Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Report Date: February 2, 2017
Period Covered: First fiscal quarter ended December 31, 2016
This filing announces the issuance of a press release containing financial results for the first fiscal quarter of 2016. The report details the company's use of non-GAAP financial measures to supplement GAAP results.
Key Financial Metrics
Revenue: The filing discusses the presentation of "comparable" revenue growth rates. These metrics exclude the impact of divestitures (specifically the Respiratory Solutions business) and foreign currency translation effects to improve period-to-period comparability. Specific revenue dollar amounts are not provided in this text.
Earnings Per Share (EPS): The company presents diluted EPS adjusted for items affecting comparability. Specific EPS figures are not provided in this text.
Cash Flow, Margins, Debt, and Liquidity: The filing text does not provide specific values for cash flow, profit margins, debt levels, or liquidity ratios.
Material Changes and Non-GAAP Adjustments
The filing outlines specific adjustments made to financial metrics to reflect underlying operational performance:
- Revenue Adjustments: Excludes impacts from infrequent divestitures and foreign currency translation fluctuations.
- EPS Adjustments: Excludes purchase accounting adjustments, acquisition-related transaction, integration and restructuring costs, the reversal of a litigation reserve, and losses from the extinguishment of certain long-term debt.
Management states these items are not considered part of ordinary operations and are excluded to facilitate better comparison with prior periods and peer companies.
Guidance, Outlook, and Management Commentary
Outlook: The company presents estimated revenue growth and EPS for the full fiscal year 2017 on a comparable, foreign currency neutral basis. Specific guidance numbers are not included in this filing text.
Management Commentary: Management utilizes these non-GAAP measures for internal budget planning and performance evaluation. They emphasize that while non-GAAP results provide insight into underlying performance, they should not be considered in isolation or as a substitute for GAAP results, as excluded items may materially impact net income and cash flows.
Risks and Contingencies: The filing notes the risk that non-GAAP measures may differ from similar measures used by other companies. It also highlights that excluded items (such as litigation reserves and debt extinguishment) can have a material impact on GAAP financials.
Investor Verification Checklist
- Review the attached press release (Exhibit 99.1) for specific GAAP and non-GAAP financial figures for Q1 2016.
- Verify the reconciliation between GAAP and non-GAAP revenue and EPS figures to understand the magnitude of excluded items.
- Confirm the specific impact of the Respiratory Solutions divestiture on revenue comparability.
- Examine the details of the litigation reserve reversal and debt extinguishment loss affecting EPS.
- Check the full fiscal year 2017 guidance estimates for revenue growth and EPS provided in the press release.