Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: April 25, 2007
Reporting Period: Second fiscal quarter ending March 31, 2007, and the first six months of fiscal year 2007.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it details the methodology for presenting non-GAAP financial measures in the accompanying press release (Exhibit 99.1). Key metrics discussed include:
- Revenues: Presented at constant foreign exchange rates to exclude currency fluctuation impacts.
- Selling and Administrative Expense: Adjusted to exclude insurance settlements from prior periods.
- Research and Development (R&D) Expense: Adjusted to exclude in-process R&D charges related to the TriPath Imaging, Inc. acquisition (2007) and GeneOhm Sciences Inc. acquisition (2006).
- Operating Income: Adjusted to exclude in-process R&D charges and insurance settlements.
- Income Taxes/Effective Tax Rate: Adjusted to exclude the impact of insurance settlements.
- Income from Continuing Operations: Adjusted to exclude in-process R&D charges and insurance settlements.
- Earnings Per Share (EPS): Adjusted to exclude in-process R&D charges and insurance settlements.
Material Changes and Adjustments
The filing highlights specific non-recurring items that management excludes from non-GAAP measures to show underlying performance:
- TriPath Imaging Acquisition: A noncash in-process R&D charge incurred in the first six months of fiscal 2007.
- GeneOhm Sciences Acquisition: A noncash in-process R&D charge incurred in fiscal 2006.
- Insurance Settlements: Occurred in fiscal 2006, which lowered reported selling and administrative expenses and increased reported income tax expense for that period.
Guidance, Outlook, and Management Commentary
Management Commentary: Management utilizes these non-GAAP measures for internal evaluation, budget planning, and to assist investors in comparing period-to-period performance by removing the effects of items considered outside of ordinary operations. The filing explicitly states that non-GAAP results should not be considered in isolation or as a substitute for GAAP results.
Guidance: The text mentions that projected earnings per share from continuing operations for fiscal year 2007 are presented in the press release after excluding the TriPath in-process R&D charge. Specific numerical guidance is not contained within this 8-K text.
Risks and Contingencies: The filing notes that items excluded from non-GAAP measures may have a material impact on GAAP net income, earnings per share, or cash flows. Investors are cautioned that non-GAAP measures may differ from similar measures used by other companies.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific numerical values of revenue, operating income, and EPS.
- Verify the reconciliation between the reported GAAP figures and the non-GAAP adjusted figures provided in the press release.
- Confirm the specific dollar amounts of the in-process R&D charges for TriPath Imaging and GeneOhm Sciences.
- Assess the impact of foreign exchange rate fluctuations on reported revenue growth.
- Examine the details of the insurance settlements affecting fiscal 2006 expenses and tax rates.