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Bard Announces Fourth Quarter Results; Earnings Per Share up 15 Percent

MURRAY HILL, N.J., Jan 25, 2006 (BUSINESS WIRE) -- C. R. Bard, Inc. (NYSE: BCR) today reported 2005 fourth quarter and full year financial results. Fourth quarter 2005 net sales were $452.0 million, an increase of 7 percent over the prior-year period on both a reported and constant currency basis. As previously announced, during the quarter the company initiated a voluntary product recall of its Composix(R) Kugel(R) Mesh X-Large Patch. The fourth quarter 2005 results include a reduction in net sales associated with the recall of $7.8 million, resulting in a 2 percentage point reduction in constant currency net sales growth.

For the fourth quarter 2005, net sales in the U.S. were $308.3 million and net sales outside the U.S. were $143.7 million, up 6 percent and 8 percent, respectively, over the prior-year period. Excluding the impact of foreign exchange, fourth quarter 2005 net sales outside the U.S. increased 11 percent over the prior-year period. The recall reduced fourth quarter 2005 net sales in the U.S. by $7.4 million, resulting in a 2 percentage point reduction in net sales growth.

Net sales for the full year 2005 were $1,771.3 million, an increase of 7 percent over the prior year. Excluding the impact of a 2004 divestiture and foreign exchange, full year 2005 ongoing net sales increased 9 percent over the prior year. The recall resulted in a reduction of 1 percentage point in full year 2005 ongoing net sales growth in constant currency.

For the fourth quarter 2005, net income was $80.1 million and diluted earnings per share were 75 cents, both up 15 percent over the prior-year period. The 2005 fourth quarter results included certain items that increased net income by $2.1 million (after-tax), or 2 cents per diluted share. Excluding certain items, fourth quarter 2005 net income was $78.0 million and diluted earnings per share were 73 cents, both up 12 percent as compared to the prior-year period. Included in the 2005 fourth quarter results were a reduction in net sales and charges associated with the recall that reduced net income by $6.6 million (after-tax), or 6 cents per diluted share.

For the full year 2005, net income was $337.1 million and diluted earnings per share were $3.12, both up 11 percent over the prior-year period. The full year 2005 results included certain items that increased net income by $16.0 million (after-tax), or 15 cents per diluted share. For comparison, the full year 2004 results included certain items that increased net income by $40.1 million (after-tax), or 37 cents per diluted share. Excluding these items in both periods, net income and diluted earnings per share for the full year 2005 increased 22 percent and 21 percent, respectively, as compared to the prior-year period.

Timothy M. Ring, chairman and chief executive officer, commented, "We are pleased to report that 2005 was another solid year for Bard. Operationally, our portfolio of businesses and products is well positioned across a broad range of medical device markets. We continue to focus on expanding the definition of these markets and therefore the opportunity they represent. We have strong management teams driving our businesses forward, leveraging our new product pipeline and market leadership positions. We look forward to 2006, ready to execute another successful year and deliver healthy revenue and earnings growth along with robust cash flow to support the continuation of our strategy. We remain focused on making ourselves a reliable double-digit revenue growth company over the long-term."

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", "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 our September 30, 2005 10-Q for more detailed information about these and other factors that may cause actual results to differ materially from those expressed or implied.

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 as "ongoing net sales".

Net sales, excluding foreign exchange, ongoing net sales and net income and diluted earnings per share (EPS) excluding certain items are non-GAAP financial measures. 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 investment gains 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, by excluding certain items, they do not reflect results on a standardized reporting basis. All non-GAAP financial measures are intended to supplement the applicable GAAP disclosures and should not be viewed as a replacement for GAAP results. For a reconciliation of these non-GAAP measures to the most comparable GAAP measures, please see the attached tables.

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

                             Quarter Ended       Twelve Months Ended
                              December 31,          December 31,
                           ------------------- -----------------------
                             2005      2004        2005        2004
                           --------- --------- ----------- -----------
Net sales                  $452,000  $424,100  $1,771,300  $1,656,100
Costs and expenses:
  Cost of goods sold        177,900   161,600     682,700     660,300
  Marketing, selling &
   administrative expense   137,300   139,000     534,600     521,000
  Research & development
   expense                   29,200    28,200     114,600     111,600
  Interest expense            2,900     2,900      12,200      12,700
  Other (income) expense,
   net                       (7,400)   (2,700)    (22,400)    (63,700)
                           --------- --------- ----------- -----------
Total costs and expenses    339,900   329,000   1,321,700   1,241,900
                           --------- --------- ----------- -----------
Income before tax
 provision                  112,100    95,100     449,600     414,200
  Income tax provision       32,000    25,300     112,500     111,400
                           --------- --------- ----------- -----------
Net income                  $80,100   $69,800    $337,100    $302,800
                           ========= ========= =========== ===========
Basic earnings per share      $0.77     $0.67       $3.22       $2.90
                           ========= ========= =========== ===========
Diluted earnings per share    $0.75     $0.65       $3.12       $2.82
                           ========= ========= =========== ===========

Wt. avg. common shares
 outstanding - basic        104,400   104,600     104,800     104,400
Wt. avg. common shares
 outstanding - diluted      107,400   107,500     108,000     107,200
Product Group Summary of Net Sales
                       (in thousands, unaudited)

                                       Quarter Ended December 31,
                                 -------------------------------------
                                                              Constant
                                    2005      2004    Change  Currency
                                 ---------- --------- ------ ---------
Vascular                         $112,600    $101,400     11%      13%
Urology                           134,000     130,400      3%       3%
Oncology                          107,400      92,600     16%      16%
Surgery                            81,200      83,100     -2%      -2%
Other                              16,800      16,600      1%       1%
                                 ---------   ---------

Ongoing Sales                    $452,000    $424,100      7%
FX Impact                             ---      (3,000)
                                 ---------   ---------
Con. Currency                    $452,000    $421,100               7%
                                 =========   =========

Ongoing Sales                    $452,000    $424,100      7%
Divested Sales                        ---         ---
                                 ---------   ---------
Reported Sales                   $452,000    $424,100      7%
                                 =========   =========


                                  Twelve Months Ended December 31,
                               ---------------------------------------
                                                              Constant
                                   2005        2004   Change  Currency
                               ----------- ---------- ------ --------
Vascular                         $434,500    $393,000     11%      10%
Urology                           524,000     493,100      6%       6%
Oncology                          405,500     342,800     18%      18%
Surgery                           333,200     313,300      6%       6%
Other                              74,100      67,800      9%       9%
                               ----------- -----------

Ongoing Sales                  $1,771,300  $1,610,000     10%
FX Impact                             ---       8,700
                               ----------- -----------
Con. Currency                  $1,771,300  $1,618,700               9%
                               =========== ===========

Ongoing Sales                  $1,771,300  $1,610,000     10%
Divested Sales                        ---      46,100
                               ----------- -----------
Reported Sales                 $1,771,300  $1,656,100      7%
                               =========== ===========
Condensed Consolidated Balance Sheets
                       (in thousands, unaudited)

                                                     December 31,
                                               -----------------------
ASSETS                                             2005       2004
----------------------------------------------------------------------
Cash and short-term
  investments                                    $758,200   $545,400
Accounts receivable, net                          267,700    290,100
Inventories                                       169,600    156,700
Other current assets                               68,600     61,800
                                               ----------------------
     Total current assets                       1,264,100  1,054,000
                                               ----------------------
Property, plant and
  equipment, net                                  310,000    260,800
Intangible assets                                 232,500    234,500
Goodwill                                          358,800    365,700
Other assets                                      100,200     94,100
                                               ----------------------
TOTAL ASSETS                                   $2,265,600 $2,009,100
                                               ======================


                                                     December 31,
                                                ----------------------
LIABILITIES AND SHAREHOLDERS' INVESTMENT            2005       2004
----------------------------------------------------------------------
Short-term debt & current maturity of
 long-term debt                                  $300,600       $100
Accounts payable                                   52,500     52,200
Accrued liabilities                               287,500    338,000
                                               -----------------------
     Total current liabilities                    640,600    390,300
                                               -----------------------
Long-term debt                                        800    151,400
Long-term liabilities                              88,100     91,600
                                               -----------------------
Noncontrolling interest                              ----     15,700
Total shareholders' investment                  1,536,100  1,360,100
                                               -----------------------
TOTAL LIABILITIES AND
 SHAREHOLDERS' INVESTMENT                      $2,265,600 $2,009,100
                                               =======================

Notes to Consolidated Statements of Income

  • The voluntary product recall announced January 13, 2006 resulted in a $7.8 million net sales reduction to the surgery product group for the quarter and year ended December 31, 2005.
  • 2004 net sales of divested products were previously reported in the oncology product group.
  • All earnings per share numbers reflect the company's 2 for 1 stock split that became effective May 28, 2004.
  • For the fourth quarter ended December 31, 2005, in addition to interest income and exchange gains and losses, other (income) expense, net included investment gains of approximately $3.4 million pretax ($2.1 million after-tax), or $0.02 diluted earnings per share.
  • For the year ended December 31, 2005, in addition to interest income and exchange gains and losses, other (income) expense, net included the following certain items: investment gains and the resolution of a royalty matter for a net adjustment of approximately $16.8 million pretax ($10.4 million after-tax), offset by a charge for an asset impairment of approximately $8.9 million pretax ($8.0 million after-tax). Certain items also included a reduction in the income tax provision of approximately $45.6 million predominantly related to the favorable completion of the Internal Revenue Service audit for the tax years 1996-1999, as well as the resolution of certain other tax positions. Additionally, the company recorded an income tax provision of approximately $32.0 million related to the company's planned repatriation of $600.0 million of undistributed foreign earnings under the American Jobs Creation Act. In total, these certain items resulted in a net gain of $16.0 million after-tax, or $0.15 diluted earnings per share.
  • For the fourth quarter ended December 31, 2004, in addition to interest income and exchange gains and losses, other (income) expense, net included 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).
  • For the year ended December 31, 2004, in addition to interest income and exchange gains and losses, other (income) expense, net included the following certain items: a gain from the sale of certain assets of the company's Endoscopic Technologies division of $45.5 million pretax ($31.1 million after-tax), the adjustment of a 2003 reserve recorded in conjunction with a legal verdict, offset by unrelated legal settlements and investment gains for a net adjustment of approximately $7.8 million pretax ($4.9 million after-tax). The company also 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 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. In total, these items resulted in a net gain of $40.1 million after-tax, or $0.37 diluted earnings per share.
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,
                                      -------------------------------
                                           2005            2004
                                      --------------- ----------------
                                        Net   Diluted   Net    Diluted
                                      Income    EPS   Income    EPS
                                      ------- ------- ------- --------
GAAP Basis                             $80.1   $0.75   $69.8   $0.65
Adjustment                              (2.1)  (0.02)   (0.3)    ---
                                      ------- ------- ------- -------
Adjusted Basis                         $78.0   $0.73   $69.5   $0.65
                                      ======= ======= ======= =======

                                      --------------------------------
                                      Twelve Months Ended December 31,
                                      --------------------------------
                                            2005            2004
                                       --------------- ---------------
                                         Net   Diluted   Net   Diluted
                                       Income    EPS    Income   EPS
                                       ------- ------- ------- -------
GAAP Basis                             $337.1   $3.12  $302.8   $2.82
Adjustment                              (16.0)  (0.15)  (40.1)  (0.37)
                                       ------- ------- ------- -------
Adjusted Basis                         $321.1   $2.97  $262.7   $2.45
                                       ======= ======= ======= =======

SOURCE: C. R. Bard, Inc.

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


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