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Bard Announces Third Quarter Results Diluted EPS of $1.34, $1.43 on Adjusted Basis

MURRAY HILL, N.J., Oct 21, 2010 (BUSINESS WIRE) -- C. R. Bard, Inc. (NYSE: BCR) today reported 2010 third quarter financial results. Third quarter 2010 net sales were $678.4 million, an increase of 6 percent over the prior-year period. Excluding the impact of foreign exchange, third quarter 2010 net sales increased 8 percent over the prior-year period.

For the third quarter 2010, net sales in the U.S. were $479.3 million and net sales outside the U.S. were $199.1 million, an increase of 8 percent and 2 percent, respectively, over the prior-year period. Excluding the impact of foreign exchange, third quarter 2010 net sales outside the U.S. increased 7 percent over the prior-year period.

For the third quarter 2010, net income attributable to common shareholders was $127.5 million and diluted earnings per share available to common shareholders were $1.34, a decrease of 2 percent and an increase of 2 percent, respectively, as compared to third quarter 2009 results. Adjusting for items that affect comparability between periods as detailed in the tables below, third quarter 2010 net income attributable to common shareholders was $135.9 million and diluted earnings per share available to common shareholders were $1.43, an increase of 5 percent and 9 percent, respectively, as compared to third quarter 2009 results.

Timothy M. Ring, chairman and chief executive officer, commented, "We are pleased to report solid revenue growth again this quarter. With gross margin at a record level, we were able to deliver strong EPS performance while continuing to increase our investment in R&D. We remain focused on improving our growth profile through the execution of our expanded product development and acquisition strategy."

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, 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 Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
Net sales $ 678,400 $ 637,000 $ 2,003,100 $ 1,858,000
Costs and expenses
Cost of goods sold 251,900 240,900 756,300 703,800
Marketing, selling and administrative expense 185,900 164,300 555,100 498,500
Research and development expense 47,500 43,000 133,200 121,100
Interest expense 3,200 3,000 8,900 9,000
Other (income) expense, net 6,700 600 8,700 17,500
Total costs and expenses 495,200 451,800 1,462,200 1,349,900
Income from operations before income taxes 183,200 185,200 540,900 508,100
Income tax provision 55,700 55,200 167,500 152,500
Net income 127,500 130,000 373,400 355,600
Net income attributable to noncontrolling interest - 500 400 1,400
Net income attributable to common shareholders $ 127,500 $ 129,500 $ 373,000 $ 354,200
Basic earnings per share available to common shareholders $ 1.35 $ 1.32 $ 3.91 $ 3.57
Diluted earnings per share available to common shareholders $ 1.34 $ 1.31 $ 3.86 $ 3.52
Wt. avg. common shares outstanding - basic 93,300 97,000 94,400 98,200
Wt. avg. common and common equivalent shares outstanding - diluted 94,300 98,100 95,500 99,500
Product Group Summary of Net Sales
(dollars in thousands, unaudited)
Quarter Ended September 30, Nine Months Ended September 30,
Constant Constant
2010 2009 Change Currency 2010 2009 Change Currency
Vascular $ 190,700 $ 173,600 10% 13% $ 550,600 $ 500,100 10% 10%
Urology 179,000 177,500 1% 2% 533,000 515,000 3% 3%
Oncology 183,300 171,600 7% 7% 535,600 499,800 7% 6%
Surgical Specialties 104,600 93,100 12% 13% 320,000 279,100 15% 14%
Other 20,800 21,200 -2% -1% 63,900 64,000 - -
Net sales $ 678,400 $ 637,000 6% $ 2,003,100 $ 1,858,000 8%
Foreign exchange impact (8,100) 13,300
Constant Currency $ 678,400 $ 628,900 8% $ 2,003,100 $ 1,871,300 7%
Reconciliation of Earnings
(dollars in millions except per share amounts, unaudited)
Quarter Ended September 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 $ 251.9 $ 185.9 $ 47.5 $ 6.7 $ 55.7 $ 127.5 $ 1.34

Items that affect comparability of

results between periods:

Acquisition related items (0.6 ) (1.9 ) - (7.7 ) 3.2 7.0
Tax items - - - - (1.4 ) 1.4
Total (0.6 ) (1.9 ) - (7.7 ) 1.8 8.4 0.09
Adjusted Basis $ 251.3 $ 184.0 $ 47.5 $ (1.0 ) $ 57.5 $ 135.9 $ 1.43
Quarter Ended September 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 $ 240.9 $ 164.3 $ 43.0 $ 0.6 $ 55.2 $ 129.5 $ 1.31
Adjusted Basis $ 240.9 $ 164.3 $ 43.0 $ 0.6 $ 55.2 $ 129.5 $ 1.31
Nine Months Ended September 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 $ 756.3 $ 555.1 $ 133.2 $ 8.7 $ 167.5 $ 373.0 $ 3.86

Items that affect comparability of

results between periods:

Acquisition related items (2.8 ) (5.6 ) (0.5 ) (9.3 ) 4.1 14.1
Write-down of receivables - (3.8 ) - - - 3.8
Tax items - - - - (1.4 ) 1.4
Total (2.8 ) (9.4 ) (0.5 ) (9.3 ) 2.7 19.3 0.20
Adjusted Basis $ 753.5 $ 545.7 $ 132.7 $ (0.6 ) $ 170.2 $ 392.3 $ 4.06
Nine Months Ended September 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 $ 703.8 $ 498.5 $ 121.1 $ 17.5 $ 152.5 $ 354.2 $ 3.52

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 $ 702.5 $ 497.7 $ 118.8 $ (2.4 ) $ 158.3 $ 372.7 $ 3.70

Notes to Reconciliation of Earnings

  • For the third quarter 2010, the following items affected the comparability of results between periods: (i) charges of $10.2 million pre-tax for acquisition related items including transaction costs, which consisted primarily of legal and valuation costs, purchase accounting adjustments and integration costs; and (ii) a net increase of $1.4 million in the income tax provision, including an increase of $5.6 million due to a planned cash repatriation of certain foreign earnings as a result of new tax legislation, partially offset by a decrease of $4.2 million due to a remeasurement of certain tax positions related to the IRS examinations of the tax years 2003 and 2004. The net effect of these items decreased net income attributable to common shareholders by $8.4 million, or $0.09 diluted earnings per share available to common shareholders.
  • For the third quarter 2009, there were no items that affected the comparability of results between periods.
  • For the nine months ended September 30, 2010 the following items affected the comparability of results between periods: (i) charges of $18.2 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; (ii) a charge of $3.8 million pre-tax for the write-down of public hospital receivables in Greece and (iii) a net increase of $1.4 million in the income tax provision, including an increase of $5.6 million due to a planned cash repatriation of certain foreign earnings as a result of new tax legislation, partially offset by a decrease of $4.2 million due to a remeasurement of certain tax positions related to the IRS examinations of the tax years 2003 and 2004. The net effect of these items decreased net income attributable to common shareholders by $19.3 million, or $0.20 diluted earnings per share available to common shareholders.
  • For the nine months ended September 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 an increase resulting from a planned cash repatriation of certain foreign earnings, a decrease due to a remeasurement of certain tax positions and 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 Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
Earnings per Share Numerator (1): GAAP Basis - basic and diluted
Net income attributable to common shareholders $ 127,500 $ 129,500 $ 373,000 $ 354,200
Less: Income allocated to participating securities 1,300 1,300 4,100 3,900
Net income available to common shareholders $ 126,200 $ 128,200 $ 368,900 $ 350,300
Earnings per Share Numerator (1): Adjusted Basis - diluted
Net income attributable to common shareholders $ 135,900 $ 129,500 $ 392,300 $ 372,700
Less: Income allocated to participating securities 1,400 1,300 4,300 4,100
Net income available to common shareholders $ 134,500 $ 128,200 $ 388,000 $ 368,600
Earnings per Share Denominator:
Wt. avg. common shares outstanding - basic 93,300 97,000 94,400 98,200
Wt. avg. common and common equivalent shares outstanding - diluted 94,300 98,100 95,500 99,500
Earnings per Share: GAAP Basis
Basic earnings per share available to common shareholders $ 1.35 $ 1.32 $ 3.91 $ 3.57
Diluted earnings per share available to common shareholders $ 1.34 $ 1.31 $ 3.86 $ 3.52
Earnings per Share: Adjusted Basis
Diluted earnings per share available to common shareholders $ 1.43 $ 1.31 $ 4.06 $ 3.70
(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
Vice President, Investor Relations
908-277-8413
or
Media Relations:
Scott T. Lowry
Vice President and Treasurer
908-277-8365


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