10-QPeriod: Q3 FY2016

BECTON DICKINSON & CO Quarterly Report for Q3 Ended Jun 30, 2016

Filed August 4, 2016For Securities:BDX

Summary

Becton Dickinson & Co. (BDX) reported solid financial results for the third quarter of fiscal year 2016, with revenues increasing by 2.5% to $3.198 billion, driven primarily by volume growth across both its Medical and Life Sciences segments. The company demonstrated improved operating income and a strengthened balance sheet, with cash flow from operations remaining robust. The successful integration of CareFusion continues to be a key focus, and management highlighted ongoing investments in research and development to fuel future growth. While the company navigates various market dynamics, including foreign currency fluctuations and pricing pressures, its strategic initiatives and strong operational execution are evident. Investors should note the company's continued commitment to returning value through dividends, with no share repurchases in the reported period, and its strong liquidity position. The company also provided pro forma results for the nine-month period, giving a clearer picture of the combined entity's performance.

Financial Highlights

53 data points
Beta

Revenue

$3.20B

48.4% Gross Margin

Net Income

$390.00M

12.2% Net Margin

EPS (Diluted)

$1.80

Total Assets

$26.02B

Cash & Equivalents

$1.69B

Free Cash Flow

$687.00M

Financial Statements
Beta
Revenue$3.20B
Cost of Revenue$1.65B
Gross Profit$1.55B
R&D Expenses$207.00M
SG&A Expenses$728.00M
Operating Expenses$2.68B
Operating Income$516.00M
Interest Expense$97.00M
Net Income$390.00M
EPS (Basic)$1.83
EPS (Diluted)$1.80
Shares Outstanding (Basic)213.08M
Shares Outstanding (Diluted)217.37M

Key Highlights

  • 1Total revenues increased by 2.5% to $3.198 billion for the third quarter, driven by a 3.5% volume growth.
  • 2Operating income significantly improved to $516 million from $137 million in the prior year's quarter.
  • 3Net income for the quarter was $390 million, a substantial increase from $62 million in the same period last year, leading to diluted EPS of $1.80.
  • 4Cash flow from operating activities was strong at $1.854 billion for the first nine months of fiscal year 2016.
  • 5The Medical segment saw revenues grow by 1.6% to $2.235 billion, while the Life Sciences segment grew by 4.6% to $963 million.
  • 6Total debt decreased to $11.913 billion from $12.822 billion at the end of the previous fiscal year.
  • 7The company is actively managing its financial risks through various hedging strategies for currency and interest rate exposures.

Frequently Asked Questions

The primary driver of revenue growth in the third quarter of fiscal year 2016 was volume growth, which increased by 3.5%. This was partially offset by a net unfavorable impact of 0.5% from the termination of a distribution agreement in the Respiratory Solutions unit and a 0.9% negative impact from foreign currency translation.

The acquisition of CareFusion, which closed in March 2015, continued to influence the financial results. CareFusion's operations are integrated into the Medical segment. The pro forma results for the nine months ended June 30, 2016 and 2015 provided in the filing offer a view of the combined entity's performance, showing revenues of $9.263 billion and $9.301 billion respectively. The integration activities and related costs, such as amortization of intangible assets and financing costs, are reflected in the consolidated statements.

Becton Dickinson & Co. returned value to shareholders through cash dividends, paying $421 million in the first nine months of fiscal year 2016. Notably, no shares were repurchased during this period. The company's dividend per common share increased to $0.66 for the quarter ended June 30, 2016, from $0.60 in the prior year.

The company operates through two principal business segments: BD Medical ('Medical') and BD Life Sciences ('Life Sciences'). For the third quarter of fiscal year 2016, the Medical segment generated $2.235 billion in revenue, a 1.6% increase, while the Life Sciences segment reported $963 million in revenue, a 4.6% increase. Both segments contributed to the overall revenue growth.