What is the primary objective of the 2016 Restructuring Program?

The primary objective is to develop global commercialization, technology, and manufacturing capabilities in key growth markets, build on the Company's Plant Network Optimization (PNO) strategy, and expand operational efficiencies to support operating income margin goals.

What is the estimated financial impact of the restructuring program?

The program is expected to incur total pre-tax charges of approximately $175 million to $225 million, of which $160 million to $210 million are anticipated as future cash outlays. The company expects annual pre-tax operating expense reductions of $115 million to $150 million by 2020.

How does the restructuring program affect Boston Scientific's 2016 financial guidance?

The company has lowered its GAAP earnings per share guidance for both the second quarter ($0.12-$0.15 vs. prior $0.14-$0.17) and the full year ($0.59-$0.65 vs. prior $0.64-$0.69). However, adjusted earnings per share guidance remains unchanged, and full-year revenue guidance is reaffirmed.

Will the restructuring program lead to a significant reduction in Boston Scientific's workforce?

While there will be some employee attrition and targeted headcount reductions, the company anticipates that its overall employee base will remain relatively unchanged upon completion of the program, as new jobs are created in growth areas and resources are redeployed.

BSX 8-K: Financial Events & Regulation FD

Summary

Boston Scientific Corporation (BSX) announced a significant 2016 Restructuring Program aimed at enhancing global commercialization, technology, and manufacturing capabilities, while also driving operational efficiencies and supporting operating income margin goals. This program, initiated in Q2 2016 and expected to conclude by year-end 2018, involves consolidating global real estate, developing commercial and technical competencies, improving manufacturing in certain regions, and continuing the Plant Network Optimization (PNO) strategy. The company anticipates substantial gross annual pre-tax operating expense reductions of $115 million to $150 million by 2020, with a portion of these savings to be reinvested in growth initiatives. While the restructuring involves some targeted headcount reductions, Boston Scientific expects its overall employee base to remain stable due to new job creation in growth areas. The estimated total pre-tax charges for the program range from $175 million to $225 million, with approximately $160 million to $210 million expected to result in future cash outlays. The company also provided updated full-year 2016 guidance, reaffirming revenue targets but adjusting GAAP earnings per share projections downwards for both Q2 and the full year, while maintaining adjusted earnings per share guidance.

Key Highlights

1Boston Scientific has approved a 2016 Restructuring Program to optimize global operations, commercialization, and manufacturing.
2The program is projected to reduce gross annual pre-tax operating expenses by $115 million to $150 million by the end of 2020.
3Total estimated pre-tax charges for the restructuring are between $175 million and $225 million, with $160 million to $210 million expected as cash outlays.
4Q2 2016 GAAP EPS guidance was revised downwards to a range of $0.12 to $0.15, from $0.14 to $0.17.
5Full-year 2016 GAAP EPS guidance was also lowered to $0.59 to $0.65, from $0.64 to $0.69.
6Adjusted earnings per share guidance (excluding certain charges) remains consistent for both Q2 and full-year 2016.
7The company reaffirms its full-year 2016 revenue guidance of $8.075 to $8.225 billion.

BOSTON SCIENTIFIC CORP 8-K Report, Exit or Disposal Costs (Jun 9, 2016)

Summary

Key Highlights

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