|Covidien Announces Highlights from Investor Meeting|
Chairman, President and CEO José (
“Despite the challenging external environment, we are delivering a very solid performance in 2012,” Almeida said. “We continue to make investments to expand our capabilities, particularly in emerging markets, and to capitalize on opportunities we are capturing from increased penetration of our broad product portfolio, particularly in vascular and energy.
“Our key initiatives – broaden innovation focus, aggressively manage our portfolio, capitalize on emerging markets opportunities and optimize spending to provide for investments in innovation and growth – will be the drivers of our future performance,” he added. “We will use our strong cash flow to fund business expansion, while remaining committed to return 50% of our free cash flow to shareholders through dividends and share repurchases.”
Mr. Almeida also said that the previously announced spinoff of the Pharmaceuticals business was on track and expected to be completed in mid-2013.
Chief Financial Officer
Excluding the impact of one-time items, the operating margin is expected
to be in the 22% to 23% range, and
Individuals who were unable to attend the meeting in person may view a replay of the presentations at Covidien’s website: http://investor.covidien.com. Presentation materials are also available at the same website.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures, including adjusted
operating margin and free cash flow, which are considered “non-GAAP”
financial measures under applicable
The Company presents its operating margin and effective tax rate forecast before special items to give investors a perspective on the expected underlying business results. Because the Company cannot predict the amount and timing of such items and the associated charges or gains that will be recorded in the Company’s financial statements, it is difficult to include the impact of those items in the forecast.
Free cash flow is defined as net cash provided by continuing operating activities less capital expenditures.
Any statements contained in this communication that do not describe
historical facts may constitute forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995. Any
forward-looking statements contained herein are based on our
management's current beliefs and expectations, but are subject to a
number of risks, uncertainties and changes in circumstances, which may
cause actual results or Company actions to differ materially from what
is expressed or implied by these statements. The factors that could
cause actual future results to differ materially from current
expectations include, but are not limited to, our ability to effectively
introduce and market new products or keep pace with advances in
technology, the reimbursement practices of a small number of large
public and private insurers, cost-containment efforts of customers,
purchasing groups, third-party payors and governmental organizations,
intellectual property rights disputes, complex and costly regulation,
including healthcare fraud and abuse regulations and the Foreign Corrupt
Practices Act, manufacturing or supply chain problems or disruptions,
rising commodity costs, recalls or safety alerts and negative publicity