share

(dollars and shares in thousands, except per share amounts, unaudited)

Quarter Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
Earnings per Share Numerator (1): GAAP Basis - basic and diluted
Net income attributable to common shareholders $ 124,600 $ 112,200 $ 245,500 $ 224,700
Less: Income allocated to participating securities 1,400 1,200 2,800 2,500
Net income available to common shareholders $ 123,200 $ 111,000 $ 242,700 $ 222,200
Earnings per Share Numerator (1): Adjusted Basis - diluted
Net income attributable to common shareholders $ 134,000 $ 124,200 $ 256,400 $ 243,200
Less: Income allocated to participating securities 1,500

1,300

2,900 2,800
Net income available to common shareholders $ 132,500 $ 122,900 $ 253,500 $ 240,400
Earnings per Share Denominator:
Wt. avg. common shares outstanding - basic 94,400 98,500 94,900 98,900
Wt. avg. common and common equivalent shares outstanding - diluted 95,600 99,600 96,100 100,300
Earnings per Share: GAAP Basis
Basic earnings per share available to common shareholders $ 1.31 $ 1.13 $ 2.56 $ 2.25
Diluted earnings per share available to common shareholders $ 1.29 $ 1.11 $ 2.53 $ 2.22
Earnings per Share: Adjusted Basis
Diluted earnings per share available to common shareholders $ 1.39 $ 1.23 $ 2.64 $ 2.40

(1) Basic and diluted earnings per share available to common shareholders is calculated using a numerator, which represents the total of net income attributable to common shareholders less income allocated to participating securities.

SOURCE: C. R. Bard, Inc.

C. R. Bard, Inc.
Investor Relations:
Eric J. Shick, 908-277-8413
Vice President, Investor Relations
or
Media Relations:
Scott T. Lowry, 908-277-8365
Vice President and Treasurer


bard-pubs

Primary Media Relations Contact

Scott Lowry
Vice President and Treasurer
C. R. Bard, Inc.
730 Central Avenue
Murray Hill, NJ 07974

Tel: 908-277-8365