Boston Scientific second-quarter net sales decrease 7% to $1.928 billion

Boston Scientific Corporation (NYSE: BSX) today announced financial results for the second quarter ended June 30, 2010, as well as guidance for net sales and earnings per share (EPS) for the third quarter and full year 2010. 

Second quarter highlights (sales growth rates are at constant currency):

• Achieved sales of $1.928 billion, reporting GAAP earnings of $0.06 per share with adjusted EPS of $0.12
• Maintained leadership position in the global drug-eluting stent (DES) market with 38 percent share worldwide
• Launched the third-generation TAXUS® Element™ Paclitaxel-Eluting Coronary Stent System in the European Union and other CE Mark countries 
• Refinanced 2011 debt maturities and have approximately $1 billion cash on hand
• Increased worldwide Endoscopy sales eight percent
• Initiated the PLATINUM PLUS "all comers" clinical trial comparing the performance of our PROMUS® Element™ Everolimus-Eluting Coronary Stent System to the Xience Prime™ Everolimus-Eluting Coronary Stent System  

"I am proud of the way the organization executed in a number of key areas during the quarter," said Ray Elliott, President and Chief Executive Officer of Boston Scientific.  "In CRM, we finished the quarter well ahead of where we expected to be, thanks to exceptional execution by the sales team and everyone else involved in our recovery.  The continued success of our PROMUS Element rollout in Europe was another example of outstanding execution to go along with a very strong 46 percent U.S. DES market share.  Once again, our Endoscopy and Women's Health businesses turned in excellent results.  In all, 44 percent of our sales in the quarter came from new products, a testament to the building strength of our R&D pipeline."

Net sales for the second quarter of 2010 were $1.928 billion, as compared to net sales of $2.074 billion for the second quarter of 2009, a decrease of seven percent on both a reported and constant currency basis, driven primarily by the cardiac rhythm management (CRM) ship hold and product removal actions in the first quarter.  

Reported net income for the second quarter of 2010 was $98 million, or $0.06 per share.  Reported results included goodwill impairment-related credits; restructuring-related charges; and amortization expense (after-tax) of $92 million, or $0.06 per share, which consisted of:

• a $31 million (on both a pre-tax and after-tax basis) credit related to the finalization of the Company's goodwill impairment charge recorded in the first quarter;
• $29 million ($41 million pre-tax) of restructuring and restructuring-related costs associated with the Company's 2010 Restructuring plan, Plant Network Optimization program and 2007 Restructuring plan; and
• $94 million ($124 million pre-tax) of amortization expense.

Adjusted net income for the second quarter of 2010, excluding these net charges, was $190 million, or $0.12 per share.

Reported net income for the second quarter of 2009 was $158 million, or $0.10 per share.  Reported results included intangible asset impairment charges; acquisition- and restructuring-related charges; discrete tax benefits; and amortization expense (after-tax) of $139 million, or $0.10 per share.  Adjusted net income for the second quarter of 2009, excluding these net charges, was $297 million, or $0.20 per share.

Guidance for Third Quarter and Full Year 2010

The Company estimates net sales for the third quarter of 2010 of between $1.850 billion and $1.925 billion.  Adjusted earnings, excluding restructuring and restructuring-related costs and amortization expense, are estimated to range between $0.10 and $0.13 per share.  The Company estimates earnings on a GAAP basis of between $0.01 and $0.05 per share.

The Company is revising estimates for the full year ending December 31, 2010.  The Company now estimates net sales for the full year 2010 of between $7.6 billion and $7.9 billion.  Adjusted earnings, excluding goodwill and intangible asset impairment net charges, acquisition-related credits, restructuring and restructuring-related costs, and amortization expense, are estimated to range between $0.54 and $0.62 per share.  The Company now estimates a net loss on a GAAP basis of between $(0.91) and $(0.81) per share.