Advertisement
Fourth quarter highlights (sales growth rates are at constant currency):
"We delivered a quarter in line with expectations, coming in at the middle of our sales range and the high end of our adjusted earnings range," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "Endoscopy, Urology/Gynecology and Neuromodulation posted excellent growth, and we maintained our clear leadership in the global drug-eluting stent market. In Japan, we have launched COGNIS, TELIGEN and our PROMUS(®) Everolimus-Eluting Coronary Stent System, three important new products in this key market. COGNIS and TELIGEN, the smallest and thinnest high-energy devices, are now available worldwide."
Advertisement
"The litigation settlement announced last week with Johnson & Johnson is part of our ongoing effort across the Company to reduce risk," said Elliott. "We have the financial strength and flexibility to meet this obligation with no appreciable impact on our debt covenants and still retain significant liquidity."
Fourth Quarter 2009
Net sales for the fourth quarter of 2009 were $2.079 billion, as compared to net sales of $2.002 billion for the fourth quarter of 2008. Excluding the impact of foreign currency and net sales from divested businesses, net sales were flat with the prior period.
Worldwide Cardiac Rhythm Management (CRM) group net sales for the fourth quarter -- on a reported basis -- were as follows:
Worldwide coronary stent system net sales for the fourth quarter -- on a reported basis -- were as follows:
Reported net loss for the fourth quarter of 2009 was $1.075 billion, or $0.71 per share. Reported results included intangible asset impairment charges; acquisition-, divestiture-, litigation- and restructuring-related net charges; discrete tax items; and amortization expense (after-tax) of $1.379 billion, or $0.91 per share, which consisted of:
Adjusted net income for the fourth quarter of 2009, excluding these net charges, was $304 million, or $0.20 per share.
Reported net loss for the fourth quarter of 2008 was $2.394 billion, or $1.59 per share, which included a $2.613 billion, or $1.74 per share, goodwill write-down. Reported results also included intangible asset impairment charges; acquisition-, divestiture-, restructuring- and litigation-related net charges; discrete tax benefits, and amortization expense (after-tax) of $83 million, or $0.05 per share. Adjusted net income for the fourth quarter of 2008, excluding these net charges, was $302 million, or $0.20 per share.
Full Year 2009
Net sales for the full year 2009 were $8.188 billion, as compared to net sales of $8.050 billion for the full year 2008, which included sales from divested businesses of $69 million. Excluding the impact of foreign currency and net sales from divested businesses, net sales increased four percent over the prior period.
Worldwide CRM group sales for the full year -- on a reported basis -- were as follows:
Worldwide coronary stent system sales for the full year -- on a reported basis -- were as follows:
Reported net loss for the full year 2009 was $1.025 billion, or $0.68 per share. Reported results included acquisition-, divestiture-, restructuring- and litigation-related net charges; discrete tax items; and amortization expense (after-tax) of $2.207 billion, or $1.46 per share, which consisted of:
Adjusted net income for the full year 2009, excluding these net charges, was $1.182 billion, or $0.78 per share.
Reported net loss for the full year 2008 was $2.036 billion, or $1.36 per share, which included a $2.613 billion, or $1.74 per share, goodwill write-down. Reported results also included intangible asset impairment charges; acquisition-, divestiture-, restructuring- and litigation-related net credits; discrete tax items, and amortization expense (after-tax) of $622 million, or $0.42 per share. Adjusted net income for the full year 2008, excluding these net charges, was $1.199 billion, or $0.80 per share.
Guidance for First Quarter and Full Year 2010
The Company estimates net sales for the first quarter of 2010 of between $2.000 billion and $2.100 billion. Adjusted earnings, excluding acquisition-related credits, restructuring and restructuring-related costs, and amortization expense, are estimated to range between $0.13 and $0.17 per share. The Company estimates net income on a GAAP basis of between $0.14 and $0.20 per share.
The Company estimates net sales for the full year 2010 of between $8.100 billion and $8.500 billion. Adjusted earnings, excluding acquisition-related credits, restructuring and restructuring-related costs, and amortization expense, are estimated to range between $0.62 and $0.72 per share. The Company estimates net income on a GAAP basis of between $0.37 and $0.49 per share.
Boston Scientific officials will be discussing these results with analysts on a conference call at 8:00 a.m. (ET) Thursday, February 11. The Company will webcast the call to all interested parties through its website: www.bostonscientific.com. Please see the website for details on how to access the webcast. The webcast will be available for one year on the Boston Scientific website.
Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: www.bostonscientific.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our financial performance, new product approvals and launches, our market position, acquisitions and divestitures, restructuring activities and litigation matters. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.
Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item IA- Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file thereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.
Use of non-GAAP Financial Information
A reconciliation of the Company's non-GAAP financial measures to the corresponding GAAP measures, and an explanation of the Company's use of these non-GAAP measures, is included in the exhibits attached to this press release.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
Growth rates are based on actual, non-rounded amounts and may not recalculate precisely.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
An explanation of the Company's use of these non-GAAP measures is provided at the end of this document.
Use of Non-GAAP Financial Measures
To supplement Boston Scientific's condensed consolidated financial statements presented on a GAAP basis; the Company discloses certain non-GAAP measures that exclude certain amounts, including non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.
The GAAP measure most comparable to non-GAAP net income is GAAP net income and the GAAP measure most comparable to non-GAAP net income per share is GAAP net income per share. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measure are included in the accompanying schedules.
To calculate regional and divisional revenue growth rates that exclude the impact of foreign exchange, the Company converts actual current-period net sales from local currency to U.S. dollars using constant foreign exchange rates. The GAAP measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue. A reconciliation of this non-GAAP financial measure to the corresponding GAAP measure is included in the accompanying schedules.
Use and Economic Substance of Non-GAAP Financial Measures Used by Boston Scientific
Management uses these supplemental non-GAAP measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company's operating segments. The adjustments excluded from the Company's non-GAAP measures are consistent with those excluded from its reportable segments' measure of profit or loss. These adjustments are excluded from the segment measures that are reported to the Company's chief operating decision maker and are used to make operating decisions and assess performance.
The following is an explanation of each of the adjustments that management excluded as part of its non-GAAP measures for the three months and year ended December 31, 2009 and 2008 and for the forecasted three month period ending March 31, 2010 and full year ending December 31, 2010, as well as reasons for excluding each of these individual items:
Material Limitations Associated with the Use of Non-GAAP Financial Measures
Non-GAAP net income, non-GAAP net income per diluted share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange may have limitations as analytical tools, and these non-GAAP measures should not be considered in isolation from or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are:
Compensation for Limitations Associated with Use of Non-GAAP Financial Measures
Boston Scientific compensates for the limitations on its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company's performance. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit a critical one, of the Company's performance.
The Company provides detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure in the accompanying schedules, and Boston Scientific encourages investors to review these reconciliations.
Usefulness of Non-GAAP Financial Measures to Investors
The Company believes that presenting non-GAAP net income, non-GAAP net income per share, and regional and divisional revenue growth rates that exclude the impact of foreign exchange in addition to the related GAAP measures provides investors greater transparency to the information used by Boston Scientific management for its financial and operational decision-making and allows investors to see Boston Scientific's results "through the eyes" of management. The Company further believes that providing this information better enables Boston Scientific's investors to understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance.
-- Recorded net sales of $2.079 billion, at the mid-point of the Company's guidance range, and achieved adjusted EPS of $0.20, at the high end of the Company's guidance range, reporting a GAAP loss of $0.71 per share -- Maintained leadership position in the worldwide drug-eluting stent (DES) market with a 39 percent share, including a 46 percent share in the U.S. and a 44 percent share in Japan -- Increased worldwide Endoscopy sales 10 percent for the quarter, and reached the $1 billion milestone in 2009 worldwide sales -- Increased worldwide Urology/Gynecology sales eight percent, including 23 percent growth in our Women's Health business -- Increased worldwide Neuromodulation sales 18 percent -- Generated 44 percent of sales from new products -- Received CE Mark approval and launched the internally developed and manufactured PROMUS(®) Element(TM) Everolimus-Eluting Coronary Stent System in Europe -- Launched the COGNIS(®) cardiac resynchronization therapy defibrillator (CRT-D) and TELIGEN(®) implantable cardiac defibrillator (ICD) systems in Japan -- Issued $2.0 billion of senior notes and prepaid remaining term loan debt maturities -- Received ratings upgrade to investment grade (BBB-) from Standard & Poor's -- Resolved longstanding litigation with settlement of $1.725 billion
SOURCE Boston Scientific Corporation
