Carefusion 3Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“We had a great start to the year in our Infusion business. Our pace of installations was ahead of plan, enabling us to grow revenue in the business better than our expectations.”

“Our Respiratory business declined due to the absence of a large government contract we had in the prior-year period. Our diagnostics products grew nicely following the long-anticipated SentrySuite product launch near the end of last year, and we continue to anticipate this business returning to growth during this fiscal year.”

“Turning to the Procedural Solutions segment. We continue to see nice growth across all 3 businesses, led by our clinically differentiated products like ChloraPrep and our PleurX drainage system. Our Specialty Disposables business continue to optimize its portfolio with products we manufacture that are clinically relevant or where we have a differentiated distribution relationship.”

“We are strengthening our internal foundation to improve the customer experience and simplify the company, thereby freeing resources to: number one, reinvest in innovation; number two, expand margins; and number three, grow in markets outside the U.S.”

“In Procedural Solutions, where the innovation cycles are faster, we recently completed a review of projects that will come to market during the next 18 months. One of those products is a needleless IV connector that features neutral reflux at disconnect. This product has now received 510(k) clearance and will be commercially available in December.”

“our Infusion business executed on installing our strong fourth quarter committed contracts and grew revenue by 8% in the quarter.”

“Procedural Solutions delivered another quarter of balanced growth across its portfolio. The segment continued to execute against the roadmap to drive growth in our strategic, clinically differentiated products. The results were 7% year-over-year revenue growth in the segment, including double-digit gains in Medical Specialties and Specialty Disposables.”

“Consolidated revenue of $830 million declined by 1% on a reported and constant currency basis, which was in line with our expectations. Continued revenue growth in Procedural Solutions of 7% was offset by a 5% year-over-year decline in Medical Systems. As we said would be the case on last quarter’s call, Medical Systems revenue was affected by the product line transition to our new Pyxis ES platform.”

“Procedural Solutions revenue grew to $306 million or 7% over the prior year. We saw balanced growth across geographies and in each business line. We continue to see strength in our clinically differentiated products, most notably ChloraPrep and PleurX, and they drive — and they drove the results in Infection Prevention and Medical Specialties, which respectively had 3% and 11% revenue growth in the quarter.”

“Moving to Medical Systems. Revenue was down $27 million or 5% to $524 million for the quarter. Again, that’s in line with our expectations. Within Medical Systems, Dispensing Technologies revenue was down 14% to $211 million.”

“Infusion Systems had a great start to the year. Revenue was up from $203 million to $219 million. That’s 8% growth.”

“we see in the [hospital] CapEx environment, it tends to be relatively stable from what we’ve seen in the last couple of quarters. So we’re not seeing any significant delta off of that.”

” What you tend to see when you get a new generation of products in this kind of category is that if you look out 2 years, you end up with about 75% of your new contracts that you’re writing are for that new platform.”