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Bard Announces Fourth Quarter Results

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.


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