Medical technologies major
CR Bard Inc.
) posted an 18.6% rise in adjusted earnings per share to $1.91
for the first quarter of 2014 from $1.61 in the prior-year
quarter. Earnings per share surpassed the Zacks Consensus
Estimate of $1.86 as well as the company's previously announced
guidance range of $1.83 to $1.87.
Adjusted earnings rose 12.8% to $152.6 million in the quarter
from $135.3 million in the prior-year quarter. Adjusted earnings
exclude one-time items such as acquisition-related expenses and
gain on sale of investment.
On a reported basis, BCR's net earnings were $148.4 million or
$1.86 per share for the first quarter, up 63.6% and 72.2% from
$90.7 million and $1.08 per share, respectively, in the year-ago
Revenues grew 8.0% both in terms of reported and constant
currency on a year-over-year basis to $799.3 million. Revenues
surpassed the Zacks Consensus Estimate of $792 million while
revenue growth exceeded the company's previously announced
guidance of 6 to 7%.
The quarterly royalty payment from Gore, which was included in
revenues for the first time in the reported quarter, was $37.6
million, which reflected an increase of 4% over the payment made
to the court a year ago.
On a geographic basis, revenues in the U.S. grew 10.6% to $551.4
million from $498.5 million a year ago. Excluding the royalty
payment which was reported entirely in the U.S., revenues went up
3.0% in the quarter. International revenues grew 2.5% both
in terms of reported and constant currency to $247.9 million, led
by healthy sales in emerging markets.
Revenues from the core
category increased 7.9% to $219.2 million, both in terms of
reported and constant currency. Sales in the U.S. dipped 4%
whereas international sales were up 5%. Excluding the royalty
payment from Gore and the impact from the divestiture of the
Electrophysiology business, total Vascular sales were flat in the
Revenues from vascular graft went down 1% in the quarter.
Excluding the royalty payment, the Endovascular business was flat
in the first quarter. Within Endovascular business, biopsy line
revenues rose 5%, due to strong international growth. Revenues
from the peripheral PTA line increased 7% in the quarter with
healthy double-digit growth outside the U.S. driven by sales of
the Lutonix drug-coated balloon.
Revenues from the vena cava filter line increased 5%, whereas,
revenues from the Stent business declined 11% due to continued
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Revenues from the
business increased 6.7% to $201.4 million, both in terms of
reported and constant currency. Revenues from the U.S. went up
5%, while it grew 12% internationally. Sale of products acquired
from Rochester Medical contributed to global growth in this
Within Urology, revenues from the basic drainage business
increased 7%, with about 500 bps of growth generated from the
acquired Rochester medical products. I.C. Foley's revenues were
flat globally and down 3% in the U.S. Revenues from the
continence business grew 25% in the quarter, mainly driven by the
new male external catheter sales.
Revenues from neurological specialties went up 6% with the
brachytherapy revenues down 8%. Revenues from StatLock catheter
stabilization line, however, decreased 4% in the quarter.
Revenues from the
category rose 5.7% to $219.0 million, both in reported and
constant foreign exchange. Revenues were up 5% in the U.S. and
11% outside the U.S. Revenues from peripherally inserted central
catheters (PICC) grew 11% in the quarter with continued strong
performance in the U.S. and abroad. However, revenues from
Vascular Access ultrasound product line dipped 5% in the quarter.
Lastly, revenues from dialysis catheter business rose 8% in the
business increased 12.4% to $135.2 million. Revenues from the
U.S. rose 10% while international revenues were up 20% in the
quarter. About 10 percentage points of global growth was
attributed to the sales of Arista Hemostat product line acquired
during the last quarter.
Revenues from the soft tissue repair business grew 3% in the
quarter. Within soft tissue, synthetic hernia products revenues
posted a double-digit rise from the comparable last-year quarter
while biologics revenues were down 12%. Hernia fixation business
revenues declined 12% and performance irrigation business was
down 6% in the quarter.
product line escalated 17.2% to $24.5 million from $20.9 million
in the first quarter of 2013.
On an adjusted basis, gross margin was $490.4 million or 61.4%,
up 100 bps from the prior-year quarter. Marketing, selling, and
administrative expenses increased 9.5% to $236.7 million on an
adjusted basis while, as a percentage of sales, it increased 40
bps to 29.6%.
Research and development expenses increased 8.5% to $63.9 million
on an adjusted basis. As a percentage of sales, R&D remained
flat at 8% on both reported and adjusted bases.
Adjusted operating income increased 11.4% to $190.7 million while
adjusted operating margin increased 80 bps to 23.9% in the first
BCR ended the first quarter with cash, restricted cash and
short-term investments of approximately $1 billion versus $1.1
billion as of Dec 31, 2013. Total debt remained flat at $1.4
billion compared with the same at the end of last year.
Debt-to-capital ratio was roughly 41% as of Mar 31, 2014.
Capital expenditures amounted to $22.7 million for the first
Moving ahead, BCR expects constant currency sales growth between
6 and 8% in the second quarter of 2014. On the earnings front,
the company expects adjusted earnings in the range of $1.98 to
$2.02 a share. The current Zacks Consensus Estimate of $2.03 for
the quarter lies above the guided range.
The company reiterated its adjusted EPS guidance between $8.20
and $8.30 for the full year. The current Zacks Consensus Estimate
of $8.25 lies within the guided range.
BCR currently carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the medical/dental supply industry include
Align Technology Inc.
Cardinal Health, Inc.
The Cooper Companies Inc.
). While Align Technology carries a Zacks Rank #1 (Strong Buy),
both Cardinal Health and The Cooper Companies retain a Zacks Rank