During the quarter, Edwards recorded a net $10.1 million pre-tax
special charge, primarily resulting from:
-- An $8.1 million loss on the sale of the LifeStent product line.
Accounting rules required the write-off of all related assets and
goodwill this quarter. Future milestone payments are expected to
result in a total pre-tax net gain from the transaction of
approximately $55 million.
-- A $2.1 million charge for the settlement of litigation related to a
previously divested perfusion services business.
Since the goodwill assigned to the LifeStent divestiture is not recognized for tax purposes, the special items resulted in a $4.9 million net tax liability this quarter. This tax liability plus the $10.1 million pre-tax special charge reduced net income by $15 million. The total charge is reconciled in the table below.
Free cash flow generated during the quarter was $20.8 million, calculated as cash flow from operating activities of $29.9 million minus capital expenditures of $9.1 million. At March 31, 2008, total debt was $213 million, and cash and cash equivalents were $163 million, resulting in net debt of $50 million.
In the quarter, the company repurchased 2.26 million shares of common stock for $100 million at an average price of $44.24 per share.
On May 15, 2008, both the holders of the company's $150 million convertible debt and the company will have the option to redeem the bond. Accordingly, the company expects the debt to be fully retired within the quarter, resulting in a reduction of 2.7 million diluted shares.
Edwards is raising its 2008 guidance for total sales by $50 million to
between $1.210 billion and $1.260 billion. This revised range reflects
expected performance improvement across all of the com
|SOURCE Edwards Lifesciences Corporation|
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