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Tag: Quiet Generators

Later we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions]. As a reminder, this conference call is being recorded and will be available for future on-demand replay through the Bard website.

Today's presentation will be hosted by Timothy M. Ring, Chairman and Chief Executive Officer along with John H. Weiland, President and Chief Operating Officer; Todd C. Schermerhorn, Senior Vice President and Chief Financial Officer; and John A. DeFord, Senior Vice President, Science, Technology and Clinical Affairs. Also in attendance today are Frank Lupisella, Vice President and Controller; and Eric J. Shick, Vice President, Investor Relations.

Today Bard's management will discuss some forward-looking statements, the accuracy of which are necessarily subject to risks and uncertainties. Please refer to the cautionary statement regarding forward-looking information and the information under the caption risks factors and the company's 2007 10-K, including disclosure of the factors that could cause actual results to differ materially from those expressed or implied.

During the call, references will be made to certain non-GAAP measure, which management believes provide and additional and meaningful assessment of the core operating performance of the company and its individual product franchises. Reconciliations of non-GAAP measures to the most comparable GAAP measures are . All information that is not historical is given only as of April 23rd, 2008 and the company undertakes no responsibility to update any information Quiet Generators. Unless otherwise noted, all comparisons are to the prior year period.

At this time, I will turn the call over to Mr. Timothy Ring. Please go ahead.

Timothy M. Ring - Chairman and Chief Executive Officer

Thank you Greg. I'd like to welcome everybody to Bard's first quarter '08 earnings call, and thank you all for taking the time to join us today. I would expect the presentation portion of the call to last around 25 to 30 minutes. The agenda today will go as follows. I'll begin with an overview of the results for the first quarter. John Weiland, our President and COO will review first quarter product line revenue. Todd Schermerhorn, our Senior VP and CFO will review the first quarter income statement and balance sheet as well as our expectations for Q2 and then John DeFord, our Senior VP Technology and Clinical Affairs, will give you an update of our product development pipeline and then will close with Q&A.

Looking at the first quarter net sales totaled $584 million. This is an increase over the first quarter of '07 of 11% on an as reported basis and 8% on a constant currency basis. Currency impact for this quarter versus the same quarter in '07 was favorable by about 250 basis points. Income from continuing ops for the first quarter of '08 was $78 million and associated diluted EPS were $0.76. As reported, income and diluted EPS from continuing operations were down 23% and 20% respectively, compared to the prior year periods.

Excluding purchased R&D primarily for the Edwards LifeStent deal. First quarter '08 income and diluted EPS from continuing ops were $109.1 million and $1.06, up 7% and 12% respectively over the prior year period. For your reference, the adjustments for our results are detailed to reconcile to GAAP results in that tables and notes for the financial statement and our press release, and also on our website.

Taking a look at revenue geographically on a constant currency basis, first quarter net sales in the U.S. increased 7%, Europe grew at 13%, Japan increased 6%, and the other international entities grew a total of 8%. Looking at net sales growth by product line in Q1, our oncology category grew within our full year '08 constant currency guidance while vascular and urology were just slightly below. As expected, our surgical business experienced a difficult quarter as a result of a challenging comp in the prior year period, compounding the difficult comp was a hold on the sale of our Salute II product for much of the quarter and increased backorders in our performance irrigation businesses.

I would tell you on a more positive note, our core hernia sales have improved in each of the last two quarters. So, it looks like Q3 of last year was likely the inflection point for the trend in the core hernia business. John Weiland will give you more details of that in the discussion. As you know effective execution is critical to the success of our strategy, and right now we are just not seeing it in our surgical business.

Beyond closing the Edwards deal in Q1, we did announce the signing an agreement to acquire Specialized Health Products International or SHPI. They are small developer, manufacturing and marketer of vascular access products primarily Safety-Winged Infusion Sets, which are used to deliver therapeutic agents through vascular access ports. In that deal, we did recently receive Hart-Scott-Rodino clearance and anticipate closing the transaction around the middle of the year, following approval by the shareholders of SHPI and the satisfaction of other customary closing conditions.

During the quarter, we also closed on a small technology based transaction in our biopsy business. The technology is pretty exciting, and we anticipate seeing a product launch around the second half of '09. So, we will give you more details around that timeframe. We continue to pursue opportunities like these and the others we've done in the last several quarters including UltraClip, Therma-Stor, Sepramesh and then LifeStent.

In summary, outside of our surgical business, it was a pretty good quarter. Todd will get to that guidance shortly, but we expect improving revenue growth rates and continued solid bottom-line results as the year progresses.

And let me turn you over to John Weiland for an overview of our product line revenue.