Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Report Date: May 2, 2017
Reporting Period: Second fiscal quarter ended March 31, 2017
This filing announces the issuance of a press release containing financial results for the second quarter of fiscal year 2017. The report focuses on the methodology for presenting non-GAAP financial measures to assist investors in evaluating underlying performance.
Key Financial Metrics
The provided text describes the methodology for calculating specific metrics but does not contain the actual numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The filing highlights the following non-GAAP measures:
- Revenues: Presented as "comparable" revenue growth rates, excluding the impact of divestitures (specifically the Respiratory Solutions business) and foreign currency translation.
- Earnings Per Share (EPS): Diluted EPS is presented after eliminating items affecting comparability, including purchase accounting adjustments, acquisition-related transaction/integration/restructuring costs, reversal of litigation reserves, and losses from debt extinguishment.
- Adjusted EPS Growth: Growth is shown after eliminating foreign currency translation impacts to evaluate underlying earnings performance.
Material Changes and Comparability
The filing details specific adjustments made to ensure comparability between the current period and prior periods:
- Divestitures: Revenue growth excludes the impact of the Respiratory Solutions business divestiture.
- Foreign Currency: Both revenue and EPS growth rates are adjusted to remove the fluctuating effects of foreign currency translation.
- One-Time Items: Adjustments are made for restructuring costs, litigation reserve reversals, and debt extinguishment losses, which management does not consider part of ordinary operations.
Guidance, Outlook, and Management Commentary
Management Commentary: Management utilizes these non-GAAP measures for internal evaluation, budget planning, and peer comparisons. They believe these adjustments provide a reasonable measure of underlying performance by isolating items outside of ordinary operations.
Guidance: The text mentions that BD presents estimated revenue growth and estimated EPS for the full fiscal year 2017 on a comparable, foreign currency-neutral basis. However, the specific numerical guidance figures are not included in this text.
Risks and Limitations: Management cautions that non-GAAP results should not be considered in isolation or as a substitute for GAAP results. Excluded items may have a material impact on net income and cash flows. Additionally, these measures may differ from similar metrics used by other companies.
Investor Verification Checklist
- Verify the specific numerical values for Q2 2017 revenue, EPS, and cash flow in the attached press release (Exhibit 99.1), as they are not present in this summary text.
- Review the reconciliation tables in the press release to understand the dollar impact of excluded items (e.g., restructuring costs, debt extinguishment losses) on GAAP results.
- Confirm the specific estimated revenue growth and EPS guidance for the full fiscal year 2017 provided in the press release.
- Assess the impact of the Respiratory Solutions divestiture on year-over-year revenue comparisons.