-
Revenue of $7.5 Billion
Increased 6.1% Reported; Increased 7.5% Organic
-
GAAP Diluted EPS of $0.82;
Non-GAAP Diluted EPS of $1.22
-
Cash Flow from Operations of
$2.9 Billion in First Six Months vs. $1.6 Billion in Prior Year;
Free Cash Flow of $2.4 Billion in First Six Months vs. $1.1 Billion
in Prior Year
-
Company Increases FY19 Organic
Revenue Growth Guidance
DUBLIN - November 20, 2018 -
Medtronic plc (NYSE: MDT) today announced financial results for its
second quarter of fiscal year 2019, which ended October 26,
2018.
The company reported second quarter worldwide
revenue of $7.481 billion, an increase of 6.1 percent as reported
or 7.5 percent on an organic basis, which adjusts for a $95 million
negative impact from foreign currency. As reported, second quarter
GAAP net income and diluted earnings per share (EPS) were $1.115
billion and $0.82, respectively. As detailed in the financial
schedules included through the link at the end of this release,
second quarter non-GAAP net income and non-GAAP diluted EPS were
$1.660 billion and $1.22, respectively, both increases of 14
percent. Adjusting for a positive 1 cent impact from foreign
currency, second quarter non-GAAP diluted EPS increased 13
percent.
Second quarter U.S. revenue of $4.045 billion
represented 54 percent of company revenue and increased 8.3 percent
as reported. Non-U.S. developed market revenue of $2.282 billion
represented 31 percent of company revenue and increased 1.8 percent
as reported and 3.1 percent on a constant currency basis. Emerging
market revenue of $1.154 billion represented 15 percent of company
revenue and increased 7.3 percent as reported and 13.5 percent on a
constant currency basis.
"This was an outstanding quarter for Medtronic. We
are executing on multiple fronts, resulting in robust top-line
growth, solid margin expansion, and increasing free cash flow,"
said Omar Ishrak, Medtronic chairman and chief executive officer.
"Yet, even more exciting than our results this quarter is the
progress we are making on our new product pipeline, which is
stronger than at any time in our company's history."
Cardiac and Vascular
Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm
& Heart Failure (CRHF), Coronary & Structural Heart (CSH),
and Aortic, Peripheral & Venous (APV) divisions. CVG worldwide
second quarter revenue of $2.858 billion increased 3.1 percent, or
4.4 percent on a constant currency basis. CVG revenue performance
was driven by high-single digit growth in CSH and APV, and
low-single digit growth in CRHF, all on a constant currency
basis.
-
CRHF second quarter revenue
of $1.472 billion increased 0.3 percent, or 1.4 percent on a
constant currency basis. Arrhythmia Management grew in the
mid-single digits on a constant currency basis, driven by
high-single digit constant currency growth in Pacing on strong
sales of the Micra® Transcatheter
Pacing System and the Azure® wireless
pacemaker. Arrhythmia Management results were also driven by
high-twenties growth of the TYRX® Absorbable
Antibacterial Envelope and mid-teens growth in AF Solutions, both
on a constant currency basis.
-
CSH second quarter revenue
of $906 million increased 6.1 percent, or 7.8 percent on a constant
currency basis, led by mid-teens constant currency growth in
transcatheter aortic valves resulting from the global strength of
the CoreValve®
Evolut® PRO. Coronary
grew in the mid-single digits on a constant currency basis, driven
by mid-single digit growth of drug-eluting stents, low-double digit
growth of coronary balloons, and high-teens growth of guide
catheters, all on a constant currency basis.
-
APV second quarter revenue
of $480 million increased 6.2 percent, or 7.3 percent on a constant
currency basis. The strength in the division was broad based, with
high-teens growth in endoVenous given strong demand for the
VenaSeal(TM) closure system, low-double digit growth of the
IN.PACT(TM) Admiral(TM) drug-coated balloon (DCB) with continued
strength in Japan, and mid-single digit growth in abdominal aortic
aneurysm (AAA) stent graft systems.
Minimally Invasive Therapies
Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical
Innovations (SI) and the Respiratory, Gastrointestinal & Renal
(RGR) divisions. MITG worldwide second quarter revenue of $2.047
billion increased 4.9 percent, or 6.8 percent on a constant
currency basis. MITG revenue performance was balanced by
high-single digit constant currency growth in both SI and RGR.
-
SI second quarter revenue
of $1.393 billion increased 4.4 percent, or 6.6 percent on a
constant currency basis, driven by low-double digit constant
currency growth in Advanced Energy resulting from the strength of
the LigaSure(TM) vessel sealing instruments with innovative
nano-coating and Valleylab(TM) FT10 energy platform. Advanced
Stapling grew in the high-single digits on a constant currency
basis, driven by strong demand for Tri-Staple(TM) 2.0 endo stapling
specialty reloads and the Signia(TM) powered stapler.
-
RGR second quarter revenue
of $654 million increased 5.8 percent, or 7.3 percent on a constant
currency basis. Growth was driven by Patient Monitoring, which grew
in the high-single digits on a constant currency basis as a result
of strength in Nellcor(TM) pulse oximetry. GI Solutions grew in the
low-double digits on a constant currency basis, led by a strong
performance in GI Diagnostics. Renal Care Solutions grew in the
mid-single digits on a constant currency basis, driven by strength
in renal access products.
Restorative Therapies
Group
The Restorative Therapies Group (RTG) includes the Spine, Brain
Therapies, Specialty Therapies, and Pain Therapies divisions. RTG
worldwide second quarter revenue of $1.993 billion increased 7.0
percent, or 7.8 percent on a constant currency basis. Group results
were driven by high-teens growth in Pain Therapies, low-double
digit growth in Specialty Therapies, high-single digit growth in
Brain Therapies, and flat results in Spine, all on a constant
currency basis.
-
Spine second quarter
revenue of $656 million decreased 0.5 percent or increased 0.2
percent on a constant currency basis. When combined with the
company's sales of enabling technology used in spine surgeries,
including robotics, navigation, imaging, and powered surgical
instruments that are recognized in the Brain Therapies division,
global Spine revenue grew in the low-single digits on a constant
currency basis and U.S. Core Spine increased in the mid-single
digits on a constant currency basis. Posterior Cervical grew in the
low-double digits on a constant currency basis, driven by the
recent launch of the Infinity(TM) OCT System.
-
Brain Therapies second
quarter revenue of $618 million increased 7.5 percent, or 8.7
percent on a constant currency basis. Neurovascular grew in the
mid-teens on a constant currency basis, with high-twenties constant
currency growth of stents for acute ischemic stroke, including the
Solitaire(TM) Platinum. Neurovascular also had strength in neuro
access products, coils and intrasaccular therapies, and flow
diversion products. Neurosurgery grew in the high-single digits,
led by strong capital equipment sales of the
StealthStation® S8 surgical
navigation system, Mazor X(TM) robotic guidance system, and
Visualase® MRI-guided
laser ablation system.
-
Specialty Therapies second
quarter revenue of $405 million increased 11.0 percent, or 11.5
percent on a constant currency basis. Results were led by mid-teens
constant currency growth in Pelvic Health on strong sales of the
InterStim(TM) II system.
-
Pain Therapies second
quarter revenue of $314 million increased 18.9 percent, or 19.7
percent on a constant currency basis. The division had strong,
mid-thirties constant currency growth in Pain Stimulation on the
continued strength of the Intellis(TM) platform for spinal cord
stimulation, as well as low-double digit constant currency growth
in Targeted Drug Delivery.
Diabetes Group
The Diabetes Group includes the Advanced Insulin Management (AIM)
and Emerging Technologies divisions. Diabetes Group worldwide
second quarter revenue of $583 million increased 26.2 percent, or
27.5 percent on a constant currency basis. The group is
experiencing strong, sustained global demand for its
sensor-augmented insulin pump systems.
-
AIM second quarter revenue
grew in the mid-twenties on a constant currency basis, driven by
the sustained U.S. market demand for the MiniMed® 670G
hybrid closed loop insulin pump system with the Guardian®
sensor 3. AIM launched the MiniMed® 670G in
several European countries in the quarter, and initial user
feedback has been very positive. The global adoption of its
sensor-augmented insulin pump systems has resulted in strong sensor
attachment rates, with integrated CGM sales growing in the
mid-sixties on a constant currency basis.
-
Emerging Technologies
second quarter revenue more than doubled on a constant currency
basis, driven by the ongoing launch of the Guardian®
Connect CGM system with Sugar.IQ(TM) personal diabetes
assistant.
Guidance
The company today updated its fiscal year 2019 guidance.
For fiscal year 2019, the company is increasing
its organic revenue growth guidance from a range of 4.5 to 5.0
percent to a range of 5.0 to 5.5 percent. If recent exchange rates
hold for the remainder of the fiscal year, the company's fiscal
year 2019 revenue would be negatively affected by approximately
$420 million to $520 million.
Medtronic's operational outperformance in the
first half of fiscal year 2019 is allowing the company to absorb
incremental expenses, including an increased impact of foreign
exchange since the beginning of the fiscal year and expected
impacts of China tariffs and the pending Mazor acquisition in the
second half of the fiscal year, such that the company is
maintaining its fiscal year 2019 diluted non-GAAP EPS guidance in
the range of $5.10 to $5.15. If recent exchange rates hold for the
remainder of the fiscal year, foreign exchange would have a neutral
impact on the company's fiscal year 2019 EPS, implying a constant
currency EPS growth forecast of 9 to 10 percent.
"Our end markets are strong, and we are leading in
most of the fastest growing markets in medical technology," said
Ishrak. "Over the remainder of this fiscal year and into fiscal
2020, we expect to develop and bring to market a number of
innovative new technologies, which will improve the lives of
millions of people around the world, help healthcare systems become
more efficient, and generate significant value for our
shareholders."
Webcast Information
Medtronic will host a webcast today, November 20, at 8:00 a.m. EST
(7:00 a.m. CST) to provide information about its businesses for the
public, analysts, and news media. This quarterly webcast can be
accessed by clicking on the Investor Events link at
investorrelations.medtronic.com and this earnings release will be
archived at newsroom.medtronic.com. Medtronic will be live tweeting
during the webcast on its Newsroom Twitter account, @Medtronic.
Within 24 hours of the webcast, a replay of the webcast and
transcript of the company's prepared remarks will be available by
clicking on the Investor Events link at
investorrelations.medtronic.com.
Financial Schedules
To view the second quarter financial schedules and non-GAAP
reconciliations, click here. To view the second quarter earnings
presentation, click here. Both documents can also be accessed by
visiting newsroom.medtronic.com.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin,
Ireland, is among the world's largest medical technology, services
and solutions companies - alleviating pain, restoring health and
extending life for millions of people around the world. Medtronic
employs more than 86,000 people worldwide, serving physicians,
hospitals and patients in more than 150 countries. The company is
focused on collaborating with stakeholders around the world to take
healthcare Further, Together.
FORWARD LOOKING
STATEMENTS
This press release contains forward-looking
statements, which are subject to risks and uncertainties, including
those described in Medtronic's periodic reports and other filings
with the U.S. Securities and Exchange Commission (the "SEC").
Anticipated results only reflect information available to Medtronic
at this time and may differ from actual results. Medtronic does not
undertake to update its forward-looking statements or any of the
information contained in this press release. Certain information in
this press release includes calculations or figures that have been
prepared internally and have not been reviewed or audited by our
independent registered public accounting firm, including but not
limited to, certain information in the financial schedules
accompanying this press release. Use of different methods for
preparing, calculating or presenting information may lead to
differences and such differences may be material.
NON-GAAP FINANCIAL
MEASURES
This press release contains financial measures and
guidance, including adjusted net income and adjusted diluted EPS,
which are considered "non-GAAP" financial measures under applicable
SEC rules and regulations. References to quarterly figures
increasing, decreasing or remaining flat are in comparison to the
second quarter of fiscal year 2018.
Medtronic management believes
that non-GAAP financial measures provide information useful to
investors in understanding the company's underlying operational
performance and trends and to facilitate comparisons with the
performance of other companies in the med tech industry. Non-GAAP
net income and diluted EPS exclude the effect of certain charges or
gains that contribute to or reduce earnings but that result from
transactions or events that management believes may or may not
recur with similar materiality or impact to operations in future
periods (Non-GAAP Adjustments). Medtronic generally uses non-GAAP
financial measures to facilitate management's review of the
operational performance of the company and as a basis for strategic
planning. Non-GAAP financial measures should be considered
supplemental to and not a substitute for financial information
prepared in accordance with U.S. generally accepted accounting
principles (GAAP), and investors are cautioned that Medtronic may
calculate non-GAAP financial measures in a way that is different
from other companies. Management strongly encourages investors to
review the company's consolidated financial statements and publicly
filed reports in their entirety. Reconciliations of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures are included in the financial schedules accompanying this
press release.
Medtronic calculates
forward-looking non-GAAP financial measures based on internal
forecasts that omit certain amounts that would be included in GAAP
financial measures. For instance, forward-looking revenue growth
projections exclude the impact of foreign currency fluctuations.
Forward-looking non-GAAP EPS guidance also excludes other potential
charges or gains that would be recorded as Non-GAAP Adjustments to
earnings during the fiscal year. Medtronic does not attempt to
provide reconciliations of forward-looking non-GAAP EPS guidance to
projected GAAP EPS guidance because the combined impact and timing
of recognition of these potential charges or gains is inherently
uncertain and difficult to predict and is unavailable without
unreasonable efforts. In addition, the company believes such
reconciliations would imply a degree of precision and certainty
that could be confusing to investors. Such items could have a
substantial impact on GAAP measures of financial
performance.
Mazor X is a trademark of Mazor Robotics.
-end-
View FY19 Second Quarter Financial Schedules &
Non-GAAP Reconciliations
View FY19 Second Quarter Earnings Presentation
Contacts:
Fernando Vivanco
Public Relations
+1-763-505-3780
Ryan Weispfenning
Investor Relations
+1-763-505-4626
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medtronic plc via Globenewswire
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