10-KPeriod: FY2010

BECTON DICKINSON & CO Annual Report, Year Ended Sep 30, 2010

Filed November 24, 2010For Securities:BDX

Summary

Becton, Dickinson and Company (BDX) reported revenues of $7.37 billion 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 billion, 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.

Financial Highlights

54 data points
Beta

Revenue

$7.12B

51.9% Gross Margin

Net Income

$1.32B

18.5% Net Margin

EPS (Diluted)

$5.49

Total Assets

$9.65B

Cash & Equivalents

$1.22B

Free Cash Flow

$1.06B

Financial Statements
Beta
Revenue$7.12B
Cost of Revenue$3.43B
Gross Profit$3.70B
R&D Expenses$422.77M
SG&A Expenses$1.69B
Operating Expenses$5.54B
Operating Income$1.58B
Interest Expense$51.26M
Net Income$1.32B
EPS (Basic)$5.62
EPS (Diluted)$5.49
Shares Outstanding (Basic)234.33M
Shares Outstanding (Diluted)240.14M

Key Highlights

  • 1Becton 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.
  • 2Operating income reached $1.7 billion, representing 22.7% of revenues, reflecting operational efficiency and growth.
  • 3The company generated strong cash flow from operations of $1.7 billion, enabling robust financial flexibility.
  • 4BDX actively returned capital to shareholders, repurchasing $750 million in common stock and paying $346 million in dividends during fiscal year 2010.
  • 5The company made a strategic acquisition of HandyLab, Inc. for $275 million to enhance its molecular diagnostics capabilities.
  • 6BDX is navigating significant risks including the impact of U.S. healthcare reform (likely excise tax on medical devices), foreign currency fluctuations, and competitive pressures.
  • 7The company's diversified business segments (Medical, Diagnostics, Biosciences) and global presence provide a stable foundation despite market challenges.

Frequently Asked Questions

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.

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.

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.

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.