Skip to content
AnalystLens

BECTON DICKINSON & CO Annual Report, Year Ended Sep 30, 1995

Filing Date
Filed December 27, 1995
Period End
September 30, 1995
Security
BDX
In the record · 2016–202610-K1010-Q338-K175

BDX filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 175 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’17May ’17
  2. Material agreement8-K · Jun ’19Jun ’19
  3. Leadership change8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed December 27, 1995. Cited figures are marked; the original filing is the authoritative source.

Becton, Dickinson and Company (BDX) reported fiscal 1995 (year ended September 30, 1995) as a year of solid operating improvement.

Revenues rose 6% to $2.71 billiona, or 6% on an underlying basis excluding a 3% favorable currency effect and the impact of divestitures (the radioimmunoassay and medical glove businesses) and reduced year-end sales promotions. Gross profit margin expanded to 47.0% from 45.3%, and operating income grew 22% to $397 million, lifting the operating margin to 14.6% from 12.7%. Net income rose 11% to $252 million, and earnings per share increased 18% to $3.59, helped by share repurchases.

Return on equity improved to 17.5% from 15.5%, moving toward management's stated 20% target. The Medical Supplies and Devices segment ($1.5 billionb revenue, $330 million operating income, up 20%) was led by diabetes care, safety injection systems, prefillable syringes, and IV catheters. The Diagnostic Systems segment ($1.2 billion revenue, $158 million operating income, up 42% reported and about 24% excluding a $12 million goodwill write-off for cellular imaging) was driven by VACUTAINER blood collection and FACS flow cytometry products.

Revenues outside the U.S. grew 12%c reported, including 8% from currency. Headwinds included a higher effective tax rate of 28.0% (up from 23.3%) due to reduced Puerto Rico tax benefits, rising resin and paper costs, higher selling and administrative expense (27% of revenues), and economic instability in Mexico and Brazil. Balance sheet and capital allocation were strong.

Operating cash flow was $472 milliond, capital expenditures $124 million, and the company repurchased 5.8 million shares for $300 million. Total debt fell $79 million and debt-to-capitalization declined to 35.2%.

Management intends to use excess cash for acquisitions and further buybacks, with 4.1 million shares remaining under the existing authorization. The filing also notes routine Superfund involvement and ordinary-course litigation that management does not expect to be material.

02—Key points

Key Highlights

  1. Revenue grew 6% to $2.71 billion, with underlying growth also at 6% after excluding currency and divestiture effects.
  2. Operating income rose 22% to $397 million; operating margin expanded to 14.6% from 12.7%, driven by a gross margin gain to 47.0% from 45.3%.
  3. Diluted-basis EPS (reported as primary) increased 18% to $3.59 and net income rose 11% to $252 million, aided by a 5.8 million share buyback.
  4. Diagnostic Systems operating income increased 42% to $158 million, including a $12 million cellular imaging goodwill write-off; Medical operating income rose 20% to $330 million.
  5. Return on equity improved to 17.5% from 15.5%, progressing toward a 20% target; book value per share rose 2% to $21.49.
  6. Effective tax rate rose to 28.0% from 23.3% as Puerto Rico tax benefits declined, a headwind expected to persist into 1996.
  7. Strong balance sheet: $472 million operating cash flow, total debt down $79 million, and debt-to-capitalization of 35.2%.

03—Questions

Frequently Asked Questions

  1. What drove the improvement in profitability in fiscal 1995?

    Operating margin improved to 14.6% from 12.7%, mainly from a 1.7-point gain in gross profit margin (to 47.0%) driven by manufacturing productivity, favorable product mix, and European warehouse centralization. Diagnostic and international profitability were the largest contributors.

  2. How did the divestitures affect results?

    The company sold its radioimmunoassay business in May 1995 and its medical glove business in June 1995 (glove revenues were $85 million in 1995 versus $104 million in 1994). Divestitures reduced revenue growth and contributed a $6 million loss on the glove sale, while proceeds totaled $79 million.

  3. Why did the effective tax rate increase, and what is expected next year?

    The rate rose to 28.0% from 23.3% primarily because tax benefits from Puerto Rico operations were reduced under the Omnibus Budget Reconciliation Act of 1993. Management expects the 1996 tax rate to be comparable to 1995.

  4. What are the company's capital allocation priorities?

    Management plans to use substantial excess cash over the next several years for strategic acquisitions and continued share repurchases. In 1995 it bought back 5.8 million shares for $300 million, with 4.1 million shares remaining under the September 1994 authorization. Capital spending in 1996 is expected to be slightly above 1995's $124 million, including investment in China.

  5. What risks are highlighted for international operations?

    Economic instability in Mexico (recession, high inflation, peso weakness) and Brazil affected revenue volatility, though the company said the combined Brazilian and Mexican operations represent 8% or less of consolidated revenues, net income, and total assets. Foreign exchange losses were $12 million, which management believes its hedging mitigated.

04—Continue

← View all 10-K filings