01—Abstract
Summary
Summary of the 10-K filed November 24, 2010. Cited figures are marked; the original filing is the authoritative source.
Becton, Dickinson and Company (BDX) reported revenues of $7.37 billiona for the fiscal year ended September 29, 2010, marking a 5.5% increase from the prior year, driven primarily by solid revenue growth in the Medical Segment.
The company's strategic focus remains on increasing revenue growth through core product enhancement, investing in research and development for innovative products, expanding presence in emerging markets, improving operational efficiency, and driving shareholder returns. BD reported operating income of $1.7 billionb, with a strong cash flow from operations totaling $1.7 billion, demonstrating financial health. The company also returned value to shareholders through share repurchases and dividends, while maintaining a solid investment-grade credit rating.
Key areas of focus for BD include enabling safer drug delivery, improving clinical outcomes through advanced diagnostics, providing research tools, and enhancing disease management in areas like diabetes and infection control. The company is navigating a complex market with evolving regulatory environments and increased competition, but remains committed to its growth strategies. Despite some legal proceedings and the impact of healthcare reform legislation, BDX's financial position appears robust, supported by diversified revenue streams and a strong operational foundation.
02—Key points
Key Highlights
- Becton Dickinson (BDX) reported total revenues of $7.37 billion for fiscal year 2010, a 5.5% increase year-over-year, driven by the Medical segment.
- Operating income reached $1.7 billion, representing 22.7% of revenues, reflecting operational efficiency and growth.
- The company generated strong cash flow from operations of $1.7 billion, enabling robust financial flexibility.
- BDX actively returned capital to shareholders, repurchasing $750 million in common stock and paying $346 million in dividends during fiscal year 2010.
- The company made a strategic acquisition of HandyLab, Inc. for $275 million to enhance its molecular diagnostics capabilities.
- BDX is navigating significant risks including the impact of U.S. healthcare reform (likely excise tax on medical devices), foreign currency fluctuations, and competitive pressures.
- The company's diversified business segments (Medical, Diagnostics, Biosciences) and global presence provide a stable foundation despite market challenges.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Becton Dickinson & Co kept $0.18.
- Revenue$7.12B100.0%
- Cost of revenue−$3.43B48.1%
- Gross profit$3.70B51.9%
- Operating costs−$2.11B29.7%
- Operating income$1.58B22.2%
- Interest, other & tax−$264.8M3.7%
- Net income$1.32B18.5%
Where FY2010 revenue went
$7.12B- Cost of revenue: $3.43B, 48% of revenue
- SG&A: $1.69B, 24% of revenue
- Net income: $1.32B, 18% of revenue
- R&D: $422.8M, 5.9% of revenue
- Interest, other & tax: $264.8M, 3.7% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed November 24, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $7.12B$6.99B | +2.0% |
| Cost of Revenue | $3.43B$3.31B | +3.5% |
| Gross Profit | $3.70B$3.68B | +0.6% |
| R&D Expenses | $422.77M$404.57M | +4.5% |
| SG&A Expenses | $1.69B$1.68B | +0.6% |
| Operating Expenses | $5.54B$5.40B | +2.7% |
| Operating Income | $1.58B$1.59B | −0.5% |
| Interest Expense | $51.26M$40.39M | +26.9% |
| Net Income | $1.32B$1.23B | +7.0% |
| EPS (Basic) | $5.62$5.12 | +9.8% |
| EPS (Diluted) | $5.49$4.99 | +10.0% |
| Shares Outstanding (Basic) | 234.33M240.48M | −2.6% |
| Shares Outstanding (Diluted) | 240.14M246.80M | −2.7% |
05—Questions
Frequently Asked Questions
What were BDX's main revenue drivers in fiscal year 2010?
BDX's revenue growth in fiscal year 2010 was primarily driven by its Medical segment, which saw solid performance. The company also experienced continued improvement in Biosciences sales and moderate growth in Diagnostics segment revenues. Specific drivers included safety-engineered products, prefilled flush syringes, pen needles for diabetes care, and pharmaceutical systems.
What are the key risks and challenges facing BDX as highlighted in the filing?
BDX faces several key risks, including adverse impacts from current economic conditions on product demand and sales cycles, foreign currency exchange rate fluctuations due to over half of its revenue coming from international operations, and the significant impact of the U.S. Patient Protection and Affordable Care Act (PPACA), particularly the 2.3% excise tax on certain medical devices starting in 2013. Additionally, changes in third-party reimbursement practices, price volatility of raw materials, intense competition, and potential supply chain disruptions are significant concerns.
How is BDX managing its financial health and returning value to shareholders?
BDX maintained a strong financial position in fiscal year 2010, with operating income growing to $1.7 billion and cash flow from operations reaching $1.7 billion. The company managed its capital structure efficiently, reducing its debt-to-capitalization ratio to 23.7%. BDX demonstrated a commitment to shareholder returns by repurchasing approximately $750 million of its common stock and paying $346 million in dividends. The company also strategically issued new debt, raising $1 billion, to fund general corporate purposes and maintain financial flexibility.
What are the main business segments of BDX and their focus areas?
Becton Dickinson operates through three global business segments: BD Medical, which focuses on medical devices for medication delivery, diabetes care, and pharmaceutical systems; BD Diagnostics, providing products for specimen collection and diagnostic systems for infectious diseases, healthcare-associated infections, and cancers; and BD Biosciences, offering research and clinical tools for cell analysis, drug discovery, and cell therapy.
06—Continue