CR Bard (BCR)
Q3 2011 Earnings Call
October 25, 2011 5:00 pm ET
Todd C. Schermerhorn - Chief Financial Officer and Senior Vice President
John A. DeFord - Senior Vice President of Science Technology & Clinical Affairs
Timothy M. Ring - Chairman, Chief Executive Officer and Chairman of Executive Committee
John H. Weiland - President, Chief Operating Officer and Director
Robert M. Goldman - CL King & Associates, Inc.
Matthew J. Dodds - Citigroup Inc, Research Division
Thomas J. Gunderson - Piper Jaffray Companies, Research Division
Michael Matson - Mizuho Securities USA Inc., Research Division
Michael N. Weinstein - JP Morgan Chase & Co, Research Division
Frederick A. Wise - Leerink Swann LLC, Research Division
David H. Roman - Goldman Sachs Group Inc., Research Division
Matthew Taylor - Barclays Capital, Research Division
Robert A. Hopkins - BofA Merrill Lynch, Research Division
Bruce D. Jackson - Morgan Joseph TriArtisan LLC, Research Division
Joshua T. Jennings - Cowen and Company, LLC, Research Division
Jonathan Demchick - Morgan Stanley, Research Division
Joanne K. Wuensch - BMO Capital Markets U.S.
Kristen M. Stewart - Deutsche Bank AG, Research Division
Suraj Kalia - Rodman & Renshaw, LLC, Research Division
Matthew O'Brien - William Blair & Company L.L.C., Research Division
Jason Wittes - Caris & Company, Inc., Research Division
Previous Statements by BCR
» CR Bard's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» CR Bard's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» CR Bard's CEO Discusses Q4 2010 Results - Earnings Call Transcript
Ladies and gentlemen, thank you for standing by, and welcome to the CR Bard Inc. Third Quarter 2011 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded and will be available for future on-demand replay through the Bard website.
Today's presentation will be hosted by Timothy M. Ring, Chairman and Chief Executive Officer; along with John H. Weiland, President and Chief Operating Officer; Todd C. Schermerhorn, Senior Vice President and Chief Financial Officer; and John A. DeFord, Senior Vice President, Science Technology and Clinical Affairs. Also in attendance today is Todd W. Garner, Vice President, Investor Relations.
Today, Bard's management will discuss some forward-looking statements, the accuracy of which are necessarily subject to risk and uncertainties. Please refer to the cautionary statement regarding forward-looking information in Bard's June 30, 2011, Form 10-Q and the information under the caption Risk Factors in Bard's 2010 10-K, including disclosure of the factors that could cause actual results to differ materially from those expressed or implied.
During the call, references will be made to certain non-GAAP measures, which management believes provide an additional and meaningful assessment of the core operating performance of the company and its individual product franchises. Reconciliations of non-GAAP measures to the most comparable GAAP measures are provided in Bard's earnings press release on the company's website at www.crbard.com. All information that is not historical is given only as of October 25, 2011, and the company undertakes no responsibility to update any information. Unless otherwise noted, all comparisons are to the prior-year period.
At this time, I will turn the call over to Mr. Timothy Ring. Please go ahead, sir.
Timothy M. Ring
Thanks, Cathy. I'd like to welcome everybody to Bard's third quarter 2011 earnings call. Thank you all for taking the time to join us today. I expect the presentation portion of the call will last about 20 minutes. The agenda today will go as follows. I'll begin with an overview of the results for the quarter. John Weiland, our President and COO, will review third quarter product line revenue. Todd Schermerhorn, our Senior VP and CFO, will review the income statement and balance sheet, as well as our expectations for the fourth quarter. John DeFord, our Senior Vice President in Science, Technology, and Clinical Affairs, will provide an update on our product development pipeline, and then we'll close with a Q&A.
Third quarter 2011 net sales totaled $719.2 million, up 6% over Q3 of last year on an as-reported basis and up 3% on a constant-currency basis. The impact of currency for the quarter versus the same quarter last year was favorable by about 280 basis points. Net income for the quarter was $130.1 million, with diluted earnings per share of $1.46. Excluding items that affected the comparability of results between periods, which Todd will cover later, third quarter 2011 net income and diluted EPS were $144.9 million and $1.62 , up 7% and 13% respectively.
Looking at revenue growth geographically compared to Q3 of last year, third quarter net sales in the U.S. increased 2%, demonstrating a continuation of the domestic headwinds we saw last quarter. Our international business grew 17% on an as-reported basis, and 7% on a constant-currency basis. Europe increased 2% on a constant-currency basis, with a couple few sales days compared to the prior-year period. Timing issues caused our sales to our joint venture in Japan to be flat this quarter compared to last year but the underlying customer demand in Japan remains steady in the mid to high single digit range. Our other international businesses grew 20% in constant currency this quarter, driven by 39% growth in emerging markets where we continue to execute well.
The U.S. sales environment today is certainly less predictable than it's been in the past. Despite the uncertainty around patient and procedure volumes, 3 of our 4 businesses are on track globally to be within or very close to our original guidance for the year, and in total, we expect to be within that original guidance, albeit at the low end. As John takes you through the product line detail for the quarter, you'll notice that in the product lines where we've made strategic acquisitions last year, we're growing in the mid-teens or better even after the anniversary mark. You'll also notice that our recent key launches in fix and synthetic ventral hernia have driven those product lines back to double-digit growth even in a tough volume period.
We think this underscores that executing our product leadership strategy continues to work even in uncertain and challenging economic times. So we'll continue to prioritize resources and investments in markets, products and technologies with double-digit growth and a clear line of sight to sustained product leadership. You'll also see this approach in our business development activities.
Last month, we announced our intention to acquire Clear Stream Technologies, and that acquisition has now been completed. Clear Stream supports our product leadership strategy in specialty small vessel PPA balloons. We are also pleased to announce today that we've reached an agreement to acquire Medivance, Inc., a private U.S. company with proprietary technology in the field of therapeutic hypothermia.
Medivance is a great fit for us, as it's the product leader in an emerging and growing market with its targeted temperature management system that sells a large and unmet need for patients with cardiac arrest and for patients who require fever management. The technology also has the potential to be effective in the areas of acute myocardial infarction, traumatic brain injury, stroke, and other morbidities. This product line is synergistic with our critical care sales call point, and will be managed out of our Bard Medical Division. We see this as an entirely new growth platform and an important building block in our critical care product offering. We expect that both of these acquisitions will start contributing to the sales line in Q4, but they should not have a meaningful impact to EPS.