Summary
Boston Scientific Corporation (BSX) announced a significant development on January 10, 2011, relating to a settlement with Medinol Ltd. The company expects to recognize a pre-tax gain of approximately $104 million ($77 million after-tax, or $0.05 per share) in the fourth quarter of 2010. This gain was not included in prior financial guidance, making it an unexpected positive for the quarter's results. The settlement, which was finalized on December 27, 2010, resolves a long-standing dispute between Boston Scientific and Medinol that was being arbitrated. As part of the agreement, Medinol made a payment of approximately $104 million to Boston Scientific on December 30, 2010. Additionally, both parties have terminated certain provisions of a previous settlement agreement from September 21, 2005, and have mutually released each other from all claims related to the arbitration. This resolution removes a significant legal overhang and positively impacts the company's financial condition.
Key Highlights
- 1Boston Scientific reached a settlement with Medinol Ltd. on December 27, 2010.
- 2The settlement is expected to result in a pre-tax gain of approximately $104 million for Q4 2010.
- 3The after-tax impact of the gain is estimated to be $77 million.
- 4The gain is expected to contribute $0.05 per share to earnings in Q4 2010.
- 5This gain was not part of previous financial guidance provided by the company.
- 6The settlement resolves a dispute that was under arbitration before the American Arbitration Association.
- 7Medinol paid Boston Scientific $104 million on December 30, 2010, as part of the settlement.