CR Bard (BCR) Q1 2011 Earnings Call April 21, 2011 5:00 pm ET Executives John Weiland - President, Chief Operating Officer and Director Timothy Ring - Chairman, Chief Executive Officer and Chairman of Executive Committee Todd Schermerhorn - Chief Financial Officer and Senior Vice President John DeFord - Senior Vice President of Science Technology & Clinical Affairs Analysts Joshua Jennings - Jefferies & Company, Inc. Matthew Dodds - Citigroup Inc Michael Matson - Mizuho Securities USA Inc. Robert Hopkins David Roman - Goldman Sachs Group Inc. Michael Weinstein - JP Morgan Chase & Co Bruce Jackson - Morgan Joseph TriArtisan LLC Kristen Stewart - Deutsche Bank AG Douglas Tsao - Barclays Capital Matthew O'Brien - William Blair & Company L.L.C. David Lewis - Morgan Stanley Frederick Wise - Leerink Swann LLC Thomas Gunderson - Piper Jaffray Companies Paul Choi - Caris & Company Lawrence Keusch - Morgan Keegan & Company, Inc. Presentation Operator
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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 franchise. Reconciliations of non-GAAP measures to the most comparable GAAP measures are provided in Bard's earnings press release and on the company's website at www.crbard.com. All information that is not historical is given only as of April 21, 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. Timothy Ring Thanks, Chris. Good afternoon, everybody. I'd like to welcome you all to Bard's First Quarter 2011 Earnings Conference Call. We expect the presentation portion of this call to last about 35 minutes. The agenda today will go as follows: I'll begin with an overview of the results for the first quarter; John Weiland, our President and COO, will review first quarter product line revenue; Todd Schermerhorn, our Senior VP and CFO will review the first quarter income statement, balance sheet as well as our expectations for the second quarter; John DeFord, our Senior VP of Science Technology and Clinical Affairs will then provide an update on our product development pipeline and we'll finally close with Q&A. First quarter 2011, net sales totaled $700.3 million. That's up 8% over Q1 of last year on both an as-reported basis and a constant currency basis. The currency impact for the quarter versus 2010 was unfavorable by about 20 basis points. Net income for the first quarter of '11 was $131.9 million. Diluted EPS were $1.49. Excluding items that affected the comparability of results between periods, which Todd will cover later, first quarter 2011 net income and diluted EPS were $133.7 million and $1.51, up 9% and 21% respectively, which exceeded our guidance range for the quarter. So obviously, a good start to the year. Todd will put this into perspective for you when he discusses the quarter's financial performance and our outlook for the second quarter.
Looking at our sales by business, growth in our Vascular category was above the range of guidance for the full year, but in line with our expectations for the quarter. As a reminder, the SenoRx acquisition occurred at the beginning of Q3 of last year, so it will be a downward pressure on the growth rate during the second half of the year. Our Oncology and Urology categories were within their full year guidance ranges. Surgery was in line with our expectations for the quarter, but below the full year guidance range as we expect our new product launches to accelerate growth as we go out through the year.So if you just look at our sales results compared to the full year guidance ranges, you'll see one business above, one on the high side of the range, one on the low side and one below. And of course, every business has a detailed story behind it that John's going to take you through in a moment. But I just want to take a minute here using this quarter's performance to explain why we feel so strongly about the strategy. First, our product portfolio is broad and well balanced. Then, within each of the businesses, our teams are relentlessly focused on product leadership and innovation, and at the corporate level, we work with the businesses to assess the opportunities, make sure the appropriate resources are applied in the right places across the company. Sounds fairly simple, but of course the key is execution at every contact point throughout the sales and marketing, operations, regulatory, R&D and business development functions. With shifting trends and lots of activity across multiple markets, the results for a given product line or business are going to naturally ebb and flow over time and obviously, we don't win every battle. But when you add it all up and you measure the results over time, you get combined results that reflect the balanced risk of the model, the strength of the overall portfolio and the effectiveness of the strategy.
Looking at revenue growth from a geographic point of view compared to the first quarter of last year, net sales in the U.S. increased 7%; Europe, we're up 4% on a constant currency basis, driven by very strong execution on the SenoRx product line. Japan grew 15%, affected by uneven ordering patterns from our joint venture. Most of the fluctuation had occurred prior to the earthquake and the tsunami in March, and we saw very little impact in the quarter as the direct result of that catastrophe. We track the demand from our joint venture to customers in Japan, and Q1 2011 growth was in the mid-to high-single digits, which is in line with the average performance we've seen over the last couple of years.Read the rest of this transcript for free on seekingalpha.com