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MURRAY HILL, N.J.--(BUSINESS WIRE)--Oct. 18, 2006--C. R. Bard,
Inc. (NYSE-BCR) today reported 2006 third quarter financial results.
Third quarter 2006 net sales were $498.9 million, an increase of 13
percent over the prior-year period. Excluding the impact of foreign
exchange, third quarter 2006 net sales increased 12 percent over the
prior-year period.
For the third quarter 2006, net sales in the U.S. were $349.2
million and net sales outside the U.S. were $149.7 million, up 12
percent and 13 percent, respectively, over the prior-year period.
Excluding the impact of foreign exchange, third quarter 2006 net sales
outside the U.S. increased 10 percent over the prior-year period.
For the third quarter 2006, net income was $87.6 million and
diluted earnings per share were 82 cents. Net income and diluted
earnings per share, as reported, were down 3 percent and 1 percent,
respectively, as compared to third quarter 2005 results. Adjusting for
certain items that affect comparability between periods, third quarter
2006 net income was $92.8 million and diluted earnings per share were
87 cents, up 11 percent and 13 percent, respectively, as compared to
third quarter 2005 results on a comparable basis. Adjustments to the
third quarter 2006 results reduced net income by $5.2 million
(after-tax), or 5 cents per diluted share, and included a charge of
$8.8 million (after-tax), or 8 cents per diluted share for share-based
compensation under FAS 123R and other items listed in the table below.
Adjustments to the third quarter 2005 results included items that
increased net income by $6.8 million (after-tax), or 6 cents per
diluted share.
Timothy M. Ring, chairman and chief executive officer, commented,
"We are pleased to deliver another quarter of solid, double-digit
revenue growth. Our ability to grow our top line above our goal of 10
percent in constant currency in today's market reflects the
productivity of our strategic growth initiatives and the value our
products bring to our customers and their patients. We will continue
to invest in product leadership opportunities while carefully managing
the associated risks to create long-term shareholder value."
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 June 30, 2006 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 excluding foreign exchange and net income and diluted
earnings per share (EPS) excluding certain items that affect the
comparability of results between periods are non-GAAP financial
measures. 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. Net income and
EPS excluding certain items are used by the company to measure the
comparability of results between periods. Certain items such as
investment gains, acquisition-related charges and litigation outcomes
may not reflect underlying operating results, and other items such as
the FAS 123R stock option expense may affect the comparability of
results between periods. As a result, the company believes the
exclusion of these and similar items provides an additional and
meaningful assessment of charges in 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.
Consolidated Statements of Income
(in thousands except per share amounts, unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
------------------- -----------------------
2006 2005 2006 2005
--------- --------- ----------- -----------
Net sales $498,900 $443,300 $1,464,600 $1,319,300
Costs and expenses:
Cost of goods sold 194,700 166,400 570,200 504,800
Marketing, selling &
administrative expense 160,900 132,700 457,000 397,300
Research & development
expense 31,200 29,200 106,900 85,400
Interest expense 4,000 3,100 13,200 9,300
Other (income) expense,
net 13,400 2,900 (1,900) (15,000)
--------- ---------
Total costs and expenses 404,200 334,300 1,145,400 981,800
--------- --------- ----------- -----------
Income before tax provision 94,700 109,000 319,200 337,500
Income tax provision 7,100 18,600 69,100 80,500
--------- --------- ----------- -----------
Net income $87,600 $90,400 $250,100 $257,000
========= ========= =========== ===========
Basic earnings per share $0.85 $0.86 $2.42 $2.45
========= ========= =========== ===========
Diluted earnings per share $0.82 $0.83 $2.34 $2.37
========= ========= =========== ===========
Wt. avg. common shares
outstanding - basic 103,200 105,000 103,500 105,000
Wt. avg. common shares
outstanding - diluted 106,600 108,300 106,900 108,300
Product Group Summary of Net Sales
(in thousands, unaudited)
Quarter Ended September 30,
---------------------------------------
Constant
2006 2005 Change Currency
------------- --------- ------ --------
Vascular $120,300 $108,800 11% 9%
Urology 148,500 130,700 14% 13%
Oncology 124,700 102,900 21% 20%
Surgical Specialties 84,700 80,900 5% 4%
Other 20,700 20,000 4% 3%
------------- ---------
Reported Sales $498,900 $443,300 13%
FX Impact --- 4,000
------------- ---------
Con. Currency $498,900 $447,300 12%
============= =========
Nine Months Ended September 30,
---------------------------------------
Constant
2006 2005 Change Currency
----------- ----------- ------ --------
Vascular $353,700 $321,900 10% 11%
Urology 432,000 390,000 11% 11%
Oncology 352,700 298,100 18% 19%
Surgical Specialties 267,300 252,000 6% 6%
Other 58,900 57,300 3% 3%
----------- -----------
Reported Sales $1,464,600 $1,319,300 11%
FX Impact --- (5,800)
----------- -----------
Con. Currency $1,464,600 $1,313,500 12%
=========== ===========
Notes to Consolidated Statements of Income
----------------------------------------------------------------------
- For the third quarter ended September 30, 2006, in addition to
interest income and exchange gains and losses, other (income)
expense, net included a charge of approximately $20.0 million
pretax ($12.6 million after-tax) for the settlement of a legal
matter. Certain items also included a reduction in the income
tax provision of approximately $16.2 million predominantly
related to the expiration of the statute of limitations in the
United States for the 2000 and 2001 tax years. The results of
the third quarter of 2006 also included the incremental impact
of the new accounting standard for share-based payments,
Statement of Financial Accounting Standards No. 123 (revised
2004), "Share-Based Payment" ("FAS 123R"), as detailed in the
table below. In total, these certain items decreased net
income by $5.2 million after-tax, or $0.05 diluted earnings
per share.
- For the nine months ended September 30, 2006, in addition to
interest income and exchange gains and losses, other (income)
expense, net included investment gains of approximately $1.6
million pretax ($1.0 million after-tax) and a charge of
approximately $20.0 million pretax ($12.6 million after-tax)
for the settlement of a legal matter. For the nine months
ended September 30, 2006, research and development expense
included payments of approximately $16.8 million pretax for
purchased research and development ($12.7 million after-tax).
Certain items also included a reduction in the income tax
provision of approximately $16.2 million predominantly related
to the expiration of the statute of limitations in the United
States for the 2000 and 2001 tax years. The results of the
nine months ended September 30, 2006 also included the
incremental impact of the new accounting standard for
share-based payments under FAS 123R, as detailed in the table
below. In total, these certain items decreased net income by
$25.4 million after-tax, or $0.24 diluted earnings per share.
- For the third quarter ended September 30, 2005, in addition to
interest income and exchange gains and losses, other (income)
expense, net included the following certain items: an
investment gain of approximately $1.9 million pretax ($1.2
million after-tax) and an asset impairment charge 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 $6.8 million after-tax, or $0.06
diluted earnings per share.
- For the nine months ended September 30, 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 $13.4 million pretax ($8.3 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 $13.9 million after-tax, or $0.13
diluted earnings per share.
Reconciliation of Earnings
(in millions except per share amounts, unaudited)
Quarter Ended September 30,
--------------------------------------------------------
2006 2005
------------------------------- ------------------------
FAS
GAAP 123R Other Adjusted GAAP Other Adjusted
Basis Adj. Items Basis Basis Items Basis
------- ------ ------- -------- ------- ------- --------
Cost of goods
sold $194.7 ($0.7) --- $194.0 $166.4 --- $166.4
Marketing,
selling &
admini-
strative
expense 160.9 (12.0) --- 148.9 132.7 --- 132.7
Research &
development
expense 31.2 (0.8) --- 30.4 29.2 --- 29.2
Other (income)
expense, net 13.4 --- (20.0) (6.6) 2.9 (7.0) (4.1)
Income tax
provision 7.1 4.7 23.6 35.4 18.6 13.8 32.4
Net income $87.6 $8.8 $(3.6) $92.8 $90.4 $(6.8) $83.6
Diluted
earnings per
share $0.82 $0.08 ($0.03) $0.87 $0.83 ($0.06) $0.77
Nine Months Ended September 30,
-------------------------------------------------------
2006 2005
------------------------------ ------------------------
FAS
GAAP 123R Other Adjusted GAAP Other Adjusted
Basis Adj. Items Basis Basis Items Basis
------- ------ ------ -------- ------- ------- --------
Cost of goods
sold $570.2 ($1.3) --- $568.9 $504.8 --- $504.8
Marketing,
selling &
administrative
expense 457.0 (23.7) --- 433.3 397.3 --- 397.3
Research &
development
expense 106.9 (1.6) (16.8) 88.5 85.4 --- 85.4
Other (income)
expense, net (1.9) --- (18.4) (20.3) (15.0) 4.5 (10.5)
Income tax
provision 69.1 9.3 27.1 105.5 80.5 9.4 89.9
Net income $250.1 $17.3 $8.1 $275.5 $257.0 ($13.9) $243.1
Diluted
earnings per
share $2.34 $0.16 $0.08 $2.58 $2.37 ($0.13) $2.24
CONTACT: C. R. Bard, Inc.
Investor Relations:
Eric J. Shick, Vice President,
Investor Relations, 908-277-8413
or
Media Relations:
Holly P. Glass, Vice President,
Government and Public Affairs, 703-754-2848
SOURCE: C. R. Bard, Inc.
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