Boston Scientific Corp 8-K, filed Apr 2, 2020
Boston Scientific Corp (BSX)
8-K
2020-04-02
For: 2020-04-01
View Original
Added on
April 07, 2026
About this 8-K
Boston Scientific Corp filed this 8-K on April 2, 2020, reporting on events of April 1, 2020.
Items reported
- Item 2.02: Financial results
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________________________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_____________________________________________________________________
Date of Report (Date of earliest event reported): April 1, 2020
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 508 683-4000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On April 2, 2020, Boston Scientific Corporation (the “Company”) issued a press release providing preliminary, unaudited sales estimates for the quarter ended March 31, 2020. The press release is furnished as Exhibit 99.1.
The information contained in Item 2.02 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 5.02. | DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. |
Reduction in Base Salary of Executive Officers
On April 2, 2020, the Company announced that, in light of the disruption and uncertainty created by the evolving COVID-19 pandemic and its anticipated impact on the Company’s operations, all of our executive officers, including our Chief Executive Officer, Chief Financial Officer, and our other named executive officers, will be taking a temporary reduction in base salary for up to 6 months. Our Chief Executive Officer, Michael Mahoney, will completely forgo his base salary, other than payments necessary to retain his benefits, resulting in a 99 percent reduction in his base salary. Our Chief Financial Officer, Daniel Brennan, and each of our other named executive officers, including, Kevin Ballinger, Joseph Fitzgerald, and Edward Mackey, will be taking a 50 percent reduction in base salary. These reductions in pay for our named executive officers will be effective as of April 13, 2020 and are expected to last for up to 6 months.
Reduction in Annual Cash Retainer for the Company’s Board of Directors
On April 1, 2020, in light of the disruption and uncertainty created by the evolving COVID-19 pandemic and its anticipated impact on the Company’s operations, the Board of Directors of the Company (the “Board”) determined that, for the one-year term beginning at the 2020 Annual Meeting of Stockholders, the annual cash retainer for each non-employee director serving on the Board will be temporarily reduced to 50 percent of the previously approved amount. The 50 percent payment will be made in 2021, no later than the 2021 Annual Meeting of Stockholders. In the event that a non-employee director elected to receive equity in lieu of the annual cash retainer, as permitted under the Company’s non-employee director compensation program, such grant will occur in the ordinary course in connection with the 2020 Annual Meeting of Stockholders but will be reduced in value by 50 percent.
ITEM 7.01. | REGULATION FD DISCLOSURE. |
The April 2, 2020 press release furnished as Exhibit 99.1 hereto also discusses the disruption and uncertainty created by the evolving COVID-19 pandemic and its anticipated impact on the Company’s operations as well as certain of the proactive measures the Company has implemented or plans to implement to support communities, innovate to address critical needs, and mitigate the continuing financial and operational challenges resulting from the pandemic.
The information contained in Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits
Exhibit No. | Description | |
99.1 | ||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words such as “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend,” “aiming,” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our business plans and product performance and impact, and the impact of the COVID-19 outbreak on the Company’s results of operations.
For a further list and description of other important risks and uncertainties that may affect our future operations, see Part I, Item IA - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item IA - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file thereafter. We disclaim any intention or obligation or publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BOSTON SCIENTIFIC CORPORATION | ||||
Date: | April 2, 2020 | By: | /s/ Vance R. Brown | |
Vance R. Brown | ||||
Vice President and Chief Corporate Counsel | ||||
FOR IMMEDIATE RELEASE
Boston Scientific Provides Update on COVID-19 Impact and Response Efforts
MARLBOROUGH, Mass., April 2, 2020 - The COVID-19 pandemic has brought unprecedented challenges upon the global community and the many healthcare providers who are caring for patients. During this time of concern and disruption, Boston Scientific Corporation (NYSE: BSX) has taken important actions to reduce the spread of the virus in local communities and support global relief efforts, while implementing business continuity plans. Today the company is providing an update on the actions it has taken and a preliminary estimated revenue growth range for the first quarter 2020.
“We are focused on the safety and well-being of our people, who continue to find innovative solutions to support critical procedures and time-sensitive patient needs,” said Mike Mahoney, chairman and chief executive officer, Boston Scientific. “As healthcare systems respond to the increasing demands of managing COVID-19, emergent procedures need to be prioritized to help enable increased hospital capacity, and therefore elective procedures are being delayed. While we expect this to negatively impact short-term performance, we continue to believe in the excellent, long-term fundamentals of our company and will continue to manage through these challenges with strategic focus and the winning spirit of our talented global team.”
For the first quarter of 2020, business trends through the first two months of the year were in line with company expectations; however, as COVID-19 reached a global pandemic level in March, procedural volumes significantly declined. Subsequently, the company now expects first quarter 2020 revenue growth on a GAAP basis to be approximately flat to up slightly versus the prior year period, and an organic* revenue decline of approximately two to three percent.
The company is currently conducting financial closing procedures for the first quarter and is unable to provide a more precise reported sales estimate at this time. Final sales results, other operating metrics and business highlights will be provided on the first quarter earnings call scheduled for April 29, 2020.
Implementing Mitigation Plans
Assuming the second quarter impact of the COVID-19 pandemic will be more significant than the first quarter of 2020, Boston Scientific is taking proactive steps to reduce costs and be in a strong position to support customers and patients when healthcare systems begin to recover, and elective procedures start to return to normal volumes. These steps include optimizing appropriate variable costs, including manufacturing output, significantly reducing the salaries of its chief executive officer, board of directors and executive committee members, and where appropriate, temporarily reducing work week schedules for employees.
The company has also strategically decreased discretionary spending and implemented precautionary measures to ensure business continuity in its supply chain and manufacturing facilities, including rotational shifts, segregating buildings and limiting movement across building sites.
Supporting Communities
To help meet the urgent needs of healthcare providers, Boston Scientific continues to contribute to COVID-19 relief efforts globally through monetary and supply donations, and by providing engineering and manufacturing expertise and resources. This includes previous and planned donations of protective personal equipment (PPE) and medical equipment to local hospitals and government agencies. The company is also providing support to children, families and the most vulnerable through direct financial contributions to local community and global non-profit organizations.
Additionally, the company is supporting employees who are trained healthcare providers choosing to volunteer as supplemental staff for hospitals in need of additional nurses, doctors and clinicians.
Innovating to Address Critical Needs
Many Boston Scientific employees are lending their time and expertise to collaborate with hospitals, universities and industry peers to find new and innovative ways to address the urgent demand for PPE and ventilators. Several initiatives are underway.
• | Ventilators: |
◦ | Working with the University of Minnesota Bakken Medical Device Center and industry collaborators to bring a ventilator alternative to market. The machine is intended to work as a one-armed robot to pump an Ambu® bag, replacing the need for manual respiration in emergency settings. |
◦ | Collaborating with a global manufacturer of commercial ventilators to source and produce product components, thereby expanding its supply chain capacity, to enable its increased production of transportable ventilators. |
• | PPE: |
◦ | Addressing PPE shortages among healthcare workers by producing face shields at three of our U.S. manufacturing sites through a collaboration with the nonprofit GetUsPPE.org and plastic packaging company Prent Corporation. |
◦ | Working with the University of Minnesota and others to develop a reusable personal respirator. The joint team intends to design and build prototypes, collect clinical feedback, obtain regulatory approval and distribute a significant quantity of reusable PPE that can be used in place of the combination N95 respirator and face shield. |
“Boston Scientific is committed to working alongside its global stakeholders to emerge from this challenging time stronger, together, so we can continue to deliver innovative medical solutions and improve the health of patients around the world,” said Mike Mahoney.
First Quarter Earnings Conference Call
As mentioned, on Wednesday, April 29, 2020 Boston Scientific will webcast its conference call discussing financial results and business highlights for the first quarter ended March 31, 2020. The call will begin at 8:00 a.m. EDT, hosted by Mike Mahoney and Dan Brennan, executive vice president and chief financial officer, Boston Scientific. The company will issue a news release announcing financial results for the first quarter on Wednesday, April 29, 2020, prior to the conference call.
A live webcast and replay of the event will be accessible at investors.bostonscientific.com. The replay will be available beginning approximately one hour following the completion of the event.
About Boston Scientific
Boston Scientific transforms lives through innovative medical solutions that improve the health of patients around the world. As a global medical technology leader for 40 years, we advance science for life by providing a broad range of high performance solutions that address unmet patient needs and reduce the cost of healthcare. For more information, visit www.bostonscientific.com and connect on Twitter and Facebook.
*Organic revenue excludes the impact of foreign currency fluctuations and sales from the recent acquisitions of Vertiflex, Inc and BTG plc (BTG), each with no prior year comparable sales. Organic revenue also excludes the impact of the divestiture of the global embolic microspheres portfolio, a transaction entered into in connection with obtaining the antitrust clearances required to complete the BTG transaction.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding our business plans and product performance and impact, and the impact of the COVID-19 outbreak on the Company’s results of operations. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.
Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.
CONTACTS: |
Kelly Leadem |
Media Relations |
(508) 683-5543 (office) |
Media@bsci.com |
Susie Lisa, CFA |
Investor Relations |
(508) 683-5565 (office) |
BSXInvestorRelations@bsci.com |