Edwards Lifesciences Corp Quarterly Report for Q1 Ended Mar 31, 2016

Summary

Edwards Lifesciences Corporation reported solid revenue growth of 18.1% for the first quarter of 2016, reaching $697.3 million, driven primarily by strong performance in its Transcatheter Heart Valve (THV) Therapy segment, particularly the SAPIEN 3 valve. The company's net income also saw a healthy increase of 15.9% to $143.0 million, translating to diluted earnings per share of $0.66, up from $0.56 in the prior year's comparable period. While gross profit margin saw a slight decline due to foreign currency impacts, the company effectively managed its operating expenses, leading to improved profitability. The company highlighted its ongoing investment in R&D and its strong liquidity position, with ample cash reserves and an undrawn credit facility.

Key Highlights

• 1Net sales increased by 18.1% to $697.3 million, primarily driven by the Transcatheter Heart Valve (THV) Therapy segment's 37.0% growth.
• 2Net income grew by 15.9% to $143.0 million, resulting in diluted EPS of $0.66, an increase from $0.56 in Q1 2015.
• 3The launch and adoption of the Edwards SAPIEN 3 valve in the United States and Europe were key drivers of THV sales growth.
• 4Research and development expenses increased by 16.0% to $102.4 million, reflecting continued investment in new product development, particularly in mitral and aortic THV.
• 5The company actively repurchased shares, with $400.0 million spent on treasury stock purchases during the period, including accelerated share repurchase agreements.
• 6Gross profit margin decreased by 2.9 percentage points to 74.1%, mainly due to foreign currency exchange rate fluctuations.
• 7The company continues to face ongoing intellectual property litigation with Boston Scientific, with new lawsuits filed in Q1 2016 and Q2 2016.

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