0001099800false00010998002024-07-242024-07-24
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 24, 2024
EDWARDS LIFESCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
| Delaware | | 1-15525 | | 36-4316614 |
(State or other jurisdiction
of incorporation) | | (Commission
file number) | | (IRS Employer
Identification No.) |
One Edwards Way
Irvine, California 92614
(Address of principal executive offices and zip code)
(949) 250-2500
(Registrant's telephone number, including area code)
| | |
| N/A |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $1.00 per share | EW | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 24, 2024, Edwards Lifesciences Corporation, a Delaware corporation (“Edwards”), issued a press release setting forth Edwards’ financial results for the second quarter of 2024. A copy of the press release is furnished as Exhibit 99.1, and is incorporated herein by reference.
The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.
Item 7.01. Regulation FD Disclosure.
On July 24, 2024, Edwards Lifesciences Corporation (the “Company”) issued a press release announcing the Company has entered into an agreement to acquire JenaValve Technology, Inc. (“JenaValve”), a medical device company focused on the transcatheter treatment of aortic regurgitation.
In the same press release, the Company also announced that it has exercised its option to acquire Endotronix, Inc. (“Endotronix”), a medical device company that recently received Premarket Approval from the U.S. Food and Drug Administration (“FDA”) for its Cordella Sensor, an implantable pulmonary artery pressure sensor allowing early, targeted therapeutic intervention.
A copy of the press release is attached as Exhibit 99.2 and is incorporated herein by reference. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
In connection with the Company’s acquisition of JenaValve and Endotronix, the Company expects to pay a total upfront purchase price of approximately $1.2 billion in cash at the closing of these acquisitions, plus up to an additional $445 million upon the achievement of certain milestones. Each of the JenaValve and Endotronix acquisitions is subject to the satisfaction or waiver of certain closing conditions.
Forward-Looking Statements
This report includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. 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,” “expect,” “intend,” “guidance,” “outlook,” “optimistic,” “aspire,” “confident” or other forms of these words or similar expressions and include, but are not limited to, expectations regarding the completion of the Company’s acquisitions of JenaValve and Endotronix, including the probability and price thereof. No inferences or assumptions should be made from statements of past performance, efforts, or results which may not be indicative of future performance or results. Forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though they are inherently uncertain, difficult to predict, may be outside of the Company’s control, and may be subject to the satisfaction of certain customary conditions. The Company’s forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If the Company does update or correct one or more of these statements, investors and others should not conclude that the Company will make additional updates or corrections.
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, but are not limited to: (i)
the Company may be unable to close the acquisitions of each of JenaValve and Endotronix, which may materially and adversely affect the Company’s business and the price of its common stock; (ii) the occurrence of any event, change or other circumstance that could cause the Company to abandon the acquisitions of either or both of JenaValve and Endotronix; (iii) risks related to disruption of management’s attention from the Company’s ongoing business operations; (iv) the effect of the announcement or the pendency of the acquisitions on the Company’s relationships with its customers, operating results and business generally; (v) potential significant transaction costs associated with either or both acquisitions; (vi) the outcome of any legal proceedings or regulatory actions to the extent initiated against the Company or others related to either or both acquisitions; (vii) the ability of the Company to execute on its strategy and achieve its goals and other expectations after the closing of either or both acquisitions; (viii) legal, regulatory, tax and economic developments affecting the Company’s
business; (ix) the unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism, outbreak of war or hostilities or current or future pandemics or epidemics, as well as the Company’s response to any of the aforementioned factors; and (x) other risks detailed in the Company’s filings with the SEC, which may be found at edwards.com.
Item 9.01. Financial Statements and Exhibits.
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| (d) | Exhibits |
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| 99.1 | Press release, dated July 24, 2024, reporting Edwards’ financial results for the second quarter of 2024. |
| 99.2 | Press release of Edwards Lifesciences Corporation, dated as of July 24, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: July 24, 2024 | | |
| | | |
| | EDWARDS LIFESCIENCES CORPORATION |
| | | |
| | By: | /s/ Scott B. Ullem |
| | | Scott B. Ullem |
| | | Chief Financial Officer |
Exhibit Index
| | | | | | | | |
Exhibit
Number | | Description |
| 99.1 | | |
| 99.2 | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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| Edwards Lifesciences Corporation One Edwards Way · Irvine, CA USA · 92614 Phone: 949.250.2500 · www.edwards.com |
FOR IMMEDIATE RELEASE
Media Contact: Amy Hytowitz, 949-250-4009
Investor Contact: Mark Wilterding, 949-250-6826
EDWARDS LIFESCIENCES REPORTS SECOND QUARTER RESULTS
IRVINE, CA, July 24, 2024 — Edwards Lifesciences (NYSE: EW) today reported financial results for the quarter ended June 30, 2024.
Highlights and Outlook
•Q2 sales grew 7%; constant currency1 sales grew 8%
•Q2 TAVR sales grew 5%; constant currency1 sales grew 6%
•Q2 TMTT sales grew 75%; increasing contribution to Edwards' growth
•Q2 EPS of $0.61; adjusted1 EPS of $0.70
•Significant TAVR and TMTT clinical evidence to be presented at TCT in October 2024
•Positive EVOQUE introduction with excellent patient outcomes; NCD process on track
•Critical Care sale expected to close late Q3 2024
•Expect full-year 2024 Edwards sales growth of 8 to 10%; lowering TAVR guidance to 5 to 7% from 8 to 10%; increasing TMTT guidance to the higher end of $320 to $340 million
“Second quarter total company sales growth of 8 percent reflected strong contributions from our rapidly growing TMTT product group, offset by lower-than-expected growth in TAVR," said Bernard Zovighian, CEO. “Edwards is well-positioned to deliver sustainable TAVR growth in 2025 and beyond, driven by advancements in our leading SAPIEN platform, indication expansions to much larger populations of patients, and improving patient access to this important therapy. Our vision for TMTT is becoming a reality, and our strategic commitment has developed into a growth portfolio of differentiated technologies. We are confident in Edwards' strategy in structural heart supported by the broadening TAVR opportunity, accelerating contributions of our TMTT therapies, and our expanding portfolio of structural heart innovations that addresses the unmet needs of millions of patients around the world."
Transcatheter Aortic Valve Replacement (TAVR)
In the second quarter, the company reported TAVR sales of $1.0 billion, which grew 5%, or 6% on a constant currency basis. Edwards’ competitive position did not meaningfully change globally, although the company experienced some regional pressures, and pricing was maintained.
Edwards remains pleased with the performance of its SAPIEN 3 Ultra RESILIA platform, which is the leading platform in the U.S. and Japan. In the second quarter, Edwards began the introduction of the SAPIEN 3 Ultra RESILIA valve in Europe. The RESILIA tissue's anti-calcification technology is designed to address one of the primary causes of reintervention following heart valve replacement and provides the potential to extend the durability of the valve.
Edwards is actively pursuing significant opportunities to grow TAVR globally over the long term and remains committed to advancing science for aortic stenosis patients through the PROGRESS and EARLY TAVR trials, which could fundamentally change how AS patients are treated. The company expects to release the results of the EARLY TAVR trial at TCT this year. Edwards believes if the data are compelling it could have a meaningful impact on the timing for patient treatment, while also streamlining referral and patient care for all severe AS patients.
Transcatheter Mitral and Tricuspid Therapies (TMTT)
In the second quarter, the company reported strong growth of both repair and replacement therapies for mitral and tricuspid patients.
Edwards’ deep structural heart expertise has enabled the company to significantly advance its portfolio of differentiated technologies, including the PASCAL repair system, EVOQUE tricuspid replacement system and the SAPIEN M3 mitral replacement system.
Second quarter sales were $83 million, led by the PASCAL system and the early commercial introduction of the EVOQUE system in the U.S. and Europe. PASCAL adoption is growing, reflecting its premium differentiation and the value it brings to physicians and patients. Edwards is excited to bring this therapy to an increasing number of physicians and patients globally. Early initial adoption of the EVOQUE therapy in both the U.S. and Europe reflects strong demand for this novel solution for patients suffering from tricuspid regurgitation. Initial real-world commercial experience has demonstrated excellent clinical results consistent with those from the TRISCEND II pivotal trial.
Edwards remains engaged with the Centers for Medicare & Medicaid Services (CMS) on coverage for EVOQUE and is pleased with the recent initiation of the National Coverage Decision (NCD) process for transcatheter tricuspid valve replacement. The company believes CMS can move quickly to finalize national coverage. This is an important step toward securing consistent and timely patient access to this breakthrough innovation.
Surgical Structural Heart and Critical Care
Surgical Structural Heart sales for the second quarter were $264 million, which grew 3%, or 5% on a constant currency basis. Growth was driven by strong global adoption of Edwards’ premium surgical
technologies, INSPIRIS, MITRIS and KONECT. The company continues to see positive procedure growth globally for the many patients best treated surgically, including those undergoing complex procedures. The company continues to expand the overall body of RESILIA tissue technology evidence and completed enrollment in the U.S. and Canada for its MOMENTIS clinical study in the second quarter, one year ahead of previous expectations.
Critical Care sales, presented as discontinued operations, were $246 million for the quarter, which grew 5%, or 7% on a constant currency basis. Growth was led by pressure monitoring devices used in the ICU, with strong contribution from smart recovery technologies including the Acumen IQ sensor. Demand was also strong for Swan-Ganz catheters. The company’s previously announced sale of Critical Care for $4.2 billion remains on track and is expected to close in late Q3 2024.
Additional Financial Results
For the quarter, the adjusted gross profit margin was 77.1%, compared to 77.7% in the same period last year. Last year's second quarter gross margin benefited from a more favorable impact from foreign exchange rates.
Adjusted selling, general and administrative expenses in the second quarter were $509 million, or 31.2% of sales, compared to $469 million in the prior year. This increase was driven by the expansion of field-based personnel in TMTT and TAVR to support the company’s growth strategy.
Adjusted research and development expenses in the second quarter were $303 million, or 18.6% of sales, compared to $270 million in the prior year. The increase was driven by continued investments in transcatheter valve innovations, including clinical trial activity.
Adjusted Earnings Per Share of $0.70 benefited $0.04 from a lower-than-expected adjusted tax rate of 8.4%.
Cash, cash equivalents and short-term investments totaled $2.0 billion as of June 30, 2024. Total debt was approximately $600 million. Adjusted free cash flow in the second quarter was $333 million.
Outlook
Based on current trends, the company anticipates second half TAVR sales growth similar to the first half year-over-year growth rate, or 5 to 7% full-year growth versus previous guidance of 8 to 10%. For TMTT, based on first half momentum, the company is increasing full-year sales guidance to the higher end of the previous $320 to $340 million range. The company remains confident in full-year Surgical sales growth of 6 to 8%.
The company expects Q3 sales of $1.56 to $1.64 billion, assuming Critical Care is included for the entire third quarter. The company expects EPS in Q3 of $0.67 to $0.71, assuming the inclusion of Critical Care and no impact from previously announced acquisitions. The company will provide pro forma information for Q4 2024 when third quarter results are reported, reflecting the sale of Critical Care and the acquisitions announced this month.
About Edwards Lifesciences
Edwards Lifesciences is the global leader of patient-focused innovations for structural heart disease and critical care monitoring. We are driven by a passion for patients, dedicated to improving and enhancing lives through partnerships with clinicians and stakeholders across the global healthcare landscape. For more information, visit www.edwards.com and follow us on Facebook, Instagram, LinkedIn, X and YouTube.
Conference Call and Webcast Information
The company will be hosting a conference call today at 2:00 p.m. PT to discuss its second quarter results. To participate in the conference call, dial (877) 704-2848 or (201) 389-0893. The call will also be available live and archived on the “Investor Relations” section of the Edwards website at ir.edwards.com or www.edwards.com.
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,” “forecast,” “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 Mr. Zovighian, second quarter and full year 2024 financial guidance, statements regarding our expected growth, commitment to and focus on structural heart disease and advancing technologies and systems to address unmet patient needs, engagement with the Centers for Medicare & Medicaid Services and expectation of a National Coverage Decision, international adoption of TAVR, transformation of patient treatment, investments, expansion of evidence, approvals, clinical trial outcomes, progress and timing of the Critical Care sale, strategy, and the information in the Outlook section. No inferences or assumptions should be made from statements of past performance, efforts, or results which may not be indicative of future performance or results. Forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though they are inherently uncertain, difficult to predict, and may be outside of the company’s control. The company's forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If the company does update or correct one or more of these statements, investors and others should not conclude that the company will make additional updates or corrections.
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 the sale of our Critical Care product group; our ability to close in time, or at all, on acquisitions and to leverage and integrate their technologies and businesses; and other risks detailed in the company's filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2023, and its other filings with the SEC. These filings, along with important safety information about our products, may be found at edwards.com.
Edwards, Edwards Lifesciences, the stylized E logo, Acumen, Acumen IQ, EARLY TAVR, EVOQUE, INSPIRIS, KONECT, MITRIS, MOMENTIS, PASCAL, PROGRESS, RESILIA, Swan, Swan-Ganz, SAPIEN, SAPIEN M3, SAPIEN 3, SAPIEN 3 Ultra, TRISCEND, and TRISCEND II, are trademarks of Edwards Lifesciences Corporation or its affiliates. All other trademarks are the property of their respective owners.
[1]"Constant currency” growth rates exclude foreign exchange fluctuations. Sales growth guidance refers to constant currency. "Adjusted" amounts are non-GAAP items. Adjusted earnings per share is a non-GAAP item computed on a diluted basis and in this press release also excludes an intellectual property agreement and certain litigation expenses, amortization of intangible assets, fair value adjustments to contingent consideration liabilities arising from acquisitions, and one-time separation costs related to the planned sale of Critical Care and
include the results of the discontinued operations. See “Non-GAAP Financial Information” and reconciliation tables below.
EDWARDS LIFESCIENCES CORPORATION
Unaudited Consolidated Statements of Operations
(in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Net sales | $ | 1,385.9 | | | $ | 1,295.5 | | | $ | 2,732.8 | | | $ | 2,533.2 | |
| Cost of sales | 285.3 | | | 256.9 | | | 581.6 | | | 495.9 | |
| Gross profit | 1,100.6 | | | 1,038.6 | | | 2,151.2 | | | 2,037.3 | |
| Selling, general, and administrative expenses | 450.8 | | | 410.4 | | | 883.6 | | | 792.4 | |
| Research and development expenses | 272.6 | | | 243.7 | | | 530.4 | | | 478.5 | |
| Intellectual property agreement and certain litigation expenses | 8.1 | | | 147.9 | | | 17.0 | | | 191.4 | |
| Change in fair value of contingent consideration liabilities | — | | | (26.9) | | | — | | | (26.2) | |
| | | | | | | |
| | | | | | | |
| Operating income, net | 369.1 | | | 263.5 | | | 720.2 | | | 601.2 | |
| Interest income, net | (15.5) | | | (9.1) | | | (32.0) | | | (17.7) | |
| | | | | | | |
| Other income, net | (2.0) | | | (2.5) | | | (7.7) | | | (3.7) | |
| Income from continuing operations before provision for income taxes | 386.6 | | | 275.1 | | | 759.9 | | | 622.6 | |
| Provision for income taxes | 20.2 | | | 20.9 | | | 66.8 | | | 66.2 | |
| Net income from continuing operations | 366.4 | | | 254.2 | | | $ | 693.1 | | | $ | 556.4 | |
| (Loss) income from discontinued operations, net of tax | (1.4) | | | 51.3 | | | 22.9 | | | 89.6 | |
| Net income | 365.0 | | | 305.5 | | | 716.0 | | | 646.0 | |
| Net loss attributable to noncontrolling interest | (1.3) | | | (1.6) | | | (2.2) | | | (1.6) | |
| Net income attributable to Edwards Lifesciences Corporation | $ | 366.3 | | | $ | 307.1 | | | $ | 718.2 | | | $ | 647.6 | |
| | | | | | | |
| Earnings per share: | | | | | | | |
| Basic: | | | | | | | |
| Continuing operations | $ | 0.61 | | | $ | 0.42 | | | $ | 1.15 | | | $ | 0.92 | |
| Discontinued operations | $ | — | | | $ | 0.09 | | | $ | 0.04 | | | $ | 0.15 | |
| Basic earnings per share | $ | 0.61 | | | $ | 0.51 | | | $ | 1.19 | | | $ | 1.07 | |
| Diluted: | | | | | | | |
| Continuing operations | $ | 0.61 | | | $ | 0.42 | | | $ | 1.15 | | | $ | 0.91 | |
| Discontinued operations | $ | — | | | $ | 0.08 | | | $ | 0.04 | | | $ | 0.15 | |
| Diluted earnings per share | $ | 0.61 | | | $ | 0.50 | | | $ | 1.19 | | | $ | 1.06 | |
| | | | | | | |
| Weighted-average common shares outstanding: | | | | | | | |
| Basic | 602.1 | | | 606.9 | | | 601.8 | | | 607.2 | |
| Diluted | 604.3 | | | 610.3 | | | 604.2 | | | 610.6 | |
| | | | | | | |
| Operating statistics from continuing operations | | | | | | | |
| As a percentage of net sales: | | | | | | | |
| Gross profit | 79.4 | % | | 80.2 | % | | 78.7 | % | | 80.4 | % |
| Selling, general, and administrative expenses | 32.5 | % | | 31.7 | % | | 32.3 | % | | 31.3 | % |
| Research and development expenses | 19.7 | % | | 18.8 | % | | 19.4 | % | | 18.9 | % |
| Operating income | 26.6 | % | | 20.3 | % | | 26.4 | % | | 23.7 | % |
| Income before provision for income taxes | 27.9 | % | | 21.2 | % | | 27.8 | % | | 24.6 | % |
| Net income from continuing operations | 26.4 | % | | 19.6 | % | | 25.4 | % | | 22.0 | % |
| | | | | | | |
| Effective tax rate | 5.2 | % | | 7.6 | % | | 8.8 | % | | 10.6 | % |
Note: Numbers may not calculate due to rounding.
EDWARDS LIFESCIENCES CORPORATION
Unaudited Balance Sheets
(in millions)
| | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| |
| | | |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 1,644.5 | | | $ | 1,136.1 | |
| Short-term investments | 345.3 | | | 500.5 | |
| Accounts receivables, net | 778.3 | | | 771.5 | |
| Other receivables | 56.1 | | | 56.6 | |
| Inventories | 1,024.7 | | | 918.3 | |
| | | |
| Prepaid expenses | 110.2 | | | 128.8 | |
| Other current assets | 252.1 | | | 224.9 | |
| Current assets of discontinued operations | 304.8 | | | 299.0 | |
| Total current assets | 4,516.0 | | | 4,035.7 | |
| Long-term investments | 353.3 | | | 583.9 | |
| Property, plant, and equipment, net | 1,640.1 | | | 1,592.8 | |
| Operating lease right-of-use assets | 92.8 | | | 84.4 | |
| Goodwill | 1,151.0 | | | 1,152.5 | |
| Other intangible assets, net | 417.1 | | | 399.4 | |
| Deferred income taxes | 832.6 | | | 749.4 | |
| Other assets | 789.8 | | | 463.1 | |
| Non-current assets of discontinued operations | 306.6 | | | 302.0 | |
| Total assets | $ | 10,099.3 | | | $ | 9,363.2 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current liabilities | | | |
| Accounts payable and accrued liabilities | $ | 1,088.3 | | | $ | 1,044.8 | |
| Operating lease liabilities | 21.5 | | | 22.9 | |
| | | |
| | | |
| Current liabilities of discontinued operations | 107.2 | | | 127.7 | |
| Total current liabilities | 1,217.0 | | | 1,195.4 | |
| Long-term debt | 597.3 | | | 597.0 | |
| | | |
| Taxes payable | 1.1 | | | 80.6 | |
| Operating lease liabilities | 74.2 | | | 65.2 | |
| Uncertain tax positions | 343.2 | | | 335.0 | |
| Litigation agreement accrual | 74.8 | | | 94.2 | |
| Other liabilities | 257.1 | | | 251.3 | |
| Non-current liabilities of discontinued operations | 30.0 | | | 25.1 | |
| Total liabilities | 2,594.7 | | | 2,643.8 | |
| Stockholders’ equity | | | |
| Common stock | 653.5 | | | 650.5 | |
| Additional paid-in capital | 2,476.3 | | | 2,274.4 | |
| Retained earnings | 9,710.6 | | | 8,992.4 | |
| Accumulated other comprehensive loss | (220.2) | | | (242.8) | |
| Treasury stock, at cost | (5,182.8) | | | (5,024.5) | |
| Total Edwards Lifesciences Corporation stockholders’ equity | 7,437.4 | | | 6,650.0 | |
| Noncontrolling interest | 67.2 | | | 69.4 | |
| Total equity | 7,504.6 | | | 6,719.4 | |
| Total liabilities and equity | $ | 10,099.3 | | | $ | 9,363.2 | |
EDWARDS LIFESCIENCES CORPORATION
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 Company, (b) are commonly adjusted within the Company’s industry to enhance comparability of the Company’s financial results with those of its peer group, or (c) are inconsistent in amount or frequency between periods (albeit such items are monitored and controlled with equal diligence relative to core operations). The Company uses the terms "adjusted" and “constant currency" when referring to non-GAAP sales and sales growth information, respectively, which excludes currency exchange rate fluctuations. The Company uses the term “adjusted” to also exclude certain litigation expenses, intellectual property agreements, amortization of intangible assets, fair value adjustments to contingent consideration liabilities arising from acquisitions, and one-time separation costs related to the planned sale of Critical Care, and to include the results of its discontinued operations.
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. A reconciliation of non-GAAP historical financial measures to the most comparable GAAP measure is provided in the tables below.
Fluctuations in currency exchange rates impact the comparative results and sales growth rates of the Company's underlying business. Management believes that excluding the impact of currency exchange rate fluctuations from its sales growth provides investors a more useful comparison to historical financial results. The impact of the fluctuations has been detailed in the "Reconciliation of Sales by Product Group and Region."
Guidance for sales and sales growth rates is provided on a "constant currency 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 without unreasonable efforts. 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.
The items described below are adjustments to the GAAP financial results in the reconciliations that follow:
Certain Litigation Expenses - The Company incurred certain litigation expenses of $8.9 million and $6.5 million in the first quarter of 2024 and 2023, respectively, and $8.1 million and $8.9 million in the second quarter of 2024 and 2023, respectively
Amortization of Intangible Assets - The Company recorded amortization expense related to developed technology and patents in the amount of $1.4 million and $1.5 million in the first quarter of 2024 and 2023, respectively, and $2.0 million and $1.3 million in the second quarter of 2024 and 2023, respectively.
Separation Costs - The Company incurred separation costs of $41.3 million and $79.7 million in the first and second quarter of 2024, respectively, related primarily to consulting, legal, tax, and other professional advisory services associated with its planned sale of Critical Care.
Change in Fair Value of Contingent Consideration Liabilities - The Company recorded expense of $0.7 million and a gain of $26.9 million in the first and second quarter of 2023, respectively, related to changes in the fair value of its contingent consideration liabilities arising from acquisitions.
Intellectual Property Agreement - The Company recorded a $37.0 million charge and a $139.0 million charge in the first and second quarter of 2023, respectively, related to an Intellectual Property Agreement with Medtronic, Inc. for a 15-year covenant not to sue.
Provision for Income Taxes - The income tax impacts of the expenses and gains discussed above are based upon the items' forecasted effect upon the Company's full year effective tax rate. Adjustments to forecasted items unrelated to the expenses and gains above, as well as impacts related to interim reporting, will have an effect on the income tax impact of these items in subsequent periods.
Adjusted Free Cash Flow - The Company defines free cash flow as cash flows from operating activities less capital expenditures. During 2024, the Company excluded from its calculation payments for separation costs associated with the planned sale of Critical Care and a material tax deposit made to mitigate interest on potential tax liabilities that the Company is contesting through the judicial process. During 2023, the Company excluded from its calculation a payment related to the Intellectual Property Agreement with Medtronic, Inc.
EDWARDS LIFESCIENCES CORPORATION
Unaudited Reconciliation of GAAP to Non-GAAP Financial Information
(in millions, except per share and percentage data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2024 |
| | Net Sales | | | | Gross Profit Margin | | Selling, General and Administrative | | Selling, General and Administrative as % of Sales | | Research and Development | | Research and Development as % of Sales | | Operating Income | | Net Income | | Diluted EPS | | Effective Tax Rate |
| GAAP - Continuing Operations | | $ | 1,385.9 | | | | | 79.4 | % | | $ | 450.8 | | | 32.5 | % | | $ | 272.6 | | | 19.7 | % | | $ | 369.1 | | | $ | 366.4 | | | $ | 0.61 | | | 5.2 | % |
| Discontinued operations | | 246.4 | | | | | (2.5) | | | 57.7 | | | (1.3) | | | 30.6 | | | (1.1) | | | (12.8) | | | (1.4) | | | — | | | (3.1) | |
| Attributable to noncontrolling interests | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 1.3 | | | — | | | — | |
| Total attributable to Edwards Lifesciences Corporation | | 1,632.3 | | | | | 76.9 | % | | 508.5 | | | 31.2 | % | | 303.2 | | | 18.6 | % | | 356.3 | | | 366.3 | | | 0.61 | | | 2.1 | % |
Non-GAAP adjustments: (A) (B) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Certain litigation expenses | | — | | | | | — | | | — | | | — | | | — | | | — | | | 8.1 | | | 6.5 | | | 0.01 | | | 0.3 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | — | | | | | 0.2 | | | — | | | — | | | — | | | — | | | 2.0 | | | 1.7 | | | — | | | — | |
| Separation costs | | — | | | | | — | | | — | | | — | | | — | | | — | | | 79.7 | | | 50.4 | | | 0.08 | | | 6.0 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Adjusted | | $ | 1,632.3 | | | | | 77.1 | % | | $ | 508.5 | | | 31.2 | % | | $ | 303.2 | | | 18.6 | % | | $ | 446.1 | | | $ | 424.9 | | | $ | 0.70 | | | 8.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2023 |
| | Net Sales | | | | Gross Profit Margin | | Selling, General and Administrative | | Selling, General and Administrative as % of Sales | | Research and Development | | Research and Development as % of Sales | | Operating Income | | Net Income | | Diluted EPS | | Effective Tax Rate |
| GAAP - Continuing Operations | | $ | 1,295.5 | | | | | 80.2 | % | | $ | 410.4 | | | 31.7 | % | | $ | 243.7 | | | 18.8 | % | | $ | 263.5 | | | $ | 254.2 | | | $ | 0.42 | | | 7.6 | % |
| Discontinued operations | | 234.7 | | | | | (2.6) | | | 58.3 | | | (1.1) | | | 26.6 | | | (1.1) | | | 63.7 | | | 51.3 | | | 0.08 | | | 2.1 | |
| Attributable to noncontrolling interests | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 1.6 | | | — | | | — | |
| Total attributable to Edwards Lifesciences Corporation | | 1,530.2 | | | | | 77.6 | % | | 468.7 | | | 30.6 | % | | 270.3 | | | 17.7 | % | | 327.2 | | | 307.1 | | | 0.50 | | | 9.7 | % |
Non-GAAP adjustments: (A) (B) | | | | | | | | | | | | | | | | | | | | | | |
| Intellectual property agreement | | — | | | | | — | | | — | | | — | | | — | | | — | | | 139.0 | | | 111.7 | | | 0.19 | | | 2.8 | |
Certain litigation expenses | | — | | | | | — | | | — | | | — | | | — | | | — | | | 8.9 | | | 7.0 | | | 0.01 | | | 0.3 | |
| Change in fair value of contingent consideration liabilities | | — | | | | | — | | | — | | | — | | | — | | | — | | | (26.9) | | | (24.8) | | | (0.04) | | | 0.2 | |
| Amortization of intangible assets | | — | | | | | 0.1 | | | — | | | — | | | — | | | — | | | 1.3 | | | 1.0 | | | — | | | 0.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Adjusted | | $ | 1,530.2 | | | | | 77.7 | % | | $ | 468.7 | | | 30.6 | % | | $ | 270.3 | | | 17.7 | % | | $ | 449.5 | | | $ | 402.0 | | | $ | 0.66 | | | 13.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2024 |
| | Net Sales | | | | Gross Profit Margin | | Selling, General and Administrative | | Selling, General and Administrative as % of Sales | | Research and Development | | Research and Development as % of Sales | | Operating Income | | Net Income | | Diluted EPS | | Effective Tax Rate |
| GAAP - Continuing Operations | | $ | 2,732.8 | | | | | 78.7 | % | | $ | 883.6 | | | 32.3 | % | | $ | 530.4 | | | 19.4 | % | | $ | 720.2 | | | $ | 693.1 | | | $ | 1.15 | | | 8.8 | % |
| Discontinued operations | | 497.7 | | | | | (2.3) | | | 114.6 | | | (1.4) | | | 58.0 | | | (1.2) | | | 23.6 | | | 22.9 | | | 0.04 | | | (0.3) | |
| Attributable to noncontrolling interests | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 2.2 | | | — | | | — | |
| Total attributable to Edwards Lifesciences Corporation | | 3,230.5 | | | | | 76.4 | % | | 998.2 | | | 30.9 | % | | 588.4 | | | 18.2 | % | | 743.8 | | | 718.2 | | | 1.19 | | | 8.5 | % |
Non-GAAP adjustments: (A) (B) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Certain litigation expenses | | — | | | | | — | | | — | | | — | | | — | | | — | | | 17.0 | | | 13.9 | | | 0.02 | | | 0.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | — | | | | | 0.1 | | | — | | | — | | | — | | | — | | | 3.4 | | | 2.9 | | | — | | | — | |
| Separation costs | | — | | | | | — | | | — | | | — | | | — | | | — | | | 121.0 | | | 87.2 | | | 0.15 | | | 2.6 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Adjusted | | $ | 3,230.5 | | | | | 76.5 | % | | $ | 998.2 | | | 30.9 | % | | $ | 588.4 | | | 18.2 | % | | $ | 885.2 | | | $ | 822.2 | | | $ | 1.36 | | | 11.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2023 |
| | Net Sales | | | | Gross Profit Margin | | Selling, General and Administrative | | Selling, General and Administrative as % of Sales | | Research and Development | | Research and Development as % of Sales | | Operating Income | | Net Income Attributable to Edwards Lifesciences Corporation | | Diluted EPS | | Effective Tax Rate |
| GAAP - Continuing Operations | | $ | 2,533.2 | | | | | 80.4 | % | | $ | 792.4 | | | 31.3 | % | | $ | 478.5 | | | 18.9 | % | | $ | 601.2 | | | $ | 556.4 | | | $ | 0.91 | | | 10.6 | % |
| Discontinued operations | | 456.6 | | | | | (2.9) | | | 112.6 | | | (1.0) | | | 53.0 | | | (1.1) | | | 114.4 | | | 89.6 | | | 0.15 | | | 1.8 | |
| Attributable to noncontrolling interests | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 1.6 | | | — | | | — | |
| Total attributable to Edwards Lifesciences Corporation | | 2,989.8 | | | | | 77.5 | % | | 905.0 | | | 30.3 | % | | 531.5 | | | 17.8 | % | | 715.6 | | | 647.6 | | | 1.06 | | | 12.4 | % |
Non-GAAP adjustments: (A) (B) | | | | | | | | | | | | | | | | | | | | | | |
| Intellectual property agreement | | — | | | | | — | | | | | | | | | | | 176.0 | | | 142.2 | | | 0.24 | | | 1.4 | |
Certain litigation expenses | | — | | | | | — | | | | | | | | | | | 15.4 | | | 12.3 | | | 0.02 | | | 0.1 | |
| Change in fair value of contingent consideration liabilities | | — | | | | | — | | | | | | | | | | | (26.2) | | | (24.2) | | | (0.04) | | | 0.1 | |
| Amortization of intangible assets | | — | | | | | 0.1 | | | | | | | | | | | 2.8 | | | 2.3 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| Adjusted | | $ | 2,989.8 | | | | | 77.6 | % | | $ | 905.0 | | | 30.3 | % | | $ | 531.5 | | | 17.8 | % | | $ | 883.6 | | | $ | 780.2 | | | $ | 1.28 | | | 14.0 | % |
(A)See description of non-GAAP adjustments under "Non-GAAP Financial Information."
(B)The tax effect on non-GAAP adjustments is calculated based upon the impact of the relevant tax jurisdictions’ statutory tax rates on the Company’s estimated annual effective tax rate, or discrete rate in the quarter, as applicable. The impact on the effective tax rate is reflected on each individual non-GAAP adjustment line item.
RECONCILIATION OF GAAP OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Net cash provided by operating activities | $ | 371.5 | | | $ | 33.6 | | | $ | 318.0 | | | $ | 347.7 | |
| Capital expenditures | (85.4) | | | (47.9) | | | (150.7) | | | (109.4) | |
| Tax deposit | — | | | — | | | 305.1 | | | — | |
| Separation cost payments | 46.7 | | | — | | | 66.6 | | | — | |
| Intellectual property agreement | — | | | 300.0 | | | — | | | 300.0 | |
Adjusted Free Cash Flow (A) | $ | 332.8 | | | $ | 285.7 | | | $ | 539.0 | | | $ | 538.3 | |
(A)See description of "Adjusted Free Cash Flow" under "Non-GAAP Financial Information."
RECONCILIATION OF SALES BY PRODUCT GROUP AND REGION
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Product Group (QTD) | | 2Q 2024 | | 2Q 2023 | | Change | | GAAP
Growth
Rate* | | | | | | | | | | | | | FX
Impact | | 2Q 2023 Adjusted Sales | | Constant Currency
Growth
Rate * |
| Transcatheter Aortic Valve Replacement | | $ | 1,038.6 | | | $ | 991.6 | | | $ | 47.0 | | | 4.7 | % | | | | | | | | | | | | | $ | (10.4) | | | $ | 981.2 | | | 5.8 | % |
| Transcatheter Mitral and Tricuspid Therapies | | 83.0 | | | 47.6 | | | 35.4 | | | 74.7 | % | | | | | | | | | | | | | — | | | 47.6 | | | 74.7 | % |
| Surgical Structural Heart | | 264.3 | | | 256.3 | | | 8.0 | | | 3.1 | % | | | | | | | | | | | | | (3.6) | | | 252.7 | | | 4.6 | % |
| Total Sales from Continuing Operations | | $ | 1,385.9 | | | $ | 1,295.5 | | | $ | 90.4 | | | 7.0 | % | | | | | | | | | | | | | $ | (14.0) | | | $ | 1,281.5 | | | 8.1 | % |
| Sales from Discontinued Operations | | 246.4 | | | 234.7 | | | 11.7 | | | 5.0 | % | | | | | | | | | | | | | (3.6) | | | 231.1 | | | 6.7 | % |
| Total Sales | | $ | 1,632.3 | | | $ | 1,530.2 | | | $ | 102.1 | | | 6.7 | % | | | | | | | | | | | | | $ | (17.6) | | | $ | 1,512.6 | | | 7.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Product Group (YTD) | | YTD 2Q 2024 | | YTD 2Q 2023 | | Change | | GAAP
Growth
Rate* | | | | | | | | | | | | | FX
Impact | | YTD 2Q 2023 Adjusted Sales | | Underlying
Growth
Rate * |
| Transcatheter Aortic Valve Replacement | | $ | 2,046.5 | | | $ | 1,939.5 | | | $ | 107.0 | | | 5.5 | % | | | | | | | | | | | | | $ | (12.5) | | | $ | 1,927.0 | | | 6.2 | % |
| Transcatheter Mitral and Tricuspid Therapies | | 155.9 | | | 89.2 | | | 66.7 | | | 74.9 | % | | | | | | | | | | | | | 0.7 | | | 89.9 | | | 73.5 | % |
| Surgical Structural Heart | | 530.4 | | | 504.5 | | | 25.9 | | | 5.1 | % | | | | | | | | | | | | | (5.0) | | | 499.5 | | | 6.2 | % |
| Total | | $ | 2,732.8 | | | $ | 2,533.2 | | | $ | 199.6 | | | 7.9 | % | | | | | | | | | | | | | $ | (16.8) | | | $ | 2,516.4 | | | 8.6 | % |
| Sales from Discontinued Operations | | 497.7 | | | 456.6 | | | 41.1 | | | 9.0 | % | | | | | | | | | | | | | (5.9) | | | 450.7 | | | 10.4 | % |
| Total Sales | | $ | 3,230.5 | | | $ | 2,989.8 | | | $ | 240.7 | | | 8.1 | % | | | | | | | | | | | | | $ | (22.7) | | | $ | 2,967.1 | | | 8.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Region (QTD) - Continuing Operations | | 2Q 2024 | | 2Q 2023 | | Change | | GAAP
Growth Rate* | | | | | | | | | | | | | FX
Impact | | 2Q 2023 Adjusted Sales | | Constant Currency
Growth
Rate * |
| United States | | $ | 816.8 | | | $ | 761.9 | | | $ | 54.9 | | | 7.2 | % | | | | | | | | | | | | | $ | — | | | $ | 761.9 | | | 7.2 | % |
| Europe | | 335.6 | | | 301.9 | | | 33.7 | | | 11.2 | % | | | | | | | | | | | | | 0.1 | | | 302.0 | | | 11.1 | % |
| Japan | | 87.4 | | | 94.1 | | | (6.7) | | | (7.2) | % | | | | | | | | | | | | | (12.1) | | | 82.0 | | | 6.5 | % |
| Rest of World | | 146.1 | | | 137.6 | | | 8.5 | | | 6.2 | % | | | | | | | | | | | | | (2.0) | | | 135.6 | | | 7.7 | % |
| Outside of the United States | | 569.1 | | | 533.6 | | | 35.5 | | | 6.7 | % | | | | | | | | | | | | | (14.0) | | | 519.6 | | | 9.5 | % |
| Total | | $ | 1,385.9 | | | $ | 1,295.5 | | | $ | 90.4 | | | 7.0 | % | | | | | | | | | | | | | $ | (14.0) | | | $ | 1,281.5 | | | 8.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Region (YTD) - Continuing Operations | | YTD 2Q 2024 | | YTD 2Q 2023 | | Change | | GAAP
Growth Rate* | | | | | | | | | | | | | FX
Impact | | YTD 2Q 2023 Adjusted Sales | | Underlying
Growth
Rate * |
| United States | | $ | 1,609.7 | | | $ | 1,487.0 | | | $ | 122.7 | | | 8.3 | % | | | | | | | | | | | | | $ | — | | | $ | 1,487.0 | | | 8.3 | % |
| Europe | | 665.3 | | | 598.6 | | | 66.7 | | | 11.2 | % | | | | | | | | | | | | | 7.3 | | | 605.9 | | | 9.8 | % |
| Japan | | 174.1 | | | 182.8 | | | (8.7) | | | (4.7) | % | | | | | | | | | | | | | (21.1) | | | 161.7 | | | 7.7 | % |
| Rest of World | | 283.7 | | | 264.8 | | | 18.9 | | | 7.1 | % | | | | | | | | | | | | | (3.0) | | | 261.8 | | | 8.4 | % |
| Outside of the United States | | 1,123.1 | | | 1,046.2 | | | 76.9 | | | 7.3 | % | | | | | | | | | | | | | (16.8) | | | 1,029.4 | | | 9.1 | % |
| Total | | $ | 2,732.8 | | | $ | 2,533.2 | | | $ | 199.6 | | | 7.9 | % | | | | | | | | | | | | | $ | (16.8) | | | $ | 2,516.4 | | | 8.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Region (QTD) - Discontinued Operations | | 2Q 2024 | | 2Q 2023 | | Change | | GAAP
Growth Rate* | | | | | | | | | | | | | FX
Impact | | 2Q 2023 Adjusted Sales | | Constant Currency
Growth
Rate * |
| United States | | $ | 149.1 | | | $ | 133.4 | | | $ | 15.7 | | | 11.8 | % | | | | | | | | | | | | | $ | — | | | $ | 133.4 | | | 11.8 | % |
| Europe | | 36.9 | | | 34.3 | | | 2.6 | | | 7.7 | % | | | | | | | | | | | | | 0.2 | | | 34.5 | | | 7.4 | % |
| Japan | | 19.4 | | | 23.9 | | | (4.5) | | | (18.8) | % | | | | | | | | | | | | | (3.0) | | | 20.9 | | | (6.9) | % |
| Rest of World | | 41.0 | | | 43.1 | | | (2.1) | | | (5.1) | % | | | | | | | | | | | | | (0.8) | | | 42.3 | | | (3.0) | % |
| Outside of the United States | | 97.3 | | | 101.3 | | | (4.0) | | | (4.0) | % | | | | | | | | | | | | | (3.6) | | | 97.7 | | | (0.3) | % |
| Total | | $ | 246.4 | | | $ | 234.7 | | | $ | 11.7 | | | 5.0 | % | | | | | | | | | | | | | $ | (3.6) | | | $ | 231.1 | | | 6.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2023 Adjusted | | |
| Sales by Region (YTD) - Discontinued Operations | | YTD 2Q 2024 | | YTD 2Q 2023 | | Change | | GAAP
Growth Rate* | | | | | | | | | | | | | FX
Impact | | YTD 2Q 2023 Adjusted Sales | | Underlying
Growth
Rate * |
| United States | | $ | 296.9 | | | $ | 257.4 | | | $ | 39.5 | | | 15.4 | % | | | | | | | | | | | | | $ | — | | | $ | 257.4 | | | 15.3 | % |
| Europe | | 75.0 | | | 68.7 | | | 6.3 | | | 9.2 | % | | | | | | | | | | | | | 1.1 | | | 69.8 | | | 7.4 | % |
| Japan | | 43.5 | | | 49.3 | | | (5.8) | | | (11.7) | % | | | | | | | | | | | | | (5.6) | | | 43.7 | | | (0.5) | % |
| Rest of World | | 82.3 | | | 81.2 | | | 1.1 | | | 1.3 | % | | | | | | | | | | | | | (1.4) | | | 79.8 | | | 3.1 | % |
| Outside of the United States | | 200.8 | | | 199.2 | | | 1.6 | | | 0.8 | % | | | | | | | | | | | | | (5.9) | | | 193.3 | | | 3.9 | % |
| Total | | $ | 497.7 | | | $ | 456.6 | | | $ | 41.1 | | | 9.0 | % | | | | | | | | | | | | | $ | (5.9) | | | $ | 450.7 | | | 10.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
* Numbers may not calculate due to rounding.
| | | | | |
| Edwards Lifesciences Corporation One Edwards Way · Irvine, CA USA · 92614 Phone: 949.250.2500 · www.edwards.com |
FOR IMMEDIATE RELEASE
Media Contact: Amy Hytowitz, 949-250-4009
Investor Contact: Mark Wilterding, 949-250-6826
EDWARDS LIFESCIENCES EXPANDS STRUCTURAL HEART PORTFOLIO WITH ACQUISITIONS OF JENAVALVE AND ENDOTRONIX
IRVINE, CA, July 24, 2024 — Edwards Lifesciences (NYSE: EW) today announced investments that reflect the company's deep commitment to advancing patient care through structural heart innovation, addressing large unmet patient needs and supporting sustainable long-term growth.
Edwards has entered into an agreement to acquire JenaValve Technology, a pioneer in the transcatheter treatment of aortic regurgitation (AR), a deadly disease that impacts a significant and growing population and is largely untreated today. JenaValve presented positive results of its U.S. pivotal trial for the treatment of symptomatic, severe AR in high-risk patients late last year. As the pioneer in valve innovation for more than 60 years, Edwards believes it is uniquely positioned to lead this next frontier of aortic valve disease treatment. Edwards anticipates FDA approval of the JenaValve Trilogy Heart Valve System in late 2025, which will represent the first approved therapy for patients suffering from AR.
Building on an investment made in 2016, Edwards has exercised its option to acquire Endotronix, a leader in heart failure (HF) management solutions. Many structural heart patients Edwards serves today also suffer from HF with limited options. This acquisition will expand Edwards’ structural heart portfolio into a new therapeutic area to address the large unmet needs of patients suffering from HF. Last month, Endotronix received FDA approval for Cordella, an implantable pulmonary artery pressure sensor allowing early, targeted therapeutic intervention. A CMS national coverage determination is expected in early 2025.
“These acquisitions expand our opportunities to address the unmet needs of aortic regurgitation and heart failure patients around the world,” said Bernard Zovighian, Edwards’ CEO. “We are pleased to enter these structural heart therapeutic areas with innovation, world-class science and clinical evidence to provide access to life-saving technologies for patients around the world.”
Edwards anticipates these investments will strengthen its leadership in structural heart innovation and represent long-term growth opportunities. Edwards expects minimal revenue contribution from these acquisitions in 2025. The aggregate upfront purchase price for these strategic investments is
approximately $1.2 billion. The acquisitions are subject to the satisfaction of certain closing conditions, including the receipt of required antitrust and foreign investment approvals.
About Edwards Lifesciences
Edwards Lifesciences is the global leader of patient-focused innovations for structural heart disease and critical care monitoring. We are driven by a passion for patients, dedicated to improving and enhancing lives through partnerships with clinicians and stakeholders across the global healthcare landscape. For more information, visit www.edwards.com and follow us on Facebook, Instagram, LinkedIn, X and YouTube.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements contained in this press release to be covered by the safe harbor provisions of such Acts. These forward-looking statements can sometimes be identified by the use of forward-looking words such as “may,” "might," "believe," “will,” "expect," "project," “estimate,” "should," "anticipate," "plan," "goal," "continue," "seek," "intend," "optimistic," "aspire," "confident" and other forms of these words and include, but are not limited to, statements made by Mr. Zovighian and statements regarding our expected continued performance of Edwards; performance of the Edwards, JenaValve or Endotronix technologies; product and therapy benefits; patient access and outcomes; size of treatable population; leading position; growth opportunities; unmet needs in structural heart, aortic regurgitation, and heart failure therapeutic areas; probability of approval by the FDA and in the anticipating timeline; probability of a positive NCD by the CMS and in the anticipated timeline; synergies between the technologies, business, and operations of each of JenaValve and Endotronix and Edwards’ technologies, products, portfolio, expertise, and operations; ability to leverage the technology or innovation from these acquisitions or cause or ensure accelerated access to life-saving technologies for patients or development of novel technologies as a result of these acquisitions; commitment to expand opportunities in structural heart innovation, address large unmet patient needs, and support sustainable long-term growth; objective to expand Edwards’ portfolio into new structural heart therapeutic areas; opportunities and revenue return on these acquisitions and their contribution to Edwards’ growth and performance, as well as the expectations on timing of such returns and contributions; therapy approval pipeline for patients suffering from AR; probability of the closing of the two acquisitions; other objectives and expectations; and other statements that are not historical facts. Forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though they are inherently uncertain and difficult to predict. Our forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. Investors are cautioned not to unduly rely on such forward-looking statements.
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, but are not limited to: (i) Edwards may be unable to close the acquisitions of each of JenaValve and Endotronix, which may materially and adversely affect Edwards’ business and the price of Edward’ common stock; (ii) the occurrence of any event, change or other circumstance that could cause Edwards to abandon the acquisitions of either or both of JenaValve and Endotronix; (iii) risks related to disruption of management’s attention from Edwards’ ongoing business operations; (iv) the effect of the announcement or the pendency of the acquisitions on Edwards’ relationships with its customers, operating results and business generally; (v) potential significant transaction costs associated with either or both acquisitions; (vi) the outcome of any legal proceedings or regulatory actions to the extent initiated against Edwards or others related to either or both acquisitions; (vii) the ability of Edwards to execute on its strategy and achieve its goals and other expectations after the closing of either or both acquisitions; (viii) legal, regulatory, tax and economic developments affecting Edwards’ business; (ix) the unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism, outbreak of war or hostilities or current or future pandemics or epidemics, as well as Edwards’ response to any of the aforementioned factors; and (x) other risks detailed in Edwards’ filings with the SEC, which may be found at edwards.com.
Edwards, Edwards Lifesciences, and the stylized E logo are trademarks of Edwards Lifesciences Corporation or its affiliates. All other trademarks are the property of their respective owners.
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