Summary
Edwards Lifesciences Corporation's (EW) second quarter and first half of 2010 results demonstrate solid top-line growth driven by its Heart Valve Therapy segment, particularly the Edwards SAPIEN transcatheter heart valve, and improved international sales. Net sales increased by 8.9% for the quarter and 8.7% for the six-month period compared to the prior year. The company also saw an improvement in gross profit margin to 72.5% in the quarter, up from 69.6% in the prior year, benefiting from a more favorable product mix and divestitures. While operating expenses, particularly R&D, increased to support growth initiatives, net income saw a modest increase year-over-year for the quarter but a slight decrease for the six-month period, impacted by special charges and tax benefits. The company remains committed to innovation, with continued investment in its transcatheter heart valve programs and the development of new technologies. The company also continues to manage its capital structure, including share repurchases and debt management, and is actively engaged in defending its intellectual property through ongoing litigation.
Financial Highlights
47 data points| Revenue | $365.20M |
| Cost of Revenue | $100.40M |
| Gross Profit | $264.80M |
| R&D Expenses | $50.60M |
| SG&A Expenses | $140.60M |
| Net Income | $57.50M |
| EPS (Basic) | $0.09 |
| EPS (Diluted) | $0.08 |
| Shares Outstanding (Basic) | 680.40M |
| Shares Outstanding (Diluted) | 712.80M |
Key Highlights
- 1Net sales for the second quarter of 2010 increased by 8.9% to $365.2 million, and for the six-month period increased by 8.7% to $705.7 million, driven by strong performance in Heart Valve Therapy and international markets.
- 2Gross profit margin improved to 72.5% for the quarter and 71.8% for the six-month period, up from 69.6% and 69.4% respectively, due to a more profitable product mix and the divestiture of the hemofiltration product line.
- 3Research and Development expenses increased by $8.0 million in the quarter and $13.3 million in the six-month period, reflecting increased investment in the transcatheter heart valve program.
- 4The company recorded an $8.3 million special charge in the second quarter of 2010 related to the discontinuation of its MONARC transcatheter mitral valve program.
- 5Edwards Lifesciences announced a two-for-one stock split effected in the form of a stock dividend, paid on May 27, 2010.
- 6The company's Heart Valve Therapy segment, driven by the Edwards SAPIEN transcatheter heart valve and the Carpentier-Edwards PERIMOUNT Magna Ease valve, saw sales increase by 18.0% in the quarter and 16.7% year-to-date.
- 7Net cash provided by operating activities was $61.0 million for the first six months of 2010, an increase from $27.9 million in the prior year period, benefiting from the termination of a Japanese securitization program.