Becton, Dickinson and (BDX)
Q3 2011 Earnings Call
August 02, 2011 8:00 am ET
William Kozy - Executive Vice President
Monique Dolecki -
Tom Polen -
Vince Forlenza - President and Chief Operating Officer
Edward Ludwig - Chairman, Chief Executive Officer and Chairman of Executive Committee
David Elkins - Chief Financial Officer and Executive Vice President
Gary Cohen - Executive Vice President
William Rhodes -
William Quirk - Piper Jaffray Companies
Sara Michelmore - Brean Murray, Carret & Co., LLC
Brian Weinstein - William Blair & Company L.L.C.
Jonathan Groberg - Macquarie Research
Michael Weinstein - JP Morgan Chase & Co
David Roman - Goldman Sachs Group Inc.
Matthew Buten - Sapphire Capital
Kristen Stewart - Deutsche Bank AG
Jeffrey Frelick - Canaccord Genuity
Frederick Wise - Leerink Swann LLC
David Lewis - Morgan Stanley
Lawrence Keusch - Morgan Keegan & Company, Inc.
Peter Lawson - Mizuho Securities USA Inc.
Doug Schenkel - Cowen and Company, LLC
Jon Wood - Jefferies & Company, Inc.
Charles Butler - Barclays Capital
Amit Bhalla - Citigroup Inc
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[Operator Instructions] Beginning today's call is Ms. Monique Dolecki. Ms. Dolecki, you may begin your conference.
Thank you, Jackie. Good morning, everyone, and thank you for joining us to review our third fiscal quarter results. As we referenced in our press release, we are presenting a set of slides to accompany our remarks on this call. The slide presentation is posted on the Investor Relations page of our website at bd.com.
During today's call, we will make forward-looking statements, and it is possible that actual results could differ from our expectations. Factors that could cause such differences appear in our third fiscal quarter press release and in the MD&A sections of our recent SEC filings.
We will also discuss some non-GAAP financial measures with respect to our performance. A reconciliation to GAAP measures can be found in our press release and its related financial schedule and then the slide. A copy of the release, including financial schedules is posted on the bd.com website.
Starting the call this morning is Ed Ludwig, Chairman and Chief Executive Officer. Also joining us are Vince Forlenza, President and Chief Operating Officer; David Elkins, Executive Vice President and Chief Financial Officer; BD Executive Vice Presidents, Gary Cohen and Bill Kozy; as well as Bill Rhodes, President of BD Biosciences; and Tom Polen, President of Diagnostic Systems. It is now my pleasure to turn the call over to Ed.
Thank you, Monique, and good morning, everyone. Before we discuss the results of the quarter, I would like to take a moment to discuss the announcement issued last week regarding the leadership change in our organization. As you may already know, the Board of Directors elected Vince Forlenza to succeed me as Chief Executive Officer effective October 1, 2011. Vince will also become a member of the board at that time. I will remain Executive Chairman of the board through June of 2012.
Vince's election is the culmination of a careful, long-term succession plan and the process, which was conducted by the board with my full support, which began in 2009 when Vince was named President. Over the past 30 years, Vince has distinguished himself as a leader. He has had an outstanding career that has spanned to strategic planning, marketing, international, technical, business development, general management and executive leadership roles. His experience and achievements eminently qualify him to lead this company and our leadership team into the next phase of growth. It's now my pleasure to turn the call over to Vince.
Thank you, Ed, and good morning, everyone. I'm honored to have been elected by the board to succeed Ed as Chief Executive Officer when we begin our new fiscal year. I've had the privilege of working with Ed for 28 years, and I believe he's done an outstanding job over the past 12 years as CEO. Ed has led the company through both prosperous and challenging times, always ensuring that we maintained our purpose of helping all people live healthy lives. He created a strong platform for growth, and we will continue to build off the key initiatives Ed put in place during his time as Chief Executive Officer.
Now moving on to Slide 4. I'll start off today's presentation by carrying a few of the key messages from our third fiscal quarter results. As Ed stated in our press release, we were pleased with our results in the quarter. Revenue growth came in at 4.8% currency neutral. Strong international safety revenues and emerging market growth were partially offset by our results in Western Europe. We continue to see softness in Western Europe due to various austerity measures and lower health care utilization.
Moving on to Japan. I would like to provide a brief update since our last earnings call subsequent to the March earthquake and tsunami. We're pleased to report that our business in Japan is fully operational. We restarted the manufacturing of the BD Hypak prefillable syringes in early May, which was ahead of schedule. We are still evaluating the longer-term impact on the company, but we believe that the bulk of the challenges are behind us.
For the full year, we are reaffirming that the impact of Japan will be approximately $50 million on revenue and about $0.05 to EPS. This was already built in to the total year guidance we have provided you back in April. I would also like to briefly discuss the newly announced planned acquisition.
Last week, we announced that we had signed a definitive agreement to acquire Carmel Pharma, a Swedish company that manufactures the PhaSeal System. This is the leading closed system drug transfer device for the safe handling of hazardous drugs that are packaged in vials. This system minimizes the risk of exposure to potentially harmful liquids and vapors from toxic drugs such as those used in treatment of cancer. The expected dilution of the acquisition for the fiscal year is approximately $0.05. This is not build into our total year guidance because the deal has not yet closed. We expect the deal to close prior to the end of the fiscal year.