Boston Scientific Announces Results for First Quarter Ended March 31, 2006
PRNewswire-FirstCall
NATICK, Mass.
(NYSE:BSX)

NATICK, Mass., April 18 /PRNewswire-FirstCall/ -- Boston Scientific Corporation (NYSE: BSX) today announced financial results for the first quarter ended March 31, 2006.

  Highlights:

  * Record net sales of $1.62 billion, the highest quarterly total in
    company history

  * Record drug-eluting stent sales in markets outside the U.S.

  * Quarterly sequential growth in worldwide TAXUS® coronary stent sales
    from $606 million to $633 million, including sequential growth in U.S.
    sales from $398 million to $419 million

Net sales for the first quarter of 2006 were $1.620 billion as compared to $1.615 billion for the first quarter of 2005. Excluding the unfavorable impact of $40 million of foreign currency fluctuations, net sales for the first quarter of 2006 increased by three percent. Worldwide sales of TAXUS paclitaxel-eluting coronary stent systems were $633 million for the first quarter of 2006 as compared to $686 million for the first quarter of 2005 and $606 million for the fourth quarter of 2005. U.S. sales of TAXUS coronary stent systems were $419 million for the first quarter of 2006 as compared to $494 million for the first quarter of 2005 and $398 million for the fourth quarter of 2005.

Net income for the first quarter of 2006 was $332 million, or $0.40 per diluted share, as compared to net income of $358 million, or $0.42 per diluted share, for the first quarter of 2005. Reported results for the first quarter of 2006 included charges (after-tax) of $22 million, or $0.03 per share, for stock-based compensation due to the adoption of SFAS No. 123®*, and $27 million (after-tax), or $0.03 per share, associated with investment write-downs due to the termination of a gene therapy trial. Reported results for the first quarter of 2005 included charges (after-tax) of $73 million, or $0.09 per share, for purchased research and development.

"We are very pleased that we achieved record company sales for the quarter, including 15 percent year-over-year constant currency growth in our Endosurgery Group, in addition to sequential growth in worldwide TAXUS stent system sales," said Jim Tobin, President and Chief Executive Officer of Boston Scientific. "This strong performance provides a solid foundation for our acquisition of Guidant, which we expect to close shortly."

Boston Scientific officials will be discussing these and other issues with analysts on a conference call at 11:00 a.m. (ET) Tuesday, April 18, 2006. The Company will webcast the call to all interested parties through its website: http://www.bostonscientific.com/. Please see the website for details on how to access the webcast. The webcast will be available for one year on the Boston Scientific website.

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: http://www.bostonscientific.com/.

* Statement of Financial Accounting Standards (new accounting standard for stock-based compensation)

Effective January 1, 2006, the Company adopted SFAS No. 123® using the modified-prospective method. In accordance with this adoption method, the Company is not adjusting its historical financial statements to reflect the impact of stock-based compensation. Based on the pro forma application of SFAS No. 123 for the calculation of employee stock-based compensation expense prior to January 1, 2006 (as previously disclosed in the Company's consolidated financial statements), pro forma employee stock-based compensation expense in the first quarter of 2005 (after-tax) was $17 million, or $0.02 per diluted share.

Forward Looking Statements

This press release contains forward-looking statements, including statements as to regulatory approvals for the merger, timing expectations to complete the merger and other statements identified by words such as "anticipates", "believes", "estimates", "expects", "intends", "may", "projects", "plans", "will" and similar expressions intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the satisfaction of other closing conditions contained in the merger agreement and other risk factors relating to our industry as detailed from time to time in each of Boston Scientific's and Guidant's reports filed with the Securities and Exchange Commission, including each such company's most recent Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Boston Scientific undertakes no obligation to update publicly any forward-looking statements herein, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

The Company discloses non-GAAP or pro forma measures that exclude certain charges. These supplemental measures exclude the impact of certain charges such as litigation settlement costs and purchased in-process research and development that are highly variable and difficult to predict. Management uses these supplemental measures to evaluate performance period over period, to analyze the underlying trends in the Company's business and to establish operational goals and forecasts that are used in allocating resources. Since management finds this measure to be useful, the Company believes that its investors benefit from seeing the Company's results through the eyes of management in addition to seeing its GAAP results.

The Company recognizes that these charges can have a material impact on the Company's cash flows and net income. Although the Company believes it is useful for investors to see its core performance free of certain charges, investors should understand that the excluded items are actual expenses that impact the cash available to the Company for other uses. To gain a complete picture of the Company's performance, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit a critical one, of the Company's performance.

Readers are therefore reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. It should be noted as well that the Company's non-GAAP information may be different from the non-GAAP information provided by other companies.

   CONTACT:  Milan Kofol
             508-650-8569
             Investor Relations
             Boston Scientific Corporation

             Paul Donovan
             508-650-8541
             Media Relations
             Boston Scientific Corporation



                      BOSTON SCIENTIFIC CORPORATION
                        GAAP RESULTS OF OPERATIONS
                               (Unaudited)


                                                      Three Months Ended
                                                          March 31,
  In millions, except per share data                2006              2005

  Net sales                                       $1,620            $1,615
  Cost of products sold                              374               344
  Gross profit                                     1,246             1,271

  Selling, general and administrative
   expenses                                          470               431
  Research and development expenses                  186               159
  Royalty expense                                     55                64
  Amortization expense                                38                31
  Purchased research and development                                    73
                                                     749               758
  Operating income                                   497               513

  Other income/(expense):
  Interest expense                                   (37)              (23)
  Other, net                                         (29)                4

  Income before income taxes                         431               494
  Income taxes                                        99               136

  Net income                                        $332              $358


  Net income per common share -
   assuming dilution                               $0.40             $0.42

  Weighted average shares outstanding -
   assuming dilution                               830.4             850.2




                      BOSTON SCIENTIFIC CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Unaudited)

                                                  March 31,     December 31,
  In millions                                       2006              2005

  Assets
  Current assets:
     Cash, cash equivalents and short-
      term investments                            $1,083              $848
     Trade accounts receivable, net                  978               932
     Inventories                                     407               418
     Other current assets                            405               433
           Total current assets                    2,873             2,631

  Property, plant and equipment, net               1,024             1,011
  Intangible assets, net                           3,741             3,735
  Investments                                        550               594
  Other assets                                       921               225
                                                  $9,109            $8,196

  Liabilities and Stockholders' Equity
  Current liabilities:
     Borrowings due within one year                 $806              $156
     Accounts payable and accrued
      expenses                                     1,040             1,229
     Other current liabilities                       189                94
           Total current liabilities               2,035             1,479

  Long-term debt                                   1,836             1,864
  Other long-term liabilities                        567               571

  Stockholders' equity                             4,671             4,282
                                                  $9,109            $8,196




  BOSTON SCIENTIFIC CORPORATION
  WORLDWIDE SALES
  REGIONAL SUMMARY
  (Unaudited)

                                         Three Months Ended
                                            March 31,           Change
                                                              As
                                                           Reported Constant
  In millions                            2006      2005   Currency  Currency
                                                            Basis     Basis

  DOMESTIC                               $991    $1,005     (1%)     (1%)



  Europe                                  314       299      5%      14%
  Japan                                   134       151    (11%)     (1%)
  Inter-Continental                       181       160     13%      11%
  INTERNATIONAL                           629       610      3%      10%

  WORLDWIDE                            $1,620    $1,615      0%       3%




  BOSTON SCIENTIFIC CORPORATION
  WORLDWIDE SALES
  DIVISIONAL SUMMARY
  (Unaudited)

                                        Three Months Ended
                                            March 31,           Change
                                                              As
                                                           Reported Constant
  In millions                               2006      2005 Currency Currency
                                                            Basis     Basis

  Cardiovascular                       $1,133    $1,192      (5%)    (3%)
  Electrophysiology                        34        32       6%     11%
  Neurovascular                            80        69      16%     20%
  CARDIOVASCULAR                        1,247     1,293      (4%)    (1%)

  Oncology                                 54        50       8%     11%
  Endoscopy                               180       167       8%     11%
  Urology                                  90        72      25%     27%
  ENDOSURGERY                             324       289      12%     15%

  NEUROMODULATION                          49        33      48%     49%

  WORLDWIDE                            $1,620    $1,615       0%      3%

SOURCE: Boston Scientific Corporation

CONTACT: Milan Kofol, Investor Relations, +1-508-650-8569, or Paul
Donovan, Media Relations, +1-508-650-8541, both of Boston Scientific
Corporation

Web site: http://www.bostonscientific.com/

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