10-QPeriod: Q1 FY2023

BOSTON SCIENTIFIC CORP Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 4, 2023For Securities:BSX

Summary

Boston Scientific Corporation (BSX) reported strong performance in the first quarter of 2023, with net sales increasing by 12.0% to $3.389 billion compared to the prior year. This growth was driven by a combination of organic growth, strategic acquisitions, and robust commercial execution across its diverse product portfolio. The company also saw an improvement in gross profit margin to 69.3% from 68.4% in the prior year, attributed to favorable sales mix and manufacturing efficiencies, despite ongoing supply chain challenges and foreign currency headwinds. Net income attributable to common stockholders rose significantly to $300 million ($0.21 per diluted share) from $97 million ($0.07 per diluted share) in Q1 2022. Management highlighted operational net sales growth of 14.9%, underscoring the underlying strength of the business. The company reaffirmed its confidence in its liquidity and ability to fund operations, invest in growth, and service debt, with a strong leverage ratio well within its credit facility covenants. The company also made progress on strategic initiatives, including the majority stake acquisition in Acotec and the completion of the Apollo Endosurgery acquisition shortly after the quarter's end.

Financial Highlights

50 data points
Beta

Revenue

$3.39B

69.3% Gross Margin

Net Income

$314.00M

9.3% Net Margin

EPS (Diluted)

$0.21

Total Assets

$32.89B

Cash & Equivalents

$570.00M

Free Cash Flow

$79.00M

Financial Statements
Beta
Revenue$3.39B
Cost of Revenue$1.04B
Gross Profit$2.35B
SG&A Expenses$1.22B
Operating Expenses$1.80B
Operating Income$552.00M
Interest Expense$65.00M
Net Income$314.00M
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)1.44B
Shares Outstanding (Diluted)1.45B

Key Highlights

  • 1Net sales increased by 12.0% to $3.389 billion, driven by 14.9% operational net sales growth.
  • 2Gross profit margin improved to 69.3% from 68.4% in the prior year quarter.
  • 3Net income attributable to common stockholders surged to $300 million ($0.21 per diluted share) from $97 million ($0.07 per diluted share) in Q1 2022.
  • 4Acquired a majority stake in Acotec Scientific Holdings Limited for $519 million to complement its Peripheral Interventions portfolio.
  • 5Cardiovascular segment showed strong growth with net sales up 12.7% to $2.11 billion, led by the Cardiology business.
  • 6MedSurg segment also performed well, with net sales up 11.0% to $1.28 billion, driven by Endoscopy and Urology.
  • 7The company's leverage ratio was 2.52 times, well below the 3.75 times covenant limit for its revolving credit facility.

Frequently Asked Questions

Boston Scientific's revenue growth in Q1 2023 was primarily driven by strong operational net sales growth of 14.9%, which includes organic growth and the contribution from recent acquisitions like Baylis Medical. The company also benefited from the diversity of its product portfolio, growth in underlying markets, and effective commercial execution.

Acquisitions played a significant role. The company completed the acquisition of a majority stake in Acotec in February 2023, which is expected to complement its Peripheral Interventions portfolio. The acquisition of Baylis Medical in Q1 2022 also contributed to the year-over-year growth figures, with less than a full period of comparable sales for the prior year.

Boston Scientific expressed confidence in its financial health and liquidity. The company has a strong cash position, generates consistent cash flow from operations, and has access to capital markets and credit facilities. Its leverage ratio remains well within compliance with its credit facility covenants, and management believes it has sufficient resources to fund operations, investments, and debt service for the foreseeable future.

Growth was observed across multiple segments. In Cardiovascular, Cardiology, driven by the WATCHMAN FLX LAAC Device and percutaneous coronary intervention products, and Peripheral Interventions showed strength. In MedSurg, Endoscopy, Urology, and Neuromodulation also contributed positively with strong procedural volumes and new product introductions.