Baxter International Inc. (NYSE:BAX) Q4 2022 Earnings Call Transcript

James Saccaro: Sure. No commentary yet on 2024. We are incredibly focused on delivering 2023, period. And we do believe that there are some discrete headwinds that we’re facing in 2023 that abate in 2024 or go completely away. So as Joe commented just moments ago, we’re really excited about where this thing goes into the future as evidenced by what happens in the second half of the year as we look at the operating margin of the company. So we’re very optimistic. But at this point, I have to stand down in terms of giving multiyear guidance. As it relates to standup costs and dis-synergy or onetime costs, stand-up costs for NewCo, we’ve said around 1% to 2%. No real adjustment at this point. From a onetime cost, we’ve commented previously on the higher end of the 3% to 4% precedence that we’ve seen.

But you’re seeing some of that in the numbers that we shared today. Specifically, we have roughly $100 million in cash-related costs that impact cash flow but much of that is either CapEx or non-GAAP, so to speak. And so in our non-GAAP results, we have roughly $0.03 of impact costs related to this program in the numbers that we shared today. So that’s really how we’re looking at it in 2023. And the cash is a very real cost. And to my comments earlier, in relation to Robbie Marcus question, for us, cash flow is a crucial and important area of focus for us in 2023. So those are very real costs. But as it relates to what’s impacting the P&L, it’s a couple $0.02, $0.03.

Lawrence Biegelsen: Jay, that’s helpful. Just let me ask one quick one here. The backlog and backorders, can you quantify those? And do you expect to get those back over time? We have seen some companies report Q4 results where we’ve seen some benefit from those coming through.

James Saccaro: Sure. I won’t get into too much specifics on this. We do have some benefit from improvement in backlog, where we have clear line of sight. And so we have reflected a little bit of that in our numbers. But what I will tell you is in the plan that we’ve reflected here today, there continues to be supply constraints on what we could otherwise sell. And so once we have line of sight to freeing up of electronic components among other key inputs, we’ll hopefully modify that assumption to the better. But at this point in time, there is still some backlog that exists over the course of the year and we did comment in the prepared remarks on continued impacts in the fourth quarter.

José Almeida: Yes, just I would add that the backlog. We’re starting to see some movement — positive movement in semiconductors, primarily Front Line Care. We’re starting to see that and that is very encouraging to us. But I think it is early to take a victory lap here. I think our supply chain folks have done a lot of work. However, we’re starting to see this progress coming through, hopefully continues on and we can actually, in the next quarter, speak more about the positive tailwind that, that can plus. Thank you.

Operator: Ladies and gentlemen, this concludes today’s conference call with Baxter International. Thank you for participating.