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Bard Announces Third Quarter Results

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.


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