01—Abstract
Summary
Summary of the 10-K filed November 23, 2016. Cited figures are marked; the original filing is the authoritative source.
Becton, Dickinson and Company (BDX) reported robust revenue growth in fiscal year 2016, driven significantly by the full-year inclusion of its CareFusion acquisition.
Total revenues reached $12.48 billiona, a 21.4% increase over the prior year. The company operates through two main segments: BD Medical and BD Life Sciences, both contributing to the overall revenue growth, with Medical showing a substantial 34.0% increase year-over-year, largely due to the CareFusion integration.
The company continued its strategic focus on increasing revenue growth through core products, R&D investment, emerging market expansion, and operational efficiency. Despite increased debt related to the CareFusion acquisition, BD maintained its investment-grade credit rating and generated strong operating cash flows, highlighting its financial stability and commitment to shareholder returns through dividends.
02—Key points
Key Highlights
- Revenue increased by 21.4% to $12.48 billion in fiscal year 2016, primarily driven by the full-year impact of the CareFusion acquisition.
- The BD Medical segment saw a significant revenue increase of 34.0%, largely due to the integration of CareFusion's product lines.
- Research and development expenses increased by 31.3% to $828 million, reflecting continued investment in innovation and new product platforms.
- The company reported diluted earnings per share of $4.49, a substantial increase from $3.35 in the prior year, aided by revenue growth and operational improvements.
- Total assets stood at $25.59 billion, with total debt at $11.55 billion, reflecting the financial leverage from the CareFusion acquisition.
- BD generated $2.56 billion in cash from operating activities, demonstrating strong cash flow generation capabilities.
- The company maintained its investment-grade credit rating with a stable outlook from major rating agencies, despite increased debt levels.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Becton Dickinson & Co kept $0.08.
- Revenue$12.48B100.0%
- Cost of revenue−$6.49B52.0%
- Gross profit$5.99B48.0%
- Operating costs−$4.56B36.5%
- Operating income$1.43B11.5%
- Interest, other & tax−$454.0M3.6%
- Net income$976.0M7.8%
Where FY2016 revenue went
$12.48B- Cost of revenue: $6.49B, 52% of revenue
- SG&A: $3.00B, 24% of revenue
- Net income: $976.0M, 7.8% of revenue
- R&D: $828.0M, 6.6% of revenue
- Other operating costs: $728.0M, 5.8% of revenue
- Interest, other & tax: $454.0M, 3.6% of revenue
Kept 7.8% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed November 23, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $12.48B$10.28B | +21.4% |
| Cost of Revenue | $6.49B$5.59B | +16.2% |
| Gross Profit | $5.99B$4.70B | +27.6% |
| R&D Expenses | $828.00M$632.00M | +31.0% |
| SG&A Expenses | $3.00B$2.56B | +17.2% |
| Operating Expenses | $11.05B$9.21B | +20.0% |
| Operating Income | $1.43B$1.07B | +33.1% |
| Interest Expense | $388.00M$371.00M | +4.6% |
| Net Income | $976.00M$695.00M | +40.4% |
| EPS (Basic) | $4.59$3.43 | +33.8% |
| EPS (Diluted) | $4.49$3.35 | +34.0% |
| Shares Outstanding (Basic) | 212.70M202.54M | +5.0% |
| Shares Outstanding (Diluted) | 217.54M207.51M | +4.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of BD's revenue growth in fiscal year 2016?
The primary driver of Becton, Dickinson and Company's (BDX) revenue growth in fiscal year 2016 was the full-year impact of its acquisition of CareFusion Corporation, which closed in March 2015. This acquisition significantly boosted the BD Medical segment's performance.
How did the CareFusion acquisition affect BD's financial position?
The CareFusion acquisition significantly increased BD's total assets and long-term debt. While this provided a broader product portfolio and market reach, it also led to higher interest expenses and a higher debt-to-capitalization ratio, though the company maintained investment-grade credit ratings.
What is BD's strategy for future growth?
BD's strategy focuses on increasing revenue growth through its core products, investing in research and development for innovative new products, expanding operations in emerging markets, improving operational effectiveness, and optimizing its capital structure to deliver strong shareholder returns.
What are the key risks highlighted in the report that could impact BD's future performance?
Key risks include global economic conditions, intense competition in the medical technology industry, foreign currency exchange rate fluctuations, changes in third-party reimbursement practices, regulatory changes, potential cybersecurity breaches, and challenges associated with integrating acquisitions and developing new products.
06—Continue