UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
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Securities Exchange Act of 1934
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| Item 2.05. | Costs Associated With Exit or Disposal Activities. |
On May 27, 2021, Abbott Laboratories (“Abbott”) approved a restructuring plan to align its manufacturing network for COVID-19 diagnostic tests with recent changes in projected testing demand. The significant changes in projected testing demand have been driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, accelerated rollout of COVID-19 vaccines globally and, most recently, U.S. health authority guidance on testing for fully vaccinated individuals.
Abbott estimates the pre-tax costs to be incurred to implement this plan to be approximately $550 million to $700 million. The costs are expected to be incurred during the remainder of 2021 with the majority of the costs expected to be recorded in the second quarter of 2021. The costs will be treated as specified items.
The costs will include fixed asset write-downs of $100 million to $135 million, inventory-related charges of $220 million to $265 million, and other exit costs, which include contract cancellations and employee-related costs, of $230 million to $300 million. Non-cash charges included in the total are estimated to be $320 million to $400 million, reflecting the fixed asset write-downs and inventory-related charges. The other exit costs are expected to result in future cash outlays.
| Item 7.01 | Regulation FD Disclosure. |
On June 1, 2021, Abbott issued a press release providing an update to its financial outlook for the full year 2021.
Furnished as Exhibit 99.1, and incorporated herein by reference, is the news release issued by Abbott announcing its updated financial outlook. In that news release, Abbott provides forecasts of a non-GAAP financial measure, adjusted diluted earnings per share from continuing operations, which adjusts for factors that are unusual or unpredictable, such as expenses primarily associated with restructuring and cost reduction initiatives, including those outlined in Item 2.05 above, and expenses associated with acquisitions. This non-GAAP financial measure also excludes intangible amortization expense to provide greater visibility on the results of operations excluding these costs, similar to how Abbott’s management internally assesses performance. Abbott’s management believes the presentation of this non-GAAP financial measure provides useful information to investors regarding Abbott’s results of operations as this non-GAAP financial measure allows investors to better evaluate ongoing business performance. Abbott’s management also uses this non-GAAP financial measure internally to monitor performance of the businesses. Abbott, however, cautions investors to consider non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit No. | Exhibit | |
| 99.1 | Press Release dated June 1, 2021 (furnished pursuant to Item 7.01). |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ABBOTT LABORATORIES | ||
| Date: June 3, 2021 | By: | /s/ Robert E. Funck, Jr. |
| Robert E. Funck, Jr. | ||
| Executive Vice President, Finance and Chief Financial Officer | ||
Exhibit 99.1
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News Release |
Abbott Issues Updated 2021 Outlook
| · | Updated outlook reflects lower recent and projected demand for COVID-19 tests |
| · | Revised forecast continues to reflect strong, double-digit EPS growth on both a GAAP and adjusted basis |
| · | Abbott's base business, excluding COVID-19 testing-related sales, continues to achieve strong growth |
| · | R&D pipeline continues to be highly productive, with a steady cadence of recent and upcoming product launches across the portfolio |
ABBOTT PARK, Ill., June 1, 2021 — Abbott today announced an update to its financial outlook for the full-year 2021. The updated guidance is due to significantly lower recent and projected COVID-19 diagnostic testing demand. This has been driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, accelerated rollout of COVID-19 vaccines globally and, most recently, U.S. health authority guidance on testing for fully vaccinated individuals.
While it's positive that these external events and trends signal an accelerated return to normalcy for many countries, they have suddenly and fundamentally impacted market demand for COVID-19 testing, particularly for surveillance and screening with rapid testing.
As a result, Abbott now projects full-year 2021 diluted EPS from continuing operations under Generally Accepted Accounting Principles (GAAP) of $2.75 to $2.95 and full-year adjusted diluted EPS from continuing operations of $4.30 to $4.50, reflecting strong, double-digit growth versus the prior year.
Abbott made significant contributions to the global fight against COVID-19, including the development of 12 tests globally. Contributions from COVID-19 testing gave the company additional flexibility to further invest in its strong and growing base business that continues to see accelerating growth momentum, including contributions from several recently launched products across its portfolio.
"We've recently seen a rapid decline in COVID-19 testing demand and anticipate this trend will continue, which led us to adjust our full-year guidance," said Robert B. Ford, president and chief executive officer, Abbott. "At the same time, excluding COVID-19 tests, our organic base business growth is accelerating, we continue to see improving end-markets and our new product pipeline continues to be highly productive."
Abbott Conference Call
Abbott will conduct a live webcast of a special conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later today.
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Abbott's Earnings-Per Share Guidance
Abbott projects 2021 diluted earnings per share from continuing operations under GAAP of $2.75 to $2.95. Abbott forecasts specified items for the full-year 2021 of $1.55 per share primarily related to intangible amortization, restructuring and cost reduction initiatives, including expenses to align its COVID-19 testing-related business with current and projected demand, expenses associated with acquisitions and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for full-year 2021.
Abbott projects second-quarter 2021 guidance for diluted earnings per share from continuing operations under GAAP of at least $0.39. Abbott forecasts specified items for the second quarter 2021 of $0.61 per share primarily related to restructuring and cost reduction initiatives, including expenses to align its COVID-19 testing-related business with current and projected demand, as well as intangible amortization, expenses associated with acquisitions and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be at least $1.00 for the second quarter.
About Abbott:
Abbott is a global healthcare leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 109,000 colleagues serve people in more than 160 countries.
Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews.
— Private Securities Litigation Reform Act of 1995 —
A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2020, and are incorporated herein by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
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Abbott Financial: Scott Leinenweber, 224-668-0791 Michael Comilla, 224-668-1872 Laura Dauer, 224-667-2299
Abbott Media: Scott Stoffel, 224-668-5201 |
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