EXHIBIT 99.1
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NEWS BOSTON
FOR IMMEDIATE RELEASE SCIENTIFIC
Boston Scientific Corporation
One Boston Scientific Park
Natick, MA 01760-1537
508-650-8000
www.bostonscientific.com
BOSTON SCIENTIFIC ANNOUNCES
SECOND QUARTER RESULTS
Natick, MA (July 26, 2004) -- Boston Scientific Corporation (NYSE: BSX) today
announced financial results for its second quarter ended June 30, 2004.
Net sales for the second quarter were $1.460 billion as compared to $854 million
for the second quarter of 2003, an increase of 71 percent. Excluding the
favorable impact of $31 million of foreign currency fluctuations, net sales were
$1.429 billion, an increase of 67 percent.
Net income for the quarter, excluding net special charges, increased 200 percent
to $377 million, or $0.44 per share (diluted), as compared to $126 million, or
$0.15 per share, excluding net special charges, in the second quarter of 2003.
The results include the net impact of the previously announced recall of certain
units of the Company's TAXUS(TM) Express(2)(TM) paclitaxel-eluting coronary
stent systems and Express(2)(TM) coronary stent systems, in the amount of $57
million (after-tax), or approximately $0.06 per share. The recall impact
consists of a $78 million (pre-tax) reduction to gross margin, including a sales
reversal of $35 million and an inventory write-off of $43 million. The results
also include a $0.01 dilution to earnings from the operating results of Advanced
Bionics, which Boston Scientific acquired on June 1, 2004.
Reported net income for the quarter, including net special charges of $64
million (after-tax), was $313 million, or $0.36 per share, as compared to
reported net income of $114 million, or $0.13 per share, in the second quarter
of 2003. The net special charges reflect purchased in-process research and
development costs related to acquisitions.
"We experienced impressive growth across all our businesses and regions, and we
are reporting new records in both sales and earnings," said Jim Tobin, President
and Chief Executive Officer of Boston Scientific. "We were especially pleased
with the strong conversion rate to drug-eluting stents in the United States,
which reached more than 80 percent by the end of the quarter. This resulted in a
significant leveraging of our profitability, and we will be working hard to
ensure it continues in the coming quarters."
Boston Scientific officials will be discussing these and other issues with
analysts on a conference call at 9:00 a.m. (ET) Monday, July 26. The Company
will webcast the call to all interested parties
through its website: www.bostonscientific.com. Please see the website for
details on how to access the webcast. The webcast will be available for 10
business days on the Boston Scientific website.
Boston Scientific is a worldwide developer, manufacturer and marketer of medical
devices whose products are used in a broad range of interventional medical
specialties. For more information, please visit: www.bostonscientific.com.
The Company discloses non-GAAP or pro forma measures that exclude certain
charges. Non-GAAP measures may exclude such items as charges related to
purchased in-process research and development and certain litigation. Management
uses these measures to establish operational goals, and believes that non-GAAP
measures may assist investors in analyzing the underlying trends in the
Company's business over time. Investors should consider these non-GAAP measures
in addition to, not as a substitute for, or as superior to, financial reporting
measures prepared in accordance with GAAP.
This press release contains forward-looking statements. The Company wishes to
caution the reader of this press release that actual results may differ from
those discussed in the forward-looking statements and may be adversely affected
by, among other things, risks associated with new product development and
introduction, clinical trials, regulatory approvals, competitive offerings,
intellectual property, litigation, the Company's relationship with third
parties, the Company's overall business strategy, and other factors described in
the Company's filings with the Securities and Exchange Commission.
CONTACT: Milan Kofol
508-650-8569
Investor Relations
Boston Scientific Corporation
Paul Donovan
508-650-8541
Media Relations
Boston Scientific Corporation
BOSTON SCIENTIFIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
In millions, except per share data Reported Adjustments Adjusted Reported Adjustments Adjusted
- ---------------------------------------------------------------------------------------------------------------------------------
Net sales $ 1,460 $ 1,460 $ 854 $ 854
Cost of products sold 363 363 235 235
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Gross profit 1,097 1,097 619 619
Selling, general and administrative expenses 375 375 292 292
Amortization expense 26 26 21 21
Royalties 52 52 13 13
Research and development expenses 132 132 108 108
Purchased research and development 64 $ (64) 12 $ (12)
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649 (64) 585 446 (12) 434
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Operating income 448 64 512 173 12 185
Other income (expense):
Interest expense (14) (14) (12) (12)
Other, net (2) (2)
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Income before income taxes 432 64 496 161 12 173
Income taxes 119 119 47 47
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Net income $ 313 $ 64 $ 377 $ 114 $ 12 $ 126
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Net income per common share - assuming dilution $ 0.36 $ 0.44 $ 0.13 $ 0.15
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Weighted average shares outstanding - assuming dilution 859.9 859.9 844.8 844.8
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BOSTON SCIENTIFIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
In millions, except per share data Reported Adjustments Adjusted Reported Adjustments Adjusted
- ---------------------------------------------------------------------------------------------------------------------------------
Net sales $ 2,542 $ 2,542 $ 1,661 $ 1,661
Cost of products sold 655 655 461 461
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Gross profit 1,887 1,887 1,200 1,200
Selling, general and administrative expenses 723 723 563 563
Amortization expense 48 48 41 41
Royalties 74 74 25 25
Research and development expenses 266 266 211 211
Litigation-related charges 7 $ (7)
Purchased research and development 64 $ (64) 25 (25)
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1,175 (64) 1,111 872 (32) 840
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Operating income 712 64 776 328 32 360
Other income (expense):
Interest expense (25) (25) (23) (23)
Other, net (4) (4)
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Income before income taxes 687 64 751 301 32 333
Income taxes 180 180 90 90
----------------------------- -----------------------------
Net income $ 507 $ 64 $ 571 $ 211 $ 32 $ 243
============================= =============================
Net income per common share - assuming dilution $ 0.59 $ 0.67 $ 0.25 $ 0.29
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Weighted average shares outstanding - assuming dilution 857.6 857.6 844.4 844.4
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BOSTON SCIENTIFIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
In millions 2004 2003
- -------------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash, cash equivalents and short-term investments $ 1,263 $ 752
Trade accounts receivable, net 814 542
Inventories 279 281
Other current assets 318 305
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Total current assets 2,674 1,880
Property, plant and equipment, net 814 744
Intangible assets, net 3,333 2,461
Investments 510 558
Other assets 101 56
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$ 7,432 $ 5,699
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Liabilities and Stockholders' Equity
Current liabilities:
Borrowings due within one year $ 792 $ 553
Accounts payable and accrued expenses 696 675
Other current liabilities 98 165
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Total current liabilities 1,586 1,393
Long-term debt 1,762 1,172
Other long-term liabilities 380 272
Stockholders' equity 3,704 2,862
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$ 7,432 $ 5,699
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BOSTON SCIENTIFIC CORPORATION
WORLDWIDE SALES
REGIONAL SUMMARY
(Unaudited)
WORLDWIDE TOTAL
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Three Months Ended June 30, Change
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As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
------------ ------------ ------------ ------------
DOMESTIC $ 944 $ 482 96% 96%
EUROPE 236 165 43% 34%
JAPAN 157 134 17% 8%
INTER-CONTINENTAL 123 73 68% 63%
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INTERNATIONAL 516 372 39% 30%
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WORLDWIDE $ 1,460 $ 854 71% 67%
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WORLDWIDE TOTAL
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Six Months Ended June 30, Change
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As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
------------ ------------ ------------ ------------
DOMESTIC $ 1,520 $ 961 58% 58%
EUROPE 471 310 52% 37%
JAPAN 312 260 20% 10%
INTER-CONTINENTAL 239 130 84% 70%
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INTERNATIONAL 1,022 700 46% 33%
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WORLDWIDE $ 2,542 $ 1,661 53% 48%
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BOSTON SCIENTIFIC CORPORATION
WORLDWIDE SALES
DIVISIONAL SUMMARY
(Unaudited)
WORLDWIDE TOTAL
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Three Months Ended June 30, Change
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As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
------------ ------------ ------------ ------------
Cardiovascular $ 1,092 $ 532 105% 100%
Electrophysiology 31 28 11% 12%
Neurovascular 62 55 13% 8%
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CARDIOVASCULAR 1,185 615 93% 88%
Oncology 45 41 10% 8%
Endoscopy 159 144 10% 7%
Urology 64 54 19% 14%
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ENDOSURGERY 268 239 12% 9%
Neuromodulation 7 N/A N/A
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WORLDWIDE $ 1,460 $ 854 71% 67%
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WORLDWIDE TOTAL
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Six Months Ended June 30, Change
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As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
------------ ------------ ------------ ------------
Cardiovascular $ 1,815 $ 1,034 76% 69%
Electrophysiology 63 55 15% 11%
Neurovascular 126 106 19% 13%
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CARDIOVASCULAR 2,004 1,195 68% 61%
Oncology 91 79 15% 11%
Endoscopy 317 282 12% 8%
Urology 123 105 17% 13%
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ENDOSURGERY 531 466 14% 10%
Neuromodulation 7 N/A N/A
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WORLDWIDE $ 2,542 $ 1,661 53% 48%
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