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Bard Exceeds Fourth Quarter Earnings Expectations; Earnings Per Share at 65 Cents

MURRAY HILL, N.J.--(BUSINESS WIRE)--Jan. 26, 2005--C. R. Bard, Inc. (NYSE:BCR) today reported 2004 fourth quarter and full year financial results. Fourth quarter 2004 net sales were $424.1 million, an increase of 11 percent over the prior-year period. The company sold certain assets of its Endoscopic Technologies division on September 30, 2004. Net sales excluding sales of the divested Endoscopic Technologies products are referred to below as ongoing net sales. On a constant currency basis, fourth quarter 2004 ongoing net sales increased 13 percent over the prior-year period.

In the fourth quarter of 2004, net sales in the U.S. were $291.2 million and net sales outside the U.S. were $132.9 million, up 8 percent and 18 percent, respectively, over the prior-year period. On a constant currency basis, fourth quarter 2004 ongoing net sales in the U.S. and outside the U.S. both increased 13 percent over the prior-year period.

Net sales for the full year 2004 were $1,656.1 million, an increase of 16 percent over the prior year. On a constant currency basis, full year 2004 ongoing net sales increased 14 percent over the prior year.

For the full year 2004, net sales in the U.S. were $1,156.2 million and net sales outside the U.S. were $499.9 million, up 13 percent and 21 percent, respectively, over the prior year. On a constant currency basis, full year 2004 ongoing net sales in the U.S. increased 15 percent and full year 2004 ongoing net sales outside the U.S. increased 12 percent over the prior year.

For the fourth quarter 2004, net income was $69.8 million and diluted earnings per share were 65 cents, an increase of 239 and 242 percent over fourth quarter 2003 net income and diluted earnings per share of $20.6 million and 19 cents, respectively. As further described in the attached consolidated statements of income, included in the 2003 fourth quarter results were certain items that reduced net income by $35.2 million (after-tax), or 33 cents per diluted share, thereby affecting comparability with the current-year quarter. Excluding these items, fourth quarter 2004 net income and diluted earnings per share both increased by 25 percent over the same period in the prior year. The earnings per share figures reported in this press release reflect the company's two-for-one common stock split that became effective on May 28, 2004.

For the full year 2004, net income was $302.8 million and diluted earnings per share were $2.82. As further described in the attached consolidated statements of income, included in these full year 2004 results were certain items that increased net income by $40.1 million, or 37 cents per diluted share, thereby affecting comparability between years. Excluding these items, net income for the full year 2004 was $262.7 million and diluted earnings per share were $2.45.

For the full year 2003, Bard reported net income of $168.5 million and diluted earnings per share of $1.60. Excluding the items identified above for both the fourth quarter 2003 and the full year 2004, net income and diluted earnings per share in 2004 grew 29 percent and 27 percent, respectively, as compared to the prior year.

"Our results for both the quarter and the year reflect solid revenue growth across our major product lines and geographies. We continue to see the benefits of investing in a broad portfolio of markets and products. Our success in improving our gross margin has enabled us to increase our investment in product technology, strengthen our sales organization and enhance our long-term revenue growth profile," commented Timothy M. Ring, chairman and chief executive officer. "We continue to be pleased with the progress of our growth strategy and the execution of the fundamentals of our business. I am thankful to Bard employees around the world for their meaningful contributions to a successful 2004."

C. R. Bard, Inc. (www.crbard.com), headquartered in Murray Hill, N.J., 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", "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, expenses, 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 our September 30, 2004 10-Q for more detailed information about these and other factors that may cause actual results to differ materially from those expressed or implied.

"Net sales on a constant currency basis", "ongoing net sales" and "net income and diluted earnings per share excluding certain items" are non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP, please see the attached tables. The company analyzes net sales on a constant currency and ongoing 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. The company believes that comparing ongoing net sales between periods provides an additional and meaningful analysis of comparable operations. Net income and EPS excluding certain items are used by the company to measure the comparability of results between periods. Because certain items such as divestiture activity and litigation outcomes may not reflect underlying operating results, the company believes the exclusion of these and similar items provides an additional and meaningful assessment of net income and EPS. The limitation of these non-GAAP measures is that they may exclude items that impact actual GAAP results. All non-GAAP financial measures are intended to supplement the applicable GAAP disclosures and should not be viewed as a replacement for GAAP results.

                           C. R. Bard, Inc.
                   Consolidated Statements of Income
          (in thousands except per share amounts, unaudited)

                              Quarter Ended      Twelve Months Ended
                              December 31,          December 31,
                           ------------------- -----------------------
                             2004      2003       2004        2003
                           --------- --------- ----------- -----------

Net sales                  $424,100  $381,200  $1,656,100  $1,433,100

Costs and expenses:
  Cost of goods sold        161,600   155,900     660,300     609,400
  Marketing, selling &
   administrative expense   139,000   121,800     521,000     448,100
  Research & development
   expense (1)               28,200    24,500     111,600      87,400
  Interest expense            2,900     3,000      12,700      12,500
  Other (income) expense,
   net                       (2,700)   56,800     (63,700)     52,500
                           --------- --------- ----------- -----------
Total costs and expenses    329,000   362,000   1,241,900   1,209,900
                           --------- --------- ----------- -----------

Income before tax provision  95,100    19,200     414,200     223,200
  Income tax provision       25,300    (1,400)    111,400      54,700
                           --------- --------- ----------- -----------

Net income (2)              $69,800   $20,600    $302,800    $168,500
                           ========= ========= =========== ===========

Basic earnings per share      $0.67     $0.20       $2.90       $1.63
                           ========= ========= =========== ===========

Diluted earnings per share    $0.65     $0.19       $2.82       $1.60
                           ========= ========= =========== ===========

Wt. avg. common shares
 outstanding - basic        104,600   103,600     104,400     103,400

Wt. avg. common shares
 outstanding - diluted      107,500   105,600     107,200     105,200


                  Product Group Summary of Net Sales
                   (dollars in thousands, unaudited)

                                       Quarter Ended December 31,
                                   -----------------------------------
                                                              Constant
                                      2004      2003   Change Currency
                                   --------- --------- ------ --------
Vascular                           $101,400   $86,500     17%      13%
Urology                             130,400   114,400     14%      12%
Oncology                             92,600    77,800     19%      17%
Surgery                              83,100    72,000     15%      14%
Other                                16,600    16,000      4%       3%
                                   --------- ---------

Ongoing Sales                      $424,100  $366,700     16%
FX Impact                               ---     7,200
                                   --------- ---------
Con. Currency                      $424,100  $373,900              13%
                                   ========= =========

Ongoing Sales                      $424,100  $366,700     16%
Divested Sales (3)                      ---    14,500
                                   --------- ---------
Reported Sales                     $424,100  $381,200     11%
                                   ========= =========



                                  Twelve Months Ended December 31,
                               ---------------------------------------
                                                              Constant
                                   2004        2003    Change Currency
                               ----------- ----------- ------ --------
Vascular                         $393,000    $307,300     28%      23%
Urology                           493,100     451,500      9%       7%
Oncology                          342,800     282,700     21%      19%
Surgery                           313,300     272,300     15%      14%
Other                              67,800      65,700      3%       2%
                               ----------- -----------

Ongoing Sales                  $1,610,000  $1,379,500     17%
FX Impact                             ---      32,200
                               ----------- -----------
Con. Currency                  $1,610,000  $1,411,700              14%
                               =========== ===========

Ongoing Sales                  $1,610,000  $1,379,500     17%
Divested Sales (3)                 46,100      53,600
                               ----------- -----------
Reported Sales                 $1,656,100  $1,433,100     16%
                               =========== ===========


                           C. R. BARD, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, unaudited)

                                                    December 31,
                                               -----------------------
ASSETS                                            2004        2003
----------------------------------------------------------------------
Cash and short-term
  investments                                    $545,400    $422,000
Accounts receivable, net                          290,100     224,100
Inventories                                       156,700     156,500
Other current assets                               61,800      72,500
                                               -----------------------
     Total current assets                       1,054,000     875,100
                                               -----------------------
Property, plant and
  equipment, net                                  260,800     222,700
Intangible assets                                 234,500     137,800
Goodwill                                          365,700     354,000
Other assets                                       94,100     102,400
                                               -----------------------
TOTAL ASSETS                                   $2,009,100  $1,692,000
                                               =======================


                                                    December 31,
                                               -----------------------
LIABILITIES AND SHAREHOLDERS' INVESTMENT          2004        2003
----------------------------------------------------------------------
Short-term debt                                      $100     $16,600
Accounts payable                                   52,200      56,100
Accrued liabilities                               338,000     349,200
                                               -----------------------
     Total current liabilities                    390,300     421,900
                                               -----------------------
Long-term debt                                    151,400     151,500
Long-term liabilities                              91,600      72,900
                                               -----------------------
Noncontrolling interest                            15,700       - - -
Total shareholders' investment                  1,360,100   1,045,700
                                               -----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $2,009,100  $1,692,000
                                               =========== ===========

Notes to Consolidated Statements of Income

(1) Included in research and development expense is approximately $6.7 million and $1.0 million in acquired in-process research and development for the years ended December 31, 2004 and 2003, respectively.

(2) For the fourth quarter and twelve months ended December 31, 2003, in addition to interest income and foreign exchange gains and losses, other (income) expense, net included the following items: a charge for a legal verdict in the amount of $58.0 million before tax ($35.5 million after-tax; $0.34 diluted earnings per share), a gain from a legal settlement of $3.5 million before tax ($2.1 million after-tax; $0.02 diluted earnings per share) and the final adjustment of 2002 restructuring charges and reserves for certain items of $2.9 million before tax ($1.8 million after-tax; $0.02 diluted earnings per share) offset by a charge for product line asset write-downs of $6.1 million before tax ($3.6 million after-tax; $0.03 diluted earnings per share).

For the first quarter of 2004, in addition to interest income and exchange gains and losses, other (income) expense, net included the adjustment of a fourth quarter 2003 reserve recorded in connection with a legal verdict. This adjustment resulted in additional pretax income of $16.0 million ($9.8 million after-tax; $0.09 diluted earnings per share), partially offset by a charge for an unrelated legal settlement of $3.9 million pretax ($2.3 million after-tax; $0.02 diluted earnings per share). In addition the company recorded a $1.1 million tax credit in income tax provision related to the retroactive effective date of its Malaysian high-technology pioneer grant ($0.01 diluted earnings per share).

For the second quarter of 2004, in addition to interest income and exchange gains and losses, other (income) expense, net included a charge for a legal settlement partially offset by an investment gain, which resulted in a net pretax charge of $4.3 million ($2.6 million after-tax; $0.02 diluted earnings per share).

For the third quarter of 2004, in addition to interest income and exchange gains and losses, other (income) expense, net included a gain from the sale of certain assets of the company's Endoscopic Technologies division of $44.9 million pretax ($30.8 million after-tax; $0.29 diluted earnings per share). In addition, the company recorded miscellaneous gains related to the sale of a facility and the conclusion of an intellectual property matter of $3.5 million pretax ($3.0 million after-tax). In total, these items resulted in a gain of $0.31 diluted earnings per share.

For the fourth quarter of 2004, in addition to interest income and exchange gains and losses, other (income) expense, net includes an adjustment to the gain from the sale of certain assets of the company's Endoscopic Technologies division of $0.6 million pretax ($0.3 million after-tax).

The aggregate impact of these items on net income and diluted earnings per share is reflected in the following table:

Reconciliation of Earnings
(in millions, except per share)

                                     ---------------------------------
                                         Quarter Ended December 31
                                     ---------------------------------
                                          2004              2003
                                     ----------------  ---------------
                                       Net    Diluted   Net    Diluted
                                      Income    EPS    Income    EPS
                                     -------  -------  ------  -------
GAAP Basis                            $69.8    $0.65   $20.6    $0.19
Adjustment                             (0.3)     ---    35.2     0.33
                                     -------  -------  ------  -------
Adjusted Basis                        $69.5    $0.65   $55.8    $0.52
                                     =======  =======  ======  =======


                                    ----------------------------------
                                     Twelve Months Ended December 31
                                    ----------------------------------
                                         2004              2003
                                    ----------------  ----------------
                                      Net    Diluted    Net    Diluted
                                     Income    EPS    Income     EPS
                                    -------  -------  -------  -------
GAAP Basis                          $302.8    $2.82   $168.5    $1.60
Adjustment                           (40.1)   (0.37)    35.2      .33
                                    -------  -------  -------  -------
Adjusted Basis                      $262.7    $2.45   $203.7    $1.93
                                    =======  =======  =======  =======

(3) All divested sales are from the oncology product group.

CONTACT: C. R. Bard, Inc.
Investor Relations:
Eric J. Shick, 908-277-8413
or
Media Relations:
Holly P. Glass, 703-754-2848

SOURCE: C. R. Bard, Inc.


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