Boston Sci to cut staff after sales decline

Boston Scientific has reported a decline in fourth quarter and year-end sales, as well as an anticipated staff reduction that could affect as many as 1,000 employees.  

In the fourth quarter, which ended Dec. 31, 2012, Boston Scientific’s sales totaled $1.82 billion compared with sales of $1.85 billion for the fourth quarter of 2011, a year-over-year decline of 1 percent on a reported basis.

Interventional cardiology and cardiac rhythm management were among businesses to incur quarterly losses while peripheral interventions, electrophysiology, urology/women’s health and neuromodulation posted gains.

Interventional cardiology posted worldwide sales of $534 million in the fourth quarter of 2012, down from $594 million in the same quarter of 2011. For cardiac rhythm management, sales for the fourth quarter of 2012 totaled $457 million, down from $482 million in the same quarter of 2011.

Worldwide fourth quarter 2012 sales for endoscopy reached $329 million, up from $304 million in the same quarter of 2011. Peripheral intervention posted sales of $199 million, up from $184 million in the same quarter of 2011. Urology/women’s health had sales of $130 million in the fourth quarter of 2012, up from $127 million in the same quarter of 2011. Neuromodulation also notched up a gain, with fourth quarter 2012 sales of $104 million compared with $91 million in the same quarter of 2011.

Electrophysiology’s quarterly sales edged up from $36 million in the fourth quarter of 2011 to $38 million for the quarter in 2012.

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of 2012 was $60 million compared with $107 million for the fourth quarter of 2011. These results included divestiture-related net credits, acquisition, restructuring- and litigation-related charges and amortization expense, of $192 million (after-tax).

Sales for the full year 2012 were $7.25 billion, as compared with sales of $7.62 billion for the full year 2011, a decrease of 5 percent. Excluding the impact of foreign currency and sales from divested businesses, sales decreased 3 percent as compared to the prior period.

Interventional cardiology and cardiac rhythm management reported declines in annual sales while endoscopy, urology/women’s health and neuromodulation posted gains. Electrophysiology sales remained the same, at $147 million in both 2012 and 2011.

Interventional cardiology posted worldwide sales were $2.18 billion in 2012, down from $2.495 billion in 2011. Cardiac rhythm management 2012 sales were $1.91 billion, down from $2.09 billion in 2011.

Worldwide sales for endoscopy totaled $1.25 billion, up from $1.19 billion in 2011. Peripheral intervention posted sales of $774 million, up from $731 million in 2011. Urology/women’s health had sales of $500 million in 2012, up from $498 million in 2011. Neuromodulation reported 2012 sales of $367 million compared with $336 million in the same quarter of 2011.

On a GAAP basis, net loss for the full year 2012 was $4.07 billion. Reported results included goodwill and other intangible asset impairment charges, acquisition- and divestiture-related net credits, restructuring- and litigation-related charges, discrete tax items and amortization expense (after-tax) of $5 billion. Net income for the full year 2011 was $441 million.

Natick, Mass-based Boston Scientific added that it anticipated a reduction of 900 to 1,000 positions worldwide through a combination of employee attrition and targeted headcount reductions. The moves are part of a continuing restructuring program that is expected to reduce gross annual pre-tax operating expenses by approximately $100 million to $115 million exiting 2013.