BSX - Earnings call transcript Q4 2019 | Boston Scientific Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Boston Scientific Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. reminder, is a recorded. As Instructions] this being conference [Operator

conference to your ahead. I like the over go would now Please turn to Lisa. host, Susie

Susan Lisa

you, and and Chief joining Officer; thanks and today's everyone, Executive Good Officer. Executive are With Vice Brennan, President call Chairman me on Financial Thank for Mahoney, Mike Dan Greg. Chief morning, us. and

release. the morning results, which XXXX issued We non-GAAP used our measures announcing a press release QX in the reconciliations earlier of this included

'XX. release, and as to be for hour. call We as approximately a Dan we'll provide strategic section then have duration of Mike that morning's review one used and questions. your heading call posted the of of the today's of the then 'XX guidance, the and measures The provide XXXX the well financials and of take non-GAAP & full-year under copy reconciliations Relations Filings. quarter will will Financials will this our in QX website QX revenue highlights Investor

During Ken session, Officers, and our Meredith; by Dr. Ian will Chief Dr. Dan today's be Mike Medical Q&A Stein. joined and

and the organic. sales BTG as to the of divestiture Before acquisitions, this revenue for net there which the the Vertiflex all of relevant we business. that currency remind to further references foreign revenue sales, in bead otherwise and and including periods certain the excludes NxThera, fluctuations, as organic Claret, unless impact impact call, the of are begin, no excludes well like specified call period-related on On revenue I'd prior operational everyone Augmenix, are

Actual be believe, performance, cost about our They financial statements guidance; new cash among differences Risk and differ federal statements. well expected and from and the flow clinical like meaning growth rates, and SEC. market discussed tax approvals and expenses. speak use; trials; product those them. our expect, sales, other other similar include share; results of securities only forward-looking may intention we things, update filed as disclaim statements such contains call QX and other may including identified subsequent margins, most forward-looking opportunities; statements launches; estimate described XX-Qs growth those today's savings note, our Also section XXXX earnings the and and XX-K within full-year other recent materially cause the as and or anticipate, of laws, words may the by words. our Factors that R&D obligation include, in spend, These which date Factors as with this our and of any to in

over At I'll his this it point, turn comments. to Mike for

Michael Mahoney

Good we as to morning. high-voltage fourth Good portfolio EPS strong of and delivered Consistent This revenue due and X% yet operational guidance primarily 'XX. to revenue businesses. organic finished XX.X% future X.X% of everyone. by XXXX and quarter represents Thank growth EP for we a on we organic growth preliminary results was XXth, X% January revenue significantly our for growth, our with revenue announced below morning, US US the excellent you, up capabilities growth. the Scientific Boston delivering strong strengthened our and Susie.

or Endoscopy. operational were Cardiology, which result Interventional Urology, worldwide growth, growth EP posted Importantly, the CRM both double-digit five of Health US our grew outside other and were solid in all of in at Pelvic three as and market divisions, and above

QX, of the due exceeding results, guidance end today's benefit. we of X% to a disclosed $X.XX adjusted in high With EPS largely tax

is tax prior XXXX. improvement revenue, the year a normalized the growth, revenue to XX% in XX-basis-point X.X% also adjusted settlement delivered $X.XX, of For for is organic year, XXXX, operational full up EPS $X.XX XX.X% the profitability in and we which which XX.X% benefit over

flow. cash approximately these in also while delivered $X billion free adjusted results generating We

provide our into solid deliver higher-growth and XXXX Our results. strategy in markets excellent portfolio category leadership of financials to a evidence differentiated continue continues key diversification of that adjacencies results five-year and trend

revenue double-digit to EPS continue Boston goal believe strategic improved and the deploy Scientific further growth, deliver is over to our brings to next growth above-market value. greatly compelling flow five continue strong Our a results EPS to of and years. ability and growth consistent a execute margin tier to plan what organic targeted we expansion, against is a long-term that cash free shareholder top drive objectives, sales position growth adjusted increase profile Boston our and combination Scientific

XX% operational are build of the excited the momentum acquisitions, XXX XX%, to in and year guidance and full targeting growth points to Vertiflex which XXXX about of organic to includes upon our approximately of revenue from BTG We resulting X.X%. revenue XXXX our XXXX basis growth We're in X.X% in plans beyond. growth

China Similar second in that half XXXX, ramp as trend to timing acquisitions turn given in the half, XXXX the procedure the Coronavirus. from as organic growth in introductions, of and will an expected first product impact negative well

guiding to $X.XX, flow. in EPS includes approximately revenue see of adjusted in growth, from comparison billion free adjusted well the $X.XX We half the XX% accretion as which XXX the in BTG representing $X.XX approximately expect $X.XX $X.X accelerate to points. of second organic of cash basis the as earnings to a acquisition, XX% to We're to to by half of first XXXX year adjusted

results along some outlooks. and XXXX 'XX fourth thoughts with I'll now on our highlights provide quarter of our

But quarter in this XX% in Middle year revenue growth East, for XX% in the XX% represents outstanding growth quarter revenue operational notably by total and Emerging XX% revenue was quarter sales. broad-based in Africa. across the now growing in markets and another full of XX% Europe, the and businesses company operation Our most XX% this Asia-Pac US, had and quarter, regions.

our deliver in sales and mix to So X% segment XX% at the our full the 'XX continues franchises. growth the double-digit biliary and quarter revenue XX% MedSurg year, quarter grew prevention in with with for led our and Endo year. sales each sales quarter infection business, franchise represents of full fourth for turning by X% results fourth XX% to growth of in and excellent the

are contributions from given strength late endo, portfolio, growth beyond. second the we Endo received single-use where also sales a slightly our as XXXX, to scope and category-leading in in also first later targeting I'm full that significant quarter CE to acceleration as decelerate breadth pleased are in quarter expected Mark we well the launch year the Exalt-D limited and more began announce January, quarter. Exalt-D in this launch of

next-generation Our which imaging opportunities advancing our Spyglass is Endo ultra-hemostasis is the surgical including therapeutic pipeline also the business portfolio scope. of call and clip Discover, the resolution single-use launch a additional

imaging $X XXXX. believe opportunity represents portfolio market to by continue 'XX opportunity differentiated our a an in incremental therapeutic We billion and

Pelvic full Neuro the This sales year also [ph]. quarter operational franchise and its continued for performance with XX% growing to Health X% and organic XXXX, growth year full Turning and the excellent XX% in for despite Rezum scope, withdrawal. mesh therapy XXX-basis-point minimally from invasive doubling strength core revenue. headwind and in Fourth of was quarter single-use LithoVue that's double-digit SpaceOAR stone, led almost the by our BPH growth

risk cancer, $XXX side therapy with XXXX. As of SpaceOAR in radiation to in resonate continues in patients resulting of prostate local undesirable Hydrogel a in and reminder, sales the the million effects diminishes marketplace and

recently coverage Shield and including expanded system Blue Blue Rezum the commercial year addition, Cigna. this Cross wins In obtained Anthem

revenue globalization double-digit progress broad expect to of We deliver and and Health our efforts. Pelvic in the growth portfolio Neuro and XXXX continued

X% and operational of XX. delivered in they quarter up our revenue and represent the full up for to and global X% up Neuromodulation XX%. year operational were revenue X% fourth 'XX. sales X XX% Rhythm Turning organic full sales were organic which in mix total sales, were Neuro and the up and The quarter fourth year plus

comprehensive our at month last on in our the NAND's investor remain both detailed As we Annual pipeline recent update brain pain and and portfolio exciting meeting, very modulation. bullish on

addition Neuromod optimize system, lead. patients. side therapy offers integrates with directionality the targeting results and The Neural Mark reduce for neural sales accelerate clinical of this to ability which our to cartesia and in approval in Navigator doubling with the precise unwanted program. effects X, allows our by Vercise visualization CE for with simplify lead to led quarter enhanced to physician help DBS physicians programming unique were This provide which of

XXXX. strong We expect in in continued momentum DBS

also sequentially spinal from quarter stimulation quarter global sales in fourth cord Our third 'XX. improved to

full-year, patient and the XXXX believe in product from return well growth new data as For digits. sales the SCS broadly. SCS low as industry clinical we low-single more our team down rates, But and to were penetration launches given will market

SCS based patients same very paresthesia WaveWriter data at In of simultaneously presented randomized mechanisms different WaveWriter subperception In and provide month, responder last XX% therapy responder NANS is the to other the for only our by studies. which comparable one rate, pain. approved SCS the demonstrated FDA among alternating therapy, combination two rates action them clinical reported which suffering chronic the at targets an trial highest clinical three-month combo platform time of not

moderate exceeded for in RF our an complements acquisition pain pro performed stenosis. lumbar SCS in well goal Vertiflex year its therapy full Vertiflex and sales our with important and quarter represents million. portfolio of 'XX $XX Also, forma Ablation and patients the

CRM. to CRM as related digits. in patient a comps in faced after that ICD the mid-single-digit X% comp by with believe was sales with to end quarter quarter revenue the for full we US quarter fourth in tough growth to low-single in was was ICD in the revenue above-market growing quarter The fell caused the year. the up sales low-single Turning worldwide. global mid-single-digit fourth ICD 'XX. largely global quarter X% expected And Fourth fourth QX down the may softness fourth declining QX we primarily digits declines weakness in global

we our likely the fourth monitors the market 'XX while addition, fourth is estimate CRM low-single don't digits. all have best implantable In worldwide inputs, excludes cardiac which declined quarter quarter

launch mid-year, revenue revenue flat be Overall, on to market CRM diagnostic we S-ICD. more to cardiac due In defib growth which worldwide benefits, our failure the we and limited in continue to potentially LUX-Dx, expect remain XXXX, is line HeartLogic in XXXX, to we'll XXXX, to down but low-single by longevity track In do aim EMBLEM we digits. the revenue recognition implantable with to above-market to due our contribution expect in deliver monitor heart policies.

in in grew the for full quarter sales US EP the quarter. X% and and fourth X%, the grew sales year X%

Europe our XX% system. Importantly, in as led international very strong mapping up continued quarter full catheter double-digit well for year be as by growth in the and HDx launch in fourth for Japan, and sales markets XX% the to our RHYTHMIA major of up DIRECTSENSE the continued

mapping and to of which response strong enjoy map LUMIPOINT, utilizing user-defined areas illuminates to inputs to continue interpretation. the HD heart is next-gen by that the algorithm also We critical assist

to We technology in CE continue our and in to pipeline announce POLARx a US as EP isolation POLARx enrollment to to in pleased just received Europe. forward vein pulmonary in well globally IDE we've look We single-shot Europe, trial. market that bringing our for the beginning we're answer as Mark

market, single-shot while mapping So, overall, to we to portfolio our XXXX mapping. in expanding to do launch also increase and expect adding EP we're our continuing and growth the footprint, new the accelerate catheter to sales navigation features excited enabled as and of RHYTHMIA NAV enter

XX% Turning and this in grew operationally organically. sales to segment fourth cardiovascular, quarter XX%

For the offset Interventional from operationally, by a X% tough Peripheral Interventions by and XX% XX% of of XX% BTG year full acquisition. Medicine comparisons due growth Asia-Pac basis for and a XXXX the accounted well and our for the in the an basis company to for PI total manufacturing sales as the sales. for competitor's the full issue Eluvia, and ago. full organic, year decline year on slight was an strong and one organic the double-digit in as Legacy was US launch operational growth year growth with X% X% XX% US driven grew in quarter on quarter

Medicine with with Oncology. Interventional growing growth expectations, Interventional high single-digit plus forma pro performed in line The in business X%

first the approvals similar as DCB, thereafter with acceleration last quarter growth global which as we supported of which Compare expect great trial, just by at week in as data LINC. integration head-to-head such of organic BTG, Ranger on in new the product well from trends new We PI is released important the XXXX

market, Cardiology grow continues to growth in above Interventional quarter. XX% organic revenue delivering nicely the and operational

for XX% We the year is in a IC versus organic of the quarter XXX-basis-point full X% the sales delivered X% which -- operational increase XX%, sales while were full 'XX, year. the XX growth up full year. and therapies coronary grew fourth For for

stent up the 'XX the in then sales led heart half polymer $XXX XX% vessels. growth Synergy an Europe achievement purpose-built launch. Strong and launching is bioresorbable as our structural large sales track IC will for over Megatron proximal to of the across now million the drove important second -- Synergy its overall a US is of 'XX. for in is on quarter. is versus revenue line end $XXX high which extension XXXX guidance XX% at structural to of market-leading platforms our million, Megatron Strong our be platform

to continue quarterly understand quarter including pursuit market strongest growth patient evidence as on of benefits achieved and fourth lower of risk to the development year the broader next-gen WATCHMAN three of clinical be number CHAMPION-AF US and and enhancements WATCHMAN WATCHMAN four and continued in launch lastly, FLX, expected we areas, and to focus of year, which important second as geographic product fourth rates and education, is its half head-to-head to study, populations countries.. patients in the other enrolled Japan the the such expansion in the in this

accounts continue approval. we and open to on track launch LOTUS to progress XX to be post the Edge Turning months the and with pleased TAVR, XXX of remain in first

market over limited recently Edge will We in received months. a in It LOTUS approval reimbursement coming the also Japan. release be

neo forward mid-year. ACURATE the of neoX next-generation in launch grew in the the valve Our we offering super to and mid-teens Europe look quarter ACURATE annular

Sentinel, which help to elevate protection trial. TAVR is in approaching of to and focused Sentinel Sentinel over only is the quarter definitive in for patients cerebral believe that end, that overall a on penetration. we clinical US embolic clinical the the XX% will guidelines. will look TAVR forward Protected estimate evidence now procedural To the standard-of-care future We is stroke We become beginning this hospitals. influence device In continue that endpoint XXX to to at randomized enroll all US

mitral US Australia valve in pleased our targeting XXXX. annuloplasty the end entered feasibility enrollment the full in for are early the mitral study of have December We're we in range by in our the Finally, repair. field, Millipede to clinic in with

of excited long-term portfolio to and in combined billion our and with Millipede, about XXXX. Sentinel growth And we So WATCHMAN, of LOTUS, capabilities ACURATE, $XXX we're target Structural our prospects. $X revenue Heart million

slightly detailed, pharma full expectations. line also and our reporting forma I brought of fourth segments $XX to which down year year-over-year spec revenue outside pro $XXX also And million, in sales BTG three quarter million of is with

to to an wrap beyond. and I'd our their spirit patients. for record performance up, well-positioned strengthen like extremely winning our to that to exciting and we thank we're So and have And and XXXX commitment and future continue track believe that, employees in

a Now, things for our detailed I'll turn over of review to Dan financials.

Daniel Brennan

less headwind the Thanks, million revenue of of Fourth time headwind On $XX an $X.XXX billion, the exchange, foreign operational basis, Mike. and was the represents the million at consolidated reported $XX an from quarter growth XX.X% million $XX revenue growth slightly guidance. XX.X% revenue reflects than in to expected quarter.

X% legacy below BTG basis organic points. net contributing BTG in of Sales partially of Medicine from Pharmaceuticals, acquisitions, contributed XXX basis range X.X% and beads as quarter to embolic X%, points XXX basis Interventional basis XXX split points a at detailed. Specialty The our resulting offset the guidance points our by Vertiflex revenue between growth Mike range. organic was guidance of the the our and end points, contribution high basis acquisition contributed divestiture the Of XXX growth XXX portfolio the of

related tax as time share tax the earnings our to rate, as within tax at of year fourth of the above The impact $X.XX, Earnings and quarter, guidance full expected results Despite adjusted $X.XX items as range the excluding we well time growth year-over-year shortly. which growth both FX the tax QX well Board, detail were net adjusted healthy representing XXXX. higher across XX% in P&L year was expected earnings is announcement. benefit, full $X.XX $X.XX, I delivered tax QX The as of quarter the metrics immaterial operational to benefit the $X.XX of as and on our at per guidance. mix, approximate will than driven an share per the preliminary discrete benefit lower by XX%

the with guidance our was net revenue year the growth grew organic beads related our acquisitions in and and contribution X.X%. on line a approximately of XXXX was guidance BTG, growth of the our expectations full Vertiflex XXX reported of acquisitions below which on Operational Augmenix, Our growth slightly billion basis, basis includes operational slightly $XX.XXX consolidated basis from higher X.X% of to of NxThera, Claret, of as X.X% XX.X% was divestiture an and the than points portfolio.

year of of an our of fourth WATCHMAN above improvements, range XX% in for franchise. prior primarily net or the midpoint and manufacturing the strong mix just XX.X% margin represents Full tax to XX per and of was Adjusted sales the $X.XX X% improvement guidance earnings $X.XX benefit points gross share adjusted XXXX basis XXXX the our in growth quarter the base. over year favorable due FX driven by excluding

full of stents XXXX, The expectations gross our coronary was range line a gross price by with XXXX. impact was guidance primarily basis and improvement XX improvements year margin points basis to manufacturing margin our offset the full was over XX For points with XX.X% adjusted positive within a in represents adjusted erosion, and FX pacers. along in drug-eluting year and

and million were expenses year improvement guidance commitment basis need the we range, prior XX sales, operating the above initiatives QX primarily points of and to an to $X,XXX fund period. related our lower over of year, to acquisitions, sales SG&A but or Adjusted key control in with recent due optimization. the to [ph] XX.X% balanced our expense launches commercial Throughout the

a by decreased and points year adjusted XXXX spending able our result, guidance XX achieve were SG&A year-over-year As to full basis to we XX.X%.

of million gaining is from down $XXX fourth R&D sales, were certain traction to XX and our in also within investments or XX.X% due of expenses primarily XXXX, timing development efforts. points and basis research QX we're Adjusted the quarter which the efficiency

the full both were of roughly R&D sales for or periods. year-over-year expense X.X% year million to flat XX.X% was was Royalty XXXX. XXXX, in in which and XXXX, year expenses full $X,XXX the sales, XX.X% compared For of QX adjusted

is guidance operating XXX range XXXX to XX%. within and adjusted our XX% of a points basis margin of QX XX% As year-over-year improved result,

also full our rate of a We XX.X%, points improvement operating the representing year full XXXX. XX of with adjusted margin year met an basis commitment XXXX over

interest other was move to $XX the expense. $XX million below in line for Adjusted I'll and QX the now quarter XXXX. of million, compared interest expense to

include was the the XXXX expense offering, X.X% program. excluding $XX other QX in income rate bond a year on gain Adjusted was million to our Our sale exchange to $X due compared XXXX X.X% both and related a periods adjusted average interest net of to costs our in for foreign QX million, expense hedging Eurobond to of for compared or ago, QX certain XXXX. other in of to repurchase X.X% related available primarily quarter our investments expenses

For guidance the expenses full below and to adjusted and as to of million were from $XX the the increase the make-whole exercised XXXX the early resulting line well execute $XXX an in year due other in of of and line XXXX, adjusted expenses XXXX notes. call interest of million. This is expense BTG, total with million, $XXX in QX XXXX acquisition as largely retirement our respectively,

guidance tax quarter, tax a was tax rate. on as within XX% the operational for well the benefits full quarter fourth lower due approximately Our basis adjusted to X.X% an as year rate of discrete below our

rate X.X% tax the on full rate. X% adjusted year was approximately an Our tax guidance operational lower below to basis of due also our

and $X.X ownership closely transfers On align subsidiaries. a certain economic rate of our deferred included wholly-owned year our our quarter of property the current a to various business future operations. intellectual full benefit These the more fourth global property of tax rights our for and with GAAP transactions basis among intellectual billion rights related tax

used $XXX flow quarter We ended free million compared million, in of by with our the billion $XXX cash In shares weighted debt, approximately EBITDA on diluted we outstanding. Adjusted plan $X.XXX fully with X.XXX XXXX and XXXX of achieve times XXXX. BTG-related a ratio $XXX pay was down average end X.X million full leverage the billion the to of QX XXXX. for to quarter, primarily QX debt to cash year executing

hand of December As XX, of cash we million. XXXX on had $XXX

expenditures year-over-year than support adjusted launches. product guidance year mainly is in a $X XXXX capital capital flow and full result working new and of down requirements, as cash timing upcoming slightly Our inventory billion to of lower of the increased free

for continue XXXX full for free year the future would cash target and $X.X to XX% flow goal adjusted flow which XXXX. over double-digit free billion, our growth We growth is cash adjusted represent

resolve legal recorded have December million work to which sequential we fourth charge Medsystems. in increase This litigation. net a in otherwise the we decreased litigation continue GAAP million primarily litigation-related Channel $XXX of drove On reserve XXXX, quarter, to as million of to our basis, related $XXX would sequentially $XXX mesh fully XX, with as a the total to

are existing anticipated of expect known which payments XX% $XXX of resolve settled into Over the remaining mesh. then contingencies the pay XXXX, we settlement stages of million final funds the to all to qualified or settlement in related and all claims significant in will

the settlement is are liability this reminder, sheet qualified balance to plan. a our out payments As released from funds as made of

the million primarily Capital full $XXX XXXX and timing $XXX launches. in of anticipation of end certain million XXXX XXXX range in high expenditures to our due of million, totaled the year capacity to from above for manufacturing $XXX pull-forward some product

$XXX We capacity, capital position million $XXX to for acquisitions growth. as continue company and we range million be build of to for in to expenditures integrate a XXXX, the expect

I'll guidance for and year XXXX. now walk the full QX through

an growth divestiture which to organic approximate full BTG For on revenue X.X% year, the XX% reported basis, approximately X.X% portfolio. expect XXX-basis-point to the range an and acquisitions the beads Vertiflex corresponds contribution XX%, the with net be in a to to of of we XXXX from

divested As portfolio August, XXXX the operational will June organic for a as which included impact. of Vertiflex reminder, beads have at as in longer also time guidance is of and no BTG an

to XXXX. approximately foreign for exchange to $XX of year expect million We be full headwind the $XX million a

year. to as shortly, detail to expect due I'll neutral EPS to hedging impact for our be program, the However, we the FX

the dilutive mixed We material margin are do addition no anticipate products POLARx and total XX% to XXXX, challenges be will new Exalt-D, slightly over as high-growth with China manufacturing company be full higher which full year declines, of be sales by the due are biannual in a not gross usual price impact. percentage to adjusted from improvements for margin to initially and such approximately Edge. offset our than that for Japan year year expect as tenders, cuts improvement LOTUS We pricing as to gross to our expected FX

of expect benefits improvement cost adjusted XX XX.X% up and our as over execute on initiatives to assumes, also points to in XXXX, full XX%. optimization range We to we basis to be the year SG&A of This of continue underway. the XXXX. programs to recognize than a to currently is royalty adjusted rate sales less remain expect year of Full XX% expected and to XX.X% for of range we at X% our in R&D be

This of year previously goal operating basis XXXX implies which over of annual represents improvement full with a consistent adjusted of to basis margin points of approximately points XX improvement. outlined basis XX.X%, XXXX, XXX our points XX

of We towards goal continue XX% operating long-term make to margin. adjusted progress our

forecast our January. compensation. an of with full with XXXX an This consistent in standard rate approximately the XX% year disclosure tax points for be approximately rate accounting our stock XXX tax of adjusted to assumes approximately from We benefit XX%, operational basis

with hedging dilution the below payments, expenses include to VC portfolio million costs $XXX to be our from million adjusted which for $XXX the year. associated our We expect program and interest line approximately

QX diluted fully of billion X.XXX billion count XXXX. we year for approximately X.XXX share And average shares and full expect shares weighted XXXX for

to GAAP be and we XXXX earnings per expect range basis, earnings a growth year per the range we be earnings to On we adjusted share be a to XX% result, $X.XX of to of adjusted in for $X. a expect $X.XX to As representing if to $X.XX, in rates hold share expect FX neutral full XX% constant. year a

beads to Now the Vertaflex QX range to turning contribution from operational acquisitions, XX% the be we revenue BTG which the and XX%, approximately to to divestiture of XXXX, reported XXX-basis-point in XX% approximately XX% growth and growth represents net a anticipate of portfolio. an

our we year-over-year. the in without range of be a to business the impact On basis, an X.X% would organic Coronavirus believe X% of growth

impact the still the to to on of believe related it revenue QX we very a supporting However, patients and is our prudent employees assessing focused while the early include stages our impact China, in to Coronavirus. potential and highly we're in

supply preliminary other is time a a deferred this impact million at million estimate disruptions. to to $XX best $XX and result procedures, revenue negative Our of potential as chain

Although, expect will the be the procedures early, February in as is business to we see and spread usual it the March. reduction on highly not containing Chinese a all healthcare device non-emergency and of as system is for in thus, it volume medical in focused China, virus,

This of to guidance X% to impact growth year, $XX negative as QX X.X% results organic during in of million contemplates China year well day over but the the includes on day of roughly as the X%. recapture QX average other selling leap selling prior equates days extra to to ability offsets globally. remainder of weighted volume the the year. Note sequentially procedure X.X% given based this organic of the $XX XXXX some year, in an million Full year, that our to throughout one-half potential growth a lost of

$XX QX million on expect an approximate headwind. revenue to million foreign impact $XX be exchange the We to

results, in first is X% expected in a of per per to For earnings is a share $X.XX expected to $X.XX per share XX% share range per to growth and representing earnings quarter, of GAAP adjusted range be the be QX XXXX QX share, financial Please and to full item and year outlines XXXX share $X.XX including per website check Relations guidance. well per year for QX which highlights, operational guidance as full and Investor $X.XX P&L our line to share. as

So it moderate will I'll Susan, the who with turn back Q&A. to that,

Susan Lisa

one go minutes take as possible, to follow-up. XX limit Greg, Greg, yourself for please Dan. order one question or please related the us questions and as it next enable so. let's ahead. Thanks, many to to In open questions up to

Operator

[Operator comes Your Robbie line first of Thank from question Marcus you. from JP ahead. Instructions] the Morgan. go Please

Michael Mahoney

us? Robbie, can hear you

Robert Marcus

you me? Can hear I hear can you.

Michael Mahoney

now. you We hear

Daniel Brennan

hear can you. We

Robert Marcus

a you Maybe The could range XXXX. just little from historically. seen guidance we've is with for Great. start top-line wider the than you

of to? issues through the cadence launches important guidance product new lot just XXXX. walk to Maybe markets any the attention for a have new rationale in pay into and range wider You

Michael Mahoney

yes. Sure,

year guidance full organic. the So,

You We heard crazy our X.X in think X.X. company script size. a isn't points to the for basis there XXX wide range

half. that X.X% half, we the 'XX the in sense. first makes Similar second organic to 'XX, X.X% think in saw we So organic

we a similar expect so in And XXXX. trend

mentioned As various we also train and mentioned, for about impact second the second like, to we products, we hopefully, product we as quarter. half as And the as you'll cadence in expect organic. China the acceleration can if talk the M&A of as you'd see enter resolution potential the aim I due well a

and see grow of double-digit. we we'll second to expect half So our acceleration many businesses

to and XXXX. We expect as accelerate Endo, as well EP all UroPH in

We to fourth first expect put up PI to similar quarter. quarter a

Heart to plan. a $XXX million We in the important to on $X is as product launches billion, expect Structural which well as nice significant over And going acceleration integration guidance due we've PI, the increase XXXX. given also

confident the product launches we're revenue will the the 'XX to that in we all So divisions. we accelerate be in have organic across 'XX. And our did aim than faster execution, very in growth

Robert Marcus

just to the And JP expectations? Great. maybe that December you in versus due softer at further maybe you high into some power. when replacements on been why follow-up come were of replacements to dig Conference was pre-announced, and thought fourth softness Morgan the CRM any with up the able Have you in quarter and that

Michael Mahoney

Yes.

mentioned before, our QX to industry. the So comps. the early we impact in have had I across positive market all too of primarily think yet. volume mid-single-digit kind to we to comps. was receive data due We Similar still don't what the It's unit

so that And also think competitors faced and our yet and believe negative defib tougher share recorder Our in fourth the loop in a a lost competitors don't that some comp -- competitors don't comps in we we had quarter. did. sales. have include see We don't we than ICM their market we we

bit XXXX, think pure be to And a have for held in low basis, flat -- we the we think single-digit. to obviously market, than global project aim think CRM we to the full to years is do we zero the like-for-like year. So X% we a the We market defib, softer declining think market in and faster share to but like, we though. we grow the is expect market continue negative many in probably for growth we

Robert Marcus

you. Thank

Operator

from Please from Bank comes the question America. Hopkins line next Your of of ahead. go Bob

Robert Hopkins

and good you morning. Thank

excluding quarter. deceleration your of and over guidance last it even question of X% an assumptions first you've that. first quarters, like the China the the maybe first if experiencing about been in on to day just you're given selling to in that, providing quarter and the QX, use couple you to the does for easier ask feel question midpoint slower X% what Coronavirus So comp My wanted a from is growth that X% X% excluding the the

So this what just in conservative? slows you QX or last guys do you assume is of being to relative couple the quarters

Michael Mahoney

Sure. morning, Bob. Good

piece a look and I think important here. so look most the what So, year forth. an guidance global as 'XX half Dan selling the full as again, quarterly we in extra We aim organic very in growth, quarter we're provided calls accelerate at at is is well day, first there to the days we 'XX over when all we which and comfortable the

soft being well similar benefit the slight there. fourth few decelerate there's quarter little script mentioned quarter quarter, PI But expect So bit from Endo as quarter. a in do in as fourth -- a in first areas, we from to again in to as a see first first

So the line. as as of Japan stents. eluting some we And cuts, are drug-eluting in price overall stents those kind well also drug with pricing environment in challenges in see

of DBS and see to to expect full that anticipate market CRM continued in the nice quarter we we year do support about talked and have zero we But importantly, range. we mixed some launches growth coronary complex So negative to well. kind X% the first the in

through combination issue pricing extremely the businesses of the But some the then guidance And guidance other we pressures the mentioned, DBS which the first integration all of estimate XX quarter brings XX Heart company in as to combined outlined the China was impact, seeing well across X that Structural and with those in X.X our Dan BTG pre-Coronavirus the Coronavirus that from [ph]. to really quarter with down to I do of that X should we're and moving to first X.

Robert Hopkins

then do just the that you. Okay. expecting also sort And a hear QX? comments And what to love obvious Exalt-D on What follow-up then for of assume of little out see an a Endo maybe your slows I'd on you're year terms of bit as in you that. product? in in Thank

Michael Mahoney

Yes.

plans. Very to So in Endo our predictable say, businesses, quarter. our it's first one slightly not for the have uncommon I execution And good of would against is a them softer more company.

be to is average going the likely soft So above and slightly BSC above market.

probably launches encouraging. clip, full improvements they we see past and the a product -- they're to have digital over SpyGlass as our definition had new But first and we've want the big very, one their we the of at Exalt-D. And cases nice hemostasis very soft -- place few week as take is with the not look year, fair. So of there they set

are well. controlled the going of make a more a And so kind you're in quarter first to things sure going see to of launch

now A terms and Exalt then are quarter in coming. the of the organized with of the and in bigger impact in really half and being second significant placements in lot much the a each month scope of very acceleration in we're a impact second confident surgical contracting year, the capital

be think more with about and the results. we're track excited I on So early launch Exalt-D really couldn't

Robert Hopkins

you. Thank Great.

Daniel Brennan

bit on And just the math of then give to little you a the ranges.

range of QX terms So growth. organic the X% to X.X% Coronavirus revenue is for without the in

got you let to know X. to Just the how we to X

low the the of for took of X. to is for the the saying, the brings Coronavirus And end it's X%. we off less to then, basically Coronavirus high get the high the the X.X million, XX end X XX low the the to and similarly of of which of you end end that the midpoint took to risk of and So X.XX of XX high X end

from just it So X you X math little to bit X a how to as the to came that X.X. to to of give

Operator

Stanley. Your next the Please Lewis ahead. go line David question from comes of Morgan from

David Lewis

morning. Good

just sort Dan come expectations. I me. to for to back Coronavirus of want questions to two Just set

company. Maybe is quick declined. But the for of appreciate growth quarter seems half in accurate? the quarter. of XX% kind So year quick Then point what's actually like And of the what of of roughly last point you drove growth implying grew from given math, XXXX. in from last a China it that the business by to maybe that either Is grower first had XX% was slightly of or China follow-up. our I numbers, it kind a annual it year? guidance a first impact for China I a is focus kind X% those you're picking

Michael Mahoney

growing as about was Day, $XXX million Sure. about mean, about $XXX China business XXXX. we at XX%. I That Investor in talked business a million would our imply a

$XX that The team so million why it China ground. a guide. our the rough we that's That's simply So very today the in on to how XX month. and close size impacts obviously that's QX issues math the in and included the the they China XX are

the kick full saw, to of can we other the of as QX ability keep and year, X.X, intact. you back in to we For assume we volumes some the X.X China that within see that organic why those parts range that company could what procedural we get acute the raised nature potential to as it's revenue that's react X.X% the of But growth X.X% just and in it. with the

David Lewis

you then seeing are And impact. Okay. that

part You in that here January impact February? have seen the of early into

Michael Mahoney

As of going expected procedures you the for or news what the procedures days mean, sees is XXX was There on ago. it device -- look to number China, everybody in medical not I just be at XX days and QX such.

are in in planning an see we business So, impact QX. that to certainly,

David Lewis

Dan your that, of two us for acceleration talk second One, just so product two from for Maybe maybe what help And the just that revenue perspective products things or the understand acceleration? to and contribution to are half back second Augmenix for absolute big the related for Okay. half you those dollar acceleration. half a drivers a about then confidence year, in drives and just Mike. your that key maybe sort two Thanks just talked of much. kind guidance perspective? obviously, of products LOTUS And from

Michael Mahoney

Sure.

and led to contributor the about. the The the number biggest and be billion. the extremely But million to to launch on $X US half WATCHMAN is there new the the we have will FLX Structural big And excited going a Europe about well number have We are of that -- growth happen impacts second by of year in driver in Heart big WATCHMAN, clinical biggest the talk ones. hit a bigger just doing of things we could $XXX trials. with in that's

on growth strong very expect a WATCHMAN. we So

accounts. very well in LOTUS It's is market. kind of doing plan the for on XXX

see impact and quarter a greater full impact expect LOTUS you'll we year So see to there. of each

company in quarter Symetis well. and the above ACURATE Our grew is It second about half. mid-teens neoX average in we expect the grew and launching see doing valve, fourth the to

see BTG meaningful be Ranger in the PI, the in as BTG, in there. would half nice products impact will you stronger being will in that of XXXX, And improvements well legacy Heart have the year put as a And then up. revenue potentially second settled as from POLARx, impact. whole as half incremental in EP, quarterly launched ramp basket from which confident will a of integration I our position driver the mentioned, the So second that new of Structural big. half you'll be particularly EXALT we we're we and with say, on second I new

which NxThera, and Augmenix to is very, expect well and Cross. which reimbursement And as Blue shortly, well well, well you we'll Neuro $XXX and data doing is Cigna as did with, approvals continues as new mentioned, growing also very do over and five-year million from

of X.X% year Dan's some reinforce There's to number across That's exciting despite So in near-term range. very X.X% portfolio. the China this is full of comfortable really a issues we're why the things. to comment, with

Operator

comes of Your ahead. from Wise line next Stifel. Rick go Please question the from

Frederick Wise

they reusable ties go pricing comparability economic focus their But you how Hi. about to to talk to and you're could about Can acceleration we -- And us doctor Mike. Obviously, the move hospitals? equals pricing of making into ramp and and toward about to you're highlighted current that uncertain at maybe cost. I it talk Thanks if and Happily, reusable manufacturing the the us and just as we're you so docs technology? that Talk last confidence going your much. Exalt-D they to conversations full launch? about case usability how Good seemed the the If all want morning, sort very interested. a had interested, excited, Exalt-D. we've focus them of all current bunch some can and were lately. And try technology. of in-depth to on

Michael Mahoney

Thanks, Rick.

LithoVue -- digital and know a be product, the multi-year Those to in leveraged a -- key is So capabilities -- we the sterilization Exalt-D to require the teams it which and off this for will you learned think you of scopes been we've processes. has built as comparable, this existing have expense it The be the if usability criteria, blockbuster be that capabilities have with program as number functionality criteria. hit -- one will of SpyGlass.

the three that so team is And past on or that over years the focused years. has been the spec four

the around in involved so the a for the with visualization product We've product. the number confident design procedures. and a globe good number of And had years the and of quite we're multiple positions done the had elements key news we've is, of capabilities

platform Also, of I the think each the team, this we'll improvements device what's important the the make and able to within with capabilities year. with be to FDA-approved

the platform. And so enhancements like we've digital upgrade, LithoVue, you and done a with once-a-year to just will, to probably with expect see if

next and be with the enhance handles, period it that different right-handed, doesn't smaller per for once throughout year product user not that whether years. year reusables which is able to least you it's get a if at features this have. so competition as left-handed, many And the be is stagnant product we'll sometimes a the This

good. I spec as it that physicians So is us allow cadence to think will make please and the to

we you That's one have expect. that this. it. with as 'XX saw our the investment in lot reason ahead We've side, and manufacturing increase the been in investing of we capital the 'XX manage experience On a of to why volume

So with laid we second have the the and beyond. comfortable we're quarter acceleration with that in ramp out

to topic. tailwinds. kind potentially And of outpatient patient additional we $XXXX the potential know, $XXXX. economics within On reimbursement and to existing there's we're $X,XXX did $XX it, which We with the of to complicated $XX,XXX call you room receive reimbursement a help it believe it's roughly ample status, could as in FDA -- do at also, breakthrough the

within itself, on the portfolio it of leveraging the business contracting price own our have look pricing we to lots of terms business across Endo potentially In at capabilities its flexibility there. our and

Frederick Wise

that. for much Thanks all so

Operator

go Your question from ISI. Kumar ahead. next Please the of from Evercore Vijay line comes

Vijay Kumar

Thanks for taking my question.

and guidance So follow-up the had one on I one maybe then Mike for Dan.

half. On days had Heart comments in shouldn't but the second cadence products, last Structural year? versus on last the up similar cadence Structural the appreciate year to the around So be you comments the and midpoint? want half. in the And the second way factors, at the to are about range of just and itself half. at should which -- but just range think comfortable X.X% real Is I half new I [ph]? for the step I to mean, given market midpoint that first you're that the the impact on to recollect right If X.X%, all incremental the to or second just I wider get comfortable you a guidance QX appreciate our whether range sense Heart

Daniel Brennan

Sure. This Vijay. is Dan,

a gain look and second I controlled LOTUS the that in over we've that should that as the rollout mentioned should neoX half. out Sentinel. obviously on as launch comes that's fair the that had think, Structural you momentum Heart Mike So that's piece, at time very

that of XXXX. I goal that's commentary relative We is XXXX to for a to off to in specific Structural you full within obviously X.X% wouldn't Mike's guidance But accelerate fair number So think the our heard X.X% in the range then give year. Heart. organic

Vijay Kumar

on it Japan does That's XX the looks from helpful tender, impact I points impact coming just implying on a factors you're expansion? And margin? given margin like Dan, on mix one biannual is because in on basis gross here, BTG Dan. Thank is the you. heard it have the And operating then any in line, price the China cuts. think, I you margins mention those What specifically

Daniel Brennan

Yes. my WATCHMAN job launch here. I the from sure since question want because done that's to a as huge WATCHMAN the that make who well, FLX US a include friends on team, team fantastic for WATCHMAN I prior has Actually inception. in

across it, areas, have at look I in normal that cost go a as margin enterprise price to above manufacturing the price just we that of the be, and their the as impact, allow price and we the a have bit not year those improvements head couple On mentioned, China gross Japan poke the cut little this would more the summary biannual will north.

pricing mix, the pricing DES and Japan, three potentially equation manufacturing has then gross margin net improvements and is year of normal and on China and your Mike you have there, This acceleration cost the a increasing. The the front bit those with is as mentioned. you normally higher little some have

that would a XX% where that two the improvement, surprise we've and all that five gross to contribute -- pick netted last of to has So then builds what not to margin set. slow for the in lot margin which along operating ability saying just It's over all a gross years last range really that paid and margin terms of R&D up six years out SG&A should its be us. slack. years we or would approximately That's is in the been margin,

you that same XXXX. the saw in thing and XXXX should You in see

Vijay Kumar

guys. Thanks

Operator

Your next of question comes Fargo. Larry ahead. from from Wells Biegelsen line Please the go

Lawrence Biegelsen

One one Good morning. guys. Thanks complex for questions taking on on PCI, the Neuromodulation.

So your visibility business complex do PCI But a of well. a we that business lot continues have to really on. don't that's

and one for So of how sustainability follow-up. in about what you the my is, And question are Dan I XXXX feeling you growth had or that are drivers? business the Mike in

Michael Mahoney

really we've as our maybe and business do around DES business mentioned it's larger globe than continues in very the to That Sure. well important Asia-Pac. and most is

under more also less pricing is compared to more is say, that would us. stents. spot sweet I So and a helpful in for clinical also is our it orientation, requires strategically very It and business big which drug-eluting pressure,

of as But a big our touch around our and Ivis as have, the can as we new and it's is that complex and have So maybe focus well you as well that. other some globe on training the matches WOLVERINE really And innovation a Ian important. key how key on really PCI there we products. later products platform, rural see focus on portfolio cadence big a that

Ian Meredith

I of you've most Mark. said it think

thing think the I'd most I population is the say, is important aging. it's Larry,

of appearing is so later. disease the And burden

with to we're more age with patients for so surgery. seeing more later And the more comorbidities, suitable due complex less

the sheer complex is disease in actually just driving So the demographic of coronary late change age. burden

more complex requires So it interventions.

Lawrence Biegelsen

lot Dan, sure for different of your helpful Neuromodulation, expectations businesses and I if gave XXXX And color wasn't on the for helpful. a relative But Neuromodulation on heard XXXX. for XXXX. just to That's I you Mike

So basis? for how do business an taking to relative you on XXXX the see that organic Thanks XXXX questions guys. in

Michael Mahoney

accelerate say, business, I Yes. hopeful aim that We're Sure. would that versus -- 'XX. for we to

'XX the market at we year. extremely look you had the slow, and our prior business was If SCS slow comps was difficult

our out 'XX as heard And And some clinical SCS to well of detail also XXXX. expect of have as NANS, benefits and some improve so global that the in with we over you would business portfolio. at we the script,

for expectations DBS truly basis we good have would comp just improve. lot momentum I really to somewhat, the So, there. think in we that market a we Excellent studies And a expect of in see on you'll place on improve to and and there. additional some share with is platform product taking presented in the that of Europe taking clinical differentiation US being and the and touched some

the you So, will go organic and second Vertiflex, year. which have in the of half then

'XX than 'XX. in faster grow will Neuromodulator speaking broadly think we So

Lawrence Biegelsen

guys. questions the taking for Thanks

Operator

next the line ahead. go Your of comes Please Jennings question from Josh Cowen. from

Josh Jennings

Hi, help understand comments Cardiology China program are us the first you there are that that business granular? get WATCHMAN as potential of by Thanks there good around for today help premium just for second of then over boost I to on terms the nice bit hump us current it risk I little headwind. get provided kind just on And it Cardiovascular the pricing get more waiting your any Can in patients? that more FLX. in a question you details China, WATCHMAN questions, FLX FLX different you deeper a from categories in just Is help driver. of a exposure will And morning. FLX broad-based? being on to Thanks. more open procedures questions. And start can penetration or its accounts WATCHMAN exposed WATCHMAN Interventional XQ it is unit? the you'll or Many mean, the taking But most up WATCHMAN launch? understand accounts just is to out just two

Daniel Brennan

the I preventing and treating being reliant well-diversified of the business The vast the pretty reflects of can one, as of first what's the have, particular resources China Coronavirus the on of at we mentioned, take one our very that do clear is It's risk mix. But on there. start of going are as news It's team think, our in healthcare can all China the are you and Mike, second on the a business. all spread and focused that on diagnosing, I in not within a portfolio Josh. one. good majority procedures on delayed. Sure,

contemplates look particular the division that don't So another basket XX quarter. and it, here or first as in the we Boston XX we at business say its we market Scientific of and the that whole could to impact see

Michael Mahoney

And capability we Yes. I it a in Ian can Europe. WATCHMAN on because we opening, not of FLX, Dr. Stein in seen or taking But have terms that And it's more think as US, in we FLX. haven't share Europe, the in on comment WATCHMAN seen of don't what centers we've well. have been

current openings wouldn't drive new going center already to receive WATCHMAN. with we So it's that think don't we sort of the

about We'll on and to -- speak we're continue utilization, for metric further continue confidence Japan. they increase other key our to have FLX, to continue countries. utilization US We're can in rates, which the to -- seeing ramp I confidence in is think in will the profile rates. that. WATCHMAN it's up will it's But We're with that all physicians more which and or broadly believe utilization in the centers turning to them enhance which the FLX US. our we WATCHMAN are give more expanding safety and so expanding open

Ian Meredith

some and being driving trial actually easier the think terms and direct building to we've in to increased And our substantial awareness I that. of utilization. [ph] -- the enhancement utilization is procedural enhancements build the simpler which that And announced highly education the or physicians add a and just physician immediately FLX trial to patient, And of helps to the WATCHMAN WATCHMAN to I'd strategies, to fact is I'd major let utilization utilization we're and third the awareness valuable part of versus FLX then the increasing is say that a enhancements. direct and use, mere education through procedural doc procedural key therefore the effective. strategies recapture to recognize evidence. CHAMPION drivers

positive. things think I will So be very

Susan Lisa

us conclude With interest your Thanks appreciate we'd BSX. Great. joining that in the for today. like call. to We

will the we give Before the details disconnect, Greg, you all pertinent for replay.

Operator

through will Time XXth. you. and available be XX:XX February replay Thank after gentlemen, today for this Eastern Ladies conference

and system XXXX-XXX-XXXX Executive the the access access dialing AT&T code access once replay or time again number at XXX-XXX-XXXX. International the may by with You dial any entering Those XXXXXXX. are XXXXXXX. code XXX-XXX-XXXX participants XXXX-XXX-XXXX

for conference your conclude today. for AT&T you Teleconferencing. does for participation That your using Thank and

disconnect. now may You

Boston Scientific (BSX) 5 Feb 202019 Q4 Earnings call transcript