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BD Announces Results for Second Fiscal Quarter

Posted on: Tuesday, 28 April 2009, 05:00 CDT

- Reports earnings per share from continuing operations of $1.06, or $1.18 after excluding specified item

- Reaffirms guidance for full fiscal year 2009 earnings per share from continuing operations, excluding specified item

FRANKLIN LAKES, N.J., April 28 /PRNewswire-FirstCall/ -- BD (Becton, Dickinson and Company) (NYSE: BDX) today reported quarterly revenues of $1.741 billion for the second fiscal quarter ended March 31, 2009, representing a decrease of 0.4 percent from the prior year period. This quarter's revenue growth rate reflects the unfavorable impact from foreign currency translation, which overall is estimated to account for 3.4 percentage points.

"In the face of global economic pressures, we are pleased to have achieved top-line growth in all three segments after adjusting for the negative impact of foreign currency translation. This growth, along with our continued focus on disciplined expense and currency risk management, has enabled us to deliver adjusted earnings in line with our expectations," stated Edward J. Ludwig, Chairman and Chief Executive Officer. "Our strong performance for the first half of fiscal 2009, combined with our commitment to continue to drive efficiency throughout BD, gives us the confidence to reaffirm our guidance for full-year adjusted earnings."

Second Quarter and Six-Month Period of Fiscal Year 2009 and 2008 Earnings

Reported diluted earnings per share from continuing operations for the second quarter were $1.06. Second quarter results included a pre-tax charge of $45 million (11 cents diluted earnings per share from continuing operations) relating to the settlement agreement with the direct purchaser plaintiffs (which includes BD's distributors) in the antitrust class actions, as described in BD's Current Report on Form 8-K filed with the SEC today. Second quarter fiscal 2009 diluted earnings per share from continuing operations, excluding the charge of 11 cents, of $1.18 increased by 8 percent over diluted earnings per share from continuing operations of $1.09 for the prior year period. For the six-month period ending March 31, 2009, reported diluted earnings per share from continuing operations were $2.32. Excluding the aforementioned charge of 11 cents, diluted earnings per share from continuing operations for the six-month period in fiscal 2009 were $2.43, representing an increase of 12.5 percent over diluted earnings per share from continuing operations of $2.16 from the prior year period.

Segment Results

In the BD Medical segment, worldwide revenues for the quarter were $897 million, representing a decrease of 3 percent from the prior year period after taking into account an estimated 5 percentage points of unfavorable impact from foreign currency translation. On a currency neutral basis, the increase in worldwide sales of Medical Surgical Systems products was offset in part by the expected decline in sales of prefillable devices in the U.S. For the six-month period ended March 31, 2009, the BD Medical segment reported a 2 percent decrease in revenue growth after taking into account an estimated 4 percentage points of unfavorable impact from foreign currency translation. On a currency neutral basis, BD Medical revenues for the six-month period increased by 2 percent.

In the BD Diagnostics segment, worldwide revenues for the quarter were $540 million, representing an increase of 2 percent from the prior year period after taking into account an estimated 3 percentage points of unfavorable impact from foreign currency translation. Increased sales of safety-engineered devices, cancer diagnostics products and infectious disease testing systems were partially offset by a decline in the sales of flu testing products due to a mild flu season in the U.S. For the six-month period ended March 31, 2009, the BD Diagnostics segment reported 3 percent revenue growth after taking into account an estimated 3 percentage points of unfavorable impact from foreign currency translation. On a currency neutral basis, BD Diagnostics revenues for the six-month period increased by 6 percent.

In the BD Biosciences segment, worldwide revenues for the quarter were $304 million, representing an increase of 3 percent from the prior year period. Strong international sales growth of research instruments and reagents, primarily in Western Europe and Japan, were offset in part by a slowdown in research-related capital spending in the U.S., particularly in the academic and biotech markets. For the six-month period ended March 31, 2009, the BD Biosciences segment reported 7 percent revenue growth after taking into account an estimated 1 percentage point favorable impact from foreign currency translation. On a currency neutral basis, BD Biosciences revenues for the six-month period increased by 6 percent.

Geographic Results

Second quarter revenues in the U.S. were $778 million, representing a decrease of 1 percent from the prior year period. Revenues outside the U.S. were $963 million, representing flat revenues from the prior year period, and reflect an estimated 6 percentage points of unfavorable impact from foreign currency translation.

For the six-month period ended March 31, 2009, revenues in the U.S. were $1.587 billion, representing an increase of 1 percent from the prior year period. Revenues outside of the U.S. were $1.887 billion, representing an increase of 0.5 percent from the prior year period, and reflect an estimated 6 percentage points of unfavorable impact from foreign currency translation.

Fiscal 2009 Outlook for Full Year

Excluding the specified item, the Company reaffirms that diluted earnings per share from continuing operations for the full fiscal year 2009 will increase approximately 9 to 11 percent over diluted earnings per share from continuing operations of $4.46 for the fiscal year 2008. The Company expects that reported diluted earnings per share from continuing operations for the full fiscal year 2009 will increase 7 to 9 percent.

Conference Call Information

A conference call regarding BD's second fiscal quarter results and its expectations for the full fiscal year will be broadcast live on BD's website, www.bd.com/investors, along with related slides, at 10:00 a.m. (ET) Tuesday, April 28, 2009. The conference call will be available for replay on BD's website, www.bd.com/investors, or at 800-642-1687 (domestic) and 706-645-9291 (international), Conference ID: 92219921, through the close of business on Tuesday, May 5, 2009.

This news release contains certain non-GAAP financial measures. A reconciliation of these and other measures to the comparable GAAP measures is included in this release and in the attached financial tables.

About BD

BD is a leading global medical technology company that develops, manufactures and sells medical devices, instrument systems and reagents. The Company is dedicated to improving people's health throughout the world. BD is focused on improving drug delivery, enhancing the quality and speed of diagnosing infectious diseases and cancers, and advancing research, discovery and production of new drugs and vaccines. BD's capabilities are instrumental in combating many of the world's most pressing diseases. Founded in 1897 and headquartered in Franklin Lakes, New Jersey, BD employs approximately 28,000 people in approximately 50 countries throughout the world. The Company serves healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. For more information, please visit www.bd.com.

This press release, including the section entitled "Fiscal 2009 Outlook for Full Year," contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding BD's performance, including future revenues, earnings per share and income, or events or developments that BD expects to occur or anticipates occurring in the future. All such statements are based upon current expectations of BD and involve a number of business risks and uncertainties. Actual results could vary materially from anticipated results described, implied or projected in any forward-looking statement. With respect to forward-looking statements contained herein, factors that could cause actual results to vary materially from any forward-looking statement include, but are not limited to: adverse changes in regional, national or foreign economic conditions, including any impact that may result from the current global economic downturn on our ability to access credit markets and finance our operations, the demand for our products and services, or our suppliers' ability to provide products needed for our operations; changes in interest or foreign currency exchange rates, particularly in light of increased volatility in currency exchange rates; competitive factors; pricing and market share pressures; difficulties inherent in product development and delays in product introductions; increases in energy costs and their effect on, among other things, the cost of producing BD's products; fluctuations in costs and availability of raw materials and in BD's ability to maintain favorable supplier arrangements and relationships; uncertainties of litigation (as described in BD's filings with the Securities and Exchange Commission); the effects of potential pandemic diseases; changes in healthcare or other governmental regulation, including changes in government pricing and reimbursement policies or other cost containment reforms; and issuance of new or revised accounting standards, as well as other factors discussed in this press release and in BD's filings with the Securities and Exchange Commission. We do not intend to update any forward-looking statements to reflect events or circumstances after the date hereof except as required by applicable laws or regulations.

BECTON DICKINSON AND COMPANY CONSOLIDATED INCOME STATEMENTS (Unaudited; Amounts in thousands, except per share data) Three Months Ended March 31, 2009 2008 % Change REVENUES $1,740,804 $1,746,925 (0.4) Cost of products sold 838,101 853,807 (1.8) Selling and administrative 440,502 415,523 6.0 Research and development 98,734 96,034 2.8 TOTAL OPERATING COSTS AND EXPENSES 1,377,337 1,365,364 0.9 OPERATING INCOME 363,467 381,561 (4.7) Interest income 4,312 8,005 (46.1) Interest expense (7,495) (8,098) (7.4) Other (expense) income, net (5,701) 828 NM INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 354,583 382,296 (7.2) Income tax provision 93,256 106,661 (12.6) INCOME FROM CONTINUING OPERATIONS 261,327 275,635 (5.2) (LOSS) INCOME FROM DISCONTINUED OPERATIONS NET OF INCOME TAX (BENEFIT) PROVISION OF $(32) AND $347, RESPECTIVELY (53) 550 NM NET INCOME $261,274 $276,185 (5.4) EARNINGS PER SHARE Basic: Income from continuing operations $1.09 $1.13 (3.5) (Loss) income from discontinued operations $- $- - Net income $1.09 $1.13 (3.5) Diluted: Income from continuing operations $1.06 $1.09 (2.8) (Loss) income from discontinued operations $- $- - Net income $1.06 $1.09 (2.8) AVERAGE SHARES OUTSTANDING Basic 240,239 244,869 Diluted 245,890 252,788 NM - Not Meaningful BECTON DICKINSON AND COMPANY SUPPLEMENTAL INFORMATION (Unaudited; Amounts in thousands, except per share data) Three Months Ended March 31, 2009 As Litigation Excluding Reported Charge (1) Item Selling and administrative $440,502 $(45,000) $395,502 as a % of revenues 25.3% 22.7% Operating Income 363,467 45,000 408,467 as a % of revenues 20.9% 23.5% Income taxes 93,256 17,100 110,356 effective tax rate 26.3% 27.6% Income from continuing operations 261,327 27,900 289,227 as a % of revenues 15.0% 16.6% Diluted earnings per share Income from continuing operations (2) $1.06 $0.11 $1.18 (1) Represents the charge relating to the settlement agreement with the direct purchaser plaintiffs (which includes BD's distributors) in the antitrust class actions. (2) Total per share amounts may not add due to rounding. BECTON DICKINSON AND COMPANY CONSOLIDATED INCOME STATEMENTS (Unaudited; Amounts in thousands, except per share data) Six Months Ended March 31, 2009 2008 % Change REVENUES $3,474,309 $3,452,692 0.6 Cost of products sold 1,642,399 1,683,654 (2.5) Selling and administrative 850,444 837,240 1.6 Research and development 196,191 187,561 4.6 TOTAL OPERATING COSTS AND EXPENSES 2,689,034 2,708,455 (0.7) OPERATING INCOME 785,275 744,237 5.5 Interest income 5,962 21,534 (72.3) Interest expense (15,319) (18,438) (16.9) Other income, net 3,711 1,535 NM INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 779,629 748,868 4.1 Income tax provision 206,233 202,337 1.9 INCOME FROM CONTINUING OPERATIONS 573,396 546,531 4.9 (LOSS) INCOME FROM DISCONTINUED OPERATIONS NET OF INCOME TAX (BENEFIT) PROVISION OF $(23) AND $734, RESPECTIVELY (40) 1,201 NM NET INCOME $573,356 $547,732 4.7 EARNINGS PER SHARE Basic: Income from continuing operations $2.38 $2.23 6.7 (Loss) income from discontinued operations $- $- - Net income (1) $2.38 $2.24 6.3 Diluted: Income from continuing operations $2.32 $2.16 7.4 (Loss) income from discontinued operations $- $- - Net income $2.32 $2.16 7.4 AVERAGE SHARES OUTSTANDING Basic 241,330 244,580 Diluted 247,436 253,288 NM - Not Meaningful (1) Total per share amounts may not add due to rounding BECTON DICKINSON AND COMPANY SUPPLEMENTAL INFORMATION (Unaudited; Amounts in thousands, except per share data) Six Months Ended March 31, 2009 As Litigation Excluding Reported Charge (1) Item Selling and administrative $850,444 $(45,000) $805,444 as a % of revenues 24.5% 23.2% Operating Income 785,275 45,000 830,275 as a % of revenues 22.6% 23.9% Income taxes 206,233 17,100 223,333 effective tax rate 26.5% 27.1% Income from continuing operations 573,396 27,900 601,296 as a % of revenues 16.5% 17.3% Diluted earnings per share Income from continuing operations $2.32 $0.11 $2.43 (1) Represents the charge relating to the settlement agreement with the direct purchaser plaintiffs (which includes BD's distributors) in the antitrust class actions. BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY SEGMENT AND GEOGRAPHIC AREA (Unaudited; Amounts in thousands) Three Months Ended March 31, 2009 2008 % Change BD MEDICAL United States $388,966 $388,281 0.2 International 508,358 533,971 (4.8) TOTAL $897,324 $922,252 (2.7) BD DIAGNOSTICS United States $285,113 $281,088 1.4 International 254,527 249,484 2.0 TOTAL $539,640 $530,572 1.7 BD BIOSCIENCES United States $104,039 $114,581 (9.2) International 199,801 179,520 11.3 TOTAL $303,840 $294,101 3.3 TOTAL REVENUES United States $778,118 $783,950 (0.7) International 962,686 962,975 - TOTAL $1,740,804 $1,746,925 (0.4) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY SEGMENT AND GEOGRAPHIC AREA (Unaudited; Amounts in thousands) Six Months Ended March 31, 2009 2008 % Change BD MEDICAL United States $796,474 $795,772 0.1 International 991,626 1,035,764 (4.3) TOTAL $1,788,100 $1,831,536 (2.4) BD DIAGNOSTICS United States $572,681 $560,576 2.2 International 507,150 492,747 2.9 TOTAL $1,079,831 $1,053,323 2.5 BD BIOSCIENCES United States $217,790 $217,653 0.1 International 388,588 350,180 11.0 TOTAL $606,378 $567,833 6.8 TOTAL REVENUES United States $1,586,945 $1,574,001 0.8 International 1,887,364 1,878,691 0.5 TOTAL $3,474,309 $3,452,692 0.6 BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended March 31, (Unaudited; Amounts in thousands) United States 2009 2008 % Change BD MEDICAL Medical Surgical Systems $242,350 $232,447 4.3 Diabetes Care 97,196 96,883 0.3 Pharmaceutical Systems 43,065 52,779 (18.4) Ophthalmic Systems 6,355 6,172 3.0 TOTAL $388,966 $388,281 0.2 BD DIAGNOSTICS Preanalytical Systems $147,436 $140,674 4.8 Diagnostic Systems 137,677 140,414 (1.9) TOTAL $285,113 $281,088 1.4 BD BIOSCIENCES Cell Analysis $71,770 $78,269 (8.3) Discovery Labware 32,269 36,312 (11.1) TOTAL $104,039 $114,581 (9.2) TOTAL UNITED STATES $778,118 $783,950 (0.7) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended March 31, (continued) (Unaudited; Amounts in thousands) International % Change FX FX 2009 2008 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $230,233 $248,269 (7.3) 3.7 (11.0) Diabetes Care 87,033 90,577 (3.9) 2.7 (6.6) Pharmaceutical Systems 178,085 181,660 (2.0) 3.2 (5.2) Ophthalmic Systems 13,007 13,465 (3.4) 3.8 (7.2) TOTAL $508,358 $533,971 (4.8) 3.4 (8.2) BD DIAGNOSTICS Preanalytical Systems $131,029 $133,518 (1.9) 7.0 (8.9) Diagnostic Systems 123,498 115,966 6.5 11.5 (5.0) TOTAL $254,527 $249,484 2.0 9.1 (7.1) BD BIOSCIENCES Cell Analysis $159,223 $141,452 12.6 11.5 1.1 Discovery Labware 40,578 38,068 6.6 4.7 1.9 TOTAL $199,801 $179,520 11.3 10.1 1.2 TOTAL INTERNATIONAL $962,686 $962,975 - 6.1 (6.1) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Three Months Ended March 31, (continued) (Unaudited; Amounts in thousands) Total % Change FX FX 2009 2008 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $472,583 $480,716 (1.7) 4.0 (5.7) Diabetes Care 184,229 187,460 (1.7) 1.5 (3.2) Pharmaceutical Systems 221,150 234,439 (5.7) (1.6) (4.1) Ophthalmic Systems 19,362 19,637 (1.4) 3.6 (5.0) TOTAL $897,324 $922,252 (2.7) 2.0 (4.7) BD DIAGNOSTICS Preanalytical Systems $278,465 $274,192 1.6 5.9 (4.3) Diagnostic Systems 261,175 256,380 1.9 4.1 (2.2) TOTAL $539,640 $530,572 1.7 5.0 (3.3) BD BIOSCIENCES Cell Analysis $230,993 $219,721 5.1 4.5 0.6 Discovery Labware 72,847 74,380 (2.1) (3.1) 1.0 TOTAL $303,840 $294,101 3.3 2.6 0.7 TOTAL REVENUES $1,740,804 $1,746,925 (0.4) 3.0 (3.4) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Six Months Ended March 31, (Unaudited; Amounts in thousands) United States 2009 2008 % Change BD MEDICAL Medical Surgical Systems $498,605 $485,192 2.8 Diabetes Care 199,008 195,409 1.8 Pharmaceutical Systems 85,717 102,757 (16.6) Ophthalmic Systems 13,144 12,414 5.9 TOTAL $796,474 $795,772 0.1 BD DIAGNOSTICS Preanalytical Systems $296,666 $283,974 4.5 Diagnostic Systems 276,015 276,602 (0.2) TOTAL $572,681 $560,576 2.2 BD BIOSCIENCES Cell Analysis $149,150 $145,629 2.4 Discovery Labware 68,640 72,024 (4.7) TOTAL $217,790 $217,653 0.1 TOTAL UNITED STATES $1,586,945 $1,574,001 0.8 BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Six Months Ended March 31, (continued) (Unaudited; Amounts in thousands) International % Change FX FX 2009 2008 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $454,480 $494,336 (8.1) 1.9 (10.0) Diabetes Care 180,813 181,438 (0.3) 6.0 (6.3) Pharmaceutical Systems 330,214 333,623 (1.0) 3.7 (4.7) Ophthalmic Systems 26,119 26,367 (0.9) 5.8 (6.7) TOTAL $991,626 $1,035,764 (4.3) 3.3 (7.6) BD DIAGNOSTICS Preanalytical Systems $259,953 $261,687 (0.7) 7.7 (8.4) Diagnostic Systems 247,197 231,060 7.0 11.7 (4.7) TOTAL $507,150 $492,747 2.9 9.6 (6.7) BD BIOSCIENCES Cell Analysis $311,364 $279,205 11.5 10.7 0.8 Discovery Labware 77,224 70,975 8.8 6.4 2.4 TOTAL $388,588 $350,180 11.0 9.8 1.2 TOTAL INTERNATIONAL $1,887,364 $1,878,691 0.5 6.2 (5.7) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION REVENUES BY BUSINESS SEGMENTS AND UNITS Six Months Ended March 31, (continued) (Unaudited; Amounts in thousands) Total % Change FX FX 2009 2008 Reported Neutral Impact BD MEDICAL Medical Surgical Systems $953,085 $979,528 (2.7) 2.3 (5.0) Diabetes Care 379,821 376,847 0.8 3.8 (3.0) Pharmaceutical Systems 415,931 436,380 (4.7) (1.1) (3.6) Ophthalmic Systems 39,263 38,781 1.2 5.8 (4.6) TOTAL $1,788,100 $1,831,536 (2.4) 1.9 (4.3) BD DIAGNOSTICS Preanalytical Systems $556,619 $545,661 2.0 6.0 (4.0) Diagnostic Systems 523,212 507,662 3.1 5.2 (2.1) TOTAL $1,079,831 $1,053,323 2.5 5.6 (3.1) BD BIOSCIENCES Cell Analysis $460,514 $424,834 8.4 7.9 0.5 Discovery Labware 145,864 142,999 2.0 0.8 1.2 TOTAL $606,378 $567,833 6.8 6.1 0.7 TOTAL REVENUES $3,474,309 $3,452,692 0.6 3.7 (3.1) BECTON DICKINSON AND COMPANY SUPPLEMENTAL REVENUE INFORMATION SAFETY REVENUES (Unaudited; Amounts in thousands) Three Months Ended March 31, % Change FX FX 2009 2008 Reported Neutral Impact TOTAL SAFETY REVENUES United States $255,026 $247,316 3.1 3.1 - International 136,718 126,418 8.1 18.9 (10.8) TOTAL $391,744 $373,734 4.8 8.5 (3.7) Six Months Ended March 31, % Change FX FX 2009 2008 Reported Neutral Impact TOTAL SAFETY REVENUES United States $523,995 $513,567 2.0 2.0 - International 270,798 247,303 9.5 19.1 (9.6) TOTAL $794,793 $760,870 4.5 7.6 (3.1)

SOURCE BD (Becton, Dickinson and Company)

Source: PR Newswire

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