10-QPeriod: Q2 FY2015

BECTON DICKINSON & CO Quarterly Report for Q2 Ended Mar 31, 2015

Filed May 8, 2015For Securities:BDX

Summary

Becton, Dickinson and Company (BDX) reported its financial results for the fiscal second quarter ended March 31, 2015. The quarter was marked by a significant event: the completion of the acquisition of CareFusion Corporation on March 17, 2015. This transformative acquisition, valued at approximately $12.5 billion, is expected to create a global leader in medication management and patient safety solutions. Financially, the company experienced a 1.0% decrease in revenue to $2.051 billion compared to the prior year, largely due to an unfavorable foreign currency translation impact of 5.9%. Despite this revenue dip, operational performance showed resilience, with strong sales in safety-engineered products and continued growth in key segments. Net income for the quarter was $216 million, down from $287 million in the prior year, resulting in diluted earnings per share of $1.08, compared to $1.45. The company also reported significant acquisition-related costs, including financing, transaction, integration, and restructuring expenses. The balance sheet reflects the impact of the CareFusion acquisition, with substantial increases in goodwill, intangible assets, and long-term debt. The company's financial position remains strong, with $2.0 billion in cash and equivalents and short-term investments at quarter-end. BDX is focused on integrating CareFusion and leveraging the combined entity's strengths to drive future growth and efficiencies.

Financial Highlights

51 data points
Beta

Revenue

$2.05B

51.0% Gross Margin

Net Income

$216.00M

10.5% Net Margin

EPS (Diluted)

$1.08

Total Assets

$28.29B

Cash & Equivalents

$1.91B

Free Cash Flow

$81.00M

Financial Statements
Beta
Revenue$2.05B
Cost of Revenue$1.00B
Gross Profit$1.05B
R&D Expenses$129.00M
SG&A Expenses$511.00M
Operating Expenses$1.76B
Operating Income$293.00M
Interest Expense$91.00M
Net Income$216.00M
EPS (Basic)$1.10
EPS (Diluted)$1.08
Shares Outstanding (Basic)196.09M
Shares Outstanding (Diluted)199.94M

Key Highlights

  • 1Acquisition of CareFusion Corporation completed on March 17, 2015, for approximately $12.5 billion.
  • 2Second quarter revenue decreased 1.0% to $2.051 billion, impacted by a 5.9% unfavorable foreign currency translation effect.
  • 3Net income for the quarter was $216 million, down from $287 million in the prior year, with diluted EPS of $1.08 versus $1.45.
  • 4Significant increase in long-term debt due to financing for the CareFusion acquisition, totaling $12.1 billion at quarter-end.
  • 5Goodwill and intangible assets increased substantially due to the CareFusion acquisition, reflecting significant brand and technology valuations.
  • 6Operating cash flow remained solid at $514 million for the six months ended March 31, 2015.
  • 7The company's share repurchase program was suspended for the remainder of fiscal year 2015 due to the CareFusion acquisition.

Frequently Asked Questions

The most significant event is the completion of Becton Dickinson's acquisition of CareFusion Corporation on March 17, 2015. This $12.5 billion acquisition is expected to create a leader in medication management and patient safety solutions.

The acquisition significantly impacted the balance sheet, leading to substantial increases in goodwill and intangible assets. It also led to a large increase in long-term debt, as the company issued $6.2 billion in senior unsecured notes and assumed $2 billion in CareFusion debt to finance the transaction. The income statement reflects acquisition-related costs, including financing, transaction, integration, and restructuring expenses.

Foreign currency translation had an unfavorable impact of approximately 5.9% on revenue growth for the quarter. The strengthening U.S. dollar resulted in a decrease in reported international revenues. While currency impacts revenue, gains or losses on derivative instruments used for hedging are largely offset by gains or losses on the underlying hedged transactions.

Net income decreased to $216 million from $287 million in the prior year's quarter, and diluted earnings per share fell to $1.08 from $1.45. This decline was partly due to acquisition-related costs and unfavorable foreign currency impacts, as well as specific items identified by the company, which collectively had a significant impact on net income and EPS.