Bristol-Myers Squibb reports 11% increase in first-quarter 2010 revenue

March 14, 2016

The Company expects additional negative financial impact in 2010 as other parts of the new health care law are implemented, including discounts to certain critical access hospitals, cancer hospitals and other covered entities as required by the expansion of the 340B Drug Pricing Program. In addition, beginning in 2011, the Company will provide a 50% discount on its brand-name drugs to patients who fall within the Medicare Part D coverage gap, also referred to as the "Donut Hole," and the Company will pay a non-deductible annual fee to the federal government based on an allocation of its market share of branded prior year sales to certain government programs including Medicare, Medicaid, Department of Veterans Affairs, Department of Defense and TriCare.

A positive impact on net sales from the expected increase in the number of people with health care coverage could potentially occur in the future, but not until 2014 at the earliest.

2010 FINANCIAL GUIDANCE

In January, the Company announced 2010 GAAP EPS guidance range of $1.94 to $2.04 and 2010 non-GAAP EPS guidance range of $2.15 to $2.25 that explicitly excluded the impact of U.S. health care reform. The Company now estimates the negative impact of health care reform on both a GAAP EPS and non-GAAP EPS basis to be approximately $0.12 and is updating its 2010 non-GAAP EPS guidance range by $0.05 to $2.10 to $2.20 as the impact of health care reform is expected to be partially offset by the strength of the underlying business and mitigating actions taken by the Company. The Company is also updating its 2010 GAAP EPS guidance range to $1.84 to $1.94 to reflect higher manufacturing rationalization costs and a licensing transaction, in addition to health care reform impact.

Key 2010 guidance assumptions include: mid-single-digit revenue growth; full-year gross margin being consistent with last year; advertising and promotion expense decrease in the high-single-digit range; marketing sales and administrative expenses remaining flat; research and development expense growth in the mid- to high-single-digit range; and an effective tax rate of between 23% and 24%. The financial guidance for 2010 excludes the impact of any potential future strategic transactions and specified items that have not yet been identified and quantified.

Use of Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP earnings from continuing operations and related earnings per share information, adjusted to exclude certain costs, expenses, gains and losses and other specified items. Among the items in GAAP measures but excluded for purposes of determining adjusted earnings and other adjusted measures are: charges related to implementation of the Productivity Transformation Initiative; gains or losses from the purchase or sale of businesses and product lines; discontinued operations; restructuring and other exit costs; accelerated depreciation charges; asset impairments; charges and recoveries relating to significant legal proceedings; upfront and milestone payments for in-licensing of products that have not achieved regulatory approval, which are immediately expensed; in-process research and development charges prior to 2009; impairments to investments; special initiative funding to the Bristol-Myers Squibb Foundation; and significant tax events. This information is intended to enhance an investor's overall understanding of the company's past financial performance and prospects for the future. For example, non-GAAP earnings and earnings per share information is an indication of the company's baseline performance before items that are considered by the company not to be reflective of the company's ongoing results. These items are also not included in the company's operating segment results. In addition, this information is among the primary indicators the company uses as a basis for evaluating company performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.

Source: Bristol-Myers Squibb Company