Medtronic Reports Second Quarter Financial Results
- Revenue of $7.7 Billion Increased 3.0% Reported and 4.1% Organic
- GAAP Diluted EPS of $1.01; Non-GAAP Diluted EPS of $1.31
- Cash Flow from Operations of $1.9 Billion Grew 61%; Free Cash Flow of $1.6 Billion Grew 66%
- Company Raises FY20 EPS Guidance
DUBLIN, Nov. 19, 2019 (GLOBE NEWSWIRE) -- Medtronic plc (NYSE:MDT) today announced financial results for its second quarter of fiscal year 2020, which ended October 25, 2019.
The company reported second quarter worldwide revenue of $7.706 billion, an increase of 3.0 percent as reported or 4.1 percent on an organic basis, which adjusts for a $97 million negative impact from foreign currency and a $16 million contribution from the company’s acquisition of Titan Spine, which is reported in the Spine division in the Restorative Therapies Group. As reported, second quarter GAAP net income and diluted earnings per share (EPS) were $1.364 billion and $1.01, respectively. As detailed in the financial schedules included through the link at the end of this release, second quarter non-GAAP net income and non-GAAP diluted EPS were $1.777 billion and $1.31, respectively, increases of 7.0 percent and 7.4 percent, respectively. Adjusting for a negative 2 cent impact from foreign currency, second quarter non-GAAP diluted EPS increased 9.0 percent.
Second quarter U.S. revenue of $4.129 billion represented 54 percent of company revenue and increased 2.1 percent as reported. Non-U.S. developed market revenue of $2.315 billion represented 30 percent of company revenue and increased 1.4 percent as reported and 4.6 percent on a constant currency basis. Emerging Markets revenue of $1.262 billion represented 16 percent of company revenue and increased 9.4 percent as reported and 11.6 percent on a constant currency basis.
“We reported another quarter of solid results, reflecting our continued focus on executing to our commitments across Medtronic,” said Omar Ishrak, Medtronic chairman and chief executive officer. “Our broad-based performance this quarter demonstrates the consistency of our execution, the strength of our innovation, and the benefit of our business and geographic diversification.”
Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure (CRHF), Coronary & Structural Heart (CSH), and Aortic, Peripheral & Venous (APV) divisions. CVG second quarter revenue of $2.855 billion decreased 0.1 percent as reported and increased 1.3 percent on a constant currency basis. CVG’s revenue performance was driven by high-single digit growth in CSH, offset by flat results in APV and low-single digit declines in CRHF, all on a constant currency basis.
- Cardiac Rhythm & Heart Failure second quarter revenue of $1.426 billion decreased 3.1 percent as reported or 1.9 percent on a constant currency basis. Arrhythmia Management grew in the low-single digits, driven by mid-single digit growth in Pacemakers on continued strength of the Micra™ transcatheter pacing system, as well as low-double digit growth in AF Solutions, all on a constant currency basis. Arrhythmia Management growth was offset by low-double digit declines in Heart Failure, including high-thirties declines in sales of left ventricular assist devices (LVADs), both on a constant currency basis.
- Coronary & Structural Heart second quarter revenue of $955 million increased 5.4 percent as reported or 7.2 percent on a constant currency basis, led by low-twenties constant currency growth in sales of transcatheter aortic valves, reflecting expansion into the low risk patient population. Transcatheter aortic valve growth was offset by mid-single digit declines in drug-eluting stents.
- Aortic, Peripheral & Venous second quarter revenue of $474 million decreased 1.3 percent as reported or 0.2 percent on a constant currency basis. Aortic grew in the mid-single digits on a constant currency basis, driven by low-twenties constant currency growth in thoracic aortic stent grafts reflecting strong demand for the Valiant Navion™. Aortic growth was offset by high-single digit constant currency declines in Peripheral, driven by low-thirties constant currency declines in drug-coated balloons.
Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. MITG second quarter revenue of $2.142 billion increased 4.6 percent as reported or 6.1 percent on a constant currency basis. MITG’s revenue performance was driven by balanced growth across both divisions, with mid-single digit constant currency growth in both SI and RGR.
- Surgical Innovations second quarter revenue of $1.454 billion increased 4.4 percent as reported or 6.0 percent on a constant currency basis, driven by strong contributions from Advanced Energy and Advanced Stapling. Advanced Energy grew in the mid-single digits on a constant currency basis on continued strength in sales of LigaSure™ vessel sealing instruments, including the Ligasure™ Exact dissector. Advanced Stapling grew in the mid-single digits on a constant currency basis, driven by strong demand for Tri-Staple™ 2.0 endo stapling specialty reloads and the EEA™ circular stapler with Tri-Staple™ technology for colorectal procedures.
- Respiratory, Gastrointestinal & Renal second quarter revenue of $688 million increased 5.2 percent as reported or 6.1 percent on a constant currency basis, with strength in Respiratory & Patient Monitoring, as well as GI Solutions. Respiratory & Patient Monitoring grew in the high-single digits on a constant currency basis on strong sales of Nellcor™ pulse oximetry, increased adoption of advanced parameters including Microstream™ capnography and BIS™ brain monitoring, as well as Puritan Bennett™ 980 ventilators, and McGRATH™ MAC video laryngoscopes. GI Solutions grew in the high-single digits on a constant currency basis, with solid growth in Bravo™ calibration-free reflux testing systems, EndoFLIP™ imaging systems, and PillCam™ capsule endoscopy systems.
Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Brain Therapies, Spine, Specialty Therapies, and Pain Therapies divisions. RTG second quarter revenue of $2.112 billion increased 6.0 percent as reported, as well as on an organic basis, which adjusts for the negative impact from foreign currency and the positive contribution from the company’s acquisition of Titan Spine. RTG’s revenue performance was driven by low-double digit growth in Brain Therapies, mid-single digit growth in Specialty Therapies and Spine, and low-single digit growth in Pain Therapies, all on an organic basis.
- Brain Therapies second quarter revenue of $772 million increased 10.1 percent as reported or 11.3 percent on a constant currency basis, driven by high-teens constant currency growth in Neurovascular and low-double digit constant currency growth in Neurosurgery. Neurovascular results were driven by low-double digit constant currency growth in Hemorrhagic Stroke and high-twenties growth in Ischemic Stroke. Neurosurgery was led by strong, double digit growth of StealthStation™ S8 surgical navigation systems, O-arm™ surgical imaging systems, and Mazor X Stealth™ Edition robotic guidance systems.
- Spine second quarter revenue of $692 million increased 5.5 percent as reported or 3.5 percent on an organic basis. When combined with the company’s sales of enabling technology used in spine surgeries, including robotics, navigation, imaging, and powered surgical instruments that are recognized in the Brain Therapies division, global Spine revenue and U.S. Spine revenue both grew in the high-single digits on an organic basis. Cervical spine products grew mid-single digits on an organic basis, driven by sales of the Infinity™ OCT system and the Prestige LP™ cervical disc system. Spine also benefitted from pull-through of Medtronic core spine implants used in Mazor™ robotic cases, as well as strong sales of Infuse™ bone graft, which grew in the low-double digits on an organic basis.
- Specialty Therapies second quarter revenue of $333 million increased 3.4 percent as reported or 4.3 percent on a constant currency basis. ENT grew in the high-single digits on a constant currency basis, driven by capital equipment sales of the StealthStation™ ENT surgical navigation system, as well as sales of disposables used with the intraoperative NIM nerve monitoring system. Pelvic Health grew in the low-single digits on a constant currency basis, driven by sales of the InterStim™ II sacral neuromodulation system.
- Pain Therapies second quarter revenue of $315 million increased 0.3 percent as reported or 1.3 percent on a constant currency basis. Interventional Pain grew in the low-double digits on the strength of Kyphon™ balloon kyphoplasty and OsteoCool™ RF ablation system sales. This was offset by declines in Pain Stimulation, reflecting the slowdown of the spinal cord stimulation market.
Diabetes Group second quarter revenue of $596 million increased 2.2 percent as reported or 4.3 percent on a constant currency basis. Diabetes Group revenue performance was led by international markets, which grew 14.5 percent as reported or 19.3 percent on a constant currency basis, driven by the ongoing launch of the MiniMed™ 670G hybrid closed loop insulin pump system. International growth was offset by high-single digit declines in the U.S., given increased competition as the group awaits its expected upcoming product approvals.
Global sales of integrated continuous glucose monitoring (CGM) sensors grew in the mid-teens on a constant currency basis, driven by global adoption of sensor-augmented insulin pump systems and the resulting strong sensor attachment rates.
The company today reiterated its revenue growth guidance and raised its full year EPS guidance for fiscal 2020.
The company continues to expect revenue growth in its fiscal year 2020 to approximate 4.0 percent on an organic basis and for revenue growth to accelerate in the second half relative to the first. If current exchange rates hold, revenue growth in fiscal year 2020 would be negatively affected by 0.8 to 1.2 percent.
The company increased its fiscal year 2020 diluted non-GAAP EPS guidance from the prior range of $5.54 to $5.60 to a new range of $5.57 to $5.63, including an estimated 9 cent negative impact from foreign exchange based on current rates.
“The first half of this fiscal year has gone well, as we’ve executed to our commitments and delivered better-than-expected results,” said Ishrak. “As we look forward, we’re even more excited about what lies ahead, as the investments we’ve made in our pipeline begin to pay off by accelerating our revenue growth and creating value for our shareholders.”
Medtronic will host a webcast today, November 19, at 8:00 a.m. EST (7:00 a.m. CST) to provide information about its businesses for the public, investors, analysts, and news media. This quarterly webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at newsroom.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company’s prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.
To view the second quarter financial schedules and non-GAAP reconciliations, click here . To view the second quarter earnings presentation, click here . Both documents can also be accessed by visiting newsroom.medtronic.com.
Medtronic plc ( www.medtronic.com ), headquartered in Dublin, Ireland, is among the world’s largest medical technology, services and solutions companies – alleviating pain, restoring health and extending life for millions of people around the world. Medtronic employs more than 90,000 people worldwide, serving physicians, hospitals and patients in more than 150 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which are subject to risks and uncertainties, including those described in Medtronic’s periodic reports and other filings with the U.S. Securities and Exchange Commission (the “SEC”). Anticipated results only reflect information available to Medtronic at this time and may differ from actual results. Medtronic does not undertake to update its forward-looking statements or any of the information contained in this press release. Certain information in this press release includes calculations or figures that have been prepared internally and have not been reviewed or audited by our independent registered public accounting firm, including but not limited to, certain information in the financial schedules accompanying this press release. Use of different methods for preparing, calculating or presenting information may lead to differences and such differences may be material.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures and guidance, including adjusted net income and adjusted diluted EPS, which are considered “non-GAAP” financial measures under applicable SEC rules and regulations. References to quarterly figures increasing, decreasing or remaining flat are in comparison to the second quarter of fiscal year 2019.
Medtronic management believes that non-GAAP financial measures provide information useful to investors in understanding the company’s underlying operational performance and trends and to facilitate comparisons with the performance of other companies in the med tech industry. Non-GAAP net income and diluted EPS exclude the effect of certain charges or gains that contribute to or reduce earnings but that result from transactions or events that management believes may or may not recur with similar materiality or impact to operations in future periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate management’s review of the operational performance of the company and as a basis for strategic planning. Non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), and investors are cautioned that Medtronic may calculate non-GAAP financial measures in a way that is different from other companies. Management strongly encourages investors to review the company’s consolidated financial statements and publicly filed reports in their entirety. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial schedules accompanying this press release.
Medtronic calculates forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, forward-looking organic revenue growth guidance excludes the impact of foreign currency fluctuations, as well as significant acquisitions or divestitures. Forward-looking diluted non-GAAP EPS guidance also excludes other potential charges or gains that would be recorded as Non-GAAP Adjustments to earnings during the fiscal year. Medtronic does not attempt to provide reconciliations of forward-looking non-GAAP EPS guidance to projected GAAP EPS guidance because the combined impact and timing of recognition of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
One Liberty Plaza - 165 Broadway
NY 10006 New York
GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.
Subscribe to releases from GlobeNewswire
Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from GlobeNewswire
Bavarian Nordic Receives Antitrust Clearance for Acquisition of Rabipur/RabAvert and Encepur from GlaxoSmithKline13.12.2019 10:26:00 CET | Press release
COPENHAGEN, Denmark, December 13, 2019 – Bavarian Nordic A/S (OMX: BAVA, OTC: BVNRY) today announced that it has received antitrust clearance in the U.S., Spain and Portugal of its planned acquisition of the two commercial vaccines, Rabipur®/RabAvert® and Encepur®, from GlaxoSmithKline plc (GSK), announced on October 21, 2019. With these clearances, and the recent approval from the Company’s shareholders of a rights issue to fund part of the acquisition, the transaction will now proceed towards closing, expected by December 31, 2019. For more information about the transaction, see company announcement no. 19/2019. About Bavarian Nordic Bavarian Nordic is a fully integrated biotechnology company focused on the development of innovative therapies against infectious diseases and cancer. Using our live virus vaccine platform technology, MVA-BN®, we have created a diverse portfolio of proprietary and partnered product candidates intended to unlock the power of the immune system to improve p
Telenor completes 5G vendor selection for Norway13.12.2019 08:59:00 CET | Press release
(Fornebu, 13 December 2019) Telenor has completed its vendor selection process for the future network in Norway. Ericsson will modernise and build the Telenor’s 5G radio access network (RAN). “We expect 5G to be the one technology that will transform our society the most in the next decade. We have been through a thorough process to evaluate all the main vendors’ ability to deliver on Telenor’s requirements for the future mobile network. When selecting the vendor for the radio access network, we have considered important factors like technical quality, ability to innovate and modernise the network, commercial terms and conditions, as well as carried out an extensive security evaluation. Based on the comprehensive and holistic evaluation, we have decided to introduce a new partner for this important technology shift in Norway,” says Sigve Brekke, CEO of Telenor Group. In the forefront of modernisation “We are happy to announce that we have chosen Ericsson to start building the future 5G
Van Lanschot Kempen to return capital of €1.50 per share on 23 December 201913.12.2019 08:30:00 CET | Press release
’s- Hertogenbosch, the Netherlands, 13 December 2019 On 23 December 2019, Van Lanschot Kempen will return the previously announced amount of €1.50 per Class A share in issue, totalling over €60 million, to its shareholders. Van Lanschot Kempen’s shareholders approved the return of capital at an extraordinary general meeting on 9 October 2019. On 11 December 2019, the legally prescribed two-month objection period expired. No objections were made, and subsequently the payment date for the capital return has been fixed on 23 December. Van Lanschot Kempen is able to make this capital return payment to its shareholders as a result of its strong capital position. This return of capital will take the total capital returned, in the form of both dividend payments and capital returns, to €330 million since 2016. Van Lanschot Kempen will continue to optimise its capital base going forward, while leaving room for possible acquisitions. If possible, it will also consider paying out capital to its s
Øresunds Bridge CEO resigns in 202013.12.2019 08:29:00 CET | Press release
Øresunds Bridge CEO resigns in 2020 CEO of the Øresunds Bridge Consortium Caroline Ullman-Hammer resigns after 13 profitable years in the Swedish-Danish company. She will remain in her role until further but will resign when a new CEO is appointed during 2020. Caroline Ullman-Hammer joined the Øresund Bridge in 2007 and has since then contributed to raising traffic volumes, increased results and significant growth in customers. The Øresunds Bridge has over 550.000 BroPas-customers. "We thank Caroline Ullman-Hammer for the very fine efforts. Under Caroline's management the bridge has positioned itself clearly – with several years' increased traffic, lowered operating costs and significantly more customers. She is responsible for the commercially healthy company, on which the bridge safely leans", says Peter Frederiksen, Chairman of the Board of directors of the Øresunds Bridge Consortium. "The Øresund Bridge is essential for the integration of Skåne and Sjælland, but also ties the regio
Ahold Delhaize share buyback update13.12.2019 08:00:00 CET | Press release
Zaandam, the Netherlands, December 13, 2019 – Ahold Delhaize has repurchased 584,327 of Ahold Delhaize common shares in the period from December 9, 2019 up to and including December 11, 2019. The shares were repurchased at an average price of €23.04 per share for a total consideration of €13.5 million. These repurchases were made as part of the €1 billion share buyback program announced on November 13, 2018. The total number of shares repurchased under this program during the financial year 2019 is 45,621,384 common shares for a total consideration of €1 billion. Ahold Delhaize confirms the successful completion of the program on December 11, 2019. The number of outstanding common shares as of this date was 1,087,955,597. Download the share buyback transactions excel sheet for detailed individual transaction information from www.aholddelhaize.com/en/investors/share-information/share-buy-back-programs/ This press release is issued in connection with the disclosure and reporting obligati
Karolinska Development´s portfolio company Umecrine Cognition completes enrollment to phase 2a study in liver cirrhosis and hepatic encephalopaty13.12.2019 08:00:00 CET | Press release
STOCKHOLM, SWEDEN – December 13, 2019. Karolinska Development´s portfolio company Umecrine Cognition announces today that the enrollment has been completed in its Phase 2a study designed to assess the safety, pharmacokinetics and potential benefit of golexanolone in patients with liver cirrhosis and hepatic encephalopathy. Umecrine Cognition is developing golexanolone (GR3027), a novel GABAA receptor modulating steroid antagonist with a potential to improve brain function in a wide range of cognitive disorders. Golexanolone is presently in clinical development for hepatic encephalopathy (HE), a serious neuropsychiatric and neurocognitive complication in acute and chronic liver disease (including cirrhosis). At present there are no treatments available that directly target the brain abnormalities believed to be responsible for HE. The study UCAB-CT-02 is a prospective, double-blind, randomized, placebo-controlled multi-center phase 1b/2a protocol in four parts enrolling healthy adults a