Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: February 6, 2018
Reporting Period: First fiscal quarter ended December 31, 2017
This filing announces the financial results for the first quarter of fiscal year 2018. The report includes a press release (Exhibit 99.1) containing both GAAP and non-GAAP financial measures.
Key Financial Metrics
The filing text provided does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It serves as a disclosure of the results and a definition of the non-GAAP measures used to present them.
Non-GAAP Measures Defined:
- Currency-Neutral Revenue Growth: Revenue growth adjusted to eliminate the effect of foreign currency translation.
- Comparable Revenue Growth: Adjusted revenue growth assuming the acquisition of C.R. Bard, Inc. ("Bard") occurred at the start of fiscal 2017. Adjustments include product line movements, pending divestitures, royalty reclassifications, and elimination of intercompany revenues. Further adjustments are made for the adverse impact of Hurricane Maria and changes in the dispensing business model.
- Adjusted Earnings Per Share (EPS): Diluted EPS excluding purchase accounting adjustments, acquisition-related costs (transaction, integration, restructuring), financing costs, hurricane recovery costs, debt extinguishment losses, litigation reserve reversals, dilutive impact of Bard acquisition shares, and tax expenses related to recent U.S. tax legislation.
Material Changes and Unusual Items
Management identifies several items that impact period-to-period comparability and are excluded from adjusted metrics:
- Acquisition of C.R. Bard, Inc.: Significant impact on revenue and EPS comparability; non-GAAP measures assume the acquisition occurred at the start of 2017.
- Hurricane Maria: Estimated adverse impact on revenue in Puerto Rico during the first quarter of fiscal 2018.
- Business Model Change: Impact of a previously announced change in the dispensing business model.
- U.S. Tax Legislation: Additional tax expense recognized in the period.
- Debt and Litigation: Losses from debt extinguishment and reversals of litigation reserves.
Guidance, Outlook, and Management Commentary
Management utilizes these non-GAAP measures for budget planning and to evaluate underlying performance against peer companies. The filing states that adjusted comparable revenues for fiscal 2017 are presented for illustrative purposes only and are not indicative of actual historical results or future expectations. Management emphasizes that non-GAAP results should not be considered in isolation or as a substitute for GAAP results, as excluded items may materially impact net income and cash flows.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific GAAP and non-GAAP numerical values for revenue, EPS, and cash flow.
- Verify the reconciliation between GAAP and non-GAAP measures to understand the magnitude of excluded items (e.g., tax legislation impact, Bard acquisition costs).
- Assess the specific quantitative impact of Hurricane Maria on the Interventional segment and total company revenue.
- Confirm the details of the dispensing business model change and its estimated financial effect.
- Examine the full text of the press release for updated full-year fiscal 2018 guidance.