Stryker Operating Results for Quarter Ended March 31, 2009
First Quarter Highlights
- Net sales increased 3.3% on a constant currency basis (2.0% decrease as reported) to
$1,601 million - Orthopaedic Implants sales increased 6.2% on a constant currency basis (0.2% increase as reported)
- MedSurg Equipment sales decreased 1.0% on a constant currency basis (5.3% decrease as reported)
- Net earnings decreased 3.2% from
$291 million to $281 million - Diluted net earnings per share increased 1.4% from
$0.70 to $0.71
“The unprecedented global economic slowdown clearly impacted our business, yet our diverse set of businesses still delivered underlying sales growth in this very challenging period as six of our eight key product franchises delivered mid-single to low double-digit constant currency revenue growth,” commented
Net sales were
Net earnings for the first quarter of 2009 were
Sales Analysis
Domestic sales were
International sales were
Worldwide sales of Orthopaedic Implants were
Worldwide sales of MedSurg Equipment were
Income Taxes
The Company’s effective income tax rate for the first quarter of 2009 was 27.3%, as compared to effective income tax rates for the first quarter of 2008 and year ended
In
Outlook for 2009
As a result of the continued weaker demand for certain MedSurg Equipment products as well as consideration of slowing elective procedures for certain Orthopaedic Implant products, the Company is reducing its guidance for 2009.
The Company now projects that diluted net earnings per share for 2009 will be in the range of
Conference Call
As previously announced, the Company will conduct a conference call for financial analysts at
A recording of the call will also be available from
Forward-Looking Statements
Certain statements made during the call may constitute forward-looking statements. They will be based upon management’s current expectations and will be subject to various risks and uncertainties that could cause the Company’s actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: further weakening of economic conditions that could adversely affect the level of demand for the Company’s products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for the Company’s products; changes in foreign exchange markets; regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; unfavorable resolution of income tax audits; changes in financial markets; and changes in the competitive environment. Additional information concerning these and other factors is contained in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Stryker Corporation is one of the world’s leading medical technology companies with the most broadly based range of products in orthopaedics and a significant presence in other medical specialties. Stryker works with respected medical professionals to help people lead more active and more satisfying lives. The Company’s products include implants used in joint replacement, trauma, craniomaxillofacial and spinal surgeries; biologics; surgical, neurologic, ear, nose & throat and interventional pain equipment; endoscopic, surgical navigation, communications and digital imaging systems; as well as patient handling and emergency medical equipment. For more information about Stryker, please visit www.stryker.com.
STRYKER CORPORATION
For the Three Month Period Ended March 31, 2009
(Unaudited - In Millions Except Per Share Amounts)
First Quarter
CONDENSED STATEMENTS OF EARNINGS 2009 2008 % Change
Net sales $1,601.3 $1,634.4 (2.0)
Cost of sales 515.5 500.5 3.0
GROSS PROFIT 1,085.8 1,133.9 (4.2)
% of Sales 67.8 69.4
Research, development and
engineering expenses 80.4 85.1 (5.5)
Selling, general and
administrative expenses 616.6 654.5 (5.8)
Intangibles amortization 9.6 10.6 (9.4)
706.6 750.2 (5.8)
OPERATING INCOME 379.2 383.7 (1.2)
% of Sales 23.7 23.5
Other income (expense) 7.2 20.3 (64.5)
EARNINGS BEFORE INCOME TAXES 386.4 404.0 (4.4)
Income taxes 105.3 113.5 (7.2)
NET EARNINGS $281.1 $290.5 (3.2)
Net Earnings Per Share:
Basic $0.71 $0.71 -
Diluted $0.71 $0.70 1.4
Average Shares Outstanding
Basic 396.7 411.4
Diluted 398.6 417.9
STRYKER CORPORATION
For the Three Month Period Ended March 31, 2009
(Unaudited - In Millions)
First Quarter
% Change
Constant
CONDENSED SALES ANALYSIS 2009 2008 Reported Currency
Domestic $1,042.0 $1,032.9 0.9 0.9
International 559.3 601.5 (7.0) 7.4
NET SALES $1,601.3 $1,634.4 (2.0) 3.3
Orthopaedic Implants $973.2 $971.1 0.2 6.2
MedSurg Equipment 628.1 663.3 (5.3) (1.0)
NET SALES $1,601.3 $1,634.4 (2.0) 3.3
First Quarter 2009
% Change
Domestic International Total
SUPPLEMENTAL SALES Constant Constant
GROWTH ANALYSIS Reported Reported Currency Reported Currency
Orthopaedic Implants sales:
Hips 3 (7) 9 (2) 6
Knees 8 (12) 4 1 6
Trauma 10 (3) 6 2 8
Spine 13 (2) 9 8 11
Craniomaxillofacial 12 (14) 0 3 8
Total Orthopaedic
Implants 6 (7) 7 0 6
MedSurg Equipment sales:
Surgical equipment and
surgical navigation
systems 11 (12) 3 4 8
Endoscopic,
communications and
digital imaging
systems (7) (1) 16 (5) (1)
Patient handling and
emergency medical
equipment (27) (1) 18 (22) (18)
Total MedSurg Equipment (5) (7) 10 (5) (1)
STRYKER CORPORATION
(Unaudited - In Millions)
March 31 December 31
CONDENSED BALANCE SHEETS 2009 2008
ASSETS
Cash and cash equivalents $685.8 $701.1
Marketable securities 1,559.3 1,494.5
Accounts receivable (net) 1,054.8 1,129.5
Inventories 990.2 952.7
Other current assets 709.8 701.5
TOTAL CURRENT ASSETS 4,999.9 4,979.3
Property, Plant and Equipment (net) 944.3 963.8
Goodwill and Other Intangibles (net) 909.5 935.5
Other Assets 731.5 724.7
TOTAL ASSETS $7,585.2 $7,603.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $1,181.8 $1,462.1
Other Liabilities 778.3 734.5
Shareholders' Equity 5,625.1 5,406.7
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $7,585.2 $7,603.3
STRYKER CORPORATION
For the Three Month Period Ended March 31, 2009
(Unaudited - In Millions)
First Quarter
CONDENSED STATEMENTS OF CASH FLOWS 2009 2008
OPERATING ACTIVITIES
Net earnings from continuing operations $281.1 $290.5
Depreciation 37.9 38.7
Amortization 53.8 59.5
Changes in working capital and other (100.4) (197.9)
NET CASH PROVIDED BY OPERATING ACTIVITIES 272.4 190.8
INVESTING ACTIVITIES
Acquisitions, net of cash acquired (2.6) (6.2)
Proceeds from sales of (purchases of)
marketable securities, net (98.2) 91.6
Purchases of property, plant and equipment (30.6) (30.9)
Proceeds from sales of property, plant and
equipment 0.7 0.1
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (130.7) 54.6
FINANCING ACTIVITIES
Proceeds from borrowings, net 0.9 0.8
Dividends paid (158.6) (135.6)
Other 24.0 4.5
NET CASH USED IN FINANCING ACTIVITIES (133.7) (130.3)
Effect of exchange rate changes on cash and
cash equivalents (23.3) 17.9
CHANGE IN CASH AND CASH EQUIVALENTS $(15.3) $133.0
SOURCE Stryker Corporation