Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: January 17, 2019
Reporting Period: Preliminary financial results for the first fiscal quarter ended December 31, 2018.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The document serves as a notification of the release of preliminary results and defines the non-GAAP measures used in the accompanying press release (Exhibit 99.1), which is not included in the source text.
- Comparable Revenue Growth: Defined as adjusted, currency-neutral growth assuming the acquisition of C.R. Bard, Inc. occurred at the start of fiscal 2018.
- Adjusted Earnings Per Share (EPS): Defined as diluted EPS excluding purchase accounting adjustments, acquisition-related restructuring/integration costs, gains on sale of business, and other non-ordinary items.
Material Changes and Non-GAAP Adjustments
The filing highlights the use of non-GAAP measures to facilitate year-to-year comparability, particularly regarding the integration of C.R. Bard, Inc. (Bard). Management notes that adjusted comparable revenues for fiscal 2018 are presented for illustrative purposes only and are not indicative of actual historical results had the acquisition occurred earlier.
Specific adjustments to GAAP results include:
- Elimination of foreign currency translation impacts.
- Exclusion of acquisition-related restructuring and integration costs.
- Exclusion of purchase accounting adjustments and gains on the sale of a business.
Guidance, Outlook, and Risks
Outlook: The filing references estimated revenue growth and adjusted EPS for fiscal year 2019, though specific guidance figures are not contained in this text.
Management Commentary: Management utilizes these non-GAAP measures for internal budget planning and to evaluate underlying operating performance against peer companies. They assert these measures provide better insight into the combined company's performance.
Risks and Limitations:
- Non-GAAP results are not a substitute for GAAP results and should not be considered in isolation.
- Items excluded from non-GAAP measures may have a material impact on net income and cash flows.
- Non-GAAP measures may differ from similar measures used by other companies.
- Illustrative adjusted revenues for 2018 do not reflect actual historical operating results.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific numerical values regarding Q1 2018 revenue, EPS, and fiscal 2019 guidance.
- Verify the reconciliation between GAAP and non-GAAP financial measures to understand the magnitude of excluded items (e.g., Bard integration costs).
- Assess the impact of foreign currency translation on reported growth versus the "currency-neutral" comparable growth.
- Confirm the treatment of the C.R. Bard acquisition in year-over-year comparisons.