Revenue Up 15 Percent as Reported, 14 Percent Excluding Foreign
Exchange
MURRAY HILL, N.J.--(BUSINESS WIRE)--Jan. 25, 2007--C. R. Bard,
Inc. (NYSE-BCR) today reported 2006 fourth quarter and full year
financial results. Fourth quarter 2006 net sales were $520.9 million,
an increase of 15 percent over the prior-year period. Excluding the
impact of foreign exchange, fourth quarter 2006 net sales increased 14
percent over the prior-year period.
For the fourth quarter 2006, net sales in the U.S. were $361.5
million and net sales outside the U.S. were $159.4 million, up 17
percent and 11 percent, respectively, over the prior-year period.
Excluding the impact of foreign exchange, fourth quarter 2006 net
sales outside the U.S. increased 7 percent over the prior-year period.
Net sales for the full year 2006 were $1,985.5 million, an
increase of 12 percent over the prior-year period on both a reported
and constant currency basis.
For the fourth quarter 2006, net income was $22.0 million and
diluted earnings per share were 21 cents. Net income and diluted
earnings per share as reported were down 73 percent and 72 percent,
respectively, as compared to fourth quarter 2005 results. Adjusting
for certain items that affect comparability between periods, fourth
quarter 2006 net income was $99.2 million and diluted earnings per
share were 93 cents, both up 27 percent as compared to fourth quarter
2005 results on a comparable basis. Adjustments to the fourth quarter
2006 results reduced net income by $77.2 million (after-tax), or 72
cents per diluted share, and included a charge of $5.6 million
(after-tax), or 5 cents per diluted share for share-based compensation
under FAS 123R and other items detailed in the statements below.
Adjustments to the fourth quarter 2005 results included items that
increased net income by $2.1 million (after-tax), or 2 cents per
diluted share.
For the full year 2006, net income was $272.1 million and diluted
earnings per share were $2.55. Net income and diluted earnings per
share as reported, were down 19 percent and 18 percent, respectively,
as compared to full year 2005 results. Adjusting for certain items
that affect comparability between periods, full year 2006 net income
was $374.7 million and diluted earnings per share were $3.51, up 17
percent and 18 percent, respectively, as compared to full year 2005
results on a comparable basis.
Timothy M. Ring, chairman and chief executive officer, commented,
"We are pleased to report strong results for the 4th quarter and full
year 2006. This marks the fourth consecutive year in which Bard has
delivered adjusted earnings growth above the company's target of 14
percent. This success has been achieved through product innovation, a
commitment to market leadership and the efforts and dedication of all
our employees. While pleased with our past results, we are equally as
excited about the future. In 2007, we will celebrate our 100th
anniversary and expect to eclipse $2 billion in revenue as we continue
to build on our growth strategy to enhance 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 September 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, diluted
earnings per share (EPS) and individual statement of income categories
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, EPS and individual statement of income categories
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, EPS and individual
statement of income categories. 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,
------------------- -----------------------
2006 2005 2006 2005
--------- --------- ----------- -----------
Net sales $520,900 $452,000 $1,985,500 $1,771,300
Costs and expenses:
Cost of goods sold 203,000 177,900 773,200 682,700
Marketing, selling &
administrative expense 159,000 137,300 616,000 534,600
Research & development
expense 38,800 29,200 145,700 114,600
Interest expense 3,700 2,900 16,900 12,200
Other (income) expense,
net 88,000 (7,400) 86,100 (22,400)
--------- --------- ----------- -----------
Total costs and expenses 492,500 339,900 1,637,900 1,321,700
--------- --------- ----------- -----------
Income before tax provision 28,400 112,100 347,600 449,600
Income tax provision 6,400 32,000 75,500 112,500
--------- --------- ----------- -----------
Net income $22,000 $80,100 $272,100 $337,100
========= ========= =========== ===========
Basic earnings per share $0.21 $0.77 $2.63 $3.22
========= ========= =========== ===========
Diluted earnings per share $0.21 $0.75 $2.55 $3.12
========= ========= =========== ===========
Wt. avg. common shares
outstanding - basic 103,300 104,400 103,500 104,800
Wt. avg. common shares
outstanding - diluted 106,800 107,400 106,900 108,000
Product Group Summary of Net Sales
(in thousands, unaudited)
Quarter Ended December 31,
------------------------------------------
Constant
2006 2005 Change Currency
---------- ---------- -------- -----------
Vascular $125,900 $112,600 12% 10%
Urology 155,900 134,000 16% 15%
Oncology 128,600 107,400 20% 19%
Surgical
Specialties 90,100 81,200 11% 10%
Other 20,400 16,800 21% 21%
---------- ----------
Reported Sales $520,900 $452,000 15%
FX Impact --- 5,800
---------- ----------
Con. Currency $520,900 $457,800 14%
========== ==========
Twelve Months Ended December 31,
---------------------------------------------
Constant
2006 2005 Change Currency
------------ ------------ --------- ---------
Vascular $479,600 $434,500 10% 11%
Urology 587,900 524,000 12% 12%
Oncology 481,300 405,500 19% 19%
Surgical
Specialties 357,400 333,200 7% 7%
Other 79,300 74,100 7% 7%
------------ ------------
Reported Sales $1,985,500 $1,771,300 12%
FX Impact --- ---
------------ ------------
Con. Currency $1,985,500 $1,771,300 12%
============ ============
Notes to Consolidated Statements of Income
- The results for the fourth quarter ended December 31, 2006
included the following certain items: Other (income) expense,
net included investment gains of approximately $1.3 million
pretax ($0.8 million after-tax), a charge of approximately
$1.2 million pretax ($1.2 million after-tax) related to the
pending settlement of a tax matter by the company's joint
venture operating in Japan, and a charge of approximately
$49.0 million pretax ($30.5 million after-tax) for the
previously disclosed settlement of a legal matter. In the
fourth quarter of 2006, as previously announced, the company
decided to discontinue the sale of its Tegress(TM) urinary
incontinence bulking agent and recorded charges of
approximately $0.5 million pretax in cost of goods sold,
approximately $0.2 million pretax in marketing, selling &
administrative expense and approximately $45.7 million pretax
in other (income) expense, net for a total charge of
approximately $46.4 million pretax ($41.5 million after-tax).
For the fourth quarter ended December 31, 2006, research and
development expense included payments of approximately $7.2
million pretax ($6.8 million after-tax) for purchased research
and development. Certain items also included a reduction in
the income tax provision of approximately $7.6 million
predominantly related to the expiration of the statute of
limitations in the United States for the 2002 tax year. The
results of the fourth quarter ended December 31, 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 approximately $77.2 million after-tax, or $0.72
diluted earnings per share.
- The results for the year ended December 31, 2006 included the
following certain items: Other (income) expense, net included
investment gains of approximately $2.9 million pretax ($1.8
million after-tax), a charge of approximately $1.2 million
pretax ($1.2 million after-tax) related to the pending
settlement of a tax matter by the company's joint venture
operating in Japan, and charges totaling approximately $69.0
million pretax ($43.1 million after-tax) for the settlement of
legal matters. In 2006, the company decided to discontinue the
sale of its Tegress(TM) urinary incontinence bulking agent and
recorded charges of approximately $0.5 million pretax in cost
of goods sold, approximately $0.2 million pretax in marketing,
selling & administrative expense and approximately $45.7
million pretax in other (income) expense, net for a total
charge of approximately $46.4 million pretax ($41.5 million
after-tax). For the year ended December 31, 2006, research and
development expense included payments of approximately $24.0
million pretax ($19.5 million after-tax) for purchased
research and development. Certain items also included a
reduction in the income tax provision of approximately $23.8
million predominantly related to the expiration of the statute
of limitations in the United States for the 2000 through 2002
tax years. The results of the year ended December 31, 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 approximately $102.6 million after-tax, or $0.96
diluted earnings per share.
- 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 approximately $16.0 million after-tax, or $0.15
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 amounts, unaudited)
Quarter Ended December 31,
-------------------------------------------------------
2006 2005
------------------------------ ------------------------
FAS
GAAP 123R Other Adjusted GAAP Other Adjusted
Basis Adj. Items Basis Basis Items Basis
------- ------ ------ -------- ------- ------- --------
Cost of goods
sold $203.0 ($1.2) ($0.5) $201.3 $177.9 --- $177.9
Marketing,
selling &
administrative
expense 159.0 (7.4) (0.2) 151.4 137.3 --- 137.3
Research &
development
expense 38.8 (0.2) (7.2) 31.4 29.2 --- 29.2
Other (income)
expense, net 88.0 --- (94.6) (6.6) (7.4) 3.4 (4.0)
Income tax
provision 6.4 3.2 30.9 40.5 32.0 (1.3) 30.7
Net income $22.0 $5.6 $71.6 $99.2 $80.1 $(2.1) $78.0
Diluted
earnings per
share $0.21 $0.05 $0.67 $0.93 $0.75 ($0.02) $0.73
Twelve Months Ended December 31,
--------------------------------------------------------
2006 2005
------------------------------- ------------------------
FAS
GAAP 123R Other Adjusted GAAP Other Adjusted
Basis Adj. Items Basis Basis Items Basis
------- ------ ------- -------- ------- ------- --------
Cost of goods
sold $773.2 ($2.5) ($0.5) $770.2 $682.7 --- $682.7
Marketing,
selling &
adminis-
trative
expense 616.0 (31.1) (0.2) 584.7 534.6 --- 534.6
Research &
development
expense 145.7 (1.8) (24.0) 119.9 114.6 --- 114.6
Other (income)
expense, net 86.1 --- (113.0) (26.9) (22.4) 7.9 (14.5)
Income tax
provision 75.5 12.5 58.0 146.0 112.5 8.1 120.6
Net income $272.1 $22.9 $79.7 $374.7 $337.1 ($16.0) $321.1
Diluted
earnings per
share $2.55 $0.21 $0.75 $3.51 $3.12 ($0.15) $2.97
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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