10-QPeriod: Q2 FY2011

BECTON DICKINSON & CO Quarterly Report for Q2 Ended Mar 31, 2011

Filed May 4, 2011For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported its second-quarter and year-to-date results for the period ending March 31, 2011. The company demonstrated revenue growth across its Medical, Diagnostics, and Biosciences segments, driven by volume increases and favorable foreign currency translation. Despite facing some headwinds, including a challenging comparison to the prior year's strong H1N1 sales and the impact of the Japanese earthquake and tsunami, BDX maintained strong operating cash flows. Key financial highlights include robust revenue growth, particularly in international markets and for safety-engineered products, alongside significant share repurchases and dividend payments returning value to shareholders. The company also completed a strategic acquisition of Accuri Cytometers, Inc., aimed at expanding its presence in the flow cytometry market. While managing increased debt levels from recent issuances, BDX's financial condition remains strong, supported by consistent cash generation and ample credit facilities.

Financial Highlights

50 data points
Beta

Revenue

$1.92B

52.1% Gross Margin

Net Income

$312.02M

16.2% Net Margin

EPS (Diluted)

$1.38

Total Assets

$10.34B

Cash & Equivalents

$748.59M

Free Cash Flow

$123.30M

Financial Statements
Beta
Revenue$1.92B
Cost of Revenue$920.59M
Gross Profit$1.00B
R&D Expenses$119.15M
SG&A Expenses$441.94M
Operating Expenses$1.48B
Operating Income$440.34M
Interest Expense$23.92M
Net Income$312.02M
EPS (Basic)$1.41
EPS (Diluted)$1.38
Shares Outstanding (Basic)220.89M
Shares Outstanding (Diluted)225.47M

Key Highlights

  • 1Total revenues for the quarter increased by 6.8% year-over-year to $1.922 billion, with international sales showing strong growth.
  • 2The company repurchased $1.058 billion of common stock and paid $183 million in dividends in the first six months of 2011, demonstrating a commitment to returning capital to shareholders.
  • 3BDX acquired Accuri Cytometers, Inc. for $204.97 million to expand its offerings in the personal flow cytometer market.
  • 4Net cash provided by continuing operating activities was $706.9 million for the first six months of 2011, indicating strong operational cash generation.
  • 5Diluted earnings per share from continuing operations increased to $1.38 in the second quarter of 2011, up from $1.18 in the prior year.
  • 6Total debt increased to $2.7 billion, representing 34.3% of total capital, a notable increase from the prior year, largely due to recent debt issuances.
  • 7The company is navigating challenges from the Japanese earthquake and tsunami, estimating a potential revenue impact of $10 to $20 million for the full fiscal year.

Frequently Asked Questions

Becton Dickinson & Co. (BDX) reported positive revenue growth of 6.8% year-over-year for the second quarter, reaching $1.922 billion. This growth was supported by volume increases and favorable foreign currency translation. Income from continuing operations also saw a significant increase, with diluted EPS rising to $1.38 from $1.18 in the prior year's comparable period. The company demonstrated strong operating cash flow, while also actively returning capital to shareholders through share repurchases and dividends.

Revenue growth was driven by multiple factors, including volume increases across its Medical, Diagnostics, and Biosciences segments. Favorable foreign currency translation also contributed positively. International sales showed particularly strong performance, with safety-engineered products showing double-digit growth in emerging markets. While the company faced some headwinds, such as a challenging comparison to prior year's H1N1 sales and the impact of the Japanese earthquake, overall sales momentum was positive.

BDX has actively managed its capital structure, issuing $700 million in 10-year notes and $300 million in 30-year notes in November 2010 to fund general corporate purposes. Concurrently, the company returned significant value to shareholders by repurchasing $1.058 billion of its common stock and paying $183 million in dividends during the first six months of 2011. Despite an increase in total debt, the company's debt-to-capital ratio remained manageable, and it has substantial credit facilities available.

BDX is involved in ongoing litigation, including antitrust claims and patent infringement cases, which could potentially result in material adverse effects on its financial results. Additionally, the company faces risks related to the recently enacted U.S. healthcare reform, which includes a medical device excise tax, and the ongoing impact of the Japanese earthquake and tsunami on its operations and supply chain. Management continually assesses these risks and believes it has meritorious defenses for ongoing legal matters.