10-QPeriod: Q1 FY2013

BECTON DICKINSON & CO Quarterly Report for Q1 Ended Dec 31, 2012

Filed February 7, 2013For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported strong performance in its first quarter of fiscal year 2013, with revenues increasing by 3.7% year-over-year to $1.9 billion. This growth was driven by solid contributions from the Medical and Diagnostics segments, supported by an early start to the influenza season and continued international demand for safety-engineered products. The company also successfully completed the divestiture of its BD Biosciences—Discovery Labware unit, generating significant cash proceeds and a pre-tax gain. Despite ongoing economic uncertainties and pricing pressures, BDX demonstrated operational improvements, including enhanced gross profit margins attributed to cost-saving initiatives like Project ReLoCo and lower raw material costs. The company continued its commitment to shareholder returns through substantial share repurchases and dividend payments. While facing some legal contingencies and the upcoming impact of the medical device excise tax, BDX's financial position remains robust, with ample liquidity and a strong cash flow from operations.

Financial Highlights

50 data points
Beta

Revenue

$1.90B

52.9% Gross Margin

Net Income

$625.00M

32.9% Net Margin

EPS (Diluted)

$3.13

Total Assets

$11.63B

Cash & Equivalents

$1.92B

Free Cash Flow

$146.00M

Financial Statements
Beta
Revenue$1.90B
Cost of Revenue$894.00M
Gross Profit$1.01B
R&D Expenses$118.00M
SG&A Expenses$496.00M
Operating Expenses$1.51B
Operating Income$392.00M
Interest Expense$35.00M
Net Income$625.00M
EPS (Basic)$3.18
EPS (Diluted)$3.13
Shares Outstanding (Basic)196.43M
Shares Outstanding (Diluted)199.57M

Key Highlights

  • 1Total revenue for the first quarter of fiscal year 2013 increased by 3.7% to $1.9 billion, up from $1.83 billion in the prior year period.
  • 2The Medical segment revenue grew by 3.5% to $983 million, driven by strong sales in Diabetes Care and Medical Surgical Systems.
  • 3The Diagnostics segment revenue increased by 5.0% to $652 million, primarily due to international expansion and favorable comparisons to the prior year.
  • 4The company completed the sale of its BD Biosciences—Discovery Labware unit on October 31, 2012, generating approximately $724.4 million in cash proceeds and a pre-tax gain of $562.8 million.
  • 5Net cash provided by continuing operating activities was $225.9 million for the quarter, although this was lower than the prior year's $297.6 million due to changes in pension obligations and working capital.
  • 6BDX repurchased approximately $300 million of its common stock and paid $97 million in dividends during the quarter, demonstrating a commitment to returning capital to shareholders.
  • 7The company is facing an estimated $40-$50 million impact from the new medical device excise tax in fiscal year 2013.

Frequently Asked Questions

Revenue growth was primarily driven by the Medical and Diagnostics segments. This growth was supported by an early start to the influenza season, continued international demand for safety-engineered products, and strong sales in emerging markets.

The divestiture, completed on October 31, 2012, generated approximately $724.4 million in cash proceeds and a pre-tax gain of $562.8 million. The results of this unit are reported as discontinued operations for all periods presented.

Becton Dickinson & Co. estimates that the new medical device excise tax will cost between $40 million to $50 million in fiscal year 2013. This tax is expected to be recorded in selling and administrative expenses.

The company reported strong cash flow from operations and held approximately $2.5 billion in cash and short-term investments as of December 31, 2012. During the quarter, BDX repurchased approximately $300 million of its common stock and paid $97 million in dividends, reflecting a consistent strategy of returning value to shareholders.