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 CORPORATIONUnaudited 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724769995/en/
Media Contact: Amy Hytowitz, 949-250-4009 Investor
Contact: Mark Wilterding, 949-250-6826
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