EXHIBIT 99
FOR IMMEDIATE RELEASE
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Media contacts: Deborah Spak, (847) 948-2349
Cindy Resman, (847) 948-2815
Investor contacts: Neville Jeharajah, (847) 948-2875
Mary Kay Ladone, (847) 948-3371
BAXTER ACHIEVES FIRST QUARTER SALES AND EPS GOALS
DEERFIELD, Ill., April 16, 2003 -- Baxter International Inc. (NYSE: BAX)
today reported that it achieved its sales and diluted earnings per share (EPS)
goals for the first quarter of 2003. Baxter's sales grew 6 percent in the first
quarter, while earnings declined as a result of product mix and competitive
pricing in the plasma market.
Baxter's sales from continuing operations in the quarter rose to $2.0
billion, up from $1.88 billion reported for the same period last year. The
increase in sales for the first quarter included a 4 percentage-point benefit
from foreign exchange. Sales within the United States grew 4 percent to $956
million, while sales outside the United States grew 9 percent to $1.04 billion
(or declined 1 percent excluding the impact of foreign exchange). First quarter
sales for Renal grew 2 percent to $407 million and sales in BioScience were down
1 percent at $740 million. Medication Delivery sales grew 17 percent to $850
million. Contributing to the growth in Medication Delivery were strong sales of
anesthesia and drug delivery products, as well as sales from ESI Lederle, which
Baxter acquired at the end of 2002.
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BAXTER REPORTS FIRST QUARTER 2003 EARNINGS - PAGE 2
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Baxter's earnings from continuing operations in the first quarter totaled
$217 million, or $0.36 per diluted share, a decline of 14 percent from the
$253 million, or 12 percent from the $0.41 per diluted share reported last year.
The first quarter results include a pre-tax impairment charge of $13 million to
reflect the decline in the market value of a minority investment.
"Despite the current challenges in the plasma protein business, I expect
our sales growth for the full year to be in the 8 to 12 percent range and our
EPS growth to be in the $2.10 to $2.20 range, in addition to generating cash
flows from continuing operations of $1.3 billion to $1.5 billion before capital
expenditures," said Harry M. Jansen Kraemer, Jr., chairman and chief executive
officer. "With the many new product launches we have planned for 2003, combined
with our ongoing expansion with current products into new markets, we believe we
are well positioned to achieve our goals."
Contributing to growth for full-year 2003 will be the anticipated approval
and launch of the company's innovative hemophilia therapy ADVATE, which will
offer patients the first Factor VIII recombinant therapy to be clinically
developed and prepared without the addition of any human- or animal-derived raw
materials.
Specifically for the second quarter, the company expects to achieve sales
growth in the range of 8 to 10 percent and EPS in the range of $0.40 to $0.42.
Among the contributors to the growth in the second quarter will be the launch of
several products, including the new peritoneal dialysis (PD) solution,
Extraneal, and the ALYX Red Blood Cell Collection System. The launch of
Extraneal is the first of several new product launches anticipated in the Renal
business this year in an effort to continually refresh its product line for
patients with end-stage renal disease.
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BAXTER REPORTS FIRST QUARTER 2003 EARNINGS - PAGE 3
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A webcast of Baxter's first quarter conference call for investors can be
accessed live from a link on Baxter's website at www.baxter.com beginning at
7:30 a.m. CDT on April 16, 2003. The company will conduct its Annual Meeting of
Stockholders on May 6, and will be making an investor presentation on June 10.
Please visit Baxter's website for additional information about these events.
Baxter International Inc., through its subsidiaries, assists health-care
professionals and their patients with treatment of complex medical conditions,
including cancer, hemophilia, immune disorders, kidney disease and trauma. The
company applies its expertise in medical devices, pharmaceuticals and
biotechnology to make a meaningful difference in patients' lives.
(Baxter, ADVATE, Extraneal and ALYX are trademarks of Baxter International Inc.
and its subsidiaries)
This news release contains forward-looking statements that involve risks and
uncertainties, including the effect of economic conditions, actions of
regulatory bodies, product development risks, product demand and market
acceptance, the impact of competitive products and pricing, foreign currency
exchange rates and other risks detailed in the company's filings with the
Securities and Exchange Commission. These forward-looking statements are based
on estimates and assumptions made by management of the company and are believed
to be reasonable, though are inherently uncertain and difficult to predict.
Actual results or experience could differ materially from the forward-looking
statements.
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BAXTER INTERNATIONAL INC.
Consolidated Statements of Income from Continuing Operations
(unaudited)
(in millions, except per share data)
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Three Months Ended
March 31,
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2003 2002 Change
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NET SALES $1,997 $1,875 6%
GROSS PROFIT 880 880 --
% to Sales 44.1% 46.9% (2.8 pts)
MARKETING AND ADMINISTRATIVE EXPENSES 413 393 5%
% to Sales 20.7% 21.0% (.3 pts)
RESEARCH AND DEVELOPMENT EXPENSES 136 115 18%
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OPERATING INCOME 331 372 (11%)
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% to Sales 16.6% 19.8% (3.2 pts)
INTEREST, NET 19 16 19%
OTHER EXPENSE 26 12 117%
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INCOME BEFORE INCOME TAXES 286 344 (17%)
INCOME TAX EXPENSE 69 91 (24%)
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INCOME FROM CONTINUING OPERATIONS $217 $253 (14%)
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BASIC EPS $0.36 $0.42 (14%)
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DILUTED EPS $0.36 $0.41 (12%)
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WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 598 600
Diluted 611 622
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RECONCILIATION TO NET INCOME
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Net Income
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Income from continuing operations $217 $253
Discontinued operations (1) --
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Net income $216 $253
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BAXTER INTERNATIONAL INC.
Cash Flows from Continuing Operations and Changes in Net Debt
(unaudited)
(in millions, except statistical data)
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Cash Flows from Continuing Operations
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(Brackets denote cash outflows) Three Months Ended
March 31,
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2003 2002
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Income from continuing operations $217 $253
Adjustments
Depreciation and amortization 128 103
Deferred income taxes (70) 37
Other 8 (16)
Changes in balance sheet items
Accounts receivable (56) (174)
Inventories (135) (127)
Accounts payable and accrued liabilities (85) (129)
Net litigation payable and other (30) (42)
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Cash flows from continuing operations ($23) ($95)
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Changes in Net Debt
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Increase (decrease) Three Months Ended
March 31,
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2003 2002
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Net debt, January 1 $3,449 $2,105
Cash flows from continuing operations 23 95
Capital expenditures 174 132
Dividends 346 348
Acquisitions, including assumed debt 70 49
Purchases of treasury stock 153 35
Other, including the effect of exchange rate changes 62 (67)
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Increase in net debt 828 592
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Net debt, March 31 $4,277 $2,697
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Key statistics, March 31:
Days sales outstanding 65.2 59.4
Inventory turns 2.3 2.7
Net-debt-to-capital ratio (A) 46.9% 40.6%
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(A) The net-debt-to-capital ratio was calculated in accordance with the
company's primary credit agreements, which give 70% equity credit to the
company's December 2002 $1.25 billion issuance of equity units.
Baxter International Inc.
Net Sales from Continuing Operations
Period Ending March 31, 2003
(Unaudited)
Q1 Q1 %
($ in Millions) 2003 2002 Growth
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BioScience
United States 340 382 (11%)
International 400 364 10%
Total 740 746 (1%)
Medication Delivery
United States 520 437 19%
International 330 291 13%
Total 850 728 17%
Renal
United States 96 98 (1%)
International 311 303 3%
Total 407 401 2%
Baxter International Inc.
United States 956 917 4%
International 1,041 958 9%
Total 1,997 1,875 6%
Baxter International Inc.
Key Product Line Sales
Period Ending March 31, 2003
(Unaudited)
Q1 Q1 %
($ in Millions) 2003 2002 Growth
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BioScience
Recombinants 244 232 5%
Plasma Proteins/1/ 229 238 (4%)
Antibody Therapy 67 76 (12%)
Transfusion Therapies/2/ 134 130 3%
Medication Delivery
IV Therapies/3/ 248 223 11%
Drug Delivery 161 132 21%
Electronic Infusion Systems 151 151 0%
Anesthesia/4/ 199 121 64%
Renal
PD Therapy 301 300 0%
HD Therapy 103 97 6%
/1/ Includes plasma-derived hemophilia (FVII, FVIII, FIX and FEIBA), albumin,
biosurgery and other plasma-based products.
/2/ Formerly referred to as Fenwal.
/3/ Principally includes intravenous solutions and nutritional products.
/4/ Includes ESI Lederle.