www.eXFILE.com 888.775-4789 BOSTON SCIENTIFIC -- FORM 8K
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): January 27,
2009
BOSTON
SCIENTIFIC CORPORATION
(Exact
name of registrant as specified in charter)
|
DELAWARE
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1-11083
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04-2695240
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|
(State or
other jurisdiction of incorporation)
|
(Commission file
number)
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(IRS employer
identification no.)
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| One Boston Scientific Place,
Natick, Massachusetts |
01760-1537
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(Address of
principal executive offices)
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(Zip
code)
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Registrant’s
telephone number, including area code: (508) 650-8000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the fling 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))
ITEM
2.02. RESULTS OF OPERATIONS AND FINANCIAL
CONDITION.
On
January 28, 2009, we issued a press release announcing financial results
for the fourth quarter and full year ended December 31, 2008, as well as
guidance for net sales and earnings per share for the first quarter of
2009. A copy of the release is furnished with this report as Exhibit
99.1.
The
information in this Item 2.02 and Exhibit 99.1 attached
hereto 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
2.05. COSTS ASSOCIATED WITH EXIT OR DISPOSAL
ACTIVITIES.
On
January 27, 2009, we committed to a Plant Network Optimization plan (the “Plan”)
which is intended to simplify our manufacturing plant structure by transferring
certain production lines from one facility to another and closing certain
facilities. The Plan is a complement to our previously announced expense and
head count reduction plan, and is intended to improve gross profit
margins. Activities under the Plan will be initiated in 2009 and are
expected to be substantially completed by the end of 2011. We
estimate that the Plan will result in annual pre-tax reductions of manufacturing
costs of approximately $65 million to $80 million in 2012. These
savings are in addition to an estimated $35 million to $40 million of annual
pre-tax reductions of manufacturing costs in 2012 from activities under our
previously announced expense and headcount reduction plan.
We
estimate that the Plan will result in total pre-tax charges of approximately
$135 million to $150 million, and that approximately $120 million to $130
million of these charges will result in future cash outlays. The
following table provides a summary of our estimates of costs associated with the
Plan by major type of cost:
|
Type
of Cost
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Total
Expected Amounts
|
| |
|
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| Restructuring
charges: |
|
|
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Termination
benefits
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$45 million to $50
million
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| |
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| Restructuring-related
expenses: |
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Accelerated
depreciation
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$15 million to $20
million
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|
Production line
transfer costs
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$75 million to $80
million
|
| |
|
|
| |
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$135
million to $150 million
|
| |
|
|
We
estimate that during 2009, we will record $20 million to $30 million of
restructuring charges associated with the Plan, as well as $15 million to $25
million of restructuring-related expenses, which will be recorded through cost
of goods sold. We will record the remaining expenses throughout 2010 and
2011. The restructuring charges relate primarily to termination benefits
recorded pursuant to FASB Statement No. 112, Employer’s Accounting for
Postemployment Benefits and FASB Statement No. 146, Accounting for Costs Associated with
Exit or Disposal Activities.
This Item 2.05 contains forward-looking
statements within the meaning of 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 Plant Network Optimization Plan, our expense
and headcount reduction plan, our potential asset divestitures, and our
operational and growth strategies. 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 Form 8-K. As a result, readers are cautioned not to place
undue reliance on any of our forward-looking
statements.
ITEM
2.06. MATERIAL IMPAIRMENTS.
On
January 27, 2009, we concluded that we are required to record a material
goodwill impairment charge during the fourth quarter of 2008 related to our 2006
acquisition of Guidant. The recent decline in our stock price and
our market capitalization created an indication of potential impairment of
our goodwill balance. Consequently, we performed an interim impairment test of
our goodwill associated with the acquisition. We considered the
changes in CRM market demand since our acquisition of Guidant relative to our
original assumptions, as well as the effect of recent disruptions in equity and
credit markets upon weighted average cost of capital. As a result, we have
recorded an estimated $2.7 billion write-down of goodwill. This
non-cash impairment charge will not affect the debt covenants under our existing
term loan and revolving credit facility agreements. We intend to
finalize the amount of the goodwill impairment charge during the first quarter
of 2009.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
|
99.1
|
Press
release issued by Boston Scientific Corporation dated January 28,
2009
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SIGNATURE
Pursuant to the
requirements of the Securities and 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.
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BOSTON
SCIENTIFIC CORPORATION
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Date:
January 29, 2009
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By:
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/s/ Lawrence
J. Knopf |
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Lawrence
J. Knopf
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Senior
Vice President and Deputy General Counsel
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EXHIBIT
INDEX
Exhibit No. Description
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99.1
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Press
release issued by Boston Scientific Corporation dated January 28,
2009
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