C.R. Bard ends 2008 with rise in net income and sales, but anticipates an 'uneven' 2009.

C.R. Bard Inc. made it through another year with its performance record intact. Growth in 2008 surpassed expectations for the sixth consecutive year despite an anemic economy and a shrinking credit market. The 102-year-old medical equipment manufacturer ended the year with an EPS (earnings per share) of $4.44, a 16 percent increase compared with its 2007 EPS.

"Bard has built a consistent record of performance, delivering adjusted EPS growth above our 14 percent target for six consecutive years," said Timothy M. Ring, Bard chairman and CEO. "We have achieved this through successful product innovation, a commitment to market leadership and the talent ... of our employees around the world. The strength of our broad product portfolio and our healthy financial condition position us well for continued success."

The company may be well positioned for "continued success," but it may encounter some bumps on the way to achieving a seventh consecutive year of above-average financial growth. During a recent conference call, Bard executives warned analysts to expect "some unevenness" in 2009. "The volatility in foreign exchange doesn't appear to be easy," said Todd Schermerhorn, Bard senior vice president and chief financial officer. "That volatility complicates our financial planning and leaves us with at least a potential for some volatility in our quarter-by-quarter results."

Though the volatility in foreign exchange rates that Schermerhorn warned analysts about began well before the start of 2009, it did not significantly affect the company's fourth-quarter financial performance. Net income for the quarter--ended Dec. 31--jumped 42 percent to $149.4 million, and diluted EPS climbed 46 percent to $1.47, according to Bard's most recent earnings report.

Fourth-quarter net sales totaled $634.2 million, an 8.7 percent increase compared with the $583.3 million in sales the company reported in the final quarter of 2007. Domestic sales rose 11 percent to $436.3 million, while international sales swelled 4 percent to $197.9 million. Foreign exchange rates, however, clearly affected Bard's overseas sales--when the impact of those rates are excluded from the sales figures, overseas sales increased 14 percent.

Bard ended 2008 with an 11 percent jump in full-year sales and a 2 percent rise in net income. The company sold $2.45 billion worth of products last year and reported a net income of $416.5 million, though when adjusted for "items that affect comparability between periods," Bard's net income for the year soared to $455.4 million.

Much of the increase in net income can be attributed to robust fourth-quarter and full-year sales in Bard's four major product lines. Vascular product sales totaled $168.5 million in the fourth quarter, a 23 percent in crease compared with the $141.9 million the company reported in the same quarter of 2007. Full-year sales of vascular products rose 17 percent to $643.1 million, and executives attributed the increase to double-digit growth in endovascular products, peripheral PTA catheters, vena cava filters and stents. The company's stent business grew 57 percent in the fourth quarter; executives said the increase was driven mostly by the October approval and subsequent launch of the FLAIR AV access stent graft, a device used to treat stenoses in synthetic arteriovenous bypass grafts.

Sales of urology products rose 10 percent in the fourth quarter to $188.9 million, and 7 percent for the entire year to $708.5 million. Higher sales of the Murray Hill, N.J. based company's StatLock catheter stabilization line and basic drainage products contributed to the increases.

Oncology product sales recorded double-digit growth for both the fourth quarter and full year. Sales of these products (including the PowerPort and Safety Winged Infusion Sets, and PowerPICC SOLO and Sherlock Tip Location System) totaled $163.6 million in the fourth quarter, a 13 percent increase compared with the $148 million Bard posted in the last quarter of 2007. Full-year sales rose 15 percent to $646.6 million.

Surgical specialty products did not fare as well as Bard's other product lines. Global net sales climbed 1 percent in the fourth quarter to $95.5 million, down 1 percent on an as reported basis. Domestic sales fell 2 percent while international sales jumped 10 percent. Full-year sales of surgical specialty products was flat, totaling $368.2 million.