Edwards Lifesciences Corporation (Edwards Lifesciences) has reported net sales of $335.5 million for the second quarter of 2009, up 2.4%, compared with the net sales of $327.6 million in the year-ago quarter. It also reported a net income of $47.5 million, or $0.81 per diluted share, for the second quarter of 2009, compared with the net income of $39.7 million, or $0.67 per diluted share, in the year-ago quarter.
Additional Operating Results
For the quarter, Edwards Lifesciences’ gross profit margin was 69.6% compared to 65.5% in the same period last year. This improvement was due primarily to product mix and the favorable impact of foreign exchange hedge agreements.
Selling, general and administrative expenses were $128.5 million for the quarter, or 38.3% of sales, compared to $126.5 million in the prior year. The increase, driven primarily by higher transcatheter heart valve sales and marketing expenses in Europe, was partially offset by foreign exchange.
Research and development expenses (R&D) for the quarter were $42.6 million, or 12.7% of sales. As a result of additional spending on the company’s transcatheter heart valve and FloTrac programs, R&D investments increased 20.3% compared to the prior year.
During the quarter, Edwards Lifesciences recorded a $1.5 million special charge related to the pending hemofiltration product line divestiture.
Free cash flow for the quarter was $66.1 million, calculated as cash from operating activities of $63.9 million, minus capital expenditures of $17.1 million, plus $19.3 million in tax payments related to the sale of the LifeStent product line.
Total debt at June 30, 2009 was $113.9 million. Cash and cash equivalents were $183.1 million at the end of the quarter, resulting in net cash of $69.2 million.
During the quarter, the company repurchased 445,000 shares of common stock for $27.7 million.
For the six months ended June 30, 2009, the company recorded net income of $108 million, or $1.85 per diluted share, compared to $57.9 million, or $0.98 per diluted share for 2008. Excluding special items detailed in the reconciliation table below, net income for the first six months in 2009 was $87.4 million, or $1.49 per diluted share, compared to $72.2 million, or $1.22 per diluted share the same period last year. For the six months ended June 30, 2009, diluted earnings per share increased 88.8% over last year. Excluding special items, diluted earnings per share grew 22.1%.
Net sales for the first six months of 2009 increased 3.9% to $649 million. Underlying sales growth was 10.6%, which primarily excludes a $28.4 million negative impact from foreign exchange.
Domestic and international sales for the six months were $278.4 million and $370.6 million, respectively.
During the first six months, the company repurchased 907,500 shares of common stock for $54.5 million.
Overall, we have had a very successful first six months, and are expecting a strong second half of the year. Our underlying sales growth estimate of 10 to 12 percent for 2009 remains unchanged and we expect to meet or exceed all of our previously stated financial goals, said Michael A. Mussallem, Edwards Lifesciences’ chairman and chief executive officer.
Excluding special items, we estimate that third quarter 2009 diluted earnings per share will be between $0.66 and $0.70. For full year 2009, we are raising our diluted earnings per share estimate to between $3.00 and $3.06, and we now expect to be at the upper end of our goal to grow diluted earnings per share by 15 to 19 percent.
Edwards Lifesciences is a company involved in the science of heart valves and hemodynamic monitoring.