Boston Scientific Corporation (NYSE:BSX) Q1 2024 Earnings Call Transcript

Michael Polark: Good morning. Thank you for sneaking me in. I want to ask the gross margin commentary, the inventory charges, Dan. Can you quantify the impact in the quarter? And what’s the nature of those charges? What’s going on? And the other thing I heard was increased mix of capital in the quarter. I think, it seems highly likely to be FARAPULSE Generator driven, but if there’s anything else underneath that comment, I’d welcome the color. Thank you.

Dan Brennan: Sure. Thanks for the question, Mike. We’re not going to quantify the inventory charges, but it was much more than we’re used to in a given quarter and that’s why we called it out and it has impact. I will say a piece of it, not an insignificant piece of it, is kind of due to the success of FARAPULSE. So, it’s not kind of all bad per se relative to our results, but it’s still inventory charges and it still reduced the gross margin in the quarter. But that’s what gives me the confidence and the optimism that heading into the rest of the year, we won’t see inventory charges at the level that we saw them in Q1 as we go through 2024. On the capital, yes, piece of that is related to FARAPULSE, but we also — as Mike mentioned, we also have a really successful launch in our IVUS business, which has some capital with it.

And not insignificantly as well, we have some in the Urology business associated with Lumenis. So, it was probably led by the launch of FARAPULSE, but we did have a little bit more in some of the other launches in some of the other businesses with respect to capital. But overall, message should be 69.8%, little lower than we would have liked, but still have a goal this year of getting back to that 70.7% or slightly below that for the year for gross margin.

Michael Polark: Thank you so much.

Jon Monson: Thanks, everyone, for joining us today. We appreciate your interest in Boston Scientific. If we were unable to get to your question or if you have any follow-ups, please don’t hesitate to reach out to the Investor Relations team. Before we disconnect, Drew will give you all of the pertinent details for the replay.

Operator: Please note, a recording will be available in one hour by dialing either 1-877-344-7529 or 1-412-317-0088 using replay code 8726199 until May 1, 2024 at 11:59 PM Eastern Time. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.