10-QPeriod: Q2 FY2009

BECTON DICKINSON & CO Quarterly Report for Q2 Ended Mar 31, 2009

Filed May 6, 2009For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported financial results for the period ending March 31, 2009, showing a slight year-over-year decrease in revenue for the second quarter, largely due to unfavorable foreign currency translation impacts. Despite the revenue dip, the company demonstrated resilience with improvements in operating income for its Diagnostics and Biosciences segments, driven by stronger product mix and effective cost management. The company also incurred a significant charge related to an antitrust class action settlement, impacting reported net income and EPS. Liquidity remains solid, supported by operating cash flows and available credit facilities, though net cash provided by operating activities saw a decrease compared to the prior year, partly due to higher inventory levels. The company continues its share repurchase program and dividend payments. Management highlighted the ongoing impact of global economic conditions and foreign currency fluctuations on its business, while also emphasizing continued investment in research and development to drive future growth.

Financial Highlights

28 data points
Beta

Revenue

$1.72B

51.9% Gross Margin

Net Income

$261.29M

15.1% Net Margin

EPS (Diluted)

$1.06

Cash & Equivalents

$542.71M

Free Cash Flow

$129.38M

Financial Statements
Beta
Revenue$1.72B
Cost of Revenue$829.35M
Gross Profit$895.62M
SG&A Expenses$436.36M
Operating Expenses$1.36B
Operating Income$360.67M
Interest Expense$7.50M
Net Income$261.29M
EPS (Basic)$1.09
EPS (Diluted)$1.06

Key Highlights

  • 1Second quarter revenues decreased by 0.4% to $1.741 billion compared to the prior year, primarily due to a 5% unfavorable foreign currency translation impact.
  • 2Net income for the quarter was $261.3 million, a decrease from $276.2 million in the prior year, impacted by a $45 million charge related to an antitrust class action settlement.
  • 3Diluted EPS from continuing operations was $1.06, down from $1.09 in the prior year, with the litigation charge reducing EPS by $0.11.
  • 4Operating income for the Diagnostics segment increased by 13% and for the Biosciences segment by 9%, reflecting improved profitability in these divisions.
  • 5Net cash provided by continuing operating activities was $525.8 million for the six months ended March 31, 2009, a decrease from $686.3 million in the prior year, attributed in part to higher inventory levels.
  • 6The company repurchased $341.5 million of its common stock during the six-month period, indicating a continued commitment to returning capital to shareholders.
  • 7Long-term debt decreased to $747.7 million from $953.2 million, while short-term debt increased significantly, reflecting a reclassification of notes due in October 2009.

Frequently Asked Questions

BDX's revenue for the second quarter ending March 31, 2009, was $1.741 billion, a slight decrease of 0.4% compared to $1.747 billion in the same period last year. This decrease was largely attributed to an unfavorable foreign currency translation impact of approximately 5%, partially offset by volume increases and price adjustments.

BDX recorded a $45 million charge in the second quarter of fiscal year 2009 related to a settlement agreement with direct purchaser plaintiffs in certain antitrust class actions. This charge reduced net income by $28 million (or $0.11 per diluted share from continuing operations) and impacted reported operating results.

The company reported net cash provided by continuing operating activities of $525.8 million for the first six months of fiscal 2009, down from $686.3 million in the prior year, partly due to increased inventory levels. BDX has a $1 billion syndicated credit facility and a commercial paper program for short-term financing. The company also continued to repurchase its common stock and pay dividends, demonstrating a commitment to shareholder returns.

BDX is involved in several legal proceedings, most notably an antitrust class action lawsuit where a $45 million settlement with direct purchasers was agreed upon in April 2009. The company is also involved in other matters, including product liability claims and patent disputes, some of which are ongoing and carry potential financial implications, though management believes it has meritorious defenses for pending cases.