Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Report Date: November 5, 2013
Period Covered: Fourth fiscal quarter and full fiscal year ended September 30, 2013.
Key Financial Metrics
The filing serves as a notice of the issuance of a press release (Exhibit 99.1) containing detailed financial results. This 8-K text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It outlines the methodology for presenting non-GAAP measures used in the accompanying press release.
Material Changes and Non-GAAP Adjustments
Management presents non-GAAP financial measures to facilitate comparisons to prior periods by excluding specific items:
- Foreign Currency Translation: Revenue growth rates and EPS growth rates are adjusted to eliminate the effect of foreign currency translation.
- Legal and Pension Charges:
- Q4 2013 EPS excludes a charge related to a verdict in litigation with Retractable Technologies, Inc. and a charge for non-cash pension settlements.
- Full Year 2013 EPS excludes the Q4 charges above plus a Q3 charge related to an antitrust class action settlement.
- 2012 EPS figures are adjusted to exclude charges primarily from non-cash pension settlements.
- Medical Device Excise Tax: EPS for Q4 and full year 2013 is adjusted to eliminate the impact of the medical device excise tax effective January 2013, which was not present in prior periods.
Guidance, Outlook, and Risks
Guidance: The company provides estimated EPS guidance for fiscal year 2014. This guidance is adjusted for the anticipated impact of foreign currency translation and the incremental one-quarter impact of the medical device excise tax expected in 2014 compared to 2013.
Management Commentary: Management utilizes these non-GAAP measures for internal evaluation, budget planning, and peer comparisons, believing they reflect underlying operational performance better than GAAP results alone. However, the filing notes that excluded items may materially impact GAAP net income and cash flows.
Risks and Contingencies: The filing highlights specific contingencies impacting results, including ongoing litigation (Retractable Technologies, Inc.) and antitrust class action settlements.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated November 5, 2013) for actual GAAP and non-GAAP financial figures, as they are not included in this 8-K text.
- Verify the specific dollar amounts of the litigation verdict against Retractable Technologies, Inc. and the antitrust settlement.
- Confirm the magnitude of the non-cash pension settlement charges excluded from EPS.
- Assess the quantitative impact of the medical device excise tax on the 2013 results and the projected 2014 guidance.
- Compare the adjusted EPS growth rates against the unadjusted GAAP growth rates to understand the volatility caused by one-time items.