Summary
Becton, Dickinson and Company (BD) announced on September 28, 2006, that it has decided to exit the blood glucose monitoring (BGM) market. This strategic shift involves discontinuing the distribution of the BD Logic® Blood Glucose Monitor immediately, while continuing to supply test strips to existing customers until December 2007. This decision follows an internal evaluation of the BGM product line's future prospects. BD anticipates recording a pre-tax charge of approximately $50 to $70 million in its 2006 fiscal fourth quarter, which translates to an after-tax impact of $33 to $47 million, or $0.13 to $0.18 per diluted share. This charge encompasses inventory write-downs, asset impairments, severance costs, and other exit-related expenses, with a portion expected to result in future cash outflows. While the company's other diabetes care products, such as insulin syringes and pen needles, remain unaffected, investors should note the potential for material variances from these estimates due to market uncertainties.
Key Highlights
- 1BD is exiting the blood glucose monitoring (BGM) market.
- 2Distribution of the BD Logic® Blood Glucose Monitor will cease immediately.
- 3BD will continue to supply test strips until December 2007.
- 4The company expects to incur a pre-tax charge of $50-$70 million in Q4 FY2006 related to this exit.
- 5The charge is estimated to impact diluted EPS by $0.13-$0.18.
- 6Other diabetes products (insulin syringes, pen needles, lancets) are not affected by this decision.
- 7Dr. Claire M. Fraser-Liggett was elected to the Board of Directors, effective November 20, 2006.