IRVINE -
Third Quarter Highlights and Outlook
Sales of
TAVR global sales grew 6%
EPS was
TMTT clinical trials now enrolling at pre-COVID levels
2020 adjusted EPS guidance increased to
2021 TAVR sales expected to return to double-digit growth
'I am very proud of the way our passionate team is serving patients during this difficult period. Our supply chain has delivered and our field team has continued to support the dedicated clinicians that count on Edwards,' said
Third Quarter 2020 Results
Sales for the quarter ended
Transcatheter Aortic Valve Replacement (TAVR)
For the quarter, the company reported global TAVR sales of
'Our observations indicate that most hospitals globally have determined that they can safely treat their aortic stenosis patients in need at the same time they care for COVID patients,' said Mussallem.
Transcatheter Mitral and Tricuspid Therapies (TMTT)
Edwards continues to view the TMTT opportunity as one with significant unmet patient needs and the potential to drive significant growth. The company's focus is on the advancement of three key value drivers, which it believes are the leading indicators of success: the company's portfolio of differentiated therapies, favorable real-world clinical outcomes and results from rigorous pivotal trials which will ultimately support approvals and adoption.
Third quarter global sales were
'We continue to believe the TMTT opportunity remains significant and expect a
Surgical Structural Heart and Critical Care
Surgical Structural Heart sales for the quarter were
Critical Care sales were
Additional Financial Results
For the quarter, the company's adjusted gross margin was 75.5%, down from 75.9% in the prior year quarter. This decrease was driven by a negative impact from foreign currency fluctuations and incremental costs associated with responding to COVID, partially offset by improved manufacturing efficiencies.
Selling, general and administrative expenses in the third quarter were
Research and development expenses in the third quarter were
Free cash flow for the third quarter was
Cash and investments totaled
Outlook
For the fourth quarter of 2020, the company anticipates year-over-year underlying sales growth similar to the third quarter. The company is raising the bottom end of full-year 2020 adjusted earnings per share guidance to
'Edwards is a dedicated member of the critical healthcare infrastructure and I admire the agility, resourcefulness and passion of our employees in maintaining their important work on behalf of patients. Putting patients first has never been more important than it is today,' said Mussallem. 'I'm grateful for our extraordinary team and partners, and I am optimistic about the future of continuing to deliver innovations to patients around the world.'
About
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can sometimes be identified by the use of words such as 'may,' 'will,' 'should,' 'anticipate,' 'believe,' 'plan,' 'project,' 'estimate,' 'potential,' 'predict,' 'early clinician feedback,' 'expect,' 'intend,' 'guidance,' 'outlook,' 'optimistic,' 'aspire,' 'confident' or other forms of these words or similar expressions and include, but are not limited to, statements made by
Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements. Factors that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements include risk and uncertainties associated with COVID-19 pandemic, clinical trial or commercial results or new product approvals and therapy adoption, particularly in TAVR and TMTT; unpredictability of product launches; competitive dynamics; changes to reimbursement for the company's products; the company's success in developing new products and avoiding manufacturing and quality issues; the impact of currency exchange rates; the timing or results of R&D and clinical trials; unanticipated actions by the
Non-GAAP Financial Information
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ('GAAP'), the Company uses non-GAAP historical financial measures. Management makes adjustments to the GAAP measures for items (both charges and gains) that (a) do not reflect the core operational activities of the
Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results, and evaluating current performance. These non-GAAP financial measures are used in addition to, and in conjunction with, results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations by investors that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting the Company's business and facilitate comparability to historical periods.
Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.
Fluctuations in exchange rates impact the comparative results and sales growth rates of the Company's underlying business. Management believes that excluding the impact of foreign exchange rate fluctuations from its sales growth provides investors a more useful comparison to historical financial results. The impact of foreign exchange rate fluctuations has been detailed in the 'Reconciliation of Sales by
Guidance for sales and sales growth rates is provided on an 'underlying basis,' and projections for diluted earnings per share, net income and growth, gross profit margin, taxes, and free cash flow are also provided on a non-GAAP basis as adjusted for the items identified above due to the inherent difficulty in forecasting such items. The Company is not able to provide a reconciliation of the non-GAAP guidance to comparable GAAP measures due to the unknown effect, timing, and potential significance of special charges or gains, and management's inability to forecast charges associated with future transactions and initiatives.
Management considers free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by business operations, after deducting payments for capital expenditures, which can then be used for strategic opportunities or other business purposes including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock.
Contact:
Tel: 949-250-5070
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