BAXTER
CONTINUES GROWTH MOMENTUM IN FIRST QUARTER WITH 11 PERCENT INCREASE
IN SALES, 12 PERCENT GROWTH IN EARNINGS AND 9 PERCENT EPS GROWTH
Company Boosts
R&D Spending 24 percent in the Quarter
DEERFIELD, ILL., April
19, 2001 - Baxter International Inc. (NYSE:BAX) continued
its sales and earnings growth momentum in the first quarter.
Net earnings for the quarter grew 12 percent to $214 million,
while earnings per diluted share grew 9 percent to $0.71.
This compares to the $191 million, or $0.65 per diluted share,
that Baxter reported for the same period last year. Net earnings
for the first quarter of 2001 exclude the one-time, non-cash
impact of adopting new accounting rulesA.
Baxter reported a
16 percent increase in sales before the impact of foreign
exchange, or 11 percent after the impact of foreign exchange.
Sales totaled $1.76 billion, up from the $1.58 billion reported
in the first quarter last year. Domestic sales increased 18
percent in the quarter, while international sales rose 15
percent (or 5 percent after the impact of foreign exchange).
Even with the impact
of foreign exchange, each of Baxter's businesses contributed
to the sales growth in the quarter. Baxter's BioScience business
grew 16 percent to $631 million, driven by continued strong
demand for therapies used in the treatment of hemophilia and
immune disorders. Sales for the company's Medication Delivery
business increased 8 percent in the quarter to $669 million,
with anesthesia products and electronic infusion pumps strong
contributors to that growth. Primary growth drivers for the
Renal business were hemodialysis products and service businesses,
contributing to a 9 percent increase in sales of $457 million.
"We continued
our very strong sales and earnings momentum with first quarter
performance consistent with our expectations," said Harry
M. Jansen Kraemer, Jr., chairman and chief executive officer.
"I expect Baxter
to continue to accelerate our sales and earnings growth through
enhancements to our product pipeline, increased production
capacity, continued improvements in operational efficiency,
and global expansion," Kraemer continued.
For 2001, Baxter expects
to accelerate annual sales growth to the low double digits,
to achieve earnings growth in the mid-teens, and to generate
more than $500 million in operational cash flow after investing
more than $1 billion in research and development and capital
expenditures. Specifically, Baxter expects to grow earnings
in the high single digits in the first half of 2001, and in
the mid- to high-teens in the second half of the year.
At its annual growth
conference conducted for investors last month, Baxter executives
highlighted numerous growth initiatives underway in each of
its businesses, including an enhanced pipeline of biopharmaceutical,
vaccine and transfusion therapy products, development of new
drug delivery platforms, and a new approach for integrating
care of patients with chronic renal insufficiency and end-stage
kidney disease.
Reflecting this commitment
to expand its product pipeline, Baxter boosted its spending
on research and development in the first quarter to $103 million,
an increase of 24 percent.
Recent Highlights
During the first quarter, Baxter announced several initiatives
designed to further align employee interests with those of
its shareholders, including changes to its long-term compensation
program for managers, and the granting of stock options to
more than 41,000 Baxter team members worldwide. The company
also announced a two-for-one common stock split, subject to
approval by shareholders of an increase in the number of common
shares the company is authorized to issue.
In BioScience, during
the first quarter the company announced plans to construct
a new facility for production of recombinant and cell-culture
derived vaccines. Baxter also completed its acquisition of
Sera-Tec Biologicals, which owns and operates 80 plasma collection
centers in 28 states, providing Baxter with a stable supply
of source plasma for processing into lifesaving plasma-based
therapies. The company also began a Phase I clinical study
for recombinant human C1 inhibitor in patients with hereditary
angioedema, as part of Baxter's collaboration with Pharming
Group N.V. With its partner Cerus Corporation, Baxter submitted
a CE mark application for approval to market the Intercept
Platelet system in Europe, and announced completion of enrollment
in a Phase III clinical trial of the Intercept Platelet System
in the United States. The Intercept Platelet System is designed
to inactivate viruses, bacteria, other pathogens and white
blood cells in donated platelets prior to transfusion.
Baxter's Medication
Delivery business announced agreements with U.S. Pharmacopeia
and Welch Allyn Protocol Inc. during the quarter, in initiatives
to improve patient safety. Baxter will promote and market
US Pharmacopeia's MedMARx database that allows hospitals to
report, track, document and analyze medication errors. Under
the agreement with Welch Allyn Protocol, the companies will
jointly develop the Acuity Pump System which will seamlessly
network Welch Allyn's monitoring systems with Baxter's Colleague
infusion pumps.
Also during the first
quarter, Baxter's Renal business announced that its New Drug
Application for Extraneal (icodextrin 7.5%) had been accepted
for filing by the U.S. Food and Drug Administration.
Baxter International
Inc. is a global medical products and services company that
provides critical therapies for people with life-threatening
conditions. Baxter's products and services in the areas of
bioscience (including biopharmaceuticals, vaccines, biosurgery
products and transfusion therapies), medication delivery and
renal therapy are used by health-care providers and their
patients in more than 100 countries.
A web cast of Baxter's
first quarter conference call for investors can be accessed
live from a link on Baxter's web site at www.baxter.com
beginning at 10:00 a.m. CDT on April 19, 2001. The company
will be making investor presentations on the following dates
during the second quarter of 2001: May 8 and June 26. Please
visit Baxter's web site for additional information regarding
web casts of these events, as well as Baxter's May 1 Annual
Meeting of Stockholders.
(Baxter, Colleague,
Extraneal and Intercept are trademarks of Baxter International
Inc. and its affiliates.)
This news release
contains forward-looking statements that involve risks and
uncertainties, including technological advances in the medical
field, product demand and market acceptance, the effect of
economic conditions, actions of regulatory bodies, the impact
of competitive products and pricing, foreign currency exchange
rates and other risks detailed in the company's filings with
the Securities and Exchange Commission. These forward-looking
statements are based on estimates and assumptions made by
management of the company and are believed to be reasonable,
though are inherently uncertain and difficult to predict.
Actual results or experience could differ materially from
the forward-looking statements.
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