Edwards Lifesciences Reports Second Quarter Results
Highlights and Outlook
- Q2 sales grew 7%; constant currency1 sales grew 8%
- Q2 TAVR sales grew 5%; constant currency1 sales grew 6%
- Q2 TMTT sales grew 75%; increasing contribution to Edwards' growth
-
Q2 EPS of
$0.61 ; adjusted1 EPS of$0.70 -
Significant TAVR and TMTT clinical evidence to be presented at TCT in
October 2024 - Positive EVOQUE introduction with excellent patient outcomes; NCD process on track
- Critical Care sale expected to close late Q3 2024
-
Expect full-year 2024 Edwards sales growth of 8 to 10%; lowering TAVR guidance to 5 to 7% from 8 to 10%; increasing TMTT guidance to the higher end of
$320 to$340 million
“Second quarter total company sales growth of 8 percent reflected strong contributions from our rapidly growing TMTT product group, offset by lower-than-expected growth in TAVR," said
Transcatheter Aortic Valve Replacement (TAVR)
In the second quarter, the company reported TAVR sales of
Edwards remains pleased with the performance of its SAPIEN 3 Ultra RESILIA platform, which is the leading platform in the
Edwards is actively pursuing significant opportunities to grow TAVR globally over the long term and remains committed to advancing science for aortic stenosis patients through the PROGRESS and EARLY TAVR trials, which could fundamentally change how AS patients are treated. The company expects to release the results of the EARLY TAVR trial at TCT this year. Edwards believes if the data are compelling it could have a meaningful impact on the timing for patient treatment, while also streamlining referral and patient care for all severe AS patients.
Transcatheter Mitral and Tricuspid Therapies (TMTT)
In the second quarter, the company reported strong growth of both repair and replacement therapies for mitral and tricuspid patients.
Edwards’ deep structural heart expertise has enabled the company to significantly advance its portfolio of differentiated technologies, including the PASCAL repair system, EVOQUE tricuspid replacement system and the SAPIEN M3 mitral replacement system.
Second quarter sales were
Edwards remains engaged with the
Surgical Structural Heart and Critical Care
Surgical Structural Heart sales for the second quarter were
Critical Care sales, presented as discontinued operations, were
Additional Financial Results
For the quarter, the adjusted gross profit margin was 77.1%, compared to 77.7% in the same period last year. Last year's second quarter gross margin benefited from a more favorable impact from foreign exchange rates.
Adjusted selling, general and administrative expenses in the second quarter were
Adjusted research and development expenses in the second quarter were
Adjusted Earnings Per Share of
Cash, cash equivalents and short-term investments totaled
Outlook
Based on current trends, the company anticipates second half TAVR sales growth similar to the first half year-over-year growth rate, or 5 to 7% full-year growth versus previous guidance of 8 to 10%. For TMTT, based on first half momentum, the company is increasing full-year sales guidance to the higher end of the previous
The company expects Q3 sales of
About
Conference Call and Webcast Information
The company will be hosting a conference call today at
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can sometimes be identified by the use of words such as “may,” “will,” “should,” “anticipate,” “believe,” “plan,” “project,” “estimate,” “forecast,” “potential,” “predict,” "early clinician feedback," “expect,” “intend,” “guidance,” “outlook,” “optimistic,” “aspire,” “confident” or other forms of these words or similar expressions and include, but are not limited to, statements made by
Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements. Factors that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements include risk and uncertainties associated with the sale of our Critical Care product group; our ability to close in time, or at all, on acquisitions and to leverage and integrate their technologies and businesses; and other risks detailed in the company's filings with the
Edwards,
__________________
[1] |
|
"Constant currency” growth rates exclude foreign exchange fluctuations. Sales growth guidance refers to constant currency. "Adjusted" amounts are non-GAAP items. Adjusted earnings per share is a non-GAAP item computed on a diluted basis and in this press release also excludes an intellectual property agreement and certain litigation expenses, amortization of intangible assets, fair value adjustments to contingent consideration liabilities arising from acquisitions, and one-time separation costs related to the planned sale of Critical Care and include the results of the discontinued operations. See “Non-GAAP Financial Information” and reconciliation tables below. |
Unaudited Consolidated Statements of Operations (in millions, except per share data) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net sales |
$ |
1,385.9 |
|
|
$ |
1,295.5 |
|
|
$ |
2,732.8 |
|
|
$ |
2,533.2 |
|
Cost of sales |
|
285.3 |
|
|
|
256.9 |
|
|
|
581.6 |
|
|
|
495.9 |
|
Gross profit |
|
1,100.6 |
|
|
|
1,038.6 |
|
|
|
2,151.2 |
|
|
|
2,037.3 |
|
Selling, general, and administrative expenses |
|
450.8 |
|
|
|
410.4 |
|
|
|
883.6 |
|
|
|
792.4 |
|
Research and development expenses |
|
272.6 |
|
|
|
243.7 |
|
|
|
530.4 |
|
|
|
478.5 |
|
Intellectual property agreement and certain litigation expenses |
|
8.1 |
|
|
|
147.9 |
|
|
|
17.0 |
|
|
|
191.4 |
|
Change in fair value of contingent consideration liabilities |
|
— |
|
|
|
(26.9 |
) |
|
|
— |
|
|
|
(26.2 |
) |
Operating income, net |
|
369.1 |
|
|
|
263.5 |
|
|
|
720.2 |
|
|
|
601.2 |
|
Interest income, net |
|
(15.5 |
) |
|
|
(9.1 |
) |
|
|
(32.0 |
) |
|
|
(17.7 |
) |
Other income, net |
|
(2.0 |
) |
|
|
(2.5 |
) |
|
|
(7.7 |
) |
|
|
(3.7 |
) |
Income from continuing operations before provision for income taxes |
|
386.6 |
|
|
|
275.1 |
|
|
|
759.9 |
|
|
|
622.6 |
|
Provision for income taxes |
|
20.2 |
|
|
|
20.9 |
|
|
|
66.8 |
|
|
|
66.2 |
|
Net income from continuing operations |
|
366.4 |
|
|
|
254.2 |
|
|
$ |
693.1 |
|
|
$ |
556.4 |
|
(Loss) income from discontinued operations, net of tax |
|
(1.4 |
) |
|
|
51.3 |
|
|
|
22.9 |
|
|
|
89.6 |
|
Net income |
|
365.0 |
|
|
|
305.5 |
|
|
|
716.0 |
|
|
|
646.0 |
|
Net loss attributable to noncontrolling interest |
|
(1.3 |
) |
|
|
(1.6 |
) |
|
|
(2.2 |
) |
|
|
(1.6 |
) |
Net income attributable to |
$ |
366.3 |
|
|
$ |
307.1 |
|
|
$ |
718.2 |
|
|
$ |
647.6 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
0.61 |
|
|
$ |
0.42 |
|
|
$ |
1.15 |
|
|
$ |
0.92 |
|
Discontinued operations |
$ |
— |
|
|
$ |
0.09 |
|
|
$ |
0.04 |
|
|
$ |
0.15 |
|
Basic earnings per share |
$ |
0.61 |
|
|
$ |
0.51 |
|
|
$ |
1.19 |
|
|
$ |
1.07 |
|
Diluted: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
0.61 |
|
|
$ |
0.42 |
|
|
$ |
1.15 |
|
|
$ |
0.91 |
|
Discontinued operations |
$ |
— |
|
|
$ |
0.08 |
|
|
$ |
0.04 |
|
|
$ |
0.15 |
|
Diluted earnings per share |
$ |
0.61 |
|
|
$ |
0.50 |
|
|
$ |
1.19 |
|
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
602.1 |
|
|
|
606.9 |
|
|
|
601.8 |
|
|
|
607.2 |
|
Diluted |
|
604.3 |
|
|
|
610.3 |
|
|
|
604.2 |
|
|
|
610.6 |
|
|
|
|
|
|
|
|
|
||||||||
Operating statistics from continuing operations |
|
|
|
|
|
|
|
||||||||
As a percentage of net sales: |
|
|
|
|
|
|
|
||||||||
Gross profit |
|
79.4 |
% |
|
|
80.2 |
% |
|
|
78.7 |
% |
|
|
80.4 |
% |
Selling, general, and administrative expenses |
|
32.5 |
% |
|
|
31.7 |
% |
|
|
32.3 |
% |
|
|
31.3 |
% |
Research and development expenses |
|
19.7 |
% |
|
|
18.8 |
% |
|
|
19.4 |
% |
|
|
18.9 |
% |
Operating income |
|
26.6 |
% |
|
|
20.3 |
% |
|
|
26.4 |
% |
|
|
23.7 |
% |
Income before provision for income taxes |
|
27.9 |
% |
|
|
21.2 |
% |
|
|
27.8 |
% |
|
|
24.6 |
% |
Net income from continuing operations |
|
26.4 |
% |
|
|
19.6 |
% |
|
|
25.4 |
% |
|
|
22.0 |
% |
|
|
|
|
|
|
|
|
||||||||
Effective tax rate |
|
5.2 |
% |
|
|
7.6 |
% |
|
|
8.8 |
% |
|
|
10.6 |
% |
__________________
Note: Numbers may not calculate due to rounding.
|
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|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
1,644.5 |
|
|
$ |
1,136.1 |
|
Short-term investments |
|
345.3 |
|
|
|
500.5 |
|
Accounts receivables, net |
|
778.3 |
|
|
|
771.5 |
|
Other receivables |
|
56.1 |
|
|
|
56.6 |
|
Inventories |
|
1,024.7 |
|
|
|
918.3 |
|
Prepaid expenses |
|
110.2 |
|
|
|
128.8 |
|
Other current assets |
|
252.1 |
|
|
|
224.9 |
|
Current assets of discontinued operations |
|
304.8 |
|
|
|
299.0 |
|
Total current assets |
|
4,516.0 |
|
|
|
4,035.7 |
|
Long-term investments |
|
353.3 |
|
|
|
583.9 |
|
Property, plant, and equipment, net |
|
1,640.1 |
|
|
|
1,592.8 |
|
Operating lease right-of-use assets |
|
92.8 |
|
|
|
84.4 |
|
|
|
1,151.0 |
|
|
|
1,152.5 |
|
Other intangible assets, net |
|
417.1 |
|
|
|
399.4 |
|
Deferred income taxes |
|
832.6 |
|
|
|
749.4 |
|
Other assets |
|
789.8 |
|
|
|
463.1 |
|
Non-current assets of discontinued operations |
|
306.6 |
|
|
|
302.0 |
|
Total assets |
$ |
10,099.3 |
|
|
$ |
9,363.2 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
1,088.3 |
|
|
$ |
1,044.8 |
|
Operating lease liabilities |
|
21.5 |
|
|
|
22.9 |
|
Current liabilities of discontinued operations |
|
107.2 |
|
|
|
127.7 |
|
Total current liabilities |
|
1,217.0 |
|
|
|
1,195.4 |
|
Long-term debt |
|
597.3 |
|
|
|
597.0 |
|
Taxes payable |
|
1.1 |
|
|
|
80.6 |
|
Operating lease liabilities |
|
74.2 |
|
|
|
65.2 |
|
Uncertain tax positions |
|
343.2 |
|
|
|
335.0 |
|
Litigation agreement accrual |
|
74.8 |
|
|
|
94.2 |
|
Other liabilities |
|
257.1 |
|
|
|
251.3 |
|
Non-current liabilities of discontinued operations |
|
30.0 |
|
|
|
25.1 |
|
Total liabilities |
|
2,594.7 |
|
|
|
2,643.8 |
|
Stockholders’ equity |
|
|
|
||||
Common stock |
|
653.5 |
|
|
|
650.5 |
|
Additional paid-in capital |
|
2,476.3 |
|
|
|
2,274.4 |
|
Retained earnings |
|
9,710.6 |
|
|
|
8,992.4 |
|
Accumulated other comprehensive loss |
|
(220.2 |
) |
|
|
(242.8 |
) |
|
|
(5,182.8 |
) |
|
|
(5,024.5 |
) |
|
|
7,437.4 |
|
|
|
6,650.0 |
|
Noncontrolling interest |
|
67.2 |
|
|
|
69.4 |
|
Total equity |
|
7,504.6 |
|
|
|
6,719.4 |
|
Total liabilities and equity |
$ |
10,099.3 |
|
|
$ |
9,363.2 |
|
Non-GAAP Financial Information
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the
Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results, and evaluating current performance. These non-GAAP financial measures are used in addition to, and in conjunction with, results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations by investors that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting the Company's business and facilitate comparability to historical periods.
Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. A reconciliation of non-GAAP historical financial measures to the most comparable GAAP measure is provided in the tables below.
Fluctuations in currency exchange rates impact the comparative results and sales growth rates of the Company's underlying business. Management believes that excluding the impact of currency exchange rate fluctuations from its sales growth provides investors a more useful comparison to historical financial results. The impact of the fluctuations has been detailed in the "Reconciliation of Sales by
Guidance for sales and sales growth rates is provided on a "constant currency basis," and projections for diluted earnings per share, net income and growth, gross profit margin, taxes, and free cash flow are also provided on a non-GAAP basis, as adjusted, for the items identified above due to the inherent difficulty in forecasting such items without unreasonable efforts. The Company is not able to provide a reconciliation of the non-GAAP guidance to comparable GAAP measures due to the unknown effect, timing, and potential significance of special charges or gains, and management's inability to forecast charges associated with future transactions and initiatives.
Management considers free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by business operations, after deducting payments for capital expenditures, which can then be used for strategic opportunities or other business purposes including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock.
The items described below are adjustments to the GAAP financial results in the reconciliations that follow:
Certain Litigation Expenses - The Company incurred certain litigation expenses of
Amortization of Intangible Assets - The Company recorded amortization expense related to developed technology and patents in the amount of
Separation Costs - The Company incurred separation costs of
Change in Fair Value of Contingent Consideration Liabilities - The Company recorded expense of
Intellectual Property Agreement - The Company recorded a
Provision for Income Taxes - The income tax impacts of the expenses and gains discussed above are based upon the items' forecasted effect upon the Company's full year effective tax rate. Adjustments to forecasted items unrelated to the expenses and gains above, as well as impacts related to interim reporting, will have an effect on the income tax impact of these items in subsequent periods.
Adjusted Free Cash Flow - The Company defines free cash flow as cash flows from operating activities less capital expenditures. During 2024, the Company excluded from its calculation payments for separation costs associated with the planned sale of Critical Care and a material tax deposit made to mitigate interest on potential tax liabilities that the Company is contesting through the judicial process. During 2023, the Company excluded from its calculation a payment related to the Intellectual Property Agreement with
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|
Three Months Ended |
||||||||||||||||||||||||||||||
|
|
|
|
Gross
|
|
Selling,
|
|
Selling,
|
|
Research
|
|
Research
|
|
Operating
|
|
Net Income |
|
Diluted
|
|
Effective
|
||||||||||||
GAAP - Continuing Operations |
|
$ |
1,385.9 |
|
79.4 |
% |
|
$ |
450.8 |
|
32.5 |
% |
|
$ |
272.6 |
|
19.7 |
% |
|
$ |
369.1 |
|
|
$ |
366.4 |
|
|
$ |
0.61 |
|
5.2 |
% |
Discontinued operations |
|
|
246.4 |
|
(2.5 |
) |
|
|
57.7 |
|
(1.3 |
) |
|
|
30.6 |
|
(1.1 |
) |
|
|
(12.8 |
) |
|
|
(1.4 |
) |
|
|
— |
|
(3.1 |
) |
Attributable to noncontrolling interests |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
1.3 |
|
|
|
— |
|
— |
|
Total attributable to |
|
|
1,632.3 |
|
76.9 |
% |
|
|
508.5 |
|
31.2 |
% |
|
|
303.2 |
|
18.6 |
% |
|
|
356.3 |
|
|
|
366.3 |
|
|
|
0.61 |
|
2.1 |
% |
Non-GAAP adjustments: (A) (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certain litigation expenses |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
8.1 |
|
|
|
6.5 |
|
|
|
0.01 |
|
0.3 |
|
Amortization of intangible assets |
|
|
— |
|
0.2 |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
2.0 |
|
|
|
1.7 |
|
|
|
— |
|
— |
|
Separation costs |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
79.7 |
|
|
|
50.4 |
|
|
|
0.08 |
|
6.0 |
|
Adjusted |
|
$ |
1,632.3 |
|
77.1 |
% |
|
$ |
508.5 |
|
31.2 |
% |
|
$ |
303.2 |
|
18.6 |
% |
|
$ |
446.1 |
|
|
$ |
424.9 |
|
|
$ |
0.70 |
|
8.4 |
% |
|
|
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
Gross
|
|
Selling,
|
|
Selling,
|
|
Research
|
|
Research
|
|
Operating
|
|
Net Income |
|
Diluted
|
|
Effective
|
|||||||||||||
GAAP - Continuing Operations |
|
$ |
1,295.5 |
|
80.2 |
% |
|
$ |
410.4 |
|
31.7 |
% |
|
$ |
243.7 |
|
18.8 |
% |
|
$ |
263.5 |
|
|
$ |
254.2 |
|
|
$ |
0.42 |
|
|
7.6 |
% |
Discontinued operations |
|
|
234.7 |
|
(2.6 |
) |
|
|
58.3 |
|
(1.1 |
) |
|
|
26.6 |
|
(1.1 |
) |
|
|
63.7 |
|
|
|
51.3 |
|
|
|
0.08 |
|
|
2.1 |
|
Attributable to noncontrolling interests |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
— |
|
Total attributable to |
|
|
1,530.2 |
|
77.6 |
% |
|
|
468.7 |
|
30.6 |
% |
|
|
270.3 |
|
17.7 |
% |
|
|
327.2 |
|
|
|
307.1 |
|
|
|
0.50 |
|
|
9.7 |
% |
Non-GAAP adjustments: (A) (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Intellectual property agreement |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
139.0 |
|
|
|
111.7 |
|
|
|
0.19 |
|
|
2.8 |
|
Certain litigation expenses |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
8.9 |
|
|
|
7.0 |
|
|
|
0.01 |
|
|
0.3 |
|
Change in fair value of contingent consideration liabilities |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
(26.9 |
) |
|
|
(24.8 |
) |
|
|
(0.04 |
) |
|
0.2 |
|
Amortization of intangible assets |
|
|
— |
|
0.1 |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
1.3 |
|
|
|
1.0 |
|
|
|
— |
|
|
0.1 |
|
Adjusted |
|
$ |
1,530.2 |
|
77.7 |
% |
|
$ |
468.7 |
|
30.6 |
% |
|
$ |
270.3 |
|
17.7 |
% |
|
$ |
449.5 |
|
|
$ |
402.0 |
|
|
$ |
0.66 |
|
|
13.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended |
||||||||||||||||||||||||||||
|
|
|
|
Gross
|
|
Selling,
|
|
Selling,
|
|
Research
|
|
Research
|
|
Operating
|
|
Net Income |
|
Diluted
|
|
Effective
|
||||||||||
GAAP - Continuing Operations |
|
$ |
2,732.8 |
|
78.7 |
% |
|
$ |
883.6 |
|
32.3 |
% |
|
$ |
530.4 |
|
19.4 |
% |
|
$ |
720.2 |
|
$ |
693.1 |
|
$ |
1.15 |
|
8.8 |
% |
Discontinued operations |
|
|
497.7 |
|
(2.3 |
) |
|
|
114.6 |
|
(1.4 |
) |
|
|
58.0 |
|
(1.2 |
) |
|
|
23.6 |
|
|
22.9 |
|
|
0.04 |
|
(0.3 |
) |
Attributable to noncontrolling interests |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
2.2 |
|
|
— |
|
— |
|
Total attributable to |
|
|
3,230.5 |
|
76.4 |
% |
|
|
998.2 |
|
30.9 |
% |
|
|
588.4 |
|
18.2 |
% |
|
|
743.8 |
|
|
718.2 |
|
|
1.19 |
|
8.5 |
% |
Non-GAAP adjustments: (A) (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certain litigation expenses |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
17.0 |
|
|
13.9 |
|
|
0.02 |
|
0.1 |
|
Amortization of intangible assets |
|
|
— |
|
0.1 |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
3.4 |
|
|
2.9 |
|
|
— |
|
— |
|
Separation costs |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
121.0 |
|
|
87.2 |
|
|
0.15 |
|
2.6 |
|
Adjusted |
|
$ |
3,230.5 |
|
76.5 |
% |
|
$ |
998.2 |
|
30.9 |
% |
|
$ |
588.4 |
|
18.2 |
% |
|
$ |
885.2 |
|
$ |
822.2 |
|
$ |
1.36 |
|
11.2 |
% |
|
|
Six Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|
Gross
|
|
Selling,
|
|
Selling,
|
|
Research
|
|
Research
|
|
Operating
|
|
Net Income
|
|
Diluted
|
|
Effective
|
|||||||||||||
GAAP - Continuing Operations |
|
$ |
2,533.2 |
|
80.4 |
% |
|
$ |
792.4 |
|
31.3 |
% |
|
$ |
478.5 |
|
18.9 |
% |
|
$ |
601.2 |
|
|
$ |
556.4 |
|
|
$ |
0.91 |
|
|
10.6 |
% |
Discontinued operations |
|
|
456.6 |
|
(2.9 |
) |
|
|
112.6 |
|
(1.0 |
) |
|
|
53.0 |
|
(1.1 |
) |
|
|
114.4 |
|
|
|
89.6 |
|
|
|
0.15 |
|
|
1.8 |
|
Attributable to noncontrolling interests |
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
— |
|
Total attributable to |
|
|
2,989.8 |
|
77.5 |
% |
|
|
905.0 |
|
30.3 |
% |
|
|
531.5 |
|
17.8 |
% |
|
|
715.6 |
|
|
|
647.6 |
|
|
|
1.06 |
|
|
12.4 |
% |
Non-GAAP adjustments: (A) (B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Intellectual property agreement |
|
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
176.0 |
|
|
|
142.2 |
|
|
|
0.24 |
|
|
1.4 |
|
||||
Certain litigation expenses |
|
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
15.4 |
|
|
|
12.3 |
|
|
|
0.02 |
|
|
0.1 |
|
||||
Change in fair value of contingent consideration liabilities |
|
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
(26.2 |
) |
|
|
(24.2 |
) |
|
|
(0.04 |
) |
|
0.1 |
|
||||
Amortization of intangible assets |
|
|
— |
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
2.8 |
|
|
|
2.3 |
|
|
|
— |
|
|
— |
|
||||
Adjusted |
|
$ |
2,989.8 |
|
77.6 |
% |
|
$ |
905.0 |
|
30.3 |
% |
|
$ |
531.5 |
|
17.8 |
% |
|
$ |
883.6 |
|
|
$ |
780.2 |
|
|
$ |
1.28 |
|
|
14.0 |
% |
__________________
(A) |
|
See description of non-GAAP adjustments under "Non-GAAP Financial Information." |
(B) |
|
The tax effect on non-GAAP adjustments is calculated based upon the impact of the relevant tax jurisdictions’ statutory tax rates on the Company’s estimated annual effective tax rate, or discrete rate in the quarter, as applicable. The impact on the effective tax rate is reflected on each individual non-GAAP adjustment line item. |
RECONCILIATION OF GAAP OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
371.5 |
|
|
$ |
33.6 |
|
|
$ |
318.0 |
|
|
$ |
347.7 |
|
Capital expenditures |
|
(85.4 |
) |
|
|
(47.9 |
) |
|
|
(150.7 |
) |
|
|
(109.4 |
) |
Tax deposit |
|
— |
|
|
|
— |
|
|
|
305.1 |
|
|
|
— |
|
Separation cost payments |
|
46.7 |
|
|
|
— |
|
|
|
66.6 |
|
|
|
— |
|
Intellectual property agreement |
|
— |
|
|
|
300.0 |
|
|
|
— |
|
|
|
300.0 |
|
Adjusted Free Cash Flow (A) |
$ |
332.8 |
|
|
$ |
285.7 |
|
|
$ |
539.0 |
|
|
$ |
538.3 |
|
__________________
(A) |
|
See description of "Adjusted Free Cash Flow" under "Non-GAAP Financial Information." |
RECONCILIATION OF SALES BY PRODUCT GROUP AND REGION |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
||||||||||
Sales by |
|
2Q 2024 |
|
2Q 2023 |
|
Change |
|
GAAP
|
|
FX
|
|
2Q 2023
|
|
Constant
|
||||||||
Transcatheter Aortic Valve Replacement |
|
$ |
1,038.6 |
|
$ |
991.6 |
|
$ |
47.0 |
|
4.7 |
% |
|
$ |
(10.4 |
) |
|
$ |
981.2 |
|
5.8 |
% |
Transcatheter Mitral and Tricuspid Therapies |
|
|
83.0 |
|
|
47.6 |
|
|
35.4 |
|
74.7 |
% |
|
|
— |
|
|
|
47.6 |
|
74.7 |
% |
Surgical Structural Heart |
|
|
264.3 |
|
|
256.3 |
|
|
8.0 |
|
3.1 |
% |
|
|
(3.6 |
) |
|
|
252.7 |
|
4.6 |
% |
Total Sales from Continuing Operations |
|
$ |
1,385.9 |
|
$ |
1,295.5 |
|
$ |
90.4 |
|
7.0 |
% |
|
$ |
(14.0 |
) |
|
$ |
1,281.5 |
|
8.1 |
% |
Sales from Discontinued Operations |
|
|
246.4 |
|
|
234.7 |
|
|
11.7 |
|
5.0 |
% |
|
|
(3.6 |
) |
|
|
231.1 |
|
6.7 |
% |
Total Sales |
|
$ |
1,632.3 |
|
$ |
1,530.2 |
|
$ |
102.1 |
|
6.7 |
% |
|
$ |
(17.6 |
) |
|
$ |
1,512.6 |
|
7.9 |
% |
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
||||||||||
Sales by |
|
YTD
|
|
YTD
|
|
Change |
|
GAAP
|
|
FX
|
|
YTD 2Q
|
|
Underlying
|
||||||||
Transcatheter Aortic Valve Replacement |
|
$ |
2,046.5 |
|
$ |
1,939.5 |
|
$ |
107.0 |
|
5.5 |
% |
|
$ |
(12.5 |
) |
|
$ |
1,927.0 |
|
6.2 |
% |
Transcatheter Mitral and Tricuspid Therapies |
|
|
155.9 |
|
|
89.2 |
|
|
66.7 |
|
74.9 |
% |
|
|
0.7 |
|
|
|
89.9 |
|
73.5 |
% |
Surgical Structural Heart |
|
|
530.4 |
|
|
504.5 |
|
|
25.9 |
|
5.1 |
% |
|
|
(5.0 |
) |
|
|
499.5 |
|
6.2 |
% |
Total |
|
$ |
2,732.8 |
|
$ |
2,533.2 |
|
$ |
199.6 |
|
7.9 |
% |
|
$ |
(16.8 |
) |
|
$ |
2,516.4 |
|
8.6 |
% |
Sales from Discontinued Operations |
|
|
497.7 |
|
|
456.6 |
|
|
41.1 |
|
9.0 |
% |
|
|
(5.9 |
) |
|
|
450.7 |
|
10.4 |
% |
Total Sales |
|
$ |
3,230.5 |
|
$ |
2,989.8 |
|
$ |
240.7 |
|
8.1 |
% |
|
$ |
(22.7 |
) |
|
$ |
2,967.1 |
|
8.9 |
% |
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
|||||||||||
Sales by Region (QTD) - Continuing Operations |
|
2Q
|
|
2Q
|
|
Change |
|
GAAP
|
|
FX
|
|
2Q 2023
|
|
Constant
|
|||||||||
|
|
$ |
816.8 |
|
$ |
761.9 |
|
$ |
54.9 |
|
|
7.2 |
% |
|
$ |
— |
|
|
$ |
761.9 |
|
7.2 |
% |
|
|
|
335.6 |
|
|
301.9 |
|
|
33.7 |
|
|
11.2 |
% |
|
|
0.1 |
|
|
|
302.0 |
|
11.1 |
% |
|
|
|
87.4 |
|
|
94.1 |
|
|
(6.7 |
) |
|
(7.2 |
)% |
|
|
(12.1 |
) |
|
|
82.0 |
|
6.5 |
% |
Rest of World |
|
|
146.1 |
|
|
137.6 |
|
|
8.5 |
|
|
6.2 |
% |
|
|
(2.0 |
) |
|
|
135.6 |
|
7.7 |
% |
Outside of |
|
|
569.1 |
|
|
533.6 |
|
|
35.5 |
|
|
6.7 |
% |
|
|
(14.0 |
) |
|
|
519.6 |
|
9.5 |
% |
Total |
|
$ |
1,385.9 |
|
$ |
1,295.5 |
|
$ |
90.4 |
|
|
7.0 |
% |
|
$ |
(14.0 |
) |
|
$ |
1,281.5 |
|
8.1 |
% |
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
|||||||||||
Sales by Region (YTD) - Continuing Operations |
|
YTD
|
|
YTD
|
|
Change |
|
GAAP
|
|
FX
|
|
YTD 2Q
|
|
Underlying
|
|||||||||
|
|
$ |
1,609.7 |
|
$ |
1,487.0 |
|
$ |
122.7 |
|
|
8.3 |
% |
|
$ |
— |
|
|
$ |
1,487.0 |
|
8.3 |
% |
|
|
|
665.3 |
|
|
598.6 |
|
|
66.7 |
|
|
11.2 |
% |
|
|
7.3 |
|
|
|
605.9 |
|
9.8 |
% |
|
|
|
174.1 |
|
|
182.8 |
|
|
(8.7 |
) |
|
(4.7 |
)% |
|
|
(21.1 |
) |
|
|
161.7 |
|
7.7 |
% |
Rest of World |
|
|
283.7 |
|
|
264.8 |
|
|
18.9 |
|
|
7.1 |
% |
|
|
(3.0 |
) |
|
|
261.8 |
|
8.4 |
% |
Outside of |
|
|
1,123.1 |
|
|
1,046.2 |
|
|
76.9 |
|
|
7.3 |
% |
|
|
(16.8 |
) |
|
|
1,029.4 |
|
9.1 |
% |
Total |
|
$ |
2,732.8 |
|
$ |
2,533.2 |
|
$ |
199.6 |
|
|
7.9 |
% |
|
$ |
(16.8 |
) |
|
$ |
2,516.4 |
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
|||||||||||
Sales by Region (QTD) - Discontinued Operations |
|
2Q
|
|
2Q
|
|
Change |
|
GAAP
|
|
FX
|
|
2Q 2023
|
|
Constant
|
|||||||||
|
|
$ |
149.1 |
|
$ |
133.4 |
|
$ |
15.7 |
|
|
11.8 |
% |
|
$ |
— |
|
|
$ |
133.4 |
|
11.8 |
% |
|
|
|
36.9 |
|
|
34.3 |
|
|
2.6 |
|
|
7.7 |
% |
|
|
0.2 |
|
|
|
34.5 |
|
7.4 |
% |
|
|
|
19.4 |
|
|
23.9 |
|
|
(4.5 |
) |
|
(18.8 |
)% |
|
|
(3.0 |
) |
|
|
20.9 |
|
(6.9 |
)% |
Rest of World |
|
|
41.0 |
|
|
43.1 |
|
|
(2.1 |
) |
|
(5.1 |
)% |
|
|
(0.8 |
) |
|
|
42.3 |
|
(3.0 |
)% |
Outside of |
|
|
97.3 |
|
|
101.3 |
|
|
(4.0 |
) |
|
(4.0 |
)% |
|
|
(3.6 |
) |
|
|
97.7 |
|
(0.3 |
)% |
Total |
|
$ |
246.4 |
|
$ |
234.7 |
|
$ |
11.7 |
|
|
5.0 |
% |
|
$ |
(3.6 |
) |
|
$ |
231.1 |
|
6.7 |
% |
|
|
|
|
|
|
|
|
|
|
2023 Adjusted |
|
|
|||||||||||
Sales by Region (YTD) - Discontinued Operations |
|
YTD
|
|
YTD
|
|
Change |
|
GAAP
|
|
FX
|
|
YTD 2Q
|
|
Underlying
|
|||||||||
|
|
$ |
296.9 |
|
$ |
257.4 |
|
$ |
39.5 |
|
|
15.4 |
% |
|
$ |
— |
|
|
$ |
257.4 |
|
15.3 |
% |
|
|
|
75.0 |
|
|
68.7 |
|
|
6.3 |
|
|
9.2 |
% |
|
|
1.1 |
|
|
|
69.8 |
|
7.4 |
% |
|
|
|
43.5 |
|
|
49.3 |
|
|
(5.8 |
) |
|
(11.7 |
)% |
|
|
(5.6 |
) |
|
|
43.7 |
|
(0.5 |
)% |
Rest of World |
|
|
82.3 |
|
|
81.2 |
|
|
1.1 |
|
|
1.3 |
% |
|
|
(1.4 |
) |
|
|
79.8 |
|
3.1 |
% |
Outside of |
|
|
200.8 |
|
|
199.2 |
|
|
1.6 |
|
|
0.8 |
% |
|
|
(5.9 |
) |
|
|
193.3 |
|
3.9 |
% |
Total |
|
$ |
497.7 |
|
$ |
456.6 |
|
$ |
41.1 |
|
|
9.0 |
% |
|
$ |
(5.9 |
) |
|
$ |
450.7 |
|
10.4 |
|
__________________
* Numbers may not calculate due to rounding.
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