01—Abstract
Summary
Summary of the 10-K filed November 26, 2014. Cited figures are marked; the original filing is the authoritative source.
Becton Dickinson & Co. (BDX) reported strong financial performance in its fiscal year 2014, with total revenues reaching $8.446 billiona, a 4.9% increase over the prior year, driven by growth across its Medical and Biosciences segments, particularly in emerging markets and sales of safety-engineered products.
The company's operational efficiency improved, with a gross profit margin of 50.9%. A significant development during the year was the announcement of a definitive agreement to acquire CareFusion Corporation for approximately $12.2 billionb, a strategic move expected to create a leader in medication management and patient safety solutions, anticipated to close in the first half of calendar year 2015. BD demonstrated solid cash flow from operations, totaling $1.75 billion, which supported its dividend payments and share repurchases, though the latter was suspended in light of the CareFusion acquisition.
The company navigated a complex regulatory and economic landscape, including the impact of the Patient Protection and Affordable Care Act's medical device excise tax. Key risks identified include global economic conditions, foreign currency fluctuations, and competitive pressures within the medical technology market. Management expressed confidence in the company's financial position and ability to access capital to fund its strategic objectives, including the significant CareFusion acquisition.
02—Key points
Key Highlights
- Total revenues increased by 4.9% to $8.446 billion, driven by growth in Medical and Biosciences segments.
- Announced a definitive agreement to acquire CareFusion Corporation for approximately $12.2 billion, aiming to create a leader in medication management and patient safety.
- Generated $1.75 billion in cash flow from operating activities.
- Maintained a strong gross profit margin of 50.9%.
- Repurchased $400 million of common stock, while suspending the program due to the CareFusion acquisition.
- Invested $550 million in Research and Development.
- Operated with three primary segments: BD Medical, BD Diagnostics, and BD Biosciences, with plans to realign into two segments (Medical and Life Sciences) starting in fiscal year 2015.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Becton Dickinson & Co kept $0.14.
- Revenue$8.45B100.0%
- Cost of revenue−$4.14B49.1%
- Gross profit$4.30B50.9%
- Operating costs−$2.69B31.9%
- Operating income$1.61B19.0%
- Interest, other & tax−$421.0M5.0%
- Net income$1.19B14.0%
Where FY2014 revenue went
$8.45B- Cost of revenue: $4.14B, 49% of revenue
- SG&A: $2.15B, 25% of revenue
- Net income: $1.19B, 14% of revenue
- R&D: $550.0M, 6.5% of revenue
- Interest, other & tax: $421.0M, 5.0% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed November 26, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $8.45B$8.05B | +4.9% |
| Cost of Revenue | $4.14B$3.88B | +6.7% |
| Gross Profit | $4.30B$4.17B | +3.1% |
| R&D Expenses | $550.00M$494.00M | +11.3% |
| SG&A Expenses | $2.15B$2.42B | −11.4% |
| Operating Expenses | $6.84B$6.80B | +0.6% |
| Operating Income | $1.61B$1.25B | +28.1% |
| Interest Expense | $135.00M$138.00M | −2.2% |
| Net Income | $1.19B$1.29B | −8.4% |
| EPS (Basic) | $6.13$6.63 | −7.5% |
| EPS (Diluted) | $5.99$6.49 | −7.7% |
| Shares Outstanding (Basic) | 193.30M195.16M | −1.0% |
| Shares Outstanding (Diluted) | 197.71M199.19M | −0.7% |
05—Questions
Frequently Asked Questions
What was Becton Dickinson's (BDX) revenue performance in fiscal year 2014?
In fiscal year 2014, Becton Dickinson reported total revenues of $8.446 billion, representing a 4.9% increase compared to the prior year. This growth was primarily attributed to strong performance in the Medical and Biosciences segments, with significant contributions from emerging markets and sales of safety-engineered products.
What is the significance of the CareFusion acquisition for BDX?
BDX announced a definitive agreement to acquire CareFusion Corporation for approximately $12.2 billion. This strategic acquisition is expected to create a leading global entity in medication management and patient safety solutions. The transaction was anticipated to close in the first half of calendar year 2015.
How did BDX manage its financial resources and shareholder returns in FY 2014?
BDX generated robust operating cash flow of $1.75 billion, which enabled it to pay dividends to shareholders. The company also engaged in share repurchases totaling $400 million during the fiscal year, although its share repurchase program was suspended due to the pending acquisition of CareFusion.
What were the key segments contributing to BD's business in 2014, and were there any organizational changes?
In fiscal year 2014, BD operated under three main segments: BD Medical, BD Diagnostics, and BD Biosciences. The company announced a realignment of its organizational structure, effective October 1, 2014, to combine the former Diagnostics and Biosciences segments into a new segment called BD Life Sciences, resulting in two principal business segments: BD Medical and BD Life Sciences.
06—Continue