BD Announces Results For 2018 Second Fiscal Quarter; Raises Fiscal 2018 Guidance

FRANKLIN LAKES, N.J., May 3, 2018 /PRNewswire/ -- BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today reported quarterly revenues of $4.222 billion for the second fiscal quarter ended March 31, 2018.  This represents an increase of 42.2 percent from the prior-year period, which is primarily due to the acquisition of C. R. Bard.  On a comparable, currency-neutral basis that includes the revenues of C.R. Bard in the current and prior year, revenues increased 5.7 percent over the prior-year period, including an estimated 80 basis point adverse impact from the previously disclosed change in the U.S. dispensing business model.

"Our results this quarter mark a significant milestone in our 120-year history, as we welcomed C. R. Bard to BD," said Vincent A. Forlenza, Chairman and CEO.  "We have strong momentum as we execute on the integration of Bard, and we are on track to deliver on all of our commitments.  Together, BD and Bard will create even more impactful healthcare solutions for our customers and their patients around the world."

Second Quarter and Six-Month Fiscal 2018 Operating Results
As reported, diluted earnings per share for the second quarter were $(0.19), compared with $1.58 in the prior-year period.  This represents a decrease of 112.0 percent and is primarily due to purchase accounting expenses related to acquisitions.  Adjusted diluted earnings per share were $2.65, compared with $2.30 in the prior-year period.  This represents an increase in adjusted diluted earnings per share of 15.2 percent, or 7.8 percent on a currency-neutral basis.

For the six-month period ended March 31, 2018, as reported, diluted earnings per share were $(0.90), compared with $4.15 in the prior-year period.  This represents a decrease of 121.7 percent and is primarily due to purchase accounting expenses, acquisition-related costs, and additional tax expense relating to new U.S. tax legislation, as well as a litigation reserve reversal in the prior-year period following a favorable appellate antitrust ruling.  Adjusted diluted earnings per share were $5.15, compared with $4.63 in the prior-year period.  This represents an increase in adjusted diluted earnings per share of 11.2 percent, or 6.0 percent on a currency-neutral basis.

Segment Results
In the BD Medical segment, as reported, worldwide revenues for the quarter of $2.172 billion increased 19.7 percent from the prior-year period.  On a comparable, currency-neutral basis, BD Medical revenues increased 4.2 percent over the prior-year period, including an estimated 160 basis point impact from the change in the U.S. dispensing business model.  The segment's results were driven by performance in the Medication Delivery Solutions, Diabetes Care and Pharmaceutical Systems units.  Performance in the Medication Management Solutions unit reflects the adverse impact of the change in the U.S. dispensing business model.

For the six-month period ended March 31, 2018, BD Medical revenues were $4.024 billion as reported, an increase of 11.6 percent from the prior-year period.  On a comparable, currency-neutral basis, BD Medical revenues of $4.234 billion increased 3.3 percent over the prior-year period, including an estimated 170 basis point adverse impact from the change in the U.S. dispensing business model.

In the BD Life Sciences segment, as reported, worldwide revenues for the quarter were $1.098 billion, an increase of 11.8 percent over the prior-year period, or 7.3 percent on a currency-neutral basis.  Revenue growth reflects strong performance in the Diagnostic Systems and Biosciences units.  Growth in the Preanalytical Systems unit was negatively impacted by a production issue in one of its product lines which was resolved during the quarter.  BD Life Sciences' growth was aided by flu-related revenues in the Diagnostic Systems unit as a result of a stronger flu season in comparison to the prior year.

For the six-month period ended March 31, 2018, BD Life Sciences revenues were $2.143 billion as reported, an increase of 10.4 percent from the prior-year period, or an increase of 7.3 percent on a currency-neutral basis.

In the BD Interventional segment, as reported, worldwide revenues for the quarter were $0.952 billion.  On a comparable, currency-neutral basis, revenues grew 7.1 percent over the prior-year period.  The segment's results reflect strong performance in the Peripheral Intervention and Urology and Critical Care units and solid growth in the Surgery unit.

For the six-month period ended March 31, 2018, BD Interventional revenues were $1.135 billion as reported.  On a comparable, currency-neutral basis, BD Interventional revenues increased 4.9 percent.

Geographic Results
As reported, second quarter revenues in the U.S. of $2.325 billion increased 42.9 percent from the prior-year period.  On a comparable basis, U.S. revenues increased 4.0 percent over the prior-year period, including an estimated 150 basis point adverse impact from the change in the U.S. dispensing business model.  Within the BD Medical segment in the U.S., growth in the Medication Delivery Solutions, Diabetes Care and Pharmaceutical Systems units was partially offset by a decline in the Medication Management Solutions unit.  Performance in the Medication Management Solutions unit reflects the adverse impact of the change in the U.S. dispensing business model.  BD Life Sciences segment results in the U.S. reflect strength in the Diagnostic Systems and Biosciences units.  Revenues in the Preanalytical Systems unit were negatively impacted by the aforementioned production issue in one of its product lines.  BD Life Sciences' growth in the U.S. was aided by the aforementioned flu-related revenues in the Diagnostic Systems unit as a result of a stronger flu season in comparison to the prior year.  Growth in the BD Interventional segment in the U.S. was driven by performance across the Peripheral Intervention, Urology and Critical Care and Surgery units.

As reported, revenues outside of the U.S. of $1.898 billion increased 41.4 percent from the prior-year period.  On a comparable, currency-neutral basis, revenues outside of the U.S. grew 7.9 percent over the prior-year period.  International revenue growth reflects strong performance across the BD Medical, BD Life Sciences and BD Interventional segments.

For the six-month period ended March 31, 2018, U.S. revenues were $3.982 billion as reported, an increase of 22.3 percent over the prior-year period.  On a comparable basis, U.S. revenues grew 2.6 percent over the prior-year period, including an estimated 220 basis point adverse impact from the change in the U.S. dispensing business model.  As reported, revenues outside of the U.S. of $3.321 billion grew 26.0 percent over the prior-year period.  On a comparable, currency-neutral basis, revenues outside the U.S. grew 7.5 percent over the prior-year period.

Fiscal 2018 Outlook for Full Year
The company now expects full fiscal year 2018 revenues to increase approximately 31.0 to 31.5 percent on a reported basis.  This is an improvement from previously issued guidance of 30.0 to 31.0 percent growth.  On a comparable, currency-neutral basis, the company is raising its revenue guidance to 5.0 to 5.5 percent growth, which is the high end of its previous guidance range.  This includes an estimated 50 basis point adverse impact from the change in the U.S. dispensing business model and the estimated sales impact from Hurricane Maria in Puerto Rico on Bard's business during BD's first fiscal quarter.

The company is raising its full fiscal year 2018 adjusted diluted earnings per share guidance to be between $10.90 and $11.05 due to an increase in the estimated benefit from foreign currency.  This represents growth of approximately 15.0 to 16.5 percent over fiscal 2017 adjusted diluted earnings per share, and is an increase from previous guidance of $10.85 to $11.00 which represented growth of approximately 15.0 to 16.0 percent.  On a currency-neutral basis, the company continues to expect full fiscal year adjusted diluted earnings per share growth of approximately 12.0 percent.

Estimated adjusted diluted earnings per share for fiscal 2018 excludes potential charges or gains that may be recorded during the fiscal year, such as, among other things, the non-cash amortization of intangible assets, acquisition-related charges, and certain tax and litigation matters.  BD does not attempt to provide reconciliations of forward-looking non-GAAP earnings guidance to the comparable GAAP measure because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts.  In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors.  Such items could have a substantial impact on GAAP measures of BD's financial performance.

Conference Call Information
A conference call regarding BD's second quarter results will be broadcast live on BD's website, www.bd.com/investors, along with related slides, at 8:00 a.m. (ET) Thursday, May 3, 2018.  The conference call will be available for replay on BD's website, www.bd.com/investors, or at 1-800-585-8367 (domestic) and 1-404-537-3406 (international) through the close of business on Thursday, May 10, 2018, confirmation number 2857189.

Non-GAAP Financial Measures/Financial Tables
This news release contains certain non-GAAP financial measures.  Reconciliations of these and other non-GAAP measures to the comparable GAAP measures are included in the attached financial tables.  Within the attached financial tables presented, certain columns and rows may not add due to the use of rounded numbers.  Percentages and earnings per share amounts presented are calculated from the underlying amounts.

All "comparable" basis revenue growth rates relating to fiscal year 2018 presented throughout this release include the results of C. R. Bard, Inc. ("Bard") in the current and prior-year periods and are further adjusted for certain items as detailed in the attached tables. Beginning in the second quarter of fiscal year 2018, the Company's organizational structure was based upon three principal business segments: BD Medical ("Medical"), BD Life Sciences ("Life Sciences") and BD Interventional ("Interventional"). The Interventional segment was added upon the Company's completion of its acquisition of Bard, and this new segment includes the majority of Bard's product offerings and certain product offerings which were previously reported in the Medical segment.  Certain of Bard's product offerings are included under the Company's Medical segment, specifically within the new Medication Delivery Solutions unit, which was formerly the Medical segment's Medication and Procedural Solutions unit.  Prior-year amounts have been revised to reflect the movement of certain product offerings which were previously reported in the Medical segment and which are now reported in the Interventional segment, as discussed above. Current and prior-year adjusted diluted earnings per share results exclude, among other things, the impact of purchase accounting adjustments (including the non-cash amortization of acquisition-related intangible assets); integration, restructuring and transaction costs; the reversal of a litigation reserve; and the loss on debt extinguishment. We also provide these measures on a currency-neutral basis after eliminating the effect of foreign currency translation, where applicable.  We calculate foreign currency-neutral percentages by converting our current-period local currency financial results using the prior period foreign currency exchange rates and comparing these adjusted amounts to our current-period results.  Reconciliations of these amounts to the most directly comparable GAAP measures are included in the tables at the end of this release.  As previously announced, comparable historical revenue schedules inclusive of Bard are available on the Investor page of BD's website, www.bd.com/investors, for BD's 2016 and 2017 fiscal years.  These schedules have been updated to include the first quarter of BD's fiscal year 2018.

About BD
BD is one of the largest global medical technology companies in the world and is advancing the world of health by improving medical discovery, diagnostics and the delivery of care. The company supports the heroes on the frontlines of health care by developing innovative technology, services and solutions that help advance both clinical therapy for patients and clinical process for health care providers. BD and its 65,000 employees have a passion and commitment to help improve patient outcomes, improve the safety and efficiency of clinicians' care delivery process, enable laboratory scientists to better diagnose disease and advance researchers' capabilities to develop the next generation of diagnostics and therapeutics. BD has a presence in virtually every country and partners with organizations around the world to address some of the most challenging global health issues. By working in close collaboration with customers, BD can help enhance outcomes, lower costs, increase efficiencies, improve safety and expand access to health care. In 2017, BD welcomed C. R. Bard and its products into the BD family. For more information on BD, please visit bd.com.

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This press release, including the section entitled "Fiscal 2018 Outlook for Full Year", contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding BD's performance, including future revenues and earnings per share.  All such statements are based upon current expectations of BD and involve a number of business risks and uncertainties.  Actual results could vary materially from anticipated results described, implied or projected in any forward-looking statement.  With respect to forward-looking statements contained herein, a number of factors could cause actual results to vary materially.  These factors include, but are not limited to: risks relating to the integration of the C.R. Bard operations, products and employees into BD and the possibility that the anticipated synergies and other benefits of the proposed acquisition will not be realized or will not be realized within the expected timeframe; the impact of the recent U.S. tax reform; legislative or regulatory changes to the U.S. healthcare system, potential cuts in governmental healthcare spending or measures to contain healthcare costs, each of which could result in reduced demand for our products or downward pricing pressure; adverse changes in regional, national or foreign economic conditions, particularly in emerging markets, including any impact on our ability to access credit markets and finance our operations, the demand for our products and services, utilization rates or otherwise, or our suppliers' ability to provide products needed for our operations; changes in interest or foreign currency exchange rates; new or changing laws and regulations impacting our business (including changes in laws impacting international trade) or changes in enforcement practices with respect to such laws; the relative strength or weakness of the flu season, our ability to successfully integrate any businesses we acquire; the adverse impact of cyber-attacks on our information systems or products; competitive factors including technological advances and new products introduced by competitors; interruptions in our supply chain or manufacturing processes; pricing and market pressures; difficulties inherent in product development, delays in product introductions and uncertainty of market acceptance of new products; adverse changes in geopolitical conditions; increases in energy costs and their effect on, among other things, the cost of producing BD's products; product efficacy or safety concerns resulting in product recalls or actions being taken by the FDA or other regulators; fluctuations in costs and availability of raw materials and in BD's ability to maintain favorable supplier arrangements and relationships; risks relating to our ability to continue to successfully integrate CareFusion's operations in order to fully obtain the benefits of the transaction; uncertainties of litigation (as described in BD's filings with the Securities and Exchange Commission); future healthcare reform outside the U.S., including changes in government pricing and reimbursement policies or other cost containment reforms; and issuance of new or revised accounting standards, as well as other factors discussed in BD's filings with the Securities and Exchange Commission.  We do not intend to update any forward-looking statements to reflect events or circumstances after the date hereof except as required by applicable laws or regulations.

Contact:
Monique N. Dolecki, Investor Relations - 201-847-5378
Kristen Cardillo, Corporate Communications - 201-847-5657