Boston Scientific Announces Results For First Quarter 2018

MARLBOROUGH, Mass., April 25, 2018 /PRNewswire/ — Boston Scientific Corporation (NYSE: BSX) generated sales of $2.379 billion during the first quarter ended March 31, 2018. This represents growth of 10.1 percent on a reported basis, 6.2 percent on an operational¹ basis and 5.2 percent on an organic² basis, all compared to the prior year period. The company reported GAAP earnings of $298 million or $0.21 per share (EPS), compared to GAAP earnings of $290 millionor $0.21 per share a year ago, and achieved adjusted earnings per share of $0.33 for the period, compared to $0.29 a year ago. 

“Our consistently strong performance reflects our team’s ongoing dedication to patients and customers,” said Mike Mahoney, chairman and chief executive officer, Boston Scientific. “With our increasingly diversified portfolio and resilience in a rapidly-evolving global landscape, we are excited about our outlook.”

First quarter financial results and recent developments:

• Reported first quarter sales of $2.379 billion, compared to the company’s guidance range of $2.320 to $2.350 billion, representing an increase of 10.1 percent on a reported basis, 6.2 percent on an operational basis and 5.2 percent on an organic basis, all compared to the prior year period.
• Reported GAAP earnings of $0.21 per share compared to the company’s guidance range of $0.19 to $0.22 per share. Achieved adjusted earnings per share of $0.33 compared to the guidance range of $0.30 to $0.32 per share.
• Created Rhythm and Neuro segment, which includes Cardiac Rhythm Management (CRM), Electrophysiology and Neuromodulation (previously included in the MedSurg segment), to align the company’s business and organizational structure focused on active implantable devices. Also combined the Middle East and Africa (MEA) organizations (previously included with Asia-Pacific) with Europe to create the EMEA region. These changes are effective January 1, 2018; year over year growth rates have been updated accordingly.
• Achieved first quarter revenue growth in all segments, compared to the prior year period:
  • MedSurg: 10.9 percent reported, 7.4 percent operational and organic
  • Rhythm and Neuro: 10.2 percent reported, 6.4 percent operational and organic
  • Cardiovascular: 9.5 percent reported, 5.2 percent operational and 2.7 percent organic
• Delivered revenue growth in all regions, compared to the prior year period:
  • U.S.: 4.8 percent reported,  operational and organic
  • EMEA (Europe, Middle East and Africa): 23.9 percent reported, 10.0 percent operational and 5.7 percent organic
  • APAC (Asia-Pacific): 12.0 percent reported, 5.8 percent operational and organic
  • Emerging Markets³: 22.6 percent reported, 17.2 percent operational and 16.7 percent organic

• Attained new commercial and clinical milestones for the WATCHMAN™ Left Atrial Appendage Closure (LAAC) Device: reached the 50,000th global implant of the device and presented positive late-breaking clinical trial data from the SALUTE trial, designed to achieve regulatory approval of the WATCHMAN device in Japan, presented during a session at the 82nd Annual Scientific Meeting of the Japanese Circulation Society.
• Achieved clinical milestone with the newer generation Ranger™ Drug Coated Balloon (DCB)⁴ as data from the investigator-sponsored COMPARE-1 trial, the first randomized controlled head-to-head trial comparing two DCB technologies, were presented at the LINC Congress in Leipzig, Germany, suggesting comparable patency with lower dose Ranger DCB versus higher dose IN.PACT™ DCB (Medtronic) and that Ranger is an effective treatment option of femoral-popliteal artery disease.
• Completed enrollment of more than 2,000 patients in the EVOLVE Short Dual Anti-Platelet Therapy (DAPT) study, a global, prospective trial designed to assess the safety of three-month DAPT in patients at high risk of bleeding who have undergone percutaneous coronary intervention with the SYNERGY Bioabsorbable Polymer stent system. Current medical guidelines provide physicians with limited data on appropriate DAPT duration for patients at high risk of bleeding.
• Announced one-year data from the INTREPID study, the first and only prospective, double-blind, randomized, sham-controlled, multi-center study of deep brain stimulation (DBS) for advanced, levodopa responsive Parkinson’s disease in the U.S.; the study supported the recent U.S. Food and Drug Administration (FDA) approval of the VERCISE™ DBS System.
• Acquired nVision Medical Corporation, a privately-held company which developed the first and only device cleared by the U.S. FDA to collect cells from the fallopian tubes, offering a potential platform for earlier diagnosis of ovarian cancer and the prevention of unnecessary surgeries to remove ovaries and fallopian tubes.
• Entered into a definitive agreement to acquire NxThera, Inc., which has developed and commercialized the Rezûm® system, a minimally invasive therapy which would expand the company’s portfolio of treatment options for men with symptoms of benign prostatic hyperplasia (BPH).
• Acquired Securus Medical Group, Inc., which will add a thermal esophageal monitoring system to the electrophysiology cardiac ablation portfolio that may prevent esophageal injury during atrial ablation procedures by offering real-time, accurate temperature sensing.
• Acquired EMcision, Limited, expanding the endoscopy portfolio to include the Habib™ EndoHPB probe, a novel endoscopic device which uses radiofrequency bipolar energy to ablate malignant and benign tissue and reduce duct obstruction to help physicians in their treatment and palliative care of patients with pancreaticobiliary cancers.
• Completed a public offering of $1.0 billion aggregate principal amount of 4.000% senior notes due March 1, 2028.
• Announced the company will host an investor event and webcast on May 11, 2018 to provide a presentation on and answer questions about the Cardiac Rhythm Management and Electrophysiology portfolio in connection with attendance at the 2018 Annual Heart Rhythm Society Scientific Sessions in Boston, MA. The event is scheduled to begin at 12:15 p.m. EDT and adjourn at approximately 1:15 p.m. EDT, and will be accessible on the Investor Relations website.

Net sales for the first quarter by business and region:

Guidance for Full Year and Second Quarter 2018

The company now estimates revenue for the full year 2018 to be in a range of $9.750 to $9.900 billion (compared to prior guidance of $9.650 to $9.800 billion), which versus the prior year period represents a growth range of approximately 8 to 10 percent on a reported basis and growth of approximately 5 to 7 percent on an organic basis excluding the impact of foreign currency fluctuations and contribution of approximately 40 basis points from Symetis. The company now estimates income on a GAAP basis in a range of $0.90 to $0.94 per share (compared to prior guidance of $0.93 to $0.98 per share) and estimates adjusted earnings, excluding amortization expense, intangible asset impairment charges, acquisition-related, restructuring and restructuring-related net charges (credits),  investment impairment charges and certain discrete tax items, in a range of $1.37 to $1.41 per share (compared to prior guidance of $1.35 to $1.39 per share).

The company estimates sales for the second quarter of 2018 to be in a range of $2.450 to $2.500 billion, which versus the prior year period represents a growth range of approximately 9 to 11 percent on a reported basis and a growth range of approximately 5 to 7 percent on an organic basis, excluding the impact of foreign currency fluctuations and contribution of approximately 70 basis points from Symetis. The company estimates earnings on a GAAP basis in a range of $0.21 to $0.23 per share and adjusted earnings, excluding amortization expense, acquisition-related and restructuring and restructuring-related net charges (credits), in a range of $0.33 to $0.35 per share.

Conference Call Information

Boston Scientific management will be discussing these results with analysts on a conference call today at 8:00 a.m. EDT. The company will webcast the call to 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 approximately one year on the Boston Scientific website.

About Boston Scientific
Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world.  As a global medical technology leader for more than 35 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.com  and connect on Twitter and Facebook.

Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and 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,” “aiming” 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 expected net sales, GAAP, operational and organic revenue growth rates, GAAP earnings and adjusted earnings for the second quarter and full year 2018, our financial performance, our business plans and our positioning for revenue and earnings growth. 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 risks and uncertainties, in some cases, have affected and in the future 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.

Risks and uncertainties that may cause such differences include, among other things: future economic, political, competitive, reimbursement and regulatory conditions, new product introductions and the market acceptance of those products, markets for our products, expected pricing environment, expected procedural volumes, the closing and integration of acquisitions, clinical trial results, demographic trends, intellectual property rights, litigation, financial market conditions, the execution and effect of our restructuring program, the execution and effect of our business strategy, including our cost-savings and growth initiatives and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict. 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 hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statement 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 press release.

Note: Amounts reported in millions within this press release are computed based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in dollars. Prior year balances were subject to rounding.

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 financial measures, is included in the exhibits attached to this press release.

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Use of Non-GAAP Financial Measures

To supplement our consolidated financial statements presented on a GAAP basis, we disclose certain non-GAAP financial measures, including adjusted net income (earnings) and adjusted net income (earnings) per share that exclude certain amounts, operational net sales, which exclude the impact of foreign currency fluctuations and organic net sales, which exclude the impact of foreign currency fluctuations and the impact of recent acquisitions with significant sales. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States and should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. Further, other companies may calculate these non-GAAP financial measures differently than we do, which may limit the usefulness of those measures for comparative purposes.

To calculate adjusted net income (earnings) and adjusted net income (earnings) per share we exclude certain charges (credits) from GAAP net income, including amortization expense, intangible asset impairment charges, acquisition-related net charges (credits), restructuring and restructuring-related net charges (credits), litigation-related net charges (credits), certain investment impairment charges and certain discrete tax items, including net income tax charges resulting from the enactment of the Tax Cuts and Jobs Act in December 2017. Amounts are tax effected at the company’s effective tax rate, unless the amount is a significant unusual or infrequently occurring item in accordance with FASB Accounting Standards Codification section 740-270-30, “General Methodology and Use of Estimated Annual Effective Tax Rate.” Please refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our most recent Annual Report filed on Form 10-K filed with the Securities and Exchange Commission for an explanation of each of these adjustments and the reasons for excluding each item.

The GAAP financial measures most directly comparable to adjusted net income and adjusted net income per share is GAAP net income and GAAP net income per share.

To calculate operational net sales, which exclude the impact of foreign currency fluctuations, we convert actual net sales from local currency to U.S. dollars using constant foreign currency exchange rates in the current and prior period. To calculate organic net sales, we remove the impact of recent acquisitions with significant sales from operational net sales. The GAAP financial measure most directly comparable to operational net sales and organic net sales is net sales on a GAAP basis.

Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP financial measure are included in the accompanying schedules.

Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP financial measures to further its understanding of the performance of our operating segments. With the exception of the impact of recent acquisitions with significant sales, the adjustments excluded from our non-GAAP financial measures are consistent with those excluded from our operating segments’ measures of net sales and profit or loss. These adjustments are excluded from the segment measures  reported to our chief operating decision maker that are used to make operating decisions and assess performance.

We believe that presenting adjusted net income and adjusted net income per share, operational net sales and organic net sales, in addition to the corresponding GAAP financial measures, provides investors greater transparency to the information used by management for its operational decision-making and allows investors to see our results “through the eyes” of management. We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance.

SOURCE Boston Scientific Corporation