EXHIBIT 99.1
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NEWS Boston
FOR IMMEDIATE RELEASE Scientific
Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-15337
508-650-8000
www.bostonscientific.com
BOSTON SCIENTIFIC ANNOUNCES
THIRD QUARTER RESULTS
Natick, MA (October 19, 2004) -- Boston Scientific Corporation (NYSE: BSX) today
announced financial results for its third quarter ended September 30, 2004.
HIGHLIGHTS:
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o Net sales of $1.482 billion, an increase of 69%
o Worldwide stent revenue of $686 million, an increase of 405%
o Gross margins of 79%
o Net income, excluding net special charges, of $404 million, an
increase of 195%
o Earnings per share, excluding net special charges, of $0.47 per share
Net sales for the third quarter were $1.482 billion as compared to $876 million
for the third quarter of 2003, an increase of 69 percent. Excluding the
favorable impact of $32 million of foreign currency fluctuations, net sales were
$1.45 billion, an increase of 66 percent. Worldwide coronary stent sales for the
third quarter were $686 million as compared to $136 million for the third
quarter of 2003, an increase of approximately 405 percent. Worldwide sales of
our TAXUS(TM) Express(2)(TM) paclitaxel-eluting coronary stent system during the
quarter were $640 million.
Reported net income for the quarter, including net special charges of $146
million (after-tax), was $258 million, or $0.30 per share, as compared to
reported net income of $124 million, or $0.15 per share, in the third quarter of
2003. The net special charges include a $71 million enhancement to the Company's
401(k) retirement plan and a $75 million provision for legal and regulatory
exposures.
Net income for the quarter, excluding net special charges, increased 195 percent
to $404 million, or $0.47 per share, as compared to $137 million, or $0.16 per
share, excluding net special charges, in the third quarter of 2003. The results
also include a $0.03 dilution to earnings from the operating results of Advanced
Bionics, which Boston Scientific acquired on June 1, 2004.
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Boston Scientific Corporation/Page 2
October 19, 2004
"With nearly 70 percent sales growth, 200 percent earnings growth and 80 percent
gross margins, this quarter was one of the best performances in our history,"
said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "The
quarter also saw the continued broad acceptance of our TAXUS coronary stent
system, which is proving itself to be the revolutionary technology we had hoped
it would become. We also made progress during the quarter on our next-generation
coronary stent system as well as several other promising projects in our
pipeline."
Boston Scientific officials will be discussing these and other issues with
analysts on a conference call at 9:00 a.m. (ET) Tuesday, October 19. 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
September 30, 2004 September 30, 2003
--------------------------------- ---------------------------------
In millions, except per share data Reported Adjustments Adjusted Reported Adjustments Adjusted
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Net sales $ 1,482 $ 1,482 $ 876 $ 876
Cost of products sold 309 309 243 243
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Gross profit 1,173 1,173 633 633
Selling, general and administrative expenses 504 $ (110) 394 295 295
Amortization expense 34 34 21 21
Royalties 57 57 15 15
Research and development expenses 145 145 113 113
Purchased research and development 8 $ (8)
Litigation-related charges 75 (75) 8 (8)
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815 (185) 630 460 (16) 444
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Operating income 358 185 543 173 16 189
Other income (expense):
Interest expense (19) (19) (12) (12)
Other, net 9 9 (3) (3)
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Income before income taxes 348 185 533 158 16 174
Income taxes 90 39 129 34 3 37
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Net income $ 258 $ 146 $ 404 $ 124 $ 13 $ 137
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Net income per common share - assuming dilution $ 0.30 $ 0.47 $ 0.15 $ 0.16
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Weighted average shares outstanding - assuming dilution 861.0 861.0 845.4 845.4
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BOSTON SCIENTIFIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2003
--------------------------------- ---------------------------------
In millions, except per share data Reported Adjustments Adjusted Reported Adjustments Adjusted
- ----------------------------------------------------------------------------------------------------------------------------------
Net sales $ 4,024 $ 4,024 $ 2,537 $ 2,537
Cost of products sold 964 964 704 704
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Gross profit 3,060 3,060 1,833 1,833
Selling, general and administrative expenses 1,227 $ (110) 1,117 858 858
Amortization expense 82 82 62 62
Royalties 131 131 40 40
Research and development expenses 411 411 324 324
Purchased research and development 64 (64) 33 $ (33)
Litigation-related charges 75 (75) 15 (15)
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1,990 (249) 1,741 1,332 (48) 1,284
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Operating income 1,070 249 1,319 501 48 549
Other income (expense):
Interest expense (44) (44) (35) (35)
Other, net 9 9 (7) (7)
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Income before income taxes 1,035 249 1,284 459 48 507
Income taxes 270 39 309 124 3 127
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Net income $ 765 $ 210 $ 975 $ 335 $ 45 $ 380
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Net income per common share - assuming dilution $ 0.89 $ 1.14 $ 0.40 $ 0.45
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Weighted average shares outstanding - assuming dilution 858.7 858.7 844.7 844.7
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BOSTON SCIENTIFIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
In millions 2004 2003
- --------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash, cash equivalents and short-term investments $ 1,542 $ 752
Trade accounts receivable, net 846 542
Inventories 314 281
Other current assets 321 305
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Total current assets 3,023 1,880
Property, plant and equipment, net 839 744
Intangible assets, net 3,327 2,461
Investments 645 558
Other assets 149 56
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$ 7,983 $ 5,699
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Liabilities and Stockholders' Equity
Current liabilities:
Borrowings due within one year $ 756 $ 553
Accounts payable and accrued expenses 934 675
Other current liabilities 181 165
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Total current liabilities 1,871 1,393
Long-term debt 1,740 1,172
Other long-term liabilities 367 272
Stockholders' equity 4,005 2,862
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$ 7,983 $ 5,699
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BOSTON SCIENTIFIC CORPORATION
WORLDWIDE SALES
REGIONAL SUMMARY
(Unaudited)
WORLDWIDE TOTAL
------------------------------------------------------------------------
Three Months Ended
September 30, Change
------------------------------------------------------------------------
As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
-------------- -------------- -------------- --------------
DOMESTIC $ 979 $ 481 104% 104%
EUROPE 236 166 42% 30%
JAPAN 144 136 6% 0%
INTER-CONTINENTAL 123 93 32% 28%
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INTERNATIONAL 503 395 27% 19%
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WORLDWIDE $ 1,482 $ 876 69% 66%
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WORLDWIDE TOTAL
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Nine Months Ended
September 30, Change
------------------------------------------------------------------------
As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
-------------- -------------- -------------- --------------
DOMESTIC $ 2,499 $ 1,442 73% 73%
EUROPE 707 476 49% 35%
JAPAN 456 396 15% 6%
INTER-CONTINENTAL 362 223 62% 53%
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INTERNATIONAL 1,525 1,095 39% 28%
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WORLDWIDE $ 4,024 $ 2,537 59% 54%
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BOSTON SCIENTIFIC CORPORATION
WORLDWIDE SALES
DIVISIONAL SUMMARY
(Unaudited)
WORLDWIDE TOTAL
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Three Months Ended
September 30, Change
------------------------------------------------------------------------
As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
-------------- -------------- -------------- --------------
Cardiovascular $ 1,107 $ 544 103% 98%
Electrophysiology 32 27 19% 16%
Neurovascular 60 55 9% 4%
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CARDIOVASCULAR 1,199 626 92% 86%
Oncology 46 43 7% 4%
Endoscopy 157 147 7% 3%
Urology 66 60 10% 11%
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ENDOSURGERY 269 250 8% 5%
Neuromodulation 14 N/A N/A
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WORLDWIDE $ 1,482 $ 876 69% 66%
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WORLDWIDE TOTAL
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Nine Months Ended
September 30, Change
------------------------------------------------------------------------
As Reported Constant
In millions 2004 2003 Currency Basis Currency Basis
-------------- -------------- -------------- --------------
Cardiovascular $ 2,922 $ 1,578 85% 79%
Electrophysiology 95 82 16% 13%
Neurovascular 186 161 16% 10%
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CARDIOVASCULAR 3,203 1,821 76% 70%
Oncology 137 122 12% 8%
Endoscopy 474 429 10% 6%
Urology 189 165 15% 13%
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ENDOSURGERY 800 716 12% 8%
Neuromodulation 21 N/A N/A
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WORLDWIDE $ 4,024 $ 2,537 59% 54%
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