BD REPORTS SECOND QUARTER FISCAL 2022 FINANCIAL RESULTS

• Revenue of $5.0 billion increased 2.1% as reported and 3.9% on currency-neutral basis
• Revenue driven by base revenue growth of 8.2% as reported, 10.2% currency-neutral, partially offset by decline in worldwide COVID-only testing revenues to $214 million from $474 million in the prior year
• GAAP diluted EPS of $1.50; adjusted diluted EPS of $3.18
• Company raises mid-point of revenue and adjusted EPS guidance ranges; Adjusts for completed spin of Diabetes Care business

FRANKLIN LAKES, N.J., May 5, 2022 /PRNewswire/ -- BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today announced results for its second quarter of fiscal year 2022, which ended March 31, 2022.

"We delivered another quarter of strong growth across our base business through continued focused execution and progress against our BD2025 strategy, despite a dynamic and challenging macro environment," said Tom Polen, chairman, CEO and president of BD. "Our Grow-Simplify-Empower initiatives, innovation pipeline and capital deployment strategy are demonstrating momentum and we remain well-positioned to drive long-term growth and value for shareholders."

Recent Business Highlights

BD continues to advance its innovation-driven growth strategy, tuck-in M&A and ESG initiatives. 

• Completed Embecta Corp. (embecta) spin of BD's former Diabetes Care business, which is now one of the largest pure-play diabetes management companies in the world. Spin demonstrates BD's ongoing commitment to its BD 2025 strategy, and creates two, independent companies with attractive long-term value for BD shareholders.
• Completed the acquisition of Cytognos to expand from cancer discovery and diagnosis into post-treatment monitoring. Year-to-date, completed four strategic acquisitions aligned with innovation-driven growth strategy, committing about $500 million in capital to M&A.
• Launched new family of BD reagents that enables researchers to break through resolution boundaries in flow cytometry. BD Horizon RealYellow™ 586 Reagents have potential to accelerate discovery and drug development in oncology, autoimmune disorders and infectious diseases.
• Released new BD Rhapsody™ TCR/BCR Multiomic Assay which speeds discovery in autoimmune disorders, immuno-oncology and infectious diseases.
• Announced inaugural members of BD Scientific Advisory Board which will review innovation pipeline and advise on emerging trends in health care, science and technology.
• Named to Forbes' 2022 List of Best Employers for Diversity.
• Named to Newsweek's inaugural list of "America's Most Trusted Companies" in the Health Care and Life Sciences category.
• Ranked No. 1 in the Health Care Equipment & Services industry in America's Best Large Employers List by Forbes.

Second Quarter Fiscal 2022 Operating Results

Geographic Results

Segment Results

Second fiscal quarter revenue growth across the segments was driven by strong base business performance. 

The BD Medical segment includes the Medication Delivery Solutions (MDS), Medication Management Solutions (MMS), Pharmaceutical Systems (PS), and Diabetes Care (DC) business units. BD Medical revenue growth was driven by strong performance across PS, MMS and MDS. 

• MDS performance reflects strong growth in the U.S., particularly catheters and vascular care products, and improved utilization year-over-year.
• MMS performance reflects continued strong demand in the dispensing platform and in the infusion platform outside the U.S. driven by increased pump placements during the COVID pandemic.
• PS performance reflects continued strong demand for pre-fillable devices enabled by capacity expansion.
• DC performance reflects the timing of certain customer orders in the U.S.

The BD Life Sciences segment includes the Integrated Diagnostic Solutions (IDS) and Biosciences (BDB) business units. BD Life Sciences performance reflects growth in the base business of 14.2% as reported and 17.1% on a currency-neutral basis and the decline in COVID-only testing revenues. 

• IDS performance reflects a decline in COVID-only testing revenues, partially offset by growth in the base business that was driven by demand for combination flu/COVID-19 diagnostic tests and continued demand for specimen management products.
• BDB performance reflects continued strong demand for research solutions driven by the recovery in lab activity. Growth was also aided by the recent acquisition of Cytognos.

The BD Interventional segment includes the Surgery, Peripheral Intervention (PI), and Urology & Critical Care (UCC) business units. BD Interventional revenue growth reflects strong performance across the segment and the benefit from the comparison to the prior-year negative COVID impact on deferrable procedures. 

• Surgery performance reflects growth across the hernia, biosurgery and infection prevention platforms as deferrable procedure volumes recovered compared to the prior year. Growth was also aided by the recent acquisitions of Tepha and Tissuemed.
• PI performance reflects growth in the U.S. across the peripheral vascular disease, end stage kidney disease and oncology platforms and double-digit growth in China across the portfolio. Growth was also aided by the recent acquisition of Venclose.
• UCC performance was primarily driven by continued strong demand for chronic female incontinence products in the acute care & alternative care settings.

Assumptions and Outlook for Full Year Fiscal 2022

The company raised the mid-point of its full-year revenue and adjusted EPS guidance ranges, and adjusted for the completed spin of Embecta Corp. (NASDAQ: EMBC), which holds BD's former Diabetes Care business.

On a pre-spin basis, which includes the results of the Diabetes Care business, the company updated its full-year guidance as follows:

• The company now expects fiscal year 2022 revenues to be in the range of approximately $19.6 billion to $19.8 billion, which reflects an increase of approximately $50 million at the mid-point compared to $19.55 billion to $19.75 billion previously announced.
• Revenue guidance for fiscal year 2022 now assumes base business currency-neutral revenue growth of 6.75% to 7.75%, compared to 5.75% to 6.75% previously announced, which represents an increase of approximately 100 basis points at the mid-point or approximately $180 million.
• The revenue guidance range continues to assume approximately $450 million in COVID-19-only diagnostic testing revenues.
• Based on current rates, foreign exchange would represent a headwind of approximately 200 basis points to total company revenue growth compared to approximately 125 basis points previously announced.
• The company now expects fiscal year 2022 adjusted diluted EPS to be $12.85 to $13.00, which reflects an increase of 2.5 cents at the mid-point, including an operational increase of 7.5 cents offset by an incremental headwind of approximately 5 cents from foreign currency, compared to $12.80 to $13.00 previously.

On a post-spin basis which reflects the former Diabetes Care business as discontinued operations in both the current and prior-year periods, the company provided the following guidance:

• The company expects fiscal year 2022 revenues to be in the range of approximately $18.5 billion to $18.7 billion.
• Revenue guidance for fiscal year 2022 assumes base business currency-neutral revenue growth of 7.25% to 8.25%.
• The company expects fiscal year 2022 adjusted diluted EPS to be $11.15 to $11.30. Compared to the pre-spin guidance of $12.85 to $13.00, this reflects a net adjustment of approximately $1.70 for discontinued operations and a half-year of Transitional Services Agreement (TSA) income of approximately $35 million, as well as the contribution from supply agreements with embecta and the benefit from financing which are both expected to be minimal.

BD's outlook for fiscal 2022 reflects numerous assumptions about many factors that could affect its business, based on the information management has reviewed as of this date, which includes assumptions regarding the continued recovery from the COVID-19 pandemic.  Among other things, the company's outlook assumes continued easing of COVID-19 restrictions, no significant or lasting disruptions to deferrable procedure volumes, continued inflationary and supply chain pressure over the balance of the fiscal year, and no further significant escalation of macro-economic headwinds.  Management will discuss its outlook and several of its assumptions on its second fiscal quarter earnings call.

The company's expected adjusted diluted EPS for fiscal 2022 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, spin related charges, and certain tax matters.  BD does not attempt to provide reconciliations of forward-looking adjusted diluted non-GAAP EPS 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.  We also present our estimated revenue and adjusted diluted EPS growth for our 2022 fiscal year after adjusting for the anticipated impact of foreign currency translation. BD believes that this adjustment allows investors to better evaluate BD's anticipated underlying earnings performance for our 2022 fiscal year in relation to our underlying 2021 fiscal year performance.

Conference Call and Presentation Materials
BD will host an audio webcast today for the public, investors, analysts, and news media to discuss its second quarter results. The audio webcast will be broadcast live on BD's website, www.bd.com/investors at 8 a.m. (ET) Thursday, May 5, 2022.  Accompanying slides will be available on BD's website, www.bd.com/investors at approximately 6:30 a.m. (ET).  The conference call will be available for replay on BD's website, www.bd.com/investors. Alternatively, you can dial into the replay at 1-800-839-3012 (domestic) and 1-402-220-7232 (international) through the close of business on Thursday, May. 12, 2022.  A confirmation number is not needed to access the replay.

Non-GAAP Financial Measures/Financial Tables
This news release contains certain non-GAAP financial measures.  These include revenue growth rates on a currency-neutral basis, adjusted diluted earnings per share, base revenue and organic revenue.  These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States.  BD management believes that the use of non-GAAP measures to adjust for items that are considered by management to be outside of BD's underlying operational results or that affect period to period comparability helps investors to gain a better understanding of our performance year-over-year, to analyze underlying trends in our businesses, to analyze our base operating results, and understand future prospects.  Management uses these non-GAAP financial measures to measure and forecast the company's performance, especially when comparing such results to previous periods or forecasts.  We believe presenting such adjusted metrics provides investors with greater transparency to the information used by BD management for its operational decision-making and for comparison for other companies within the medical technology industry.  Although BD's management believes non-GAAP results are useful in evaluating the performance of its business, its reliance on these measures is limited since items excluded from such measures may have a material impact on BD's net income, earnings per share or cash flows calculated in accordance with GAAP.  Therefore, management typically uses non-GAAP results in conjunction with GAAP results to address these limitations.  BD strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP measures used by BD may differ from similar measures used by other companies, even when similar terms are used to identify such measures.  Non-GAAP measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.

We present adjusted diluted earnings per share for the second fiscal quarter and the first six months of fiscal year 2022, and the corresponding prior periods, after eliminating items we believe are not part of our ordinary operations and affect the comparability of the periods presented. We also present adjusted diluted earnings per share for the full 2021 fiscal year. Adjusted diluted earnings per share includes adjustments for the impact of purchase accounting adjustments, integration and restructuring costs, spin related charges, certain transaction gains and losses, certain legal defense and product remediation costs, certain regulatory costs, certain investment gains and losses, certain asset impairment costs, and the impact of the extinguishment of debt. In particular, current and prior-year adjusted diluted earnings per share results exclude European regulatory initiative-related costs, which represent costs incurred to develop processes and systems to establish initial compliance with the European Union Medical Device Regulation and the European Union In Vitro Diagnostic Medical Device Regulation (collectively, the "New EU Medical Devices Regulations"), which represent a significant, unusual change to the existing regulatory framework.  We consider the excluded European regulatory initiative-related costs to be duplicative of previously incurred costs and/or one-off costs related to establishing initial compliance with such regulatory regimes, and in each case are limited to a specific period of time.  These expenses relate to establishing initial compliance with the New EU Medical Devices Regulations and include the cost of labor, other services and consulting (in particular, research and development and clinical trials) and supplies, travel and other miscellaneous costs.  These costs were recorded in Cost of products sold and Research and development expense.

We also present revenue growth rates for the second fiscal quarter and the first six months of fiscal year 2022 over the corresponding prior periods on a currency-neutral basis after eliminating the effect of foreign currency translation, where applicable.  We also show the growth in adjusted diluted earnings per share compared to the prior year period after eliminating the impact of foreign currency translation to further enable investors to evaluate BD's underlying earnings performance compared to the prior period.  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.  As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a foreign currency-neutral basis in addition to reported results helps improve investors' ability to understand our operating results and evaluate our performance in comparison to prior periods.

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.

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 75,000 employees have a passion and commitment to help enhance the safety and efficiency of clinicians' care delivery process, enable laboratory scientists to accurately detect 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.  For more information on BD, please visit bd.com or connect with us on LinkedIn at www.linkedin.com/company/bd1/ and Twitter @BDandCo.

This press release contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding BD's future prospects and performance, including, but not limited to, 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 any impact of the current disruptions in the global supply chain on our operations, including our ability to source raw materials and components needed to manufacture our products and inflationary pressures; the possible impact of the COVID-19 pandemic on our business and the global healthcare system (including decreases in the demand for our products,  disruptions to our operations (including the impact of employee absenteeism) and our supply chain, and factors such as vaccine utilization rates, the rate of infections, the emergence of new variants and competitive factors that could impact the demand and pricing for our COVID-19 diagnostics testing); product efficacy or safety concerns resulting in product recalls or actions being taken with respect to our products; new or changing laws and regulations impacting our business (including the imposition of tariffs, changes in tax laws, new environmental laws and regulations, or changes in laws impacting international trade) or changes in enforcement practices with respect to such laws; labor shortages and increased labor costs; our suppliers' ability to provide products needed for our operations and BD's ability to maintain favorable supplier arrangements and relationships; legislative or regulatory changes to the U.S. or foreign healthcare systems, potential cuts in governmental healthcare spending (including China's volume-based procurement tender process) or governmental or private measures to contain healthcare costs, including changes in pricing and reimbursement policies, each of which could result in reduced demand for our products or downward pricing pressure; changes in interest or foreign currency exchange rates; adverse changes in regional, national or foreign economic conditions, including inflation, deflation and fluctuations in interest rates, particularly in emerging markets, including any impact on our ability to access credit markets and finance our operations; the adverse impact of cyber-attacks on our information systems or products; competitive factors including technological advances and new products introduced by competitors; risks relating to our overall indebtedness; interruptions in our manufacturing or sterilization 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; the remediation of our infusion pump business (including risks relating to our ability to obtain regulatory clearance and market acceptance of the BD Alaris™ System); our ability to achieve our projected level or mix of product sales; our ability to successfully integrate any businesses we acquire; uncertainties of litigation and/or investigations and/or subpoenas (as described in BD's filings with the Securities and Exchange Commission); and the issuance of new or revised accounting standards, as well as other factors discussed in BD's filings with the Securities and Exchange Commission ("SEC").  In addition, we have made certain assumptions in making these forward-looking statements, particularly regarding the COVID-19 pandemic.  If any of these assumptions are incorrect, BD's actual results could differ materially from those described in these forward-looking statements. The Russia and Ukraine conflict may also heighten the impact of certain of these factors described above as well as other factors discussed in BD's filings with the SEC. 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:
Investors: Francesca DeMartino, SVP, Head of Investor Relations - 201-847-5743
Media: Troy Kirkpatrick, VP, Public Relations - 858-617-2361

Note - Base Business Revenues denotes total revenues less estimated revenues for COVID-19 only diagnostic testing

SOURCE BD (Becton, Dickinson and Company)