10-QPeriod: Q1 FY2013

Edwards Lifesciences Corp Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 6, 2013For Securities:EW

Summary

Edwards Lifesciences Corporation (EW) reported a strong first quarter for 2013, with net sales increasing by 8.2% to $496.7 million compared to the same period in 2012. This growth was primarily driven by a significant 39.7% surge in Transcatheter Heart Valve sales, largely attributed to the successful adoption of the Edwards SAPIEN valve in the United States following FDA approval for high-risk patients. The company also benefited from a substantial one-time special gain of $83.6 million from a litigation award, which significantly boosted net income to $144.9 million, leading to a diluted EPS of $1.24, a notable increase from $0.55 in the prior year. While Surgical Heart Valve Therapy and Critical Care segments saw modest declines, the overall performance reflects positive momentum, particularly in the high-growth Transcatheter Heart Valve market. The company's financial position remains solid, with robust operating cash flow and a healthy liquidity position, supported by ongoing share repurchase programs and a well-utilized credit facility. Investors should note the strong top-line growth, the significant impact of the litigation award on profitability, and continued investment in R&D to support future product development.

Financial Highlights

45 data points
Beta

Revenue

$496.70M

75.6% Gross Margin

Net Income

$143.90M

29.0% Net Margin

EPS (Diluted)

$0.21

Total Assets

$2.30B

Cash & Equivalents

$401.50M

Free Cash Flow

$64.30M

Financial Statements
Beta
Revenue$496.70M
Cost of Revenue$121.00M
Gross Profit$375.70M
R&D Expenses$79.80M
SG&A Expenses$182.40M
Net Income$143.90M
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)683.40M
Shares Outstanding (Diluted)699.00M

Key Highlights

  • 1Net sales increased by 8.2% to $496.7 million in Q1 2013 compared to Q1 2012.
  • 2Transcatheter Heart Valve sales surged by 39.7%, driven by the Edwards SAPIEN valve in the U.S.
  • 3Net income increased significantly to $144.9 million, up from $65.1 million in Q1 2012.
  • 4Diluted Earnings Per Share (EPS) rose to $1.24, more than doubling from $0.55 in the prior year.
  • 5The company received a special gain of $83.6 million from a litigation award.
  • 6Gross profit margin improved by 3.1 percentage points to 75.4% due to product mix and currency effects.
  • 7Research and Development expenses increased by $11.2 million, reflecting investments in clinical studies.

Frequently Asked Questions

The primary driver of the 8.2% increase in net sales was the Transcatheter Heart Valves segment, which saw a 39.7% growth. This was largely due to the strong performance of the Edwards SAPIEN transcatheter heart valve in the United States, following FDA approval for high-risk patients.

The company received a special gain of $83.6 million in February 2013 from a litigation award related to patent infringement. This significantly boosted net income and contributed to the substantial increase in diluted Earnings Per Share (EPS) for the quarter.

While the Transcatheter Heart Valves segment is showing robust growth, Surgical Heart Valve Therapy and Critical Care segments experienced modest declines in sales. The company continues to invest in R&D to support future product development across its segments.

The company maintains a solid liquidity position with $401.5 million in cash and cash equivalents. It has a $500 million credit facility, of which $192.7 million was outstanding at the end of the quarter. The company is also actively engaged in share repurchase programs, demonstrating confidence in its financial health and commitment to returning value to shareholders.