Guidant Posts All-Time Record Sales of $668.4 Million in Second Quarter; Record Net Income and Earnings Per Share of $0.40 Grow 22 Percent

Business Wire,  July 18, 2000  

Tags: earnings per share, Guidant Corp., net income

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Guidant Corporation and Subsidiaries
Income Statements
(In millions, except per-share data)
(Unaudited)


                       Three Months Ended       Three Months Ended
                          June 30, 2000            June 30, 1999

                                                     Special     As
                                          Reported   Items(a) Adjusted
                                          --------   -------  --------
Net sales                   $668.4         $610.8               $610.8

Cost of products sold        162.3          160.1     (11.0)     149.1
                            ------         ------     ------    ------

Gross Profit                 506.1          450.7      11.0      461.7

Research and development      93.0           81.7      (0.5)      81.2
Sales, marketing, and
 administrative              191.9          174.8      (1.5)     173.3
Other expenses, net           39.7           44.0                 44.0
                            ------         ------     ------    ------

Income before income taxes   181.5          150.2      13.0      163.2

Income taxes                  57.2           58.6       2.4       61.0
                            ------         ------     ------    ------

Net Income                  $124.3          $91.6     $10.6     $102.2
                            ------         ------     ------    ------
                            ------         ------     ------    ------

Earnings per share           $0.41          $0.30     $0.04      $0.34
                            ------         ------     ------    ------
                            ------         ------     ------    ------

Weighted average shares
 outstanding                300.78         300.48    300.48     300.48

Earnings per share -
 assuming dilution           $0.40          $0.29     $0.04      $0.33
                            ------         ------     ------    ------
                            ------         ------     ------    ------

Weighted average shares
 outstanding - assuming
 dilution                   309.24         310.75    310.75     310.75

(a) Special items include stay pay for manufacturing and
    non-manufacturing Intermedics personnel and the impact of purchase
    accounting adjustments required to write-up inventory acquired
    from Sulzer Medica

For purposes of analysis and discussion herein, the Company employs
the concepts of operating expenses and income from operations.
Operating expenses are defined as research and development and sales,
marketing, and administrative expenses, excluding special charges.
Operating expenses amount to $284.9 million and $254.5 million for the
three months ended June 30, 2000, and 1999, respectively. Income from
operations, which is defined as gross profit less operating expenses,
excluding special charges, was $221.2 million and $207.2 million for
the three months ended June 30, 2000, and 1999, respectively.



Guidant Corporation and Subsidiaries
Income Statements
(In millions, except per-share data)
(Unaudited)

                        Six Months Ended         Six Months Ended
                          June 30, 2000            June 30, 1999

                                                     Special     As
                                          Reported   Items(a) Adjusted
                                          --------   -------  --------

Net sales                   $1,299.1      $1,207.2            $1,207.2

Cost of products sold          303.1         308.8    (17.9)     290.9
                            --------      --------    ------  --------

Gross Profit                   996.0         898.4     17.9      916.3

Research and development       179.4         166.7     (1.0)     165.7
Sales, marketing, and
 administrative                377.5         351.4     (2.4)     349.0
Purchased research and
 development                                  49.0    (49.0)
Foundation contribution         10.8
Litigation settlement, net     (10.8)
Other expenses, net             78.9          65.9     14.4       80.3
                            --------      --------    ------  --------

Income before income taxes and
 cumulative effect of change
 in accounting principle       360.2         265.4     55.9      321.3

Income taxes                   117.1         122.2     (1.4)     120.8
                            --------      --------    ------  --------

Income before cumulative
 effect of change in
 accounting principle          243.1         143.2     57.3      200.5

Cumulative effect of change
 in accounting principle,
 net of tax                     --            (3.3)     3.3
                            --------      --------    ------  --------

Net Income                    $243.1        $139.9    $60.6     $200.5
                            --------      --------    ------  --------
                            --------      --------    ------  --------

Earnings per share             $0.81         $0.47    $0.20      $0.67
                            --------      --------    ------  --------
                            --------      --------    ------  --------

Weighted average shares
 outstanding                  300.83        300.39   300.39     300.39

Earnings per share -
 assuming dilution             $0.78         $0.45    $0.19      $0.64
                            --------      --------    ------  --------
                            --------      --------    ------  --------

Weighted average shares
 outstanding - assuming
 dilution                     310.57        311.25   311.25     311.25

(a) Special items include the following:

  --  Stay pay for manufacturing and non-manufacturing Intermedics
      personnel and the impact of purchase accounting adjustments
      required to write-up inventory acquired from Sulzer Medica
  --  Purchased research and development charge related to the
      acquisition of Intermedics
  --  One-time gain on an equity investment
  --  Cumulative effect of change in accounting principle, net of tax