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

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.

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.

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