Press releases

Baxter Reports Fourth Quarter 2013 Financial Results In Line with Expectations  

Sales Growth of 16 Percent Driven by Strong Demand for Hemophilia Therapies, Medical Products & Gambro Acquisition

Company Provides 2014 Financial Outlook, Advances New Product
Pipeline & Collaborations

DEERFIELD, Ill., January 23, 2014 - Baxter International Inc. (NYSE:BAX) today announced financial results for the fourth quarter of 2013, and provided its financial outlook for the first quarter and full-year 2014.

For the fourth quarter, Baxter reported net income of $326 million and earnings per diluted share of $0.59, compared to net income of $494 million and earnings per diluted share of $0.89 in the same period last year. These results include after-tax special items totaling $366 million (or $0.67 per diluted share), primarily for costs associated with Baxter's acquisition of Gambro, business optimization programs and recent collaborations with Coherus Biosciences and Cell Therapeutics, Inc.  Fourth quarter 2012 results included after-tax special items of $206 million (or $0.37 per diluted share).

On an adjusted basis, excluding special items, Baxter's net income totaled $692 million, or $1.26 per diluted share, in line with the company's previously-issued earnings guidance.

Worldwide sales totaled $4.4 billion and increased 16 percent from prior-year levels.  Excluding the contribution of Gambro revenues in the quarter, Baxter's sales increased 5 percent to $4.0 billion (or 6 percent excluding the impact of foreign currency). Sales within the United States totaled $1.8 billion and advanced 13 percent, and international sales of $2.6 billion increased
19 percent (or 20 percent excluding the impact of foreign currency).

BioScience revenues of $1.8 billion grew 5 percent from the prior-year period (or 6 percent excluding the impact of foreign currency), driven primarily by double-digit growth and solid demand for the company's hemophilia therapies, including ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method] and FEIBA (an inhibitor therapy) in the United States and Europe, as well as for biosurgery products.

Medical Products sales of $2.6 billion increased 25 percent from the prior-year period (or 27 percent excluding the impact of foreign currency), and included revenues associated with the Gambro acquisition of $413 million. Excluding foreign currency and the contribution from the acquisition, Medical Products sales grew 7 percent, driven by strong growth across the entire business portfolio.

Full-Year Results
Baxter's net income totaled $2.0 billion, or $3.66 per diluted share in 2013. Excluding special items, Baxter's adjusted net income increased 2 percent to $2.6 billion, and earnings per diluted share of $4.67 advanced 3 percent.

Baxter's worldwide sales in 2013 totaled $15.3 billion and rose 8 percent.  Excluding revenues of $513 million associated with the Gambro acquisition, Baxter's revenues increased 4 percent to $14.7 billion. BioScience sales of $6.6 billion advanced 5 percent (or 6 percent excluding the impact of foreign currency), while Medical Products sales of $8.7 billion grew 9 percent from the prior-year period. Excluding revenues associated with the Gambro acquisition, Medical Products sales increased 3 percent (or 4 percent excluding the impact of foreign currency) on a full-year basis.

During 2013, Baxter generated cash flows from operations of approximately $3.2 billion and returned significant value to shareholders. Baxter returned more than $1.9 billion to shareholders during the year, through share repurchases of $913 million (or approximately 13 million shares) and dividends totaling more than $1.0 billion, reflecting a 27 percent increase in dividend payments versus the prior year.

"We continue to meet our financial objectives while navigating a challenging and complex macro-environment," said Robert L. Parkinson, Jr., chairman and chief executive officer. "We remain focused on the company's strategic priorities of advancing the new product pipeline, investing in future growth opportunities, and strengthening our operational execution, which will result in enhanced value for patients, healthcare providers and shareholders."

2013 Highlights
In 2013, Baxter continued to transform its new product pipeline into a robust portfolio of products and therapies that improve the quality of care and address key, high-potential areas of unmet medical need, while also expanding its business portfolio. This is evidenced by:


"We are building upon the proven expertise and leadership we have across a number of therapeutic areas by capitalizing on our significant global presence and differentiated brands, pursuing innovation and establishing a robust new product pipeline, and improving access and standards of care around the world while enhancing patient outcomes," said Parkinson.

Fourth Quarter Highlights
Momentum accelerated in the fourth quarter as Baxter advanced its late-stage pipeline with a number of regulatory filings, product approvals, and collaborations. Highlights include:


Outlook for First Quarter and Full-Year 2014
Baxter also announced today its outlook for the first quarter and full-year 2014.  Baxter expects sales growth for full-year 2014 of 9 to 10 percent, before the impact of foreign exchange. Also, for the full year, Baxter expects earnings, before special items, of $5.05 to $5.25 per diluted share and cash flows from operations of approximately $3.5 billion.

The 2014 earnings guidance excludes approximately $0.25 per diluted share of intangible asset amortization expense. Reconciling for the inclusion of intangible asset amortization results in GAAP (Generally Accepted Accounting Principles) earnings of $4.80 to $5.00 per diluted share, before other special items. Historical financial results (restated for the exclusion of intangible amortization) are available on the Investor Relations page of Baxter's website at www.baxter.com.

For the first quarter of 2014, the company expects sales growth of approximately 13 to 14 percent, excluding the impact of foreign currency.  Baxter expects earnings, before special items, of $1.06 to $1.09 per diluted share in the first quarter (or GAAP earnings of $1.00 to $1.03 per diluted share including approximately $0.06 per diluted share of intangible asset amortization expense).

A webcast of Baxter's fourth quarter conference call for investors can be accessed live from a link on the company's website at www.baxter.com beginning at 7:30 a.m. CST on January 23, 2014. Please visit www.baxter.com for more information regarding this and future investor events and webcasts.

Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.

This release includes forward-looking statements concerning the company's financial results, business development activities, R&D pipeline and outlook for 2014. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: demand for and market acceptance of risks for new and existing products, such as ADVATE, and other technologies; future actions of regulatory bodies and other governmental authorities that could delay, limit or suspend product development, manufacturing or sales or result in sanctions; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; future actions of governmental authorities and other third parties as U.S. healthcare reform legislation and other austerity measures are implemented globally; additional legislation, regulation and other governmental pressures, which may affect pricing, taxation, reimbursement and rebate policies of government agencies and private payers or other elements of the company's business; product development risks, including satisfactory clinical performance; the company's ability to realize the anticipated benefits from its business development and R&D activities, including the ability to successfully integrate the Gambro acquisition; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; the impact of geographic and product mix on the company's sales; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; the availability of acceptable raw materials and component supply; fluctuations in supply and demand and the pricing of plasma-based therapies; the ability to enforce company patents; patents of third parties preventing or restricting the company's manufacture, sale or use of affected products or technology; the impact of global economic conditions on Baxter and its customers, including foreign governments in certain countries in which the company operates; foreign currency fluctuations and other risks identified in the company's most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on the company's website.  The company does not undertake to update its forward-looking statements.  Financial schedules are attached to this release and available on the company's website.