Baxter International : Q1 2025 Financial Schedules

Published: 2025-05-01 07:40:09 ET BAX

Published on 05/01/2025 at 07:40

BAXTER - PAGE 9

Three Months Ended March 31,

2025

2024

Change

NET SALES

$ 2,625

$ 2,490

COST OF SALES

1,764

1,529

15%

GROSS MARGIN

861

961

(10)%

% of Net Sales

32.8 %

38.6 %

(5.8) pts

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

703

729

(4)%

% of Net Sales

26.8 %

29.3 %

(2.5) pts

RESEARCH AND DEVELOPMENT EXPENSES

140

120

17%

% of Net Sales

5.3 %

4.8 %

0.5 pts

OTHER OPERATING INCOME, NET

(40)

(3)

OPERATING INCOME

115

(50)%

% of Net Sales

2.2 %

4.6 %

(2.4) pts

INTEREST EXPENSE, NET

(18)%

OTHER (INCOME) EXPENSE, NET

(3)

(9)

(67)%

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(3)

INCOME TAX EXPENSE (BENEFIT)

(67)

% of Income (loss) from Continuing Operations Before Income Taxes

2,233.3 %

87.0 %

INCOME (LOSS) FROM CONTINUING OPERATIONS

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX

88%

NET INCOME (LOSS)

126

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS INCLUDED IN CONTINUING OPERATIONS

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS INCLUDED IN DISCONTINUED OPERATIONS

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

NET INCOME (LOSS) ATTRIBUTABLE TO BAXTER STOCKHOLDERS

$ 126

$ 37

INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE

Basic

$ 0.13

$ 0.01

Diluted

$ 0.13

$ 0.01

INCOME (LOSS) FROM DISCONTINUED OPERATIONS PER COMMON SHARE

Basic

$ 0.12

$ 0.06

100%

Diluted

$ 0.12

$ 0.06

100%

INCOME (LOSS) PER COMMON SHARE

Basic

$ 0.25

$ 0.07

Diluted

$ 0.25

$ 0.07

WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING

Basic

512

508

Diluted

514

510

ADJUSTED OPERATING INCOME (excluding special items)¹

$ 392

$ 307

28%

ADJUSTED INCOME (LOSS) FROM CONTINUING OPERATIONS (excluding special items)¹

$ 285

$ 183

56%

ADJUSTED INCOME (LOSS) FROM DISCONTINUED OPERATIONS (excluding special items)1

$ 35

$ 150

(77)%

ADJUSTED NET INCOME ATTRIBUTABLE TO BAXTER STOCKHOLDERS (excluding special

items)¹

$ 320

$ 331

(3)%

ADJUSTED DILUTED EPS FROM CONTINUING OPERATIONS (excluding special items)¹

$ 0.55

$ 0.36

53%

ADJUSTED DILUTED EPS FROM DISCONTINUED OPERATIONS (excluding special items)¹

$ 0.07

$ 0.29

(76)%

ADJUSTED DILUTED EPS (excluding special items)¹

$ 0.62

$ 0.65

(5)%

1Refer to page 10 for a description of the adjustments and a reconciliation to U.S. GAAP measures. NM - Not Meaningful

The company's U.S. GAAP results for the three months ended March 31, 2025 included special items which impacted the U.S. GAAP measures as follows:

Income (Loss)

Diluted

Gross Margin

Selling, General and Administrative Expenses

Research and Development Expenses

Operating Income

Other (Income) Expense, Net

From Continuing Operations Before Income Taxes

Income Tax Expense (Benefit)

Income (Loss) From Continuing Operations

Income (Loss) From Discontinued Operations, Net of Tax

Net Income (Loss)

Net Income (Loss) Attributable to Baxter Stockholders

Earnings Per Share from Continuing Operations

Diluted Earnings Per Share from Discontinued Operations

Diluted Earnings Per Share

Reported $ 861 $ 703 $ 140 $ 58 $ (3) $ (3) $ (67) $ 64 $ 62 $ 126 $ 126 $ 0.13 $ 0.12 $ 0.25

Intangible asset amortization 104 (51) - 155 - 155 37 118 - 118 118 0.23 0.00 0.23

Reported percent of net sales (or effective tax rate for income tax expense (benefit))

32.8 % 26.8 % 5.3 % 2.2 % (0.1) % (0.1) % 2,233.3 % 2.4 % 2.4 % 4.8 % 4.8 %

Acquisition and integration items2 - (1) - 1 (5) 6 1 5 - 5 5 0.01 0.00 0.01

Business optimization items1 13 (30) (2) 45 - 45 11 34 - 34 34 0.07 0.00 0.07

Product related reserves4 6 - - 6 - 6 2 4 - 4 4 0.01 0.00 0.01

European medical devices regulation3 5 - - 5 - 5 1 4 - 4 4 0.01 0.00 0.01

Legal matters6 11 - - 11 - 11 2 9 - 9 9 0.02 0.00 0.02

Hurricane Helene costs5 98 - - 98 98 25 73 6 79 79 0.14 0.01 0.15

Investment impairments8 - - - - (9) 9 2 7 - 7 7 0.01 0.00 0.01

Separation-related costs7 - (13) - 13 - 13 3 10 31 41 41 0.02 0.06 0.08

Gain on Kidney Care sale9 - - - - - - - - (111) (111) (111) 0.00 (0.22) (0.22)

Adjusted percent of net sales (or effective tax rate for income tax expense (benefit))

41.8 %

23.2 %

5.3 % 14.9 % (0.6)%

13.1 % 17.4 % 10.9 %

1.3 % 12.2 % 12.2 %

Adjusted

$1,098 $

608 $ 138 $ 392 $ (17) $ 345 $ 60 $ 285 $

35 $ 320 $ 320 $ 0.55 $

0.07 $ 0.62

Tax matters10 - - - - - - 43 (43) 47 4 4 (0.08) 0.09 0.01

The company's U.S. GAAP results for the three months ended March 31, 2024 included special items which impacted the U.S. GAAP measures as follows:

Gross

Selling, General and Administrative

Operating

Income (Loss) From Continuing Operations Before Income

Income Tax Expense

Income (Loss) From Continuing

Income (Loss) From Discontinued Operations,

Net Income

Net Income (Loss) Attributable to Baxter

Diluted Earnings Per Share from Continuing

Diluted Earnings Per Share from Discontinued

Diluted Earnings

Margin

Expenses

Income

Taxes

(Benefit)

Operations

Net of Tax

(Loss)

Stockholders

Operations

Per Share

Reported

$ 961

$ 729

$ 115

$ 46

$ 40

$ 6

$ 33

$ 39

$ 37

$ 0.01

$ 0.06

$ 0.07

Reported percent of net sales (or effective tax rate for income tax expense (benefit))

38.6 %

29.3 %

4.6 %

1.8 %

87.0 %

0.2 %

1.3 %

1.6 %

1.5 %

Intangible asset amortization

106

(52)

158

120

126

0.24

0.01

0.25

Business optimization items1

(17)

0.03

0.05

0.08

Acquisition and integration items2

(4)

0.01

0.00

0.01

European medical devices regulation3

0.01

0.00

0.01

Separation-related costs7

0.00

0.15

Tax matters10

(32)

0.06

0.01

0.07

Adjusted

$ 1,080

$ 656

$ 307

$ 238

$ 55

$ 183

$ 150

$ 333

$ 331

$ 0.36

$ 0.29

$ 0.65

Adjusted percent of net sales (or effective tax rate for income tax expense (benefit))

43.4 %

26.3 %

12.3 %

9.6 %

23.1 %

7.3 %

6.0 %

13.4 %

13.3 %

Reported

Adjusted

Income from discontinued operations, net of tax

$ 33

$ 150

Less: Net income attributable to noncontrolling interests included in discontinued operations

Income from discontinued operations, net of tax attributable to Baxter stockholders

$ 31

$ 148

Reported

Adjusted

Net income (loss)

$ 39

$ 333

Less: Net income attributable to noncontrolling interests

Net income (loss) attributable to Baxter stockholders

$ 37

$331

1 The company's results of continuing operations in 2025 and 2024 included costs related to programs to optimize its organization and cost structure. These restructuring and business optimization costs in 2025 included costs primarily related to its initiatives to reduce its cost structure following the sale of its former Kidney Care segment. These restructuring and business optimization costs in 2024 included costs primarily related to the implementation of a new operating model intended to simplify and streamline its operations and better align its manufacturing and supply chain to its commercial activities and to a lesser extent, third-party costs incurred to support the transformation of certain general and administrative functions. The company's results of discontinued operations in 2024 included costs primarily related to a program to centralize certain of its research and development activities into a new location.

2The company's results of continuing operations in 2025 and 2024 included integration-related items comprised of Hillrom acquisition and integration expenses. In 2025 these expenses primarily reflected the recognition of a noncash impairment of property, plant and equipment related to integration activities. In 2024 these expenses primarily reflected third party consulting costs related to its integration of Hillrom.

3The company's results in 2025 and 2024 included incremental costs to comply with the European Union's medical device regulations for previously registered products, which primarily consisted of contractor costs and other direct third-party costs. The company considers the adoption of these regulations to be a significant one-time regulatory change and believes that the costs of initial compliance for previously registered products over the implementation period are not indicative of its core operating results.

4The company's results of continuing operations in 2025 included charges related to a revised estimate of warranty and remediation activities arising from a field corrective action on certain of our infusion pumps initially recorded in 2022.

5The company's results of continuing operations in 2025 included charges related to Hurricane Helene, which consisted of remediation, air freight and other costs. The company's results of discontinued operations in 2025 included charges related to Hurricane Helene, which consisted of air freight and other costs.

6The company's results of continuing operations in 2025 included charges related to matters involving alleged injury from environmental exposure.

7The company's results of continuing operations in 2025 included separation-related costs primarily related to external advisors supporting its activities related to the separation of its Kidney Care segment. The company's results of discontinued operations in 2025 and 2024 included separation-related costs primarily related to external advisors supporting its activities related to the completed sale of its Kidney Care segment.

8The company's results of continuing operations in 2025 included losses from a noncash impairment write-down in an equity method investment.

9The company's results of discontinued operations in 2025 included a gain from the sale of the Kidney Care business.

10The company's results of continuing operations in 2025 included a tax benefit driven by an entity classification election that it made for U.S. tax purposes, which resulted in a capital loss. The company's results of discontinued operations in 2025 included indirect impacts of the carryback of the tax benefits generated by the sale of its Kidney Care business to prior years. The company's results in 2024 included a change in its permanent reinvestment assertion that it allocated to continuing operations and a reallocation of income tax expense between discontinued and continuing operations resulting from the application of intraperiod tax allocation to its adjusted results in an interim period.

For more information on the company's use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.

BAXTER - PAGE 11

The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products. The Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including operating room integration technologies, precision positioning devices and other accessories. The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthesia and drug compounding. Other sales not allocated to a segment primarily includes sales to Vantive, pursuant to the Kidney Care MSA, and sales of products and services provided directly through certain of our manufacturing facilities

Three Months Ended March 31,

2025 2024

% Change @ Actual Rates

% Change @ Operational Sales Growth

Infusion Therapies & Technologies

$ 994

$ 966

3 %

6 %

Advanced Surgery

268

263

2 %

4 %

Medical Products & Therapies

1,262

1,229

3 %

6 %

Care & Connectivity Solutions

427

402

6 %

7 %

Front Line Care

277

265

5 %

Healthcare Systems & Technologies

704

667

6 %

Injectables & Anesthesia

335

328

2 %

4 %

Drug Compounding

246

250

(2)%

2 %

Pharmaceuticals

581

578

1 %

3 %

Other

388 %

0 %

Total - Continuing Operations

$ 2,625

$ 2,490

5 %

Operational sales growth is a non-GAAP measure. For more information on the company's use of non-GAAP financial measures, please see the Non-GAAP Financial Measures section of this press release.

Disclaimer

Baxter International Inc. published this content on May 01, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 01, 2025 at 11:39 UTC.