Summary
Boston Scientific Corporation (BSX) reported modest net sales growth of 1% to $1.774 billion for the first quarter of 2014, compared to $1.761 billion in the prior year. Excluding the impact of foreign currency fluctuations and divested businesses, net sales increased by 4% on a constant currency basis. The company achieved net income of $133 million ($0.10 per diluted share) for the quarter, a significant improvement from a net loss of $354 million ($-0.26 per diluted share) in the first quarter of 2013. This turnaround was largely driven by the absence of a substantial goodwill impairment charge that impacted the prior year's results, coupled with a $55 million intangible asset impairment charge in the current quarter. Adjusted net income, which excludes certain non-recurring items, was $268 million ($0.20 per share), up from $224 million ($0.16 per share) in the prior year. Operationally, gross profit margin improved to 69.7% from 67.2% due to lower costs associated with divested businesses and manufacturing efficiencies, partially offset by pricing pressures and product mix. Selling, general, and administrative expenses increased due to business combinations and emerging market expansion, while R&D expenses decreased slightly, reflecting cost reduction initiatives. The company's liquidity remains solid, with $191 million in cash and cash equivalents and an undrawn $2 billion revolving credit facility, supported by strong operating cash flow of $198 million.
Financial Highlights
51 data points| Revenue | $1.78B |
| Cost of Revenue | $537.00M |
| Gross Profit | $1.24B |
| SG&A Expenses | $666.00M |
| Operating Expenses | $1.04B |
| Operating Income | $197.00M |
| Interest Expense | $54.00M |
| Net Income | $133.00M |
| EPS (Basic) | $0.10 |
| EPS (Diluted) | $0.10 |
| Shares Outstanding (Basic) | 1.32B |
| Shares Outstanding (Diluted) | 1.35B |
Key Highlights
- 1Net sales increased 1% to $1.774 billion, with a 4% increase on a constant currency basis excluding divested businesses.
- 2Reported net income turned positive at $133 million ($0.10/share) from a net loss of $354 million ($-0.26/share) in the prior year's quarter.
- 3Adjusted net income (non-GAAP) increased to $268 million ($0.20/share) from $224 million ($0.16/share) in Q1 2013.
- 4Gross profit margin improved to 69.7% from 67.2% year-over-year, driven by cost reductions and favorable divestiture impacts.
- 5A $55 million intangible asset impairment charge was recorded in Q1 2014, compared to a significant $423 million goodwill impairment charge in Q1 2013.
- 6Operating cash flow strengthened to $198 million, up from $187 million in the prior year's quarter.
- 7The company maintained strong liquidity with $191 million in cash and an undrawn $2 billion revolving credit facility, while remaining compliant with debt covenants.