Becton, Dickinson and Company (NYSE:BDX) 7th Annual Evercore ISI HealthCONx Results Conference December 3, 2024 10:50 AM ET Company Participants Richard Byrd - EVP and President of Interventional Business Chris DelOrefice - Executive Vice President & Chief Financial Officer Conference Call Participants Vijay Kumar - Evercore ISI Vijay Kumar Thanks, everyone, for joining us this morning. A pleasure to have with us Becton, Dickinson. From the company, we have our CFO, Chris DelOrefice. We also have Rick Byrd, ...

Summary of Becton, Dickinson and Company (BDX) Conference Call Company Overview - **Company**: Becton, Dickinson and Company (NYSE: BDX) - **Date**: December 3, 2024 - **Participants**: - Richard Byrd - EVP and President of Interventional Business - Chris DelOrefice - Executive Vice President & Chief Financial Officer - Vijay Kumar - Evercore ISI Key Points Financial Performance - **Fiscal Year 2024 Growth**: Achieved strong overall growth of 5% despite market dynamics affecting certain segments [4][10] - **Segment Performance**: - BDB and pharma systems grew low single digits (1%) - Other portfolio segments, excluding a low single-digit decline in China, grew nearly 6% [5][6] - **Fiscal Year 2025 Guidance**: - Projected organic growth of 4% to 4.5%, with expectations of continued challenges in China [6][10] - Anticipated earnings growth of approximately 10% at the midpoint [10] - **Gross Margin Improvement**: Expected to improve by about 100 basis points in FY 2025, driven by strong second-half performance in FY 2024 [7][10] Cash Flow and Share Buybacks - **Cash Conversion**: Strong cash conversion rate of 82% in FY 2024, expected to remain similar in FY 2025 [8][10] - **Share Buybacks**: Plans to execute approximately $1 billion in share repurchases throughout FY 2025 [10][88] Market Dynamics and Challenges - **China Market**: Anticipated mid-single-digit decline in China due to market dynamics and volume-based procurement [25][34] - **Macro Environment**: Positive outlook for med tech utilization in healthcare systems, with BD well-positioned to benefit [12][14] - **Tariffs and Supply Chain**: Monitoring potential tariff impacts, particularly concerning manufacturing hubs in Mexico and China [15][16][18] Product and Segment Insights - **Interventional Business**: Strong performance driven by the PureWick franchise, addressing urinary incontinence in both acute and home care settings [36][38] - **Surgical Segment**: Notable growth in hemostat sealants and hernia meshes, with a focus on innovative products like Phasix [46][50] - **Biosciences and Pharma Systems**: - Biosciences expected to recover with strong growth potential in clinical applications [56][62] - Pharma systems, particularly biologics, projected to return to high single-digit to double-digit growth [60][62] Future Outlook - **Investor Day**: Upcoming event to provide further insights into growth strategies and product innovations [53][79] - **Long-term Growth**: BD aims to position PureWick as a $1 billion franchise by 2030, with ongoing expansion into international markets [42][53] Additional Considerations - **Regulatory Environment**: BD has been proactive in addressing quality system improvements and regulatory compliance, particularly concerning its dispensing business [72][74] - **Tax Rate**: Expected increase in tax rate to approximately 14.75% for FY 2025, influenced by global minimum tax regulations [86] This summary encapsulates the key insights and financial outlook for Becton, Dickinson and Company as discussed in the conference call, highlighting both opportunities and challenges in the current market landscape.

Acquisitions and Divestitures - Completed acquisition of Edwards Lifesciences' Critical Care product group for $3.911 billion, renamed as BD Advanced Patient Monitoring[286][299] - The Company completed the sale of its Interventional segment's Surgical Instrumentation platform in August 2023, recognizing a pre-tax gain of approximately $268 million[356] - The Company completed the spin-off of its Diabetes Care business as Embecta Corp. on April 1, 2022, receiving a cash distribution of approximately $1.266 billion from Embecta[357] - Acquisitions, net of cash acquired, totaled $3,924 million in 2024, compared to $0 in 2023 and $2,070 million in 2022[323] Financial Performance - Revenue increased to $20,178 million in 2024, up 4.2% from $19,372 million in 2023[314] - Net income from continuing operations rose to $1,705 million in 2024, an 11.4% increase from $1,530 million in 2023[314] - Operating income grew to $2,397 million in 2024, a 13.5% increase from $2,111 million in 2023[314] - Comprehensive income was $1,521 million in 2024, a 6.8% increase from $1,424 million in 2023[317] - Diluted earnings per share from continuing operations increased to $5.86 in 2024, up 14.9% from $5.10 in 2023[314] - Net income for 2024 increased to $1,705 million, up from $1,484 million in 2023 and $1,779 million in 2022[323] - Net cash provided by continuing operating activities in 2024 was $3,844 million, compared to $2,990 million in 2023 and $2,471 million in 2022[323] Segment Performance - Medical segment revenues increased to $10,074 million in 2024, up from $9,502 million in 2023 and $8,841 million in 2022[437] - Life Sciences segment revenues grew to $5,191 million in 2024, compared to $5,133 million in 2023 and $5,564 million in 2022[437] - Interventional segment revenues rose to $4,980 million in 2024, up from $4,736 million in 2023 and $4,464 million in 2022[437] - Total company revenues from continuing operations reached $20,178 million in 2024, compared to $19,372 million in 2023 and $18,870 million in 2022[437] - Medical segment operating income increased to $2,742 million in 2024, up from $1,967 million in 2023[441] - Life Sciences segment operating income remained stable at $1,595 million in 2024, compared to $1,585 million in 2023[441] - Interventional segment operating income grew to $1,420 million in 2024, up from $1,217 million in 2023[441] Assets and Liabilities - Total assets increased to $57,286 million in 2024, up 8.5% from $52,780 million in 2023[320] - Cash and equivalents rose to $1,717 million in 2024, a 21.3% increase from $1,416 million in 2023[320] - Long-term debt increased to $17,940 million in 2024, up 21.7% from $14,738 million in 2023[320] - Goodwill increased to $26,465 million in 2024, a 7.9% rise from $24,522 million in 2023[320] - Recorded a liability of $257 million related to uncertain tax positions as of September 30, 2024[300] - Product liability accruals amounted to $1.7 billion and $1.9 billion at September 30, 2024 and 2023, respectively[407] - The company's rebate liabilities were $749 million and $669 million at September 30, 2024 and 2023, respectively[416] - Contract liabilities for unearned revenue were approximately $482 million and $412 million at September 30, 2024 and 2023, respectively[421] Research and Development - Research and development expense decreased to $1,190 million in 2024, down 3.8% from $1,237 million in 2023[314] Share Repurchases and Compensation - The Company executed and settled accelerated share repurchase agreements in fiscal year 2024, repurchasing 2.118 million shares of its common stock for $500 million[374] - In fiscal year 2022, the Company repurchased 1.953 million common shares for $500 million and recorded an additional $150 million as an increase to Treasury stock[375] - Share repurchase program authorized on November 3, 2021 for up to 10 million shares of BD common stock, with no expiration date[376] - Total share-based compensation cost for 2024 was $249 million, compared to $261 million in 2023 and $240 million in 2022[447] - The company issued 0.1 million shares during 2024 to satisfy SARs exercised, with a total intrinsic value of $25 million[450][451] - The weighted average grant date fair value of SARs granted in 2024 was $63.05, up from $57.80 in 2023 and $49.45 in 2022[450] - Performance-based restricted stock units outstanding as of September 30, 2024 were 991 thousand, with a weighted average grant date fair value of $229.02[457] - Time-vested restricted stock units outstanding as of September 30, 2024 were 1,693 thousand, with a weighted average grant date fair value of $227.20[457] - The total fair value of restricted stock units vested during 2024 was $45 million for performance-based and $179 million for time-vested units[458] - Unrecognized compensation expense for all non-vested share-based awards as of September 30, 2024 was approximately $253 million[459] Pension and Postretirement Benefits - Net pension cost for 2024 was $131 million, down from $174 million in 2023 and $143 million in 2022[468] - The company's U.S. pension plan benefit obligation increased to $2,913 million in 2024 from $2,617 million in 2023, with a significant actuarial gain of $241 million in 2024 compared to a loss of $24 million in 2023[472] - International pension plan assets at fair value grew to $880 million in 2024 from $748 million in 2023, while the projected benefit obligations increased to $992 million from $833 million over the same period[472] - The company made a discretionary contribution of $150 million to its U.S. pension plan in fiscal year 2024 and does not anticipate significant required contributions in fiscal year 2025[480] - The discount rate for U.S. pension plans increased to 6.01% in 2024 from 5.62% in 2023, while the expected return on plan assets for U.S. plans slightly increased to 7.29% from 7.25%[476] - The funded status of the U.S. pension plan improved, with the unfunded benefit obligation decreasing to $356 million in 2024 from $488 million in 2023[472] - The company recognized a curtailment gain in 2023 related to the freeze of the U.S. pension plan, while settlement losses were recorded in both 2023 and 2022 due to lump sum benefit payments[471] - The postretirement healthcare and life insurance benefit obligation for domestic retirees increased slightly to $94 million in 2024 from $92 million in 2023[475] - The fair value of U.S. pension plan assets increased to $2,557 million in 2024 from $2,129 million in 2023, driven by an actual return on plan assets of $395 million[472] - The company's international pension plans saw a decrease in the discount rate to 4.52% in 2024 from 4.26% in 2023, while the expected return on plan assets increased to 5.30% from 5.02%[476] - The rate of compensation increase for U.S. pension plans decreased to 4.00% in 2024 from 4.51% in 2023, while international plans saw a slight decrease to 2.81% from 2.86%[476] Legal and Regulatory Matters - The company is defending approximately 6,610 product liability claims involving hernia repair devices as of September 30, 2024, down from 34,845 in 2023 due to a settlement agreement[387] - The company recorded charges of $50 million and $125 million in the third and fourth quarters of 2024, respectively, to accrue an estimated $175 million liability related to SEC discussions[394] - The company received subpoenas from the SEC in February 2021 regarding reporting issues involving BD Alaris infusion pumps, with ongoing discussions and potential monetary penalties[394] - In July 2017, C.R. Bard received a CID from the Department of Justice regarding an investigation into possible violations of the False Claims Act, with ongoing discussions as of July 2024[394] - In April 2019, the Department of Justice served the company and CareFusion with CIDs regarding contracts with the Department of Veteran's Affairs, with ongoing document requests and interviews[394] - In September 2021, the company received a CID related to an inquiry initiated by the Department of Justice in 2018 concerning sales and marketing practices in the urology business, resolved with an adequately accrued amount[394] - The company has approximately 350 lawsuits involving 360 plaintiffs related to ethylene oxide exposure, with a trial date set for April 2025[398] - The company recorded a $62 million reduction in revenues due to Italian medical device payback legislation[398] - The company recorded a $28 million liability for estimated future costs related to an FDA Warning Letter[398] Intangible Assets and Valuation - Developed technology intangible assets valued at $714 million and customer relationships intangible assets valued at $650 million as part of the acquisition[299] - The company used an income approach to measure technology-related intangible assets and certain customer relationship-related assets[299] - Significant assumptions for valuation included discount rates and revenue growth rates, which are forward-looking and subject to future economic and market conditions[299] Internal Controls and Audits - Internal control over financial reporting was effective as of September 30, 2024, excluding BD Advanced Patient Monitoring[286][304] - The company's consolidated financial statements were audited and found to be in conformity with U.S. generally accepted accounting principles[293] - The company's internal control over financial reporting was audited and found to be effective based on COSO criteria[303] - The company's audit included evaluation of controls over accounting for business combinations and uncertain tax positions[299][300] Geographic Revenue Performance - United States revenues increased to $11,663 million in 2024, compared to $11,113 million in 2023 and $10,722 million in 2022[445] - EMEA revenues grew to $4,402 million in 2024, up from $4,244 million in 2023 and $4,043 million in 2022[445] Capital Expenditures and Commitments - Total capital expenditures decreased to $725 million in 2024, down from $874 million in 2023[441] - Future purchase commitments as of September 30, 2024 aggregated to approximately $1.831 billion, to be expended over the next several years[381] Discontinued Operations - The company completed the spin-off of its Diabetes Care business on April 1, 2022, with historical results reflected as discontinued operations[327] - In fiscal year 2023, the Company recorded expenses of $46 million within (Loss) Income from Discontinued Operations, Net of Tax related to a foreign tax associated with the spin-off[362] Tax and Valuation Allowances - The company is permanently reinvested with respect to all historical foreign earnings as of September 30, 2024[347] - The company maintains valuation allowances for deferred tax assets where realization is not more likely than not[349] Shipping and Depreciation Expenses - Shipping expense decreased to $702 million in 2024 from $733 million in 2023 and $751 million in 2022[344] - Depreciation and amortization expense was $676 million in 2024, $696 million in 2023, and $672 million in 2022[335] Goodwill and Impairment - Goodwill impairment review on July 1, 2024, indicated that all reporting units' fair values exceeded their carrying values[336] Share-Based Awards and Plans - The company has 10.0 million shares authorized for future grants under the 2004 Plan as of September 30, 2024[461] - Accumulated other comprehensive income (loss) balance at September 30, 2024 was $(1,732) million, including $(1,244) million from foreign currency translation and $(557) million from benefit plans[376] - Weighted average common shares outstanding for 2024 were 289,763 thousand, with dilutive share equivalents of 1,246 thousand, resulting in 291,009 thousand average common and common equivalent shares outstanding[380] Revenue from Unsatisfied Obligations - The company estimates $2.3 billion in revenue from unsatisfied performance obligations as of September 30, 2024[422] - The company estimates $2.1 billion in revenue from unsatisfied minimum purchase commitments as of September 30, 2024[423]

BROWNSVILLE, Texas, Nov. 20, 2024 /PRNewswire/ -- A first of its kind Human Papillomavirus (HPV) self-collection screening pilot program aimed at improving cervical cancer screening in underserved communities has officially launched in Texas. HPV is the cause of virtually all cervical cancers. BD, The University of Texas MD Anderson Cancer Center and Su Clinica have announced a first-of-its-kind HPV self-collection pilot program aimed at improving cervical cancer screening in underserved communities has ...

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Becton, Dickinson and Company (NYSE:BDX) Q4 2024 Earnings Conference Call November 7, 2024 8:00 AM ET Company Participants Greg Rodetis - Senior Vice President, Treasurer & Head of Investor Relations Tom Polen - Chairman, Chief Executive Officer & President Chris DelOrefice - Executive Vice President & Chief Financial Officer Mike Garrison - President of Medical Segment Conference Call Participants Vijay Kumar - Evercore ISI Larry Biegelsen - Wells Fargo Travis Steed - Bank of America Robbie Marcus - JPMorg ...

Becton, Dickinson and Company (BDX) , popularly known as BD, delivered adjusted earnings per share (EPS) of $3.81 in the fourth quarter of fiscal 2024, up 11.4% year over year. The figure topped the Zacks Consensus Estimate by 1.1%.The adjustments include expenses related to purchase accounting adjustments and integration costs, among others.GAAP EPS for the quarter was $1.45, reflecting an improvement of 173.6% from the year-ago figure.Full-year fiscal 2024 EPS was $13.14, reflecting a 7.6% uptick from the ...

For the quarter ended September 2024, Becton Dickinson (BDX) reported revenue of $5.44 billion, up 6.9% over the same period last year. EPS came in at $3.81, compared to $3.42 in the year-ago quarter.The reported revenue represents a surprise of +1.59% over the Zacks Consensus Estimate of $5.35 billion. With the consensus EPS estimate being $3.77, the EPS surprise was +1.06%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine ...