What are the main non-GAAP measures BDX is reporting and why?

BDX is reporting currency-neutral revenue growth, comparable revenue growth, and adjusted EPS. These non-GAAP measures are used to provide investors with a clearer view of the company's underlying operational performance by removing the impact of foreign currency fluctuations and adjusting for items that affect period-to-period comparability. This includes incorporating the results of the C.R. Bard acquisition in prior periods and excluding acquisition-related costs, purchase accounting adjustments, and other non-operational items.

How does the C.R. Bard acquisition impact the reported financial results?

The financial results are presented on a 'comparable' revenue growth basis, which includes the results of C.R. Bard in the prior year periods. This is done to allow for better year-over-year comparability of the combined company's performance following the acquisition. Adjustments are made for product line movements, divestitures, and reclassification of certain royalties to ensure accurate comparison.

What types of expenses are excluded from the Adjusted EPS calculation?

Adjusted EPS excludes items that management believes are not part of ordinary operations and affect period-to-period comparability. These include purchase accounting adjustments, acquisition-related transaction, integration, and restructuring costs, financing costs, hurricane recovery costs, losses from debt extinguishment, gains from business sales, certain regulatory costs, and the dilutive impact of shares issued for the Bard acquisition.

Are these non-GAAP measures a substitute for GAAP results?

No, Becton Dickinson explicitly states that non-GAAP measures are provided on a supplemental basis and are not a substitute for GAAP results. While management finds them useful for evaluating performance, investors are advised to consider these limitations and use the non-GAAP results in conjunction with GAAP results.

BDX 8-K: Earnings & Results

Summary

Becton, Dickinson and Company (BD) filed an 8-K on February 5, 2019, to report its financial results for the first fiscal quarter ended December 31, 2018. The primary purpose of this filing is to provide investors with detailed financial performance information, including key non-GAAP measures designed to offer a clearer view of the company's operational performance and strategic progress post-acquisition. Investors should note that BD is emphasizing several non-GAAP financial metrics, including currency-neutral revenue growth, comparable revenue growth (which incorporates the results of the C.R. Bard acquisition), and adjusted earnings per share (EPS). These metrics aim to remove the impact of foreign currency fluctuations and to provide a more consistent year-over-year comparison, particularly by including Bard's results in prior periods and excluding acquisition-related costs, purchase accounting adjustments, and other non-operational items. Management uses these measures internally for performance evaluation and budgeting, believing they offer valuable insights into underlying business performance and future outlook.

Key Highlights

1BD announced its first fiscal quarter results for the period ending December 31, 2018, via an 8-K filing.
2The company is presenting key financial metrics on a non-GAAP basis, including currency-neutral and comparable revenue growth.
3Comparable revenue growth incorporates C.R. Bard's (Bard) results into prior periods for better year-over-year comparison post-acquisition.
4Adjustments for comparability include accounting for product line movements, divestitures, royalty reclassifications, and intercompany revenues related to the Bard integration.
5Adjusted Earnings Per Share (EPS) is provided to exclude items not considered part of ordinary operations, such as purchase accounting adjustments, integration costs, and financing costs.
6Management believes these non-GAAP measures provide a clearer understanding of underlying operational performance and aid in comparisons.
7The filing also includes estimated currency-neutral adjusted EPS for fiscal year 2019.

BECTON DICKINSON & CO 8-K Report, Financial Results (Feb 5, 2019)

Summary

Key Highlights

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