BDX - Earnings call transcript Q2 2020 | Becton, Dickinson and Company

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Operator

Hello, and welcome to BD’s Second Fiscal Quarter 2020 Earnings Call. At the request of BD, today’s call is being recorded. It will be available for replay through May 14, 2020, on the Investors page of the bd.com website or by telephone at (800) 585-8367 for domestic calls and area code (404) 537-3406 for international calls using confirmation number 2189907. I would like to inform all parties that your lines have been placed in 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

everyone Good everyone, you, this quarter you mind, safe we that virtual safety for conducting a today times. Thank these results. healthy thank unprecedented during hope are second joining morning, while in our in and exercising Stephanie. call. With distancing and review us We more taking is approach to social

Tom Vice Joining and Polen, Chief person, me have our President; Chief Executive we Officer and Chris Executive Officer Reidy, President, Chief Financial and Officer. in Administrative

the have Joining by Campion, Mas, phone, President and and and President Life President President of Executive Vice the we of Simon Sciences Alberto segment, segment. Kaltenbach, Executive Interventional segment President Patrick Vice Medical the and of Vice Executive President

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

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

duration the are seeing on in COVID-XX providing contemplated today and trends we In our results the significant uncertainty is preliminary data our we particular, there’s about impact the based The of and pandemic. are April sales businesses.

managing that certain our We change but how we are business, have made move assumptions we and as could forward.

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

the value of the related non-cash our cytometer write include million the charge planned BD carrying quarter platform flow to results business. within second Our technology Accuri Biosciences to a retirement of $XX developed down

our our to FDA remediation are working current are Alaris to efforts. we additive features of addition, the with pump products that infusion In respect with certain

could proactive to estimated increase possible reflect remediating As charge estimate we approximately remediation Any actions that It Alaris over to products. is a costs be the $XXX million commitment recorded to have patient future by this will probable continue our safety. of result, to a time. relating guided

due to expect Alaris to COVID the global in fourth quarter. among we addition, our In with five, other challenges XX-K no the factors, associated filing longer submit pandemic,

financial to can to closely plan an quickly and working update details with get we how our call. along assess back will we and of our These accounting the with are including FDA on copy the purchase on previous the August earnings be other and adjustments can items in GAAP the schedules, We provide release the website. release of found measures the of schedule our the appendix is financial reconciliations A slides. relations in press bd.com to posted in in investor the

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

Tom Polen

certainly you, unprecedented navigate Monique, and you and as your everyone. hope time. good Thank well this doing we morning, are families I

workers particularly affected battling with are and thoughts healthcare Our including by the those this virus. frontline COVID-XX caring on who are personally patients for

directly tied seen anticipated. in our larger diagnosis ahead portfolio strength that’s second of to We’ve expectations, quarter you treatment. was COVID-XX though seen in results more As even QX than COVID-XX our the our impact for we press our release, and were

elective phasing areas in this significant for remains we��ve healthcare predict. will Chris the dynamic call. to more care. hard and decided FY detail relied That’s on in procedures, pressure is research This our such and of and other and routine elective returning why also situation experiencing XXXX. We’re withdraw an in cover timing the to as later research guidance products a more

he’ll the saw recovery. in transparency color April talk expect what the past, you impacting you in straight many with including so so more far will shared and Chris give and what on we I’ve share and you can As know factors we

believe I what on time our get unique. want impact COVID-XX, BD the purpose BD’s makes we business, I spend because for to and we embodies into response it what and stand our to Before to

And Slide team years the to and BD for What our in of ceases thanks to start it like never and rises is customers, months occasion last I’ve team uncertainty. our this my the especially how XX to by times around the alongside deepest team. amaze truly sharing X, to been to proud I’d the seen with during me inspirational nearly so I’m two I’ve so serve company on the world.

response Turn four we to X. team. have our convened crisis when Slide COVID-XX to January defined that priorities since our We guided management

and First the health our protect was of to safety employees.

Second, to help the maintain mobilize combat pandemic. continuity world-class operations business our and

across solutions discovery the we from fourth And position. and that our new so measures ultimately can strong strategy proactive to bring delivery this from of continuum advance diagnosis better continue and and care entire pandemic emerge Third, take of care. to

And actively related creation. long-term for value working operate detail while pressures near-term each address will we COVID-XX, these of we are more in to business our now. to always discuss I’ll

of cleaning at and number and health Slide a protocols, and adapting on safety centers beginning social our X. including disinfection increasing actions early and February. temperature the team, took We of our very distribution help adding workplace in for safeguard distancing, to associates, on protecting our manufacturing the First, monitoring

capabilities employees. We’ve including space shields further XD can scale we equipment personal our employees, to protect our protective manufacture also our printing increased and so leveraging for molding large own

a during preserved small we We to covering both associates. furlough including difficult to our access percentage for employee as and full manufacturing the furlough of period. employer the made in Even associates impacted decisions reductions U.S. payroll the the healthcare our own benefits

X Turning Slide operations. priority, second to mobilizing global our and

focus As you know, world-class manufacturing core and excellence BD. is a competency for

centers manufacturing capacity. full COVID to critical operating near are our and or at distribution of All

that’s easy environment. in this can imagine not You

stepping world around associates the this have happen. to up BD make We

plant. is Singapore associates our in They just to Singapore their operations of more than from families XXX our to moved Malaysia, relocate to closure. to from example middle manufacturing had Singapore volunteer temporarily we’ve maintain away during one of the Just border the in the help live at pandemic

associates field service to all and centers continued plants, than have are sites each to nearly into help most. workforce them customer our or when day BD and BD roles one and of need thirds crisis our manufacturing are that. work every come of distribution XX,XXX products in more thank there Two solutions patients our this I us every for of during to And ensure who

production the me. scale leveraged possible this examples highest and degree to We’ve environment. to ramp out in our And three stand

First of the exposure risk is caregivers. to reduce to

about collection responded from demand of X in increasing dramatically week a Some BD clinicians dramatically just We’ve June the number to these urgency, extension system production room sets X from month. XXX,XXX with sets. swabs February XXX-fold for Alaris million in move the a the June. week and outside patient increasing team bedside types within – of an specimen expected in each increased million the to IV

tests for used COVID-XX. We’ve significantly our of assay production for including MAX molecular new BD our scaled reagents open-assay

than have times output currently month We more we’re each that and of and manufacturing by did of scale last open-assay more increased up. XX-fold kits six to we year June all and than February we between continue

of ahead also which potential flu wise second with timing align wave recognizing We’re could COVID-XX looking a season.

a additional preparing antigen We’re assay. capacity address test for can we COVID-XX both flu to an and ensure demand

production extremely potential delivering unfocused. commitment that similar, the well. are that also I ramped highest our to reassure pretty quality we’ve fall and as this you we’ve as Given we’re to higher also focus has anticipating demand remained the production want ramped symptoms products

tied there’s negative also historically routine to visits COVID procedures, pressure critical categories elective health experiencing products, testing, research. and demand high we’re to product and While on for non-COVID care lab

see For QX, to decline example, elective during procedures. began in we a significant

institutions reagents research instruments labs and the end due for slowed closed dramatically demand as research During of and quarter, to lockdown. the second temporarily

a at As related non-COVID we suspended manufacturing of result, a have slowed production to liquidity. few preserve or sites temporarily our

We’re immediately to as and immediately in demand signals research soon monitoring resumed production our with closely frequent we’re as customers those contact we’re – restarts. and ready start and procedures

ability manufacturing a our to of our adapt mobilize Our and is the public-private capabilities, of strength dedication pandemic our the global testament employees to to the best-in-class our partnerships. to and respond operations

global on pandemic, is the of the local advantage and network chain healthcare to engaged and state operations BD significant regularly rely us. strength providers and of our help world clear safeguard operations Throughout the we’ve It’s minimize officials a government disruption. the who risk the supply federal, for around

of the past, diversity unmatched I advantage said the is to BD I’ve Turning which in Slide believe, and to industry. as our is X, unique in another portfolio, our strength

our to diagnosis leveraging response understand deliver to to surveillance, capabilities and prevention and ahead vaccination expertise across We’re solutions medication delivery immune campaign. research to the and look as management, to from and to continuum ultimately a potential we care, critical

has it. disease, people forward postpone pause have you our labs Biosciences a understand on understanding some other ultimately the better helping system research that’s been research as to believe researchers to symptoms. to move COVID-XX understand or this why and mild or in are And effected institutions show we business and how and COVID-XX continues COVID-XX. many why scientific only others immune And First, no key is studies. to more even responds to important order better treat And and scientific battling better

which molecular to and diagnostics tests, so U.S. molecular about launched approval answer market mark from two And it diagnostic think who received the leveraged healthcare the Turning a full have and strength three two the that who solutions who of it? help We’ve portfolio questions, COVID-XX Slide has providers X. as basic a had you COVID-XX, our has two bring FDA to as in we’ve in EUA CE

over around and provide MAX moving test to BD week X,XXX has increased tests just samples already month. worldwide. designed hours to The kits X of conducted a XX shipped We’ve are onsite, to per to tests result up than or able world hospitals time. use exclusively tests system, time on laboratories forward the million hospital three a now These more mostly in at the are approximately to XXX,XXX which labs, we’re and at for XXX about two at to

forced in to than leverages minutes. at targeted We’re platform point-of-care [ph] diagnose XX antigen also a COVID-XX our test work hard developing Veritor diagnostic that less

in Veritor in nearly the across interest broad already devices this centers mostly with care U.S. test XX,XXX non-acute and There’s

you restoring is EUA expect in as This BioMedomics still past outcome, to under authorization can we serology COVID-XX, development test confirm now. game for keep real that helping current blood We with and COVID-XX we’ll detect the who in or this we’re minutes. we’ve for test progresses. test updated XX be had antibodies this and capacity submit that changer economy. to with performance To Pending samples market little as and exposure to testing evaluating for as partnered would a and could a

published the Journal world’s serology first COVID-XX Virology of Medical In was of data for test. fact, one the the in

is currently testing Given forward now. from the of on we’re EUA we of for of a approval the tests, moving this and that performance enhanced which kit with serology validating second version generation are FDA produced latest guidelines characteristics performance testing

urgent public portfolio launched proud need. in and are time We help the this built health of We’ve diagnostics. of address record to COVID-XX

our is to And global nearly Turn enabling care. country around patient unparalleled world. care scale BD’s treatment Slide every XX. and solutions the almost for in

setting enter In fact, that a care of XX% product. an about are BD by touched patients acute

utilization the medical BD teams call overall technologies. hospitals answered set preparing for COVID-XX, providers up Although and is working ensure ICU have facilities expanding setting beds. to worst, up been access hospital due down healthcare countries to surge and to and critical help field COVID the the these around world to

an help like in For increased week field set emergency about for offering Pyxis McCormick the hospitals med to recently and rapid demand deployment Chicago. we example, deploy did can temporary stations where center our saw in install at up we we Pyxis a

critical and our for injection management portfolio access seen delivery. sets targeted safe infusion high and temperature also to also effective help turned have multiple demand We’ve serious catheters for dialysis are of to of our devices acute COVID-XX one medication devices which seen symptomatic vascular Hospitals demand kidney of as complications of a injury. COVID-XX organ and strong we’ve in care failure the acute including our to is patients the devices,

offering in to want to infusion especially as we Outside which a as and of pumps patient each select in an that multiple devices know have on also you on infusion are ventilator infusion comment is countries Europe. COVID-XX. customer response in address the accelerated our and for of agreement and I more help expand the ICU pumps systems. demand for pumps, care EMEA distribution critical connected BD’s infusion often U.S., rising to throughout will shipments acute We’ve manufacturing the tripled infusion than

at to existing process additional speak further pumps in Alaris later of a system medical customers upon on. receive Alaris certification I’ll the BD U.S., necessity. established detail And this for to we’ve the In

associated prepare our initial and to February. to a work ensure Our in is in extending with five, this And to other point timing the filing we meet to FDA we’re team with we for filing to We global our XX-K the continuing diligently urgency challenges and precise continuing factors, with actively timing QX. the submit has quarter have team submission to pandemic expectations. that the while their fourth don’t been among collaborate discussed anticipate closely due comprehensive at we until after driving more

to I committed priority top to this dedicated our you It’s ensure added that want are significant right. getting resources. done we and done and we’ve

We’re BD rotating program making and talent we’re significant investments to top completion. across in incremental this drive to from

My to weekly that And this critical priority best company. on challenge basis daily the executive potential a the and are our for that team is directly work this is obstacles any we positioned on said, progress. might to through as I ensure

we number following with in In connection we We address the MMS San we’re corrective in Form described, observations to their observations. XX The during made to were why already of inspection to quarter. a the a facility were the early implement Diego beginning working and received certain the FDA an onsite process. our charge April of that the Monique FDA actions in notice

patients. this we’re FDA taking collaboratively customers what’s for and with also doing seriously the and our right and and working quality necessary focus and our We’re keeping on investments making

you to posted progress to keep We’re here. continue our going on

to COVID-XX scale an we’re a response provide Finally, including vaccination the and syringes for ongoing active to world’s vaccine, of development around campaign. potential maximum the production countries discussions possible with looking large the ahead for the of world potential support multiple to

It’s anticipation we financial acknowledge, As for manufacturer important in which and production the devices have syringes, of products. BD this of surgeon of of to of up injection coronavirus, not the saw a course, demand already impacts the to world’s needles these is that largest in we immune China ramped certainly quarter.

solid strong as And remains while by QX evidenced business our our underlying pre-COVID results.

continue to we on expect pressure move to forward. We see certain significant businesses as

recovery, give around these better Chris to XX, uncertainties is sense the which and on more the want to of of I you And Slide explain a in going detail. headwinds pace

are for impacted. and oncology a on the and hernia portfolio. end-stage non-urgent being Intervention procedures here So our significantly, and peripheral businesses down our disease least disease having most and which is biosurgery range procedures elective being impacted arterial wide Peripheral a and Surgery elective direct impact There’s and with renal

resume of indicates done some of phased that resuming restart this As clear physicians allow to states want top begin and procedures these by controlled elective accounts some early and and to customers way. there’s elective procedures A begin to a month, hospitals by elective procedures our survey our willingness degree XX% interest to we’ve by in that June.

readiness to procedure fall that While procedures, of our restart prioritization. return to monitoring have sentiment there customers mix, well. patient’s are mid-range clearly particularly seen of procedures want has in patients date as among we’re questions to for that certainly closely and some We the

we’re and as of monitoring forward. and Secondly, utilization we closely business see with China other expect several inpatient monitoring few to U.S., the hospitalization Since months non-COVID are our we can impact recovery the ahead down, terms as in of in as countries both products look care well we’re what of capital used a budget. to their

In tests routine in have about recovery we’re impact having sample Again, know closers to significant see we’re immediate China for deferral comprehensive reagents research demand our COVID-XX here an strong what we pace temporary which lab course and testing for a Biosciences on of on diagnostic to offerings, our and negative learn of the where research as of demand the And lower collection. and impact diagnostics, routine closely however, can instruments. for watching of sample seeing overall, you significant care of devices. collection is leads temporarily use portfolio had

going some is We to time. expect recovery take

back those a swift experiments in and to testing it’s We’ve very to now to we’re and long taking attention liquidity detail action work reduce our been going business. to greater paying And costs in lab In is proactive be anticipation position. take to prudent strong for when the speak restart. just reinforce to seeing moments. our able in to and how to Chris few going to head and going We’re researchers of pressures,

same measures. proactive time, the At we’re taking

prepare next continuing deeply to of growth our strategies We’re our empower grow, long-term as segments, executing of creation. our shown value and on XX. Slide focused In phase each we’re to and on strategy for our also simplify advance

category R&D. taking faster We’re that’s we’re the through and growth to always foot it Across strong to for towards each gas growing innovation not going we portfolio off markets. solutions our robust innovation with a drive comes segments, our weighted when of pipeline have a

of cadence our our quarter, we continued new in R&D During pipeline, the quarter. products introducing the strong delivering nine

right me from of the demonstrate Let emerge strong. to a to highlights progress confident few why this seizing opportunities I’m our strategic we’re share pandemic

with earlier mentioned Medcaptain very in we’re who with management new advance expansion agreement as pleased Medical enabling CE help in Technology I medical, European collaboration for as and platform accelerated us first presence pump the infusion this that’s and global market it’s steps In the innovative distribution the in developed well and had the to tailored strategy. we Company, our our region marked medication

strategy execute In continuing faster interventional, we’re our growing to advanced markets. solutions and for

During prior and Dry incontinent enable a use the were sequential Lutonix is and the technology launches, both to drug AV low-profile coated COVID. see home. device Supported XXX launch post X.X Dock acute PureWick by improvement also the the released in early we designed to we We our female of millimeter the which in continue to of continued in use quarter, in balloons balloon. these of the the

China. portfolio we completed on approved devices it’s or held which and device and channel a existing world. with or acquisition existing the treat has arterial vessels. blood atherectomy U.S. strong be leveraging to for our in after solid this in the Europe flow existing Straub of focused the with thrombectomy expertise Medical, our acquisition U.S. It bring sales the indications endovascular accelerate sales the and around that restore dual we blocked product clotted in Shortly the further technology privately as of company close We’d – quarter, with a expands to and This proven is

BTK This BDI of week, completed is review. within data Lutonix the filing. we continuing last for submission Finally, additional now FDA

Turning to Life Sciences.

the This solution parameter and SX with sorter an our our and reinforces quarter research high panels we sorting analysis detection. up of cell XX SX FACSymphony enables cellular end-to-end system, for to solutions. The six-way new to commitment launched

XX-K and five, Europe launched instrument We the quarter. filing the submitted also ReadA in this FDA BD with Kiestra the we

modular system an – on solutions, manual Continuing Kiestra BD the laboratory recall, efficiency ReadA you automated the our to strategy system of process the execute workflow to labs. core a molecular is also our reading system the digital BD result. I time and hands-on fully launch lab automation of and Europe, to high of you’ll that give automated fully update enhances which ReadA transforms reduces platform for want volume as into on plate a BD in

this extend forward during BD exceed quarter, in a we The quarter, launch. fast completed this When of the growing we early ultimately think an the announced care interest platform. point This of in even molecular point core the with acquisition acquisition of into continues will platform offerings the the move stage company very the Also of last in breadth Diagnostics, market. testing. new care were of early solution innovative very light molecular NAT our innovation and in expectations reinforcing COVID-XX, BD customer installations we still I to

this molecular towards closer platform keep We are the launch advancing next and point-of-care system as in development you few in updated years. advances new this we’ll

evident during the which growth three steps confident we the about navigating will to Diagnostics, that we’re even pandemic. position we’ve the taking in Medical, now for Straub making while BD continue in pressures, the invest And we’re excited this agreements the the real near-term I’m best we’re and term. completed, NAT are and I’m in segments put Medcaptain, all progress three long

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

Chris Reidy

Tom, comments the good pandemic. begin response morning, Thanks, and for my like BD’s everyone. I’d COVID-XX addressing to by

response the was ensuring focus across collaboration our on the of the very to and and around First, the our as BD proud the world. wellbeing team I see and safety associates emerged, coronavirus immediate

our the response crisis communities care our we vital taking customers and Also to serve. of on focus was our

at reaction the by in and their the from level, took Beyond a everywhere between we been amazed and associates associates, our customers priorities. truly company that back our actions wellbeing office put above I’ve from staff our of our to our our own communities the personal frontline

early the strategy. And perspective, long-term actions cash Second, protect we during contemplated lastly, focus paramount. our with actions, the our continued business when time on liquidity from and prudent a did we to took these as is we so

We’re create health this confident emerge strength continue value will a of all to and stakeholders. global position deliver and will that crisis BD to from from

let’s COVID-XX context, that the to review results impacts. move including a With on the of for our quarter, second

currency basis, As COVID. our was Tom the mentioned performance neutral from quarter second anticipated larger impact a grew prior in on earlier, Revenues ahead than despite of expectations. X.X% a

borders As aware, China February worsened the spread subsequently and you’re significantly mid-March. in global a virus well becoming quickly China’s during beyond pandemic by

color second moment COVID take more revenue provide the by a growth impact I’ll and segment. through in from on when you the results quarter I

currency. was $X.XX, benefit due X.X% on over performance EPS foreign EPS to a represents well a or above guidance as of neutral quarter decline small X.X% basis. was related currency operating as the performance a our expenses and range end high of year-over-year revenue lower to adjusted Second which

in growth the quarter weak lower also of expiration of margin EPS expectations driven adjusted royalty the ahead about the expected, Gore impacted Operating and lower for compensation of stock As basis deferred expenses. by our operating market by XX.X%, quarter, the performance due largely points. we’re to XXX expense

at reinforce to on and Turning to we to favorable cash term strong during times early This we our XX. quarter position. very actions $X.X March, In improvement liquidity resulted March increase in at in an leverage successfully took loan gross an provide the our completed billion funding rates. Slide I’ll XX, and update of X.X the liquidity

also continuing company billion revolver increased to to debt the million delever to remains very to our that in capacity important currently approximately to liquidity pay $X second gross remain commitment target, further billion leverage strengthen also committed position. we $XXX It’s $X.XX we important plan in available we to our and under During XXXX. quarter, three by to the down FY achieving below our times a note

the on due liquidity, it and However, reach we EBITDA cash out on importance focus given to take near-term our the longer to and now anticipated current target. expect pressure conservation of deleverage will

treasury have actions, number conservation initiatives we a measures. of includes on working capital cash focus capital well related instituted our inventory to a This expenditures lowering with as addition In management. as

to businesses From in as earlier, their additional in much an are needed keeping of seeing standpoint, operation as our COVID-XX. and of beyond our we’re above products mentioned making are serve a I going plants demand employees up our operational. customers are our patients ramping investments and this includes teams some due the we and to Manufacturing increased result

other in areas some and the near-term inventories back demand manage made where adjust temporarily we employees to decision as In have levels. furlough scaling and difficult

team. In we addition our to values felt global temporary share the important impact furloughs, to it the and with was across our consistent

to the hiring and year to for reduce across benefit match actions taken at to leaders. we’ve to XXX(k) more remainder the team Board The positions. also reduction. Board and of for the company The and the levels for also made company was largest the percent took calendar broadly the So senior critical decision and salaries management and plans the limit executive other suspend

will today taking are we pandemic. the side actions the as difficult, coronavirus financial strength our other of we on emerge reinforce the While

and our quarter. growth points estimate impact the discuss we I’d in basis XXX the you I like Now to the by approximately by performance in, All segment, COVID in moving COVID XX, that revenue reduced before to second take revenue last Slide escalation through COVID was on the the virus double This had to the of weeks the during global at which we call, impact of March. spread quarter. the about of is of earnings estimated China prior in two our time last the

well home in the lower lab you at driven majority headwind tests second As utilization collections. as by routine adherence the and elective of was would was fewer related the measures which quarter strict decline hospital China. in to a procedures This in and resulted in COVID as expect, specimen stay

the addition, In reduced to was from stay-at-home amid research labs there demand measures. due closures

there was Europe, second net during and driven critical was U.S. tailwind increased by pandemic. healthcare the This COVID the devices the quarter. for from in Within demand a

We use COVID also saw MAX of the for BD testing. initial

While was decline the of treatment increased a care acute people to stopped generally partially seeking by the in care as setting, the related offset this in non-acute demand area virus. outside

our but and Medical including quarter segment, the the the as anticipated, a Slide approximately headwind to year, BD in volume-based COVID the revenues in slightly XX prior Medical solutions our declined second process to delivery compared to basis XX line net from Turning which medication China procurement related reductions in distributor were points, reflects inventory then ongoing the unit performance expectations. with of

that most by portfolio hospital setting. utilization. acute distributor declines China, China quarter lower the strong offset by tailwind we saw respect significant U.S., and With in surge in in management and elective growth headwind routine in a our of Outside the utilization the and the impacts driven COVID demand vascular care solutions. COVID, by access to notable of net lower driven stocking was In non-acute from and was the partially was in and was procedures

in surge unit demand quarter. the COVID-driven as anticipated. Europe in experienced medication the limited reflect Revenues of also management solutions pumps Alaris second We in installations

Within the approximately high on sales was quarter, million. were approval medical pending the Alaris necessity March. end on the at medical the necessity $XX of order Alaris volume

the end. before orders However, were quarter not these filled

follow respond the As were albeit than the the the hospitals in the continue to the a of necessity as with quarter COVID We on virus in April expect evolution currently revenues demand medical Alaris recorded lesser April. associated a extent situation, result, to will pumps anticipate for demand to third those we orders as curve.

ability their to XX% saw aided of business, syringes prefilled was sales also of the reflects insulin of retailers timing continued pen our increase increase and we in our Systems, for over Pharmaceutical it In Within growth high care diabetes shipments. meet timing by needles comparison. an demand Diabetes a that of is as the strong distributors reflects last what on inventories year. The drove hand result QX a and of syringes a tough pandemic. as also and performance COVID Care

Turning Growth in diagnostic to Life pre-analytical in including swab by systems season Sciences stronger to units. comparison March Revenues in second basis Slide a due X.X% and diagnostic increased transport and growth headwind assay the year a COVID-XX. points. COVID performance was flu the driven collection in point-of-care quarter, systems prior of strong in This primarily and our the net by flu to approximately XX in driven was XXX BD BD by systems was a and from segment. was systems. Revenue aided Veritor

and continue as due MAX increased decline in to was also assays globally China. by partially for and women’s well particularly in This the offset and and demand growth testing We pandemic routine COVID-XX microbiology health for see routine testing COVID-XX cancer as a strong instruments our of products an our to using BD testing.

systems COVID-XX solid devices ordering to Europe, in Within as prior due growth collections and particularly was to we develop to China. in Performance routine distributor pandemic, in pre-analytical decline offset specimen year. markets as related in wingsets the saw favorable in comparison collection some well of This a by stocking due reflect specimen patterns the partially COVID.

significantly also in in emerging in by reflects demand Europe a tough the for tenders China. instruments to and slowed particularly reagents COVID-XX Performance licensing timing reflect activity prior through of the in markets. the the lab comparison the as Results research well U.S. and in Biosciences Biosciences revenues unit unit and as as year, the reduced pandemic, driven

second increased BD to XXX from quarter, XX a including approximately Turning in segment, COVID basis points. the net Interventional and the X.X% of revenues headwind Slide

including growth elective of strong the peripheral COVID and WavelinQ, was revenue broad-based, on performance Venovo Excluding and our products. procedures, Covera in continued impact intervention

to across impacted China Revenues sales unit in related Europe broadly the China commercialization DCBs procedures product demand Japan in to U.S., reduced in elective well in U.S. two in related global driven there the and in in the in related our new DCB slowdown continued portfolio. particularly PI, as Additionally, and across surgery decline repair improvement were launches year-over-year elective hernia Within biosurgery was in China. the by in as due the to COVID, the procedures by an revenues of resulted decline

continue care Revenue PureWick. to Prior in COVID-XX, targeted growth care of be driven to was infection home and performance management, in urology by the outbreak and temperature hernia critical and and growth prevention. both strong

for gross I’ll to in Slide second our the now operating turn profit quarter. and XX margins

As in our business. COVID you’ve near-term given will nature fixed put the MedTech, in heard our some on margins cost of pressures from the already of peers high

lost see average. In rate the that higher impact than company is from an your margin the revenues gross addition, carrying we’ll

We expect revenues this as pressure on margins the to improve return.

the synergy and gross on partially larger In the performance offset anticipated this points basis. expectations. lower to procurement China, from our profit Alaris COVID volume particularly impact quarter, to Due and initiatives. to a due revenues than improvement margin slightly related decline declined impact basis continuous our in a a in from impact gross in XX.X%, XXX year-over-year sales had and below based gross of margins and We by anticipated to margin came mix,

deferred lower line was an of other gross impact positive neutral quarter. quarter a in XX margin points with basis. by XX XX.X%, had basis P&L in currency the driven item. is Currency on net of basis basis income that a or expense the points Operating margin points offset increased and compensation in the SSG&A This the XXX recorded on

initiatives in compensation, operating basis reduce quarter. lower gross was margin a deferred Excluding neutral. margins from offset the point the performance decreased benefit basis Unfavorable expenses, G&A. of points to points particularly positive within Currency operating impact partially XX by currency ongoing XX had XXX basis margin in

which Slide income second the to XX recaps turning statement. quarter Now

revenues positive grew of This discussed, As includes quarter. XX basis X.X%. pricing in points the

previous points full XX we approximately points. fiscal our to decline expect basis XX estimate to versus basis pricing the For year, points of basis XX

was a and a below on I including was revenues from the comp deferred at reflect rate SSG&A our as as benefit XX.X% of ago. margin deferred expenses ongoing an grew the Gross discipline excluding compensation. On moment percentage synergies. a and focus underlying basis, sales XX.X% cost SSG&A discussed Bard of achievement spending

of continue despite R&D as X.X% and we revenue future was invest innovation COVID-XX in pressures. to growth, a as percentage

line XX% tax our of to XX%. in guidance rate Our our range full was quarter year the in with XX% expectations and

share $XX of preferred quarter a on as earnings as million dividends and May the preferred in previously discussed. X. paid we were converted reminder, Adjusted shares the per $X.XX expected, As

uncertain or all stakeholders COVID-XX our there still Unfortunately, quarter. having ability. it’s to of to despite believe anticipated are and these variables business the the on our these times, of best In share year third to our financial transparency we too April unwavering results, unprecedented navigate even of to with as the to we fiscal effects the many commitment times, critical our maintain guide

forward, following considering macroeconomic we As factors. are the we look

we’re is utilization. First in BD of recovery the return great of the general still to the scope early and the impact Key to recovery and there’s duration healthcare stages of uncertainty regarding the and pandemic. the

While to to our and U.S. be China speak improvement seen can April we just results, I’ll begun some they are in phase, in recovery are the the moment. which Europe and a see this in earlier as have in lagging

This pressure macroeconomic pace variable. normal Second, much of the the seek we consumer It’s utilization you factors know, in to that return and a patient how acuity, all healthcare and and will within deferred is out. environment to call are spending. the procedures And world weaker around reopening puts willingness at care. the condition weaker disease countries testing as including and on depend the will to several on system operating by overall too COVID-XX a generally state biggest play availability, state early environment and finally, which U.S. clearly

slide. the of And brings to me bottom this that

demand. expect which move forward, the at because we Surgery procedures biggest impact pace being and Peripheral are COVID-XX or unfavorable surgeries customers how anticipate cannot manage in our pent-up our procedures We are As and products the will return businesses of used see we will other in our Intervention to those deferred. which

and Moving minuses. where the participate. some acute on and non-acute see and our MDS to UCC area pluses businesses We MMS,

forward these more on to the provide and slide. expect details going shift dynamics I’ll next We

of strong earlier, for as in instruments I diagnostics, to growth In expect and see COVID-XX our MAX assays mentioned BD use testing. we

good we April performance and the validating our test of traction addition, of currently in version In mentioned, kit. with serology had enhanced an as Tom we’re

system. is as early Tom this to market as test we for leveraging currently the development test evaluation clinical get issues possible, some as BD in but face have team Veritor The XX/X working still to the unforeseeable during coronavirus phase. point-of-care Additionally, mentioned, could we

when early to And lastly, it’s capital be, institutions will our it result, for a of spending. in what and about labs product talk and up business, to on these and may As scale specific market driver a research our but growth. and recovery a Biosciences reopened this could be opportunity potential quickly how the timeline meaningful largely too depend normal resume operations

applications We have also impact COVID-XX. leukemia lymphoma on testing because and flow some focused seen clinical hospitals are like on

funding. a there programs for potential or side, positive the COVID-XX other NIH On benefit should stimulus receive modest is

This moving results. of is we month saw Now XX. what Slide view to our includes a into on in April, sales which the preliminary

result and as Going deferrals. by Surgery PI to revenues procedure Surgery by XX% forward, and of the procedures businesses of will our significant a and month the decline elective XX% see continue to XX% Interventional revenues April to pressure impacted XX%. In

XX% In across the to Interventional and China, Surgery revenues are pre-COVID of Surgical and U.S. expectation and down still are XX% XX%. revenues Europe, approximately

In we saw $XX $XX terms approximately Surgery Intervention. Peripheral in of business revenues, our decline of loss a million and in million

of In which and elective continue by forward. installations, in not resulted and see This States, continue necessity, in delays reduced in to Pyxis at on to expect MMS, This saw forward. the United million. routine increased pace going [indiscernible] and tailwind demand do demand acute continued business net the businesses we approximately non-acute MDS we to to $XX do partially a in to medical Moving to infusion our offset procedures. continue expect due MMS softness our under we same we continued which moving pumps was and for

these of tailwind demand the and search abate stocking. began COVID impacts Within Conversely, from offset began COVID-related surge the accordingly. to the and March, were distributed curve virus by distributors flatten, in demand the April acted to month negative as

XX% XX% China still approximately restrictions broadly returned saw in April in volumes below revenues the as to In April, result isolation As pre-COVID approximately revenue a hospital expectations. been XX% we below in U.S. while XX% lifted, expectations. to have was that pre-COVID was

decline to the we of $XX started in $XX demand in above Combined, COVID saw million in some X% MDS largely with demand Correspondingly surge volumes lastly and of April decline Europe we million by U.S. a related And catheter revenues expectations. in saw April. lower Foley the our in the approximately in pre-COVID driven approximately we China continuation approximately UCC, of

routine Moving on in to continues related remained systems testing and testing COVID diagnostics Conversely, high. specimen collections non-COVID volumes testing. demand resulted for lower and diagnostic lower fewer pre-analytical

In $XX the terms of month a million decline for of revenues, of approximately April. saw we

such capital forward. In as addition, Kiestra as large we expect more we meaningful delays move installations in

million approximately closures. of business, due April And lastly in to $XX our Biosciences in we a saw decline lab

reduced related capital ongoing We spending expect a impact continued research on activity. to negative

$XXX that by If offset a partially the impact pluses million this of will a approximately estimate increased April. related tailwind aggregate to COVID-XX we and Alaris impact beyond month in minuses MMS Pump we of necessarily million not demand portfolio, the medical negative we the same at of for was had And in approximately $XX under across April. the anticipate pace continue do that moving

on the high is once regarding and my due about lower I margin the BD as enduring and diversity the operations the like sales of you helpful nature to pressure again high transparency fixed level of you earlier margins to products. our in would of think hope comment portfolio. on cost remind this also We

can the variables make progress as and see there to of it to each COVID-XX very keep provide difficult we’ll are situation And these which continues get as of around clarity guidance variables, more you number you we a informed.

call questions, like from the our the to key summarize Before today. I’d messages we open for presentation

by expertise As medication from COVID-XX and positioned across critical core management, uniquely the and solutions care. respond research, faces to diagnosis surveillance, full we the world are our continuum the delivery to to and pandemic, deliver of capabilities to leveraging care

from the of diversity results strength portfolio COVID-XX. our increased Our second impact despite reflect the and quarter

to as place manage term have the impact in near we forward, business put virus. we Going initiatives navigate negative the our actively of

position. these measures actions to include and liquidity cash Importantly, the we our strong took reinforce

stakeholders in crisis emerge remain forward, we a and strength. ability from position in deliver value As this our for confident we all look to of

for Thanks that.

to the to Q&A. open call like up Now

Operator

Thank now Instructions] for is [Operator Floor questions. you. open

Our first with question Kristen comes from Stewart Barclays.

Tom Polen

morning Kristen Good

Chris Reidy

you are there? Kristen Hey

Tom Polen

you Are on mute?

Kristen Stewart

okay? we Are

Tom Polen

now. can we Yes

Kristen Stewart

good. Oh

Tom Polen

Chris. Hey

Kristen Stewart

the you really is Hi, and good guys deck fantastic. much the there for so the And morning. Thanks doing frontline. all all thanks for are on really you transparency, slide out thank

into that. sure was lot put you guys I’m of that So appreciate it a work. all I really

Tom Polen

Thank you.

Kristen Stewart

there. you to on ask just side, the seeing with of kind of bit more are kind takes into the medication little I just kind what dive and and wanted a just just puts of management

as could increase that slippage we should was the curious I with are about just for just just to, whatnot. in kind going extrapolate seeing line. getting that forward. necessity little terms of we could of medical guess, kind rest that kind not I of that kind that with infer I of not kind hoped So what all details you continue that just product of additional you were year. know guess, be talked could we the give that just sets curious million And to of something seem and that for XXX that of K. something you expect benefit I and you of and continued on on of that was $XX on bit since had a necessity kind medical the maybe a any the I’m why

you If add Thank there’s that’d anything can be helpful. you.

Tom Polen

Good Hey Kristen, Tom. this question. is

to So turn bit color there. components give let first and over little more can the financial then XXXK the a it on I about to me maybe piece Chris talk

we on around testing have as the filing which XXXK, human factor that drove that testing. factor biggest delay really complete the one the part main the commentary the there is of is of of the course So of to areas

be could who not So them – use the workers, use training that’s make having the to naive using going familiar people of who able variety be all people using to the that’s infusions. with pump, it, aren’t for with and for instructions pump, familiar those the successfully healthcare

challenging it’s a timely get that done in cetera, to staff, more nursing in et pandemic, way. the course a access Of to

that get And extremely to there’s soon earnings on understand but the an specific and nothing go gets work on early submitted, to we’re feedback but collaboratively item. evaluating. we with right submission. are also it Again, the main that possible. It’s got Again, update in that evaluating Right? there to fast getting making XXX focused does it we’ll you call. too provide that’s on the it comment done very we’re that that as number FDA the or as as can through to something focused are August from we continuing that’s so process in then the one that we’re implications any it’s from So as very addition, possible, that, once XXXK sure we’re

a caveat turn think number Chris just in me net has just MMS an higher in some a maybe $XX other to one number update that I referred let million it So, offset takes on partially the And is to over that’s give for numbers. you areas. the to, by infusion that that’s

Chris Reidy

right. exactly That’s

the normal gave medical of in, medical the way quarter guess to had was that to against about in necessity spike that, But million month as $XX we when we I fight necessity you the peak expected medical imagine COVID-related, We last So, something we guidance is think this might really in Alaris well. of had that the and wasn’t a similar the the Pumps that would for had in quarter. beyond kind of second pandemic. above of as we necessity April that have

et Alaris. But of bulk And so and the was the Pyxis bit cetera. offset installations, Rowa the we a that and have that from spike the spiked, of did installations

the would it We Now, keep June and not as expect to spike – and in bit and it we at installations would as levels of that Rowa that see little forward, to spike deferral but we that same that a we keep in was going. somewhat. Pyxis also a look in going expect the April. abate would would in to abate Not expect completely, be May and

So offset. would that

you we wanted May the June. million sure clear So to that we down next about in months, that $XX make to were few come people think would and just expect as

Tom Polen

may may course, and recognize additional change. to beds assumptions at time this need Again, over period need that’s same situation not of were for just would that the change, pace. that COVID-XX of building of continue based that But that abate, to will the on hospitals, then the ICU

Kristen Stewart

are unique at United are just just early States? hospitals. all you then in what And the guess bit now you. a in little in about seeing with touch a I days guys Got you what tell the spot across country us can terms You points here your of

you’re from business regionalized of can little in terms kind perspective, starting you that optimistic up, to I’m pop within some and terms be things little get very the of are are things, things more hospital anything Just in back add just are are maybe to what places there starting in seeing bit to of you recovery seeing Just sure Interventional a helpful. that’d you a starting signs better? or get a surgeries are or,

Tom Polen

question. good So

I think see XX% again real doing of of customers doing then pockets they And very recovery to they’re drop-off. – like is accurate, regionalized. to data. our the hospital few elective XX certainly states a a another last time that procedures hernia really XX% you’ll of our comment though a And we hospitals ramping there Again, in saying basically surveys is for and back very the lot at very back before. days. have not up we’re And directly elective that it areas your down other primary we’re that is regionalized data you’ll kind that shows in Texas, we healthcare research where be a still see what strongly. see road And of certain at were procedures could is

And I to bit. early particular. we’ve are it’s a April certain in regions still days. begin late seeing But think generally it that increase early we But in reflected in

calls, probably were back you say month weeks over CEOs largest our of lot access or the the the of dialogues having fair a getting I diagnostics coronavirus of other for to with diagnosis two, for thing patients today. I’m is getting customers was I if a need think couple step of of last increasing that around in many

better patients that where looking prior Today, coming lot being happening, today of those access into tests more those a screening I’d surgery. on basis. at is to more start them met a to people much to And needs are national I and getting get say calls are now elective

to across and are in. they they elective putting they think people And in testing starting So the come I see nation up get the and about is doing thinking standard procedures place the how about are to actually haven’t are for running. procedures timelines they going to before going people back started yet, be even how test those to if used actually pretty

seeing sign the that’s of of think And intentions. intentions occur. a people’s positive that timing I so we’re sign, and And a those

to the So you few as we’ll things may progresses but that just that helpful. be keep continue of a updated

Kristen Stewart

so you care. Thank much. Take

Tom Polen

Okay, thanks Kristen. safe. Be

Kristen Stewart

You too.

Operator

David comes question of Stanley. line from Morgan next Lewis with Our

Tom Polen

Hey David.

Chris Reidy

Good morning David. There be seems a to pause David?

David Lewis

Good morning.

Chris Reidy

are. There you

David Lewis

Can you hear me?

Chris Reidy

can. Yes we

David Lewis

Great, that’s good news. got morning. I thing this one right

or Tom quick So either follow-up, diagnostic Roberto. question, just diagnostic a a for

of So question about the on, away a we on post capacity kind if EUA situation, I follow-up. then approved, but first you type weeks are we a the Then I manufacturing what get talking know this wonder, update it’s quick could months morning. I think potential away? of just I Veritor or appreciate fluid approval? And have is can

Tom Polen

David. question, good A

patient So – samples. testing it’s in we’re now clinical with right

for and we’re generate performance testing developed we’ve that that assay an approval. have EUA if we could we data works to phase that submit at So it for

that’s where we So are.

assets we’re one we it’s and always internally these cautious three-year and and is clinical I them get approved. through develop studies things of a about talk the course – typically to process of always

that doing months are We in three essentially.

window. a And it so, couple the an in what weeks even away be in you EUA general timeline submitting of where could that of learn can from

almost normally scale-up, et learning because that also you of learned year a cetera. what had includes are manufacturing, You

still learn And be relatively could specifics there’s though so a yet because to a that’s it’s a time. cautious to – why we’re a of give even lot bit relative short period

last pre-EUA come can testing filing as with that our testing, complete we that. to already had results clinical clinical on of discussions. the pending that I FDA more the week. testing So we we discussions And again, have share started

to that so results And it have to a testing And product in Concurrently our takes we know file. been assay. through. get working the that study production to the of up we’ll results, what ramp we again, be position pending

be ready, teams we position equipment a of that scale balance some the meaningful started in actually in invest the to So in over would we’ve additional as way. well are to year our a that so manufacturing

David Lewis

Okay. helpful. very That’s

Tom Polen

of tests, millions We’re a millions a doing not of week. million millions tests, right,

David Lewis

others, that some or anything is on your going significant peers production related love be there. really right And of up And larger capacity of of testing, for or then production be questions ramp point-of-care within of what is test BD MAX for to done you. you, then to now not all doing companies? to your of to can this IVD MAX or of morning. so limited capacity? BD is think Okay, a third filled just Tom testing, immunity Thank macro kind think you sort views kind production of Thanks going you immunity get much so that there’s analyzer by demand the demand for most get serology you do are just,

Tom Polen

thanks Yes, David.

They of on throughput system a So high the are different are it have hospital that peers platforms. is benefit MAX which very is in designed real for course. more aren’t those that much much there of more you high platforms settings MAX, usable that. time higher select on that’s are BD platforms have going throughput right, volume Obviously to of are that

that we’re time, a in our at with point where at systems say So, that current is tests manufacturing. in instrumentation month and this I’d million we have

that capacity well. future and the that is have recognizing capacity that, I’m tests for invest the there. about million but a proceeding we’re investing are now. online, We right an we’ll ready need to share additional not that in But are saying month we approved what coming as to timing of But a additional

being in and one. does point-of-care maybe time procedure whole patients of used of the able well. central to as as and testing invasive from screening that will about good a lab interest a more coming terms obviously blood, testing. a approach And providers think employer’s, continue different we based use seeing collection In convenience having being do It an specimen, stick than as see finger demand strong much certainly well we are a that immunology samples think testing, less we send immunology in to out real sample for the the from is healthcare

we demand expect So we and seeing are continue. will strong that

David Lewis

much. so Thanks

Operator

LLC] is question from Newitter. next Your Leerink [SVB Richard

Tom Polen

good morning. Richard, Hi

Richard Newitter

hear Hi, me? can you

Chris Reidy

can. we Yes

Richard Newitter

to thanks old all the David’s, the Okay, Thank here. presentation morning’s It just of question, to back go questioning the in helpful. release. for you. on I great. detail line was or of follow-up very wanted And this maybe testing

in to the the you more color portfolio very fits your the a is at either in helpful sector national are employers to out as on and Can as us think how perhaps with private what kind on how to there So to any general, you’re the respect had. you of potentially level the work or sense conversations of back testing on hospital being algorithm side. going just seeing a be give whatever

a Just other was Thanks. testing, so in high-throughput automated for fits what trying testing get with how kind to systems? serology a and/or sense of point-of-care

Tom Polen

screen specifically out in come least surgery. at lot we’re It’s question, that, testing we’re interest I before would a I Rich. thinking – to a elective we’re don’t great on of to say yet. again, the they have talking algorithm as antigen getting for figured patients, that as our customers,

they’re we comment back antibody that for work, can I’m to they what screening testing be patients mix. getting on antigen least before would associates So Certainly think pace make then that about their come employers I surgery. at it’ll more imagine. focused as for in I seeing a

of are lot We focused And a question. spending were through that prioritizing. we course time of very thinking ourselves on

work our our actually the get in of of of month in starting being phasing numbers And based on to be office as teams R&D working starting the then an after work get in for time some field customers of to U.S. extended associates as associates this example priority after the increasing starting communicated next that. period and commercial to then we’ll associates yesterday support just back able to to We some phase more that. back

And I home. think testing the what expect they they access of a from use importance can’t to of do based phasing to in of being them regardless of that on you really work setting have getting so the also work some people back access in

Richard Newitter

by that the per point Is That’s where week that? you Thank that that That’s swab a you will think, or substantial been. millions by situation, ramping referenced, you. said at in be June. no a you from kits that think of ramp the, longer you production in to testing the just U.S. you. – helpful. I Thank you And on that Do can than even seems time? the And go bottleneck the least for the further level? right had

Tom Polen

Yeah. Good question.

So a million clarify week. dramatic we’re in the expect start couple week three course by from we that’s a so at we a the to of up million June week at where be, of And it’s strongly that’s a that crisis a where ramp. of direction heading XXX,XXX just already to is

well there the that’s of we’ve big and with organizations been the across – the that few like the the pandemic, the At from very for industry middle that So of start partners thing other Foundation. products as happened as were is Gates there FDA, working the validated were in right testing.

the And so clearly at was a beginning. constraint that

that of to beginning to increased systematically capacity of systematic in are beyond the devices other manufacturers swabs the providers. to And a which the with and organizations been the some been swabs viral collaboration test types sailing, who transport like What’s well testing of there is lot dramatically dry that in Gates have to which available. happened of swab as in limited now have swabs including as FDA different the work again expand the now of across driving Foundation the was types has media,

they of ago issues not around don’t were that I’m the to hospitals the regionally we if And point in swab managing stop getting Sundays to occur. hearing testing. significant ton this coming to testing yes, and calls at actively work and Today, make I stop. on so, did things to very in there. package issue those sure much we we are up a make on didn’t month that they And testing teams them at stopping the country rare more calls anymore do drive an midnight having didn’t and sure or were a was get and the proud our was really those that time We of

Richard Newitter

much. Thank you very

Operator

is Your with of line of America. the Hopkins question Bank from Bob next

Bob Hopkins

And morning. you. good thank Great,

Tom Polen

Good morning Bob.

Bob Hopkins

I Again the detail. Yes good all appreciate morning.

maybe one follow-up realized And but So we’re information. term, this a bit I is just hungry April. on short little for also

business million, curious $XX the if for and sum something? probably the that or sustained, single related the but negatives of realize am everything then company won’t the April, you’re Regarding may April, of maybe be suggested parts just I ballpark year-over-year. by positives COVID to and the the math I’m saying revenues missing month total in up down my that Is be other digits high that I we just

Tom Polen

No, we’re mid-teens down.

then offset the at level $XX and somewhat total the in that’s million. mid-teens by So XXX

Bob Hopkins

Okay.

that include teens benefit the $XX are That’s you mid So that million seeing. right. would not

other part of the do bit get longer thing thinking doses. be about vaccine ask I mentioned, want on a a vaccines little billion is then curious talking the guys that capacity a we And term there. will vaccine the okay. to hopefully, Okay, being is for Tom I’m made a if about obviously do solution just have the demand to you meet J&J out you progress

frame of part investors the meet being your demand? and of do that how Kind solution potential BD you that for ability to

Tom Polen

what’s a talking it’s active Bob. be to in to stockpile expect and And that question, that waited around and have products people it’s here to manufactured very in beginning minute to the cannot your world. produced been important proactive in now, is, governments is something to it period will of order devices the we’ve those Hey, be these great time. scale because can’t last point, be until be able be that that that And

done been are in Others some buys pretty citizens already around governments create gotten awareness we to governments vaccines. a stockpile now. our orders policy working that public large of daily to seeing greater world, really larger cover And with their the scale yet. we’ve basis on haven’t much the start team in to need country So the doing we’ve that beginning of very

of to us in are invest capabilities self. There have for a some We opportunities that our proactively doing year. presented over production we’re next the further our capital,

we’re But that. a needs And help needed in ensure again, done further working there’s do that I from be includes it here U.S. again, perspective. That happens. to think, the actions And stockpiling to to

Chris Reidy

a on to million Bob, to your basis. question, for when you adjust impact clear double digits comes it just first that be out low on $XX year-over-year And

Bob Hopkins

very you Thank much.

Operator

Biegelsen comes with line next the Larry of Your from question Wells Fargo.

Larry Biegelsen

you the for Good morning. taking Thanks question. color. for And all yes, thank the

One, like spending. appreciate some a couple P&L? Any impact. on P&L of me. questions the of on on Chris you provide it the follow-up. P&L? margin other half the I about other lines For one can second maybe R&D color SG&A the that to color we Just of the How you had maintain And should the from think the are sounds going and I

Chris Reidy

a question. such to gross being think of about lot is a the Okay. way a fortunate what’s it’s as Larry to profiles. PI impacting very business And have good and margin it Thanks, surgery the negatively we’re high

So, XX the of think plus kind in range.

the In and inventories the we do. addition thing adjust right revenue is accordingly impact to the you our that, to going the think which variances about manufacturing are you’ve as got impact which as P&L consider adjust for to to

So, also as on we investments in as COVID-related think ramping the call here. it, about talked making we’re we’ve about

So we’re making those investments.

and PPNE investing things. about, talked and facilities kinds we health cleaning those own associates making also our in which the We’re of our of safety

we’re higher probably additional costs. costs seeing And by. as are those are not surprised you So then shipping also

our offsetting we’re remarks. saw Board, so management deductions that actions that second taken limited and we’ve we’ve about and salary mitigating freeze that when of So we and you that. travel for early talked the XXXk then taking But the benefits – quarter we take and taken hiring in also offsets cost the in that the things. We match,

when everything be about that lost thinking margin range going of that of net should the forward you you revenues of impact net together. XX% in all when kind the out, So you

gives So some color. you hopefully that more

Larry Biegelsen

thanks. helpful Very

you my long-term thinking For implications coronavirus. of the are Tom, how about follow-up,

and you slides, the questions. of settings, example. BD acute Thank the you taking for does that BD? for for the mentioned the the How You industry, care mentioned impact in shift to non

Chris Reidy

platform strategy, So that the place, solutions platform been and non-acute. et additional commercial specifically centers developing we’ve sector, it surgery been for our teams medication solutions Rowa and very even or management – course into including in catheters, of be we’ve nonacute our the retail our put pharmacy, cetera, we’ve our Veritor in bringing for

growing been only segment, been certainly a we’ve that our we’ll faster It’s increase going shifting forward. direction. So but resources in direction in that

new DX, a you of the product which based. will platform, be our time I This we supplement, similar a give we development to of on Veritor. So right? like talked think some us that resolve the based will heard will as molecular platforms expect acquisition flow platform Nat Veritor be to lateral announcements about today would point-of-care molecular

Again, that’s to making, an investment will expect shift that we’re seeing in diagnostics that direction. that we continue

much PAS blood We’re that et making are that of other allow setting, for business self even cetera. our appropriate sample retail more the and investments other in collection collection types

in trend. It’s a So that continue double we we on to go down investing only definitely it forward. something and been as we’ve see will

Larry Biegelsen

Thanks guys.

Operator

you. Thank

line of Your the next William Blair. question with comes from Brian Weinstein

Brian Weinstein

the questions. very taking here for for Probably thanks guys, Hey coming Veritor questions me, not surprisingly from you. some

Just kind of fire. rapid

have these AV speak you’re confirm doing wanted you on studies? are relative talking that’s expecting Can to combo a that seen to assay to I wanted you Tom, week? that, know I be said relative flu especially you say assay to, performance PCR COVID that? about on the there plans per millions then to you’re And compare characteristics when are for did what confirm we a think to I So, you any I COVID-XX and that. to

Tom Polen

Brian. morning. questions, Good, Good Sure.

that right towards. would be So be where yes, necessarily have that would you Veritor We on at we up heard ramping available wouldn’t launch.

up that that will We way. ramping have towards

and plans plans on. later from have those We share we’ll a perspective timing

is. From what performance performance studies we’re perspective, right again, to our now, inappropriate it’s say so in a

right specimens, to that actually anything. PCR obviously is for comparative getting now We’re typical in clinical recognize we obviously the

important assay these of a very PCR that lateral is why cost and mobile they a as role. platform has recognize it as strep which used in what see won’t also sensitive still be PCR, as no sensitive wide no applications today. flow We like as in see ease you And you as as assays, is but use, PCR, flu assay testing Veritor, base, is

be We a key lateral COVID customers a constituents, flow need FDA, based it the our assay. very hear from House, other also see we see the for role important White in and

COVID that a secure a that characterized to about think phase in on confirm becomes of out you combine once that do for next is to put our point, ability assay We started the that, are flu a to down the asset which to – well we’ve can we focused to getting That us that. with test, both launched now flu test. Brian, simpler of And Absolutely the would think test with the antigen first, COVID then course in your add about. single done, much strip. assays we’ve are a be then

Brian Weinstein

pump follow-up the going a a would XXX, bigger broad you as looking business then kind of And willing that great. Okay, stroke, are received a to some just of be to be back the deal that things of going for second, kind the to here? you in share you observations to with the

Tom Polen

in very share more our that. closely go already started FDA we this – plans we actually working response the actions with forward. Brian, of obviously response. on Yes, many taking that share in in we’re We’ve we’ll time, at We’ve those those on as already don’t point we’re and submitted

Brian Weinstein

Understood, thank you.

Tom Polen

Yes, okay, Brian. thanks

Operator

with from is Stifel. question next Wise Rick Your

Tom Polen

good Rick morning.

Rick Wise

Good Good morning, Chris. morning, Tom.

what Other recent companies could weekly Very and Let I been representation that. to short like me nature the commenting it. pauses stuff understood large start clear. in for sure with your April. make again have and if I of happened excellent on of But term trends wanted I

state month? you something week in million that into as I or that the $XX as assume contribution, looking it by improve less things that million about, I’m have be positive of May? is you less bad? of ask negative that as months April coming the will assume the will for month gets positive a somewhat shouldn’t million shouldn’t seeing specific indeed, did things but get we think reason we last bad less impact we goes that? $XXX Yes, that $XXX reopen And that Are that but April down

Chris Reidy

enough it’s really Yes, give to so wasn’t the about really hard you to think And it’s of us elective differential sense There of April really that. in last when a week procedures. predict.

what be we and could a a months think closures, a down, see and might that didn’t worse. we get and the anything your something changing. in would the couple up elective that enough the change over also call levels around to little to be bit lab any of of So procedures impact might be get spending the point little able capital May in sense get To to of next worse May

but think last this makes variables, where May predict. just early goes as so point. said, would April, nothing I it’s so hard just sense we’ll a us of It’s on time to And you many there’s June, what And, is that about more there this the very and going. was give tell it’s learn week of to at very, as too

Tom Polen

we take advantage over procedure the And on a high be Rick, the We turn we for level. just do seeing on maybe Simon on a May quick have at are side we’ve got. comment line. you to Simon what

Simon Campion

particular, final so a are reimbursed. on an heavily did uptick Rick They Yes, hernia. also in very hey, much pockets outpatient certain England Eric, is based. we in see England, are in certainly the ventral it’s They

treat and So, they they home. patients patients nicely reimbursed get the get go them, they in, the

the been end that’s up at April. back So has that – nicely picked of

of to customers salesforce April, receive cases. more from And about also hit worth calls to the something is another point began noting end our re-attend beginning their back

just again they yesterday those go here them middle attend the allowed. shipping in back those So, Tom PPE at their the guys And all the said, and let that where to about cases hospitals month. began in of so fact loose in they’re we’re can into as we

of right are that in our pockets certain in elective things several the direction respect pointing in to are aspects business. there So some

Tom Polen

think see not going difference small April. not on seeing to at we as requested are sciences, as very will that say about at that real unless end reps life Chris subsets any the to I’d our Simon hospitals case. – And in specifically attend some that be clarify, medical to think just of we I a and that described, in they we’re And commented as just while seeing just

specimen or collection difference. anything I there MDS, example, can For notable

Rick Wise

right initiatives, And and angles, of you, focusing happening I Tom, factoring and aspect a your – prioritized as you the What’s accelerate great. initiatives, those focused cetera. initiatives you’ve et those time recover on just empower reduction COVID and simplify couple ironically cost all know helpful maybe optimizing costs – just initiatives? as could from be might we Actually, one simplify is we for Thank Becton’s appropriate to you this you. efficiencies, period. grow, That’s this fixed reduction, now SKU manual from to would contemplate an as that potential

Tom Polen

Rick, question. Absolutely. Hey great

the the much what looking So we’ve been number traditionally. substitute in actually near have products teams been the to of remove point has engage in way ability with of able has team your working to the work we’re actually term through to them which have than able product a to SKU do to sales been from list the – engage we been the able rationalization more folks – over the would on accelerated fact – at months, to the in actually last products home, two portfolio,

And of number the we time had had significantly company that this expanded that et to bandwidth accelerate simplification pretty where to already starting think were Actually other the across businesses of during work. marketing I window that teams, a businesses cetera, product initiative. also

period one to that’s we’ve that double this So been taken of advantage on. down

manufacturing, network move forward. that consolidation the does of terms to continue In

teams navigating We now and supply able accelerate necessarily right manufacturing been of Obviously to haven’t that during on time. this focus period primarily that.

moving Of still But course well continue every to you our there’s we that. in that facilities. our day chain, we’ll updated you manage forward can imagine have is and fully all supply own items on in keep that to as as in ways

Rick Wise

Thank you.

Operator

next Your question Robert Marcus from with comes JPMorgan.

Robert Marcus

out are plus also, ability more are temporary? hoping just the for about about Thanks your year thinking you this then capital the in thoughts I Really this? thinking And is by all in see capital CapEx allocation $XXX something you one. just you coming effected. how Could question. are reduction permanent pipeline? how and should on of pipeline ask around Thanks. about shouldn’t and be this. your general down took out road, for the million come investing of we you that CapEx taking your could touch What the your Great. both in potential them delays I’ll down noticed of

Tom Polen

short question. we that the to wanted the with make we from COVID. the might to is Robert, And Yes of weeks. the, sure what think we mitigate mitigate a as And that And we’ve made that I’ll great of headwinds start prudent thanks imagine, impact. for first impact as we progress that substantial we in part to the to thing were on from cash the you able able few that a are And do. was see capital the thing

some P&L perspective those one and would basically of of critical And there in sure careful going discretionary. of impact was items items clearly being delaying that P&L to on we’re talked the making one cash mission we’re cash. not that we to get take prioritizing we that addition we’re more the that make from because down are very that cutting some cutting Now, capital investments we that a did want the that and about did But CapEx. the that of and to we’re capacity any And inhibit we’re that anything spending, things forward we

are when have and on a that. in permanent those clearly we’re out spend we’re will So deferring being just not CapEx. of we’ll to we very it come adjustment that cutting, would, is that expect of We that things we some this targeted and we pandemic would that

think to so thing. of back kind go you billion necessary expect to as in the to about $X $XXX,XXX investing are COVID. can is us particularly that And that normal And for true areas we

that to a areas, have of capacity continue and fronts. terms sure make and articulated in as those We invest ramp number on we

We’re ramping capacity.

think of reduction. that So as temporary a

question. the for Thanks

Operator

Matt from Taylor comes UBS. question next with Your

Matt Taylor

for Thank the Hi. question. you Good morning. taking

syringes given wanted for, there and get of some material would we could you about just would the order question if have, one it I revisit global QX, an were could back material say, to to you how mean that the you a what be is us for market, And get able what remind be? today? be and that how circle So could of that Bob’s ramp vaccine, you to if billion up, kind in syringe could material just share you

Tom Polen

Good question, Matt.

our So global on specific shares basis. a we don’t share

leader U.S. of in billions well a clearly said, each we year. worldwide, billions billions billions We in leader specifically and U.S. make and as of them we’re we just year. the needles syringes And and make as are, the the market We the for

provide So to able to capacity in billion it, a month. a provide example, your to be spontaneously, say those syringes just let’s not there’s in just

product opportunity different where go partnership the we in with We to is governments. hundreds And be can it millions above to and have periods governments to plans time. provided done those around of there of provide of that, over world but needs months,

most of So again, in some important Others do to to are those and that. On to engaged get us we’ve of still that that you’ve their plans. those governments what’s now. engaged have and orders point, things through got start strongly working to with ahead is start get

caveat U.S. is capacity The there’s as that is we sell the sell products that other the example, there sell, we that the ex-U.S. is we for is, ex-U.S. a little in well, there’s sell certain many I don’t in thing we don’t that hesitate it’s and just reason there global products U.S.

So in much for sell U.S. example, exclusively safety we devices pretty the

lot of a of ex-U.S. non-safety have We devices capacity

In delivery. need the the vaccine end a may delivery vaccine situation prioritize safety a pandemic one of on not needles for

the to And those, And actions again, requirements. some working getting that’s additional the governments so to we’re stockpiling, come really the already again free them you governments those act sooner. up on the have with specific started on marketplace. But into capacity taking aggressively, can focused others

Matt Taylor

long COVID providers be acute the capacity ICU ongoing run actually, increased their points to some wondering in the could so the be responsive or fusion you given for just many follow-up, obviously for was in is care management. of that. or pumps. you’re touched Understood, think to then if I offer size just a permanently increase wave will term And that thanks whether one setting, care thoughts the and there second seeing or hospitals medium if you demand acute you able

Tom Polen

our I It’s second about it they imagine answer that the the haven’t of that about how those. time. know in of are have be could beds hospitals what up wave deep including of something had we that That’s discussions fall a hospitals fairness, that, may a may on the that over question. ICU these winter. many good that. thinking customers And think and long-term In they or field about thinking some of a that implications maintain balance would how been next longer and don’t I and set with honestly you how not period

did particularly little and in ICU stats beds have of are. seen below you’ve may What of heard beds. some per like that well that think different in seen benchmarking ICU Europe those some different the we be where Certainly, not in how capita as beds a But think, to maintain countries areas levels. ICU were the permanently want of may you’ve in in on that U.S., I those a higher some ratio have countries, Europe many I countries that’s disparate were

Matt Taylor

Great, thanks for the clarification.

Tom Polen

Yes.

Operator

Thank you.

Josh Your next Jennings question comes from with Cowen.

Josh Jennings

systems units forward or as for units, build COVID-XX the to out most pumps? or Thanks the to individual follow-up floors they a But capacity, I Pyxis fleets, even taking the recent questions. they just non-COVID-XX potential or similar thinking at and for Hi, potential to move these reopening cross-contamination looking maybe wards, are or the and good medication more avoid question. versus of distinct morning. need had about hospitals Matt’s to floors delivery question

Tom Polen

allocate reallocating? much for they relatively XX% this not wards, hospital low so across think overall we’re seeing time. the would normal that be requests they be how not COVID-specific in I the in would rate, U.S. to would widespread terms, board Remember, utilization cetera. question point Josh, is it’s still et And the at in

growth spike or from a pump systems as not Obviously it’s are COVID think would visible – we’ll type monitor not see we’re time. today. hospitals figured don’t there separate point still were dedicated But I of this that seeing people something all that that main in being but We some Pyxis build at trying out. today to that’s to wards. their being be in

Josh Jennings

incremental just with Becton Great. – BTK What a And more filed. put about for back then for was Lutonix you just or can that confidence And to your FDA? and comments that the Thanks forth lot. share Any details was on forward required any follow-up, submission required the I from was mentioned submission? you heard what approval?

Tom Polen

Obviously really submitted at those generated point clinical we many includes of sets in the time. Yes, FDA. this And data studies various can’t a details were on additional number that it with comment to data BTK. we

remains that and So believe unmet significant for again, patient strong not population there we in alternatives that for review. We today. safety product under the a strongly believe need the BTK of that there’s it’s active

data So we isn’t complete updated and that process. to review you the so it believe as submitted But under Thank we’ll continue you. the it’s now progresses. keep we’ve

Operator

questions. your you Thank for

We turn closing your floor will to now for back the over remarks. Polen Tom

Tom Polen

everyone the today. Okay, for discussion well great thanks

healthcare’s at I a truly revealed character, everything commitment breadth, revealed forget BD make patient today’s respond the seen a call, we’ve that significant mustering solve put our is us past the that I’m portfolio character. most that’s problems. COVID-XX help mine bring solutions it’s who innovate, health record that healthcare And in their of the As mentor track the to our something health of associates ability I necessity the It’s new BD has really providers and product diagnosis our the it of revealed that play shared, discovery the end of and the treatment disease is best officials and to here in we depth adapt why biggest and never resources worldwide to the to have century. we once reveals doesn’t reminded our close That crisis which from do. central the the of delivery role think, there’s reinforcing reinforcing and care crisis during of trust of way, and of crisis

the been confidence continue And it’s contained. us after that gives will innovation, drive value creation the long we serve what we has COVID-XX in and categories to many growth,

execute that the I’m confident I necessary take recovery will road the likely it’s our bumps, its near It’s to to the some and emerge to BD but think global time. and to economy take industry actions these going say for challenges, navigate own strategy is fair to strong. healthcare term have

I’ve been associates. the of inspired BD by so response

thank team. times. committed enough and can’t team We challenging I the going incredibly and for above in And have dedicated an these beyond

Stay your want to all I well. today. you for thank time of

Chris Reidy

everyone. Thanks

Operator

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

Becton, Dickinson and (BDX) 7 May 202020 Q2 Earnings call transcript