BDX - Earnings call transcript Q1 2020 | Becton, Dickinson and Company

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Operator

Hello, and welcome to BD's First Fiscal Quarter 2020 Earnings Call. At the request of BD, today's call is being recorded. It will be available for replay through February 13, 2020, on the Investors page of the bd.com website or by phone at 800-585-8367 for domestic calls and area code 404-537-3406 for international calls, using confirmation number 6886458.

I would like to inform all parties that your lines have been placed in a listen-only mode until the question-and-answer segment.

Beginning today's call is Ms. President Relations. Vice Senior Dolecki, of Investor Monique Ms. Dolecki, begin. you may

Monique Dolecki

Good everyone, you, fiscal you for Thank quarter thank first joining morning, our and Pasha. review us results. to

set release, we this on of presentation the are As our our on The to press posted Relations in presenting our referenced call. a Investor of is remarks website slides accompany bd.com. we page at

cause actual forward-looking such results fourth press we SEC call, of it and today's Factors our statements, that appear our will expectations. differences make could differ in fiscal could release possible the During from and recent our that MD&A is quarter filings. in sections

We measures with will financial some performance. also non-GAAP respect to discuss our

in MMS press quarter is copy financial of of release GAAP the certain a charge address can results the slides. A matters. the to measures software of be $XX in and first alarm to website. the bd.com a and item accounting include Relations on details business the in the of schedules infusion along financial with prioritization and appendix release to related including Our adjustments the in reconciliations other Investor This purchase million found voluntary our posted the recall in schedules the

Executive Chief morning and Chief Simon Administrative Sciences and Vice are Life and President President. and of Also Patrick Officer; Chris Leading Mas, is joining Tom President President the Officer Executive Alberto Vice call us Campion, President Vice Executive Chief President, Reidy, this Polen, Officer Financial and Executive President of Executive Vice segment. of segment; Medical Interventional Kaltenbach, the and the segment; President the

to turn to pleasure my Tom. now the call is over It

Tom Polen

And everyone. Monique. you, morning, good Thank

resetting brought and call this start is CEO. the saw expectations my to morning guidance release that first certainly me let where earnings for You just how not want down say our I revenue we year, and as EPS in

discuss say what's an accountability, happening going that expect And me quality doing Alaris, talk, call to is right. what to you commitment want our compliance, can what's I to regulatory how and topics so, before unwavering on we we're from with straight and and values jump today's – into

At and to how we very you our with a actions the It's take. we situation operate, can of is will respond we core, heart purpose-driven purpose what defines current what are, expect be And who values our BD how at the and Alaris. we that company.

personally resolving Every challenges, company we strength and face to is going entire not along team, focused, on leadership fully company’s I'm we my real challenges, whether it's measure face the or the with how And of respond. situation. isn't this

me take let recently have continued you said with So, conversations more and to specifically starting happened our even this in with we the how through November even and week. FDA what evolve, what

make pump told indicated with we then some to these discussions of timing were we including improvements. FDA implementation and to about November, prioritization alarm planning software, that to the were the active and we Alaris our you upgrades In improvements optimization. We in

we could within with that of updates how believed shipping and software approach software our these updates a a XXX(k) releases time, did clearance. in December, issued and infusion we We we take not managed we've process the and first updates quality Alaris our the Alaris software on as then require shared phase last resumed month. you Relying phased over releasing the to team business

software for this the we the new that need dialogue an in-depth discussion learned FDA with conclusion Monday, clearance FDA, ongoing these past disagreed XXX(k) for about with our our upgrades. the a Through including

we ensure to submit we're over to collaborate We're a to updates, Alaris of and changes light continuing the for Alaris And meet the recall FY single system of actively fourth into which time expectations decree, quarter consent XXXX. upcoming we in regulatory FDA has software FDA enhancements, requested all in the the filing, that combine going with made their remediation submission. to XXX(k) this comprehensive the

clear this FDA's to case and we now actions did right. our while we've be taking it not to and in want committed here expectations, relied I that the we're get on infusion meet that process appropriate to learned this quality system,

healthcare necessity. provided safety will I to to of undergoing to the want ensure fully to is for Alaris stand system behind also risks mitigate our be not remediated. support we medical a that a access we infusion they also guidance clear do our of until of live under responsibility and which used of that's the customers is potential in how lightly. patients and our We've support to clinical benefits consultants take therapy, we have the care and product, We've to to continue software fully on team clinical providers, training created customers dedicated existing the XX%

focus ensuring execution FDA As and we processes, company capabilities, within ensure CEO, right my supporting foremost deliver on is on the to expectations. the

this year but news on range our revenue we more, EPS this in fiscal based approximately XXXX. in million our saw you Chris guidance as $X.XX in release, for situation, $XXX reduced by will and discuss

is to last China's shared than better catheter our of we impacting a initiatives and also have MDS evolving month. on procurement be comment business sense volume-based want we much that would I we've did how the and now which situation

at faster we upsides the from several impact doing a during got than progressing the other China, year, in expected there which DCBs, few expect rest level. including it's are our to testing, digits flu far, forecasted we the November, We've initially double to in so in FX. are business fully that and grow BDX we're areas expected better the than offset also while and So, of

both want a with happening and geographies, things and strong a of terms lot I portfolio, a good highlight company of our there's in BD. a diverse our across And are just We few. products to

incremental were new an products benefit results saw DCBs saw than performance, The flu our with from regions led and Sciences shared growth the a where in our November. where from also expectations line better First, segment the and you started delivered in with Life we bit the and expected. we businesses QX we solid by Interventional

integration. progress deliver we During remain quarter, deal the brings to total over track three-year $XXX which period. the this We on BD-Bard million synergies million continued make to cost the $XXX year, our to in on good

We of achieve as our commercial commitment also programs revenue continue scale million part by to to in $XXX our synergies XXXX.

there and We've such management, we've talked biosurgery continued good incubator, international the to the make vascular product to with past, progress European about things you access in our registrations. as

with our far deliver is XXXX in FY QX. we're new launches pipeline new in robust off cadence strength products, already to on a solid of ability to XX so a and Another

makes to to. catheter portfolio. access we're launched valve catheter call our continuing just PowerPICC we vascular In easier Provena the And with Medical, innovate there's care for. in three I'd technology, attention like to And recently to X new your SOLO which the

from Our is positive. feedback early extremely customers

laboratory Europe. In targeted for which completely diagnosis. HPV molecular Life recently BD Sciences, cervical initial available cancer and automates screening flagship and we system introduced in the This molecular is Onclarity is configuration used system BD innovation our the the assay, that's workflow, COR with

in We're signed feel far, still we having in progress very made volume early high-value the this launch, already we've QX. accounts about really XX but so good

for market, Of new of new BD. so is and HPV course, to all business we're the that

the which In ensure biopsy very Interventional, we're vacuum assisted well. breast regardless It's samples, positive we as device, clinical high-quality our breast getting tissue but clearance received tissue. helps EleVation, next-generation here density feedback of samples tissue early, for of the

and innovation launches these by excited pipeline. and We're other our our long-term

bring on you market we R&D see five it's over that launches but a of major projects FY the to five What active slide to expect small our for XXXX, next captures portion to the three only total years.

to see of market each the informatics growth pipeline spaces product legacy in R&D where also we capabilities automation focused and X% BD's leverage new we're capabilities our Bard faster to digitize with And We're the our several existing X% our pipeline markets higher our Interventional portfolio. in across to growing including three now in entering segments, overall of than portfolio. elements starting

Before over some the comments I want turn make coronavirus. Chris, to on things I to

the coronavirus, our comes China around it as of priority. employees is the to health in and and top the safety world First, the

and China particular to closely health paying we're CDC, China. and the attention WHO We're guidance virus the officials in the from the tracking US in

us, to and and we're in-kind you'd also response supporting providing in donations by from Wuhan Hope. Project Cross China As Red monetary the expect efforts

Wuhan Chinese Suzhou at government the doesn't BD any or operations the the manufacturing in from and distribution extending have our province Hubei in we guidance New we or don't February – and and Year manufacture XX facilities Shanghai. and the to until Chinese adhering are holiday offices

as received are the And we of of products perspective, a China We in China. within and products raw manufacture are sufficient from materials supply goods current China imports inventory currently From to used and export sold that meet we have the within XX% being few about demand. China, of chain expected.

business of the of dynamic. situation course, still terms very In is impact,

and We balancing are closely watching trends. two

seeing guidance. we have fewer go people contemplating molecular time, you are we're to through seek received within several for being installed to hospital Chris urgent orders used how are same systems, and standard in we MAX additional At BD which testing. coronavirus will the take the First, care. this our

to keep you the We'll as monitor updated closely continue situation it and evolves.

call With Chris. that, the let turn over me to

Christopher Reidy

And Thanks, morning, good Tom. everyone.

full quarter year, first Tom's for pump the to Alaris guidance remarks and on our the through results I'd you take like I Before issue. reinforce

has to senior We expect resolving and that current to from materialize assure management team is committed would anticipate the you seriously. that situation not the matter very pump we way did this take the As it you us, I Alaris the situation. fully

So quarter our with results. me let that, first review

solid first quarter. we in mentioned, performance delivered Tom the As

expectations. revenue a moment and growth results growth First quarter take line you revenues segment the with through our I first by more provide in grew the X.X% neutral geography. Revenue on was color basis. a quarter currency when on in I'll

Adjusted neutral of adjusted First was a X% about the at $X.XX, was about basis. EPS which guidance flat quarter declined on currency our is range. and year-over-year high-end EPS

first of tax adjusted reflects to offset compare very and EPS royalty the expected, tough performance, operating of the XX.X%. last Gore year's expiration As growth rate quarter by a solid

line Operating our margins with XX% in were expectations quarter. for of the

million and to XX, was down achieve our below our At We de-lever to to of year. the X calendar December times this we on times remain ratio also $XX to gross leverage quarter, first track debt. during paying de-lever commitment continued approximately X.X

slide first our the to X.X% expectations. review medical with in quarter, line I'll Medical growth. XX, revenues in on the revenue Moving segment declined BD

certain new Chinese China, our medication our being As of growth vascular delivery in performance Medical saw quarter portfolio provinces, specific which procurement access catheter of expected, to China. strong impacted portfolio volume-based the process the within adopted of we business first management is solutions by our Outside solutions. segment in in was

addition, management installations to anticipated, of revenues Alaris limited as solutions due pumps. declined in In medication

syringes capacity in continues. as strength investments In our conversion for over pharmaceutical meet prefillable vials ability as our prefillable demand a of high ongoing from of devices reflects X% to systems, to result

driven year, orders prior expected, anticipated in the As the the year by were call. revenues compared diabetes strong timing about flat and that previous of earnings on US pricing as care discussed drove last pressure to the our QX

and BD performance the Now, Revenue driven in and turning slide revenues by increased systems diagnostic X.X% Life XX Sciences growth segment, to strong units. first was biosciences the quarter. in

platforms flu, in point-of-care, across systems and microbiology was our our health as portfolio. based molecular as diagnostic woman's Growth well brought diagnostic our solutions, cancer and

feedback growth in BD see continue With over MAX launch Europe. in COR our on are to and positive XX% receiving BD very

due Very the quarter. This line driven revenues divestiture year's was tough by fiscal last during of for comparison by product reagents. bioprocessing biosciences advanced partially strong to growth in offset instruments demand was and licensing first a and the

additional revenues sets reflects grew timing orders. tough the year demand and when brought distributor in on pushbutton the capacity pre-analytical systems to blood our Growth by collection comparison a X.X%, meet of driven to for prior

to Interventional business revenues quarter, slide first units. three the in mid-single-digit turning segment, increased BD the Now, with XX growth and across all X%

was including and Revenue growth intervention performance to well. perform Covera that products broad-based, our in Venovo extremely peripheral WavelinQ, continue in

DCB-related has planned better seeing trend letter since revenues been we the the as was have FDA slightly than improved.

revenues DCB over peripheral X%. in grew Excluding intervention impact, the

growth single-digit China. quarter revenue performance double-digit in and saw hernia. growth and reflects We First growth the in US, robust Europe high in surgery strong biosurgery across

and may approaching in recall, are our historical last run year we relaunched sales. As you Progel now rate

be to business. acute driven care in temperature growth management performance urology, across urology our and targeted and by critical continues Revenue care home

and and segment as anticipated XX previously slide was to Sciences revenues, to in the a upgrade, Life X% grew software segments the developed infusion the by first Interventional in quarter as decline Moving Medical growth offset discussed. pump in due our geographic markets as partially in the US the

automation spoke MDS. in unit. in and care also performance health cancer and systems strong and Europe in vascular and diagnostics, saw hernia lab within within We diagnostic Molecular the biosurgery surgery women's

reflect related and nearly in markets Interventional double-digit the strong anticipated. broader China China Sciences Emerging China was and for and systems expectations segments with the was quarter. growth Asia-Pacific across in in diabetes also revenues the peripheral region. The care X.X% as first procurement offset performance revenues Performance impact driven Life our growth catheters grew was MMS, strong by double-digit in as by line growth MDS. of to segment's double-digit Medical pharmaceutical volume-based in

China provinces As and after we process November, modeled initiatives for you in had the adopted, situation started new remained provided volume-based year, the fluid. about generic guidance When in that categories. several new fiscal similar a procurement drugs we we was which other spending told

catheter While the variety business. it's within on our our BD, program medical million for a MDS portfolio covers consumable peripheral of wide products focus $XXX

While at rate. we a expand faster expand, volume-based that we procurement anticipated have would it seen now

are we due that In and distributors addition, procurement we are large in continue. part seeing will to, of, inventory new this and levels anticipation process assuming in reduce

fully at offset impact expect As the level. Tom to BDX we the said,

result dynamics, expect year. we of now for growth the However, fiscal as low-single-digit these full China a in

Excluding with in and seeing region. high the China are performance double-digit in our are portfolio, growth we MDS that pleased

slide turning quarter first to which recaps Now, income XX the statement.

As in grew This had discussed, would of agreements acute as quarter anticipated prior-year most first includes line revenues annualize. the as pressure, which in XX is certain pricing pricing with basis we expectations pricing our X.X%. be points

year, we For full XX basis points. fiscal approximately the basis XX to decline pricing expect to points

grew XX.X%. year-over-year. Gross was Moving profit a down P&L, solid X% approximately the gross margin

compensation SSG&A in percentage stock additional reflects as strong XX.X%. revenue due This performance quarter. a to of was deferred the market expense

in SSG&A expense grew On net of reflect spending For Bard in disciplined your our ongoing with is reference, expenses income line. line basis, offset other and underlying and compensation an on focus synergies. sales the fully deferred achievement the cost

was R&D percentage a as of X%. revenues

full our reflects billion the innovation. For fiscal we R&D to in $X commitment which drive invest continued year, to expect

basis with points As XX neutral line a our basis is currency in result, decreased points XX operating on margins a or basis which expectations.

our XX.X% quarter, was in in Our line the guidance XX%. rate of tax to with range full-year XX%

$XX expected, quarter. million preferred paid of dividends we as And in the

reminder, As of in shares convert preferred May a year. will the this

Adjusted previously $X.XX as earnings share per were discussed.

our offset profit on XX margins gross our basis. Now, of and for This of the turning and Gross slide basis initiatives impact continuous quarter. improved and XX margin points first operating pricing. improvement a reflects cost to partially by profit performance XX.X% the synergies,

currency margin of the on XX% in basis. XX Operating points or declined points neutral quarter a basis XX basis

income by driven offset is previously within item. compensation income discussed, As in net deferred that other the expense was line recorded this higher SSG&A below operating

of impact have operating the would basis neutral. deferred Excluding XX increased compensation, currency margins points

on a and Currency in quarter. had negative impact of XX gross points both basis operating the margins

to on XXXX fiscal XX moving Now, and P&L our full and year revenue slide guidance.

As you've X.X% guidance Alaris growth X.X%, Tom, specifically the our to to revenue from situation. revising we already due are heard to

with reflects conversations fiscal range updated range limited very bottom based our scenarios the our pumps several with a ship FDA, this ongoing ability assuming Our on end Alaris to of the year.

BD for Medical be now segment, expect we year, full revenue flat. about to By the growth

the high-end growth and X% X% and We be X% respectively. at to BD of to revenue guidance ranges BD of Sciences X% our both Interventional Life expect previous

low fiscal developed single-digit by In growth, in of in XXXX. in growth EMA. strengthen discussed, diversified and China, low we driven anticipate emerging previously mid-single-digit markets, now as single-digit growth now in expect markets a We base

approximately coronavirus Based on to the our $X.XX and X% to This within revenue EPS headwind quarter quarter. includes contemplated FY we our be an guidance for now guidance $XX growth This impact full-year $X.XX. XXXX, range. approximately second million new $XX to and between expect be within in is from million the

operating reflect the impact. margin, down P&L, infusion gross the margin SSG&A we profit to our guidance have and Moving updated pump

deferred first and quarter of guidance include SSG&A impact updated the operating compensation. also margin ranges Our

to fiscal operating the now flat The be we the year the unchanged. of XXXX at and year-over-year to expectations balance points basis. expect range guidance P&L midpoint gross neutral about margin XX for the basis fiscal margin approximately currency For improve our on year, full remain a full of

the year. total Moving XX, this guidance for slide on our revised EPS to reflects

EPS to we now which FX latest the reflects our see, As impact adjusted Alaris you to of of and pumps. on can deliver view expect $XX.XX, $XX.XX

In with solid quarter, summary, a first expectation. we our line in delivered

the good products and bringing integration make on BD-Bard during to new progress our launching on innovation to continue the market XX pipeline, quarter. robust We

delivered take record resolving the fully seriously long-standing we their to committed Moving balance we news Alaris returning to and and of the the delivering of track today shareholders. are situation and the to year, our we value customers, to very patients

And Q&A. Thanks. the to I'd like open now for call up

Operator

[Operator Instructions].

Our JP with of first from the Marcus question Robbie comes line Morgan.

Robbie Marcus

could million just with minus impact, much XXXX? fiscal that for the Will is by, how the for question. the into of you pump Great, we Maybe and taking or exactly $XXX the us lowered and help linger pump? plus start understand guidance this thanks

just that through contribution it the as to here. you from ask P&L, like margin Maybe seems to there all Help I'll hit the get walk my million XX% $XXX $X.XX. questions number. us a is down us that

Tom Polen

I'll is this to one. Chris turn then for two last Tom. it questions Robbie, the Hey, and your take first

million, unable pump So, we're to $XXX the that that essentially ship. is capital of

we course, Of base very in install have a large field. the

We on continued infusions, actually delivering we we We XX% seen usage particularly of quality as its very some increase there. And and impact of strongly the demand in consumable in aren't meaningful certainly products of stand flu in behind the our the expecting business the mentioned, season. consumable US. any have because

within say could to Lingering that's into look, and QX, the to I this as do to know we situation, this XXXX, XXX(k) need what point at what I shared. submit is, address we updated

focused now. we're right on that's So, what

resume shipping. the collaboratively that and terms to give as up to timing our we'll and in progresses I'd which we're working going get you of say updates The in – FDA, open we're with ability

we'll keep visibility we you as the continue So, and with that we'll updated. more FDA, have collaboration

Christopher Reidy

the pump of provide meeting our business, issue XXXX. change. guidance add week, selling some potential reaffirm necessity. guidance growth that that infusion And just XXX-ish the range would low-end, no Up essentially, The range on our fiscal we until we to the issue the we pumps. year normal FDA expect under X.X% infusion were that prior as of with assumes week to above to guidance in of to pumps this sell clarity fully planning would pump this the the would've this as our kind for guidance I revenue well of virtually US had to the medical X.X%

Robbie Marcus

lowering breakdown you're the maybe just for increased versus the how much And coronavirus for what's reimbursement? quickly, so, of and pump

Christopher Reidy

XXX% I takes because puts had you as as we the would flu say it's we think we about. seeing talked is, year, So, on pumps We're seeing about this in the what side. DCBs better performance and that upside are

strong extremely some business. rest double Life Sciences. well, and value-based across doing China, volume-based performance digits have the in procurement we So, of Interventional is of the the outside – strong

had did procurement. upside. some acceleration the we That take into stepped up. So, We the consideration volume-based of

you a we are give the even of Just tenders. $XX quarter, million. sense, to million, we more these partly dramatically, seeing, that's inventories accelerations We've of down by but catheter tenders million that took province it because $XXX accelerated business about anticipation by kind of for in that Last down us. distributors $XX taking peripheral about in the

And so, $XX that's million. an additional

$XX we've million. down an taken So, additional

forward. left about, of So, the That $XXX down the of that in with other as $XX to talked the strong takes business million, performance, us million, offsetting in $XX we're million about $XX coronavirus business. I parts plus to about million going that

in all as So guidance the mix year. would have the that and reaffirmed of this our into we still had I week, for going said,

you the Alaris issue. the as So, pump think can entirely takedown about

Robbie Marcus

Thanks lot. a

Operator

line is Morgan of coming Our David next the from Lewis Stanley. question with

David Lewis

taking morning. the for Thanks Good question.

of initially, over look share you start and that series Colleague historically loss Tom, Baxter if back at years. to the a built, wanted Just Tom, go recall,

support and do can during on wait to decision incentivizing Or So, any evaluate customers this, have buy are or provider comments this early be what them to going customers interim to another wait for from ship-hold resolution? you period? done how

Tom Polen

David. Hey,

would years year, that strong. is, course, increasingly to say selecting FY we've customers of the in you the Alaris I would into seen in and very been very, continued – I share have category. going many had that know, say, momentum for what product, So, really continuing this gains XXXX is be we've as

So, continuing platform. high to level of customer point, going convert and engagement the to up this and to right interest,

level interoperability obviously, I one So, see only have. but not ability in We'd And the US of offer. able in solution of think we the pumps they conviction nearly medication capability all It's think BD that are which having management the value course, connects integrated have of are broadly. more that have interoperable that we product, we than the expect integrated also, people's of power today. another a of XX% others we at terms the pumps is system, to the

for and early feedback is see as on will that. to value so, that still to that help working customers And people be possible wait

We a very have we large begin – we every upgrade fleet. normally XX let's in their to that course, people and see say, – years install people see Of very, takes general. base, refresh

XXX(k) So, of flexibility right get in updated do do also in until do people we they our wait they place. now terms that recognize or we have

only upgrades changes to updated now, course, be right have and that of Of with will the it's to but XXX(k) the fast continue going done, XXX(k) right filing dialogue been FDA we made number also not a reflect historically, submitted. this software in we our better which be be we're that have is included customers one get making our now, that we'll how the And as re-engage getting reflect updated with will submitting. we'll all the and that that's that focus as to we'll able sense

Operator

Our of next William Brian with Blair. line question is coming from Weinstein the

Brian Weinstein

quality the system XXX(k)? so more to be just for would to kind say submit where are software doing, specifically that the question. dig the come tell did in repackage bit you Can there, to got of us It kind didn't that that make specific submission FDA that software quarter? maybe already you little quality seems side? a like done need that Hey, I Thanks. of The upgrades about of like to are on of sometime can you here the want in more they long were into fourth on changes guys. why Thanks you've some with you're take your taking them? steps required of respect you to upgrades the systems. kind these you What think do what and broadly the

Tom Polen

Yeah. Hey, Tom. It's Brian.

with and last our question way forward. your then start me work let So,

I mentioned, the as talking based upgrade the a So, – upgrades we've on infusion period been not that in of process year, require talking and over system this quality did determined to business, system. time, our Alaris we're time quality XXX(k) making those over And that we're we've not that software our made number of in business years, clearance. that a

And and recent clearance. did so, in process also team updates we've that based on updates November that that we most changes made, not an recently, require on follow process same determined that those XXX(k) the and new our most recent

And so, we December released resumed software month. we last we in and with that you improvement had shipping, as shared

that key that a and Since with the determination clearance software. dialogue process as had Through we in I the recently occurred new about software with need that FDA not just talking upgraded XXX(k) about as we decision time. over with ongoing November, updated had for that the the for And FDA the this that mentioned, we're learned that a disagreed FDA, to as – applies but what meeting our the we've Monday. learned

a Alaris and years, is over this upgrades with the over additional remediation I their software to on with so, we're be made into Alaris time, And more changes comprehensive the to as combine request FDA system summer. all submitted going be enhancements said, regulatory which filing collaborating to the

ready changes place so, recent the you're the and submission more the work some today. do is And right, testing additional requirements the and made historical are that have for to been we multiple to the that software on between upgrades, that – date those back the has information reflect we changes going historic while we to need take have years referenced ready to now over to testing

to that's the work So, done. that be has

Operator

of Hopkins America. Bank Our coming next Bob from with question is

Bob Hopkins

good question. morning. the Hi. Thanks for And taking

Tom Polen

Good morning.

Bob Hopkins

broadly? Alaris, their On to little pumps FDA guess is the is understand XXX% view, with struggling of a to The requirements FDA for and caught off I guard In of something Morning. upgrade how question sort is a issue picture. kind the bit went reason from this I much I this I'm the you changing question or more have how bigger significant? is software Becton-specific the got your ask

Tom Polen

is Tom. but changes not a where there FDA can't looks I a time. to situations then say I on and wait updated over be what those of that can this reflect current product says, unprecedented is minute, XXX(k) comment the organizations, series other are to needs evolves your Bob, where and it's over time

a a X, that that given that's XXX(k) series been say, exact you team looks And in was work process quality the following XXX(k) this decree that within Again, put that business it require changes XX-year consent specific and each FDA period, was the need wait there's a business, those a the the the over have a case, minute, they there didn't to that actually a in infusion back when in doing. said, made. And at of process we're the process. within of individual changes

Operator

next Kristen Stewart Our line the of with is coming Barclays. from question

Kristen Stewart

a would you guess degree once timeline of again, taking the your in the the FY How the terms to the would then, horse, I about difficult waiting platform, with approved would not Hi. the be question. for for be And customers to just for? I trying Thanks to customers? going think it Alaris, dead I'm just for just for XXXX I you to I what customer out what FDA? to that in just back to Thanks. expectation impact the on and, and guess, but sidelines for expect that rolled gauge this by this to on be how summer, to medical guess is software necessity? be qualify the do we should package beat guess, submit upgrade

Tom Polen

thanks, Kristen, Yeah. for the question.

Alaris get answer access customers process me put to to place working to FDA it collaboratively new And getting to necessity, as for again the process finalized necessity that's let then comes So, We'll your last reviewing FDA medical the medical we first. for to and to is in that customers. with question that a pumps medical now. continue are When process providing that under with necessity. be required and

it medical house. needs course, certainly and have requests and there cases be we product we pumps, a many those in for expect, in now, Of necessity is will for sustaining life

that, When on submitted. I'd getting it to for now timing, focused we're very again with right we're that course, clearance the Clearance of comes working and FDA. timing XXX(k) say,

not the probably it's think from FDA. prudent I feedback speculate to get the until we

I that catch-up the underway. That's of would XXX(k) sense momentum though, and that and timing say that have well parallel, I've described, in full of work we why submission. started work In good have confidence in a we've the on the

Thanks, Kristen.

Operator

line question from Kumar next of comes Evercore Vijay with Our ISI. a

Vijay Kumar

bundled have going the new Hey, Thanks that, revenues, this on? is Or just guys placements? that is I'm XXX(k)? one approves version all this pump the then – are question. for is $X guess, $XXX at And the you. a to and trying on any to If has on assuming older Tom, on just go digital do Thank math. your the now purchase just FDA, an given is because I to you back some connected Cancustomers billion, just sales software, think the work half the market map so there. related once Pyxis impact connectivity know part, I this up through of pump the trying no the to software in if here Pyxis. deep the taking for placements The upgrade part, all, at million the you to pump you guys. cut the on impact

Tom Polen

Hey Vijay. the Tom. question. Thanks for

don't on Pyxis. impact we So, any expect

to delay either we're to fleet. we there. what momentum continue for and we when many strong them who discussions pumps late will to convert to in can by wait is the products, the Again, to or order the Alaris again, we this with safety able stage so of in their customers new of ship focused have have And of terms we ongoing think is upgrade stand resume We product shipping be a on.

limiting to software, And version to, go expect, we is prior we work pump we – answer and your had more under medical By necessity of past the of we the updated the the back progress get you version we ship and ship we keep way, medical again, the once can't We're shipments think when to do no, and just we'll you we broadly. with can't that. can submission. prior question, XXX(k) ship I pumps be under And, alluded will necessity, the as the shipping, exclusively FDA. of the that as we we no,

Christopher Reidy

have would but that that range be low would essentially some again range our response we taken your rest clarity, account of out. your And the as first assume I under the of just of for medical to as no have the we there would necessity limited, revenue assume range amount would sales sold of of would say, pumps range, the end in low and X.X%, the under the pumps be And question, – normal of there that part to medical pumps that end in just up from guidance. the well would the was the are would for sold entire necessity,

Tom Polen

we'll situation, As more FDA again, work want sure the to be with we we you particularly that, as progress. and know imagine, discussions those collaboratively given the can here, make prudent as

Operator

Our the next of Lawrence Keusch Raymond line is from with James. question coming

Lawrence Keusch

morning. Good Thanks.

Just a two-part here. question

package the curious as FDA bit frustrated really a space? to sense are I pumps new this puts that software by to there FDA, within they not my the little desires overarching been that the the like. that where guess, So, I'm that to standards out pump has It's relative up the would lot of have cleared you once FDA a you

where So, through once of of kind getting you of the puts done. sense ultimately this all you go trying this pain a get I'm to

the guess might other upgrades as business of and second I in have you there the software been And over there need part the where Pyxis, there had well? a have gone or such review back filings is, Thank you. you XXX(k) question as time of areas

Tom Polen

question. the for Thanks Larry. Hey,

of regarding this to the overall the extremely comprehensive. is terms catch-up be question going pumps, in So, XXX(k)

us have dialogue, comprehensive we led new are an And XXX(k) working full And and FDA. the our the of we all But that requirements. once full actually so FDA that that's that, end of put one, for get the process may that getting being fully compliance. timeline spot active the understanding how meeting established, into obviously, the be completely that the of submission expectations make will the expectations so, there. day, terms decisions us this we of to your the FDA a to point, this at of because the with the we're to different in expectations, good expectations Again, their prudent and that reason comprehensive and put we'll with we're feel reflected some will and fully getting FDA, we're be having latest

a So, us you forward. should position could in going that put good say

product. in as same dispensing Pyxis not regulated approved system. the is On XXX(k) It's a it's not a way

on Pyxis. certainly, company, it the in assessing but that, pertain other products to are So, we doesn't

Lawrence Keusch

guys. you, Thank

Operator

Stifel. line Our the Rick next question Wise from comes of from

Rick Wise

Hi Tom. morning, Good Chris.

Tom Polen

Good morning.

Rick Wise

for comments restated/emphasized night meeting very from me how wondering ask them double-digit bottom was goals rereading line language, guess think top your goals upfront. I'm your and I durable the you're X% about today. questions and those I'll just at line. where I annual I Two X% your clearly growth, thinking you a last was low to BD

this XX point has do what margin? to on improvement of point your impact imagine basis operating Two, basis annual we XXX in goal

should this longer-term imagine today. Thank to the well, these taking frame the it numbers. framing guidance. that and we accelerated imagine guidance, to And what would last you're beyond of and obviously, better I with longer-term it's all all no, off ready targets? wherever XXXX of to sure our not goals, year you're we a contemplate of a XXXX, give little these outlook part fiscal goes do of hope We're you. do But a if that – – fiscal up this, to have than all or relative year sort growth this imagine, we piece. to year But end long-term shaping going be we you'll could I'm

Christopher Reidy

say shot year. that, take this we're me a let at I'd So, that quarter a Rick. only Thanks for into the question.

it's a which this addressing. that at little developments FDA recent we're So, the very with week about XXXX talk point. This this clearly, to tough occurred is

bit That's for the of year-over-year. of which chunk With the not mind big this base XXXX, size a that year revenue of out FY a focus. keep our in does compare an easier is impact coming create

this this strong growth extremely I to and focus business continue forward, again. will issue the about Our is getting working X% and is strong and that with through the And be situation there's continues double-digit pumps changes think to underlying are to strong. the going FDA shipping X% to get nothing be

delivering same the said, down our issue. back We'll that I guidance of issue As get this thing only be value taking to past going forward. standard is this and

Operator

Our is from of Newitter Leerink. with line Richard next question the coming SVB

Richard Newitter

a what I question. just become pressure going me confidence that right was this on of year sorry of outlook if target. on was conservative Thanks. that China in took again, to the guess taking for I two pricing a saw you little to guide moving level you've what contemplated kind curious gives for the issue? full you this confidence you it, doesn't bit is you – the volume-based that headwind remind based and – back Thank missed gives I the put between of in quarters. more kind the what that there what just And the

Tom Polen

getting we rolling gave them then were at hadn't Chris. provinces. me guidance. really It beginning we've over their and discussion. as start started Certainly, shared, it It out others turn of was in when and the let Richard, had just the to I'll processes dialogue. Very across started was just few started

was And made clear, pace that number the so, that the of we think, time. provinces when of we very And shared uncertain. that that and happening I still at

evolving than originally bit seen happened – it's how we've Again, would. involving and drug this had faster to has another So, we've that's we it the had understand thought quarter generic I a in industry. would say

surrogates seen see what pace tenders. being tenders we've go able see quarter pricing we've also the finalized the last have which are goes it the to now we the through those model, of changes to at in been and and So, exactly some in

exact so, built that that in. reductions we've now been to number pricing okay, of see And and we've here's going provinces and we're able the to the say,

here the Chris, flu other two. that in level areas It's expected. thus comment better those in of It in some redirecting Sciences At into we built we increased from portfolio with total China $XXX doing the significant it's are same so China for and it and said, than time, with and across Chris us areas some is Alaris the certainly opportunities that you've that Life as for out business, in. a see in the XXX% the from testing, that's million that mentioned, million of to resources fully, acceleration and the today associated China, a in business the of $XXX we Interventional business. as company, it businesses a offset why We've again, $X.X that pump. are complete heard in that is As billion not drop Chris' of offsets change we guidance and combined see level but DCBs opportunities

Christopher Reidy

The as would than saw as developed this distributors saw issue well. only inventory originally is levels their we thing down that much the we thing taking they I other anticipated would add have situation to that quicker the that is the develop as

And that impacting spoke. happened chunk we since that So, of quarter. the time last a the mostly see second really big we

And down biggest the and from the third China in quarter. us hit so, additional hit will $XX that moderate in and that somewhat million quarter we second took then the fourth

go million an XXXX last we're it $XX $XX to million just it down by took through spoke, number. again, But, it We taking we we and kind million. additional the FY million, down being took time business. now math, by $XXX million $XXX $XX of The down the

a next as just but you across is year business down somewhat $XXX extent. this going lesser that to spillover for impact And will taking the some million that So, forward. into be expect, specific year, item, $XXX million that might there to

Tom Polen

has disproportionate sell to bit to them products to the companies impact in is we sell year our – the customers. other we're just tricky. and of little China, little distributors a way course then – the be little who selling, first we that can because in distributors, on give maybe Richard, a it and you a The color comment works bit it the more

we've down. at get a with those, – the certain now a they large happening if to a price distributors the going is see selling higher of they now this them price they process and at market the don't of to bunch stuck so, been and And inventory have if ability inventory price a

wait who's And at selling inventory days uncertain so, environment. looking thing is bringing they they're in down don't to at so on and low, win going prices that and of the they have hand, both the high becomes all to bought tenders this pricing because more they're their at see these other

with made comprehended a And don't the stuck see inventory on a down in an of concurrent inventory with That's the give then the have on we've why they impact. guidance get you taking so, that situation. we little all given, more distributors to want the just and again, the amount to bit channel large want comment updated color but

Richard Newitter

That's really helpful color. you. Thank

Operator

the is of Our from with Wells next line coming Fargo. Biegelsen question Larry

Larry Biegelsen

question. the taking for Thanks morning. Good

pump on one DCBs, and the one Just Tom.

it's the for successful, in while. market missed very a sorry been is And Alaris I side, obviously, the on first, next So, new? pump has, but I your the the that. I'm been pump? if decree consent generation status of what's think

And up now. my follow-up I'll just ask

for On XX-month approval? taking impact Thanks refiling, how you And status the link do questions. the metanalysis what's the data the there? and of the think new below-the-knee could the chances

Tom Polen

Simon. take I'll question turn it first Larry. the to over I'll and Sure,

consent influence acquisition. heightened well CareFusion and also expectations. time at the as in certainly That does a can decree, the place course, of that the with business, of So, been regulatory certainly put dialogue over FDA that's from oversight which

and in we're there. And so, forward new that's place. always That's nothing been moving

across of not broader that position timing product over certainly to about of by going pipeline. across we say timing the solutions. it's remains most benefits be well. very want clinicians certainly pump, forward. to As generation preference in is The our several of is it remain integrated the a don't product next a submission on of will you pump itself, and only Alaris it see the clearly have do confident because about continued today. We trajectory – can generation it's It preferred I'd the that talk medication to well suite continue we last the pump progressing the of that but next very we how in we US be based positioned And of years. – think the a of management

XXX(k) that We've submitted, this to our catchup for making get that got can we available to to customers and patients. so return

So, Simon, on DCB?

Simon Campion

to I FDA Yeah. Good say sooner in morning. and Simon. we'll well advanced say would that than submission into BTK, would I respect on preparation we're the submission going With be later. that our of rather

So, on that's about of the size things that.

to you information signal our And more asking published that think if data, with Link to saw the recent not data a respect from – the then, Katanos, any weeks paper, you about you respect we we significance did safety with when was exist DCB, was ago where see the signal with were I couple [ph], three-year is the of you to published by which we have. low despite safety continue a – the were not note [ph] seeing not data. X will hand that Katanos use dose And limitations think that what the or they of indeed, I

well in for preparation we we're the that and it But material the impact our FDA? products. continue our to – advanced safety that don't the is of data know. So, going I to really supports

Operator

Taylor Our with the Matt line UBS. next question from is of coming

Matt Taylor

Alaris this taking have situation. Thank to you on Hi. little for two the just question. wanted I follow-ups

that Is about the date that a talk pretty confident XXX(k) or there filing The first pulled risk flips risks How to can any the that for progressing? end get and is, year for forward? any or Is you to you that the you're upside you guided there is of could about? the be that, timing? are comprehensive could

Tom Polen

Yeah. we just Again, – this the with this Matt. discussion recent the Monday. FDA had Thanks, most

update to that already on be momentum We starting well an we position So, XXX(k). then. certainly, focused we're to going it. very through before give want we're some I that – going But we're get to on don't had a – on and of had you the better in once work that

submit seek Our expectations now to and is and the possible of meet to the as goal right clearance as FDA. quick

the to premature So, of I on timing will process. Thanks. clearance speculate be it think any

Matt Taylor

that… file do you that Assuming

Tom Polen

Sorry, Matt.

lost I think you. we

Christopher Reidy

next to go question. We the

Operator

Our with Cowen. of line Jennings next the question is Josh from

Joshua Jennings

was the morning. to about Interventional Thanks. Good business. hoping just I ask

commented historically? provide You about the details that XX% balloon drug-coated relative to the ground stake put improving. in paclitaxel just decline you you Any can headwind that

And the the a peripheral question. for then, were of around for any vascular that? from and details lot products what also rationale any shifting Thanks the products just those surgery into taking and

Tom Polen

Simon let would that. I answer Josh,

Simon Campion

Yeah.

here, So, Simon Josh.

to QX I give to we've QX the here material with I won't we year. increase in seen – classify SSI a would performance respect it's increase it I you a what think as but in specifics, saw performance last and DCBs. prior our in sequential

drainage catheter respect there. transferred We some intervention with and focus the alignment, into business And call business delivery sales we our then, from surgery the ports force our business, with heavily synergistic the to peripheral have PleurX and business and which that's of of on points chemotherapy. that implantable simply biopsy is we breast

end So, fit of cancer, is perfect taking their a PleurX at life to their patients the care pre-existing of for sales force. relation in that

what done. that's So, we've

Tom Polen

Josh. you, Thank

Operator

coming from is Mishan line Matthew question next KeyBanc. Our of with the

Matthew Mishan

taking questions. Thank the you for Great.

these the follow-up to one. on addition that management the issues, kind to your proposition broader the some of then, side, think affect the have customers or this Becton, some syringe in and of then the delays good the the Does but I quick Just in of some I think through other this with And not the probably on allows broader pain in think the also of expand medication conversion a not pump be pump? overall LVP also in to and in side hospital, I as conversation a patient value you related in customers some conversion about the would portfolio areas? or it it, as work of you of is broader other maybe

Tom Polen

Hey, Matthew. question. the Thanks for

patients a all system Alaris the it right? much which modules includes types administration based of and of reasons syringe medications the choose it They route. the the as is PCA. the one the that that the all one and that can on requires system, from you patient so Alaris So, it's it – the prefer the So, snap is system as customers – and LVP, includes an do on

So, you we scope within guidance an those are comprehended the all update and that fully gave on. in

data value it's me the that full and helping customers activity In terms just like an do can, provides solutions necessarily not just right doing strategy, analytics impetus management with people set of an that medication of that that say pumps solutions. and having that's other move that can't can't want manage direction in deeply do that medications, from product literally broader want to isolated we're move how to other I a there to you're exactly you think things just and pumping diversion using I and data the full to and do Pyxis I that not to use things I

medication doing So, this you're think impact deals. we I right don't point see We at there. even as are broader management

Pyxis Pyxis there's of There's HealthSight, with there's Prep, there's be as Alaris Logistics, there's other products still used can that other of course, Pyxis, multiple there's of Of solutions. products. a of And products, existing course, part suite those the number space.

as and use off of stopping continuing data that add those continue to products solution. they there's from part on their the So, to nothing coming as of be Alaris Alaris full utilize people products to used

for you the question. Thank

Operator

Our Kristen is line follow-up of with a the question final Barclays. from Stewart

Kristen Stewart

for taking question. Hi. the Thanks

the business provinces business, what's China, product Thank more but that the I know Maybe other into just talk you're risk spreads China seeing risk are categories it – of guess, to you. broadly about within talking I that broader continues just the just for you spill about to, back products. guess, that going $XXX Just medical the it million number you. within and, I that

Tom Polen

that. turn the Alberto Kristen. Thanks to it for to over I'll questions, answer

Alberto Mas

Yes.

say that any the about think in. thing to other is seeing is way whether that there's three consider tend will procurement probably for of we're at I'll first this that it The you big no new categories that we're to [indiscernible] evidence any that consider, they variables moment. to category applicable The we

that the category that is biggest and do or it of The category. spend fall in PICCs And peripheral total XX And of are – within again, in do plus MDS, versus necessarily well and another other there approaching portfolio of amount two spend then, top are applicable into that factor. categories. the a be the is over the XX the today left, conditions – perception of will small We they significantly talking a hospitals? is where top categories flush the the have of catheters number one think categories. handful there's less the which We're competitors to as the these not a all parts a first about XX players. dozen, other not in The commoditization

Tom Polen

Thank you, Alberto. Thank you, Kristen.

Operator

are now will no at turn Polen to for over closing this time. further the floor remarks. There I questions back Tom

Tom Polen

you. thank Great,

to as close safety. I to BD's So, today, compliance we regulatory strong patient product quality, and want commitment reiterate

it, our on expect our You patients and deserve depend customers it it.

moment a that we While on a this also BD. I'm to confident catalyst we'll as I'm guidance today, lower that better for look disappointed back very our had driving

proceeding are to acting with we're patients that the an with and assure we we and me unwavering purpose urgency you commitment Let accountability, serve. we're our taking

incredible long-term of patients a customers, I'm our on reach around our growth enable the drive shareholders our also make us opportunity team passionate that to and global confident and provide impact world. to associates broad portfolio, and an bigger

you. Thank

Operator

Thank you. at teleconference. have today's This and your a this wonderful Please disconnect day. does time conclude lines

Becton, Dickinson and (BDX) 6 Feb 202020 Q1 Earnings call transcript