EX-99 2 sykex99072109.htm EXHIBIT TO STRYKER CORP FORM 8-K JULY 21, 2009

EXHIBIT 99.1

 

STRYKER OPERATING RESULTS FOR

QUARTER ENDED JUNE 30, 2009

 

Kalamazoo, Michigan - July 21, 2009 - Stryker Corporation (NYSE:SYK) reported operating results for the quarter ended June 30, 2009 as follows:

 

Second Quarter Highlights

 

·      

Net sales of $1,634 million were flat (0.1% decrease) on a constant currency basis (4.6% decrease as reported)

·      

Orthopaedic Implants sales increased 5.1% on a constant currency basis (0.2% decrease as reported)

·      

MedSurg Equipment sales decreased 7.7% on a constant currency basis (11.0% decrease as reported)

·      

Net earnings decreased 4.7% from $306 million to $291 million

·      

Diluted net earnings per share were unchanged at $0.73

 

"In a challenging environment, we were very pleased with the growth of our U.S. Orthopaedic Implant businesses, which accelerated from last quarter and showed strong year-over-year gains. This performance, combined with our heavy focus on controlling costs across the company preserved our diluted earnings per share results in the face of the steep short term slowdown in our MedSurg businesses, and the foreign currency headwinds in the quarter," commented Stephen P. MacMillan, President and Chief Executive Officer.

 

Net sales were $1,634 million for the second quarter of 2009, representing a 4.6% decrease compared to net sales of $1,713 million for the second quarter of 2008, and were $3,236 million for the first half of 2009, representing a 3.3% decrease compared to net sales of $3,347 million for the first half of 2008. On a constant currency basis, net sales decreased 0.1% for the second quarter and increased 1.6% for the first half.

 

Net earnings for the second quarter of 2009 were $291 million, representing a 4.7% decrease compared to net earnings of $306 million for the second quarter of 2008.  Diluted net earnings per share for the second quarter of 2009 were unchanged at $0.73 compared to the second quarter of 2008.  Net earnings for the first half of 2009 were $572 million, representing a 4.0% decrease compared to net earnings of $596 million for the first half of 2008.  Diluted net earnings per share for the first half of 2009 increased 0.7% to $1.44 compared to $1.43 for the first half of 2008.

 

Sales Analysis

 

Domestic sales were $1,047 million for the second quarter of 2009, representing a decrease of 0.5%, as a 9.1% increase in shipments of Orthopaedic Implants was offset by an 11.0% decrease in shipments of MedSurg Equipment.  Domestic sales were $2,089 million for the first half of 2009, representing an increase of 0.2%, as a result of a 7.5% increase in shipments of Orthopaedic Implants offset by an 8.0% decrease in shipments of MedSurg Equipment.

 

International sales were $587 million for the second quarter of 2009, representing a decrease of 11.0%.  The impact of foreign currency comparisons to the dollar value of international sales was unfavorable by $77 million in the second quarter of 2009.  On a constant currency basis, international sales increased 0.6% in the second quarter of 2009, as a result of a 0.4% increase in shipments of Orthopaedic Implants and a 1.1% increase in shipments of MedSurg Equipment.  International sales were $1,146 million for the first half of 2009, representing a decrease of 9.1%.  The impact of foreign currency comparisons to the dollar value of international sales was unfavorable by $164 million in the first half of 2009.  On a constant currency basis, international sales increased 3.9% in the first half of 2009, as a result of a 3.3% increase in shipments of Orthopaedic Implants and a 5.2% increase in shipments of MedSurg Equipment.

 


Worldwide sales of Orthopaedic Implants were $1,014 million for the second quarter of 2009, representing a decrease of 0.2%, and were $1,987 million for both the first half of 2009 and 2008.  On a constant currency basis, sales of Orthopaedic Implants increased 5.1% in the second quarter and 5.7% in the first half of 2009, based on higher shipments of reconstructive, trauma, spinal and craniomaxillofacial implant systems.

 

Worldwide sales of MedSurg Equipment were $620 million for the second quarter of 2009, representing a decrease of 11.0% as reported and 7.7% on a constant currency basis based on lower shipments of surgical equipment and surgical navigation systems; endoscopic, communications and digital imaging systems; and patient handling and emergency medical equipment.  Worldwide sales of MedSurg Equipment were $1,248 million for the first half of 2009, representing a decrease of 8.2% as reported and 4.4% on a constant currency basis as higher shipments of surgical equipment and surgical navigation systems were offset by lower sales of endoscopic, communications and digital imaging systems and patient handling and emergency medical equipment.

 

Outlook for 2009

 

The Company projects that diluted net earnings per share for 2009 will be in the range of $2.90 to $3.10, an increase of 2% to 10% over adjusted diluted net earnings per share of $2.83 in 2008.  The financial forecast for 2009 anticipates a constant currency net sales increase in the range of 1% to 3%. If foreign currency exchange rates hold near June 30, 2009 levels, the Company anticipates an unfavorable impact on net sales of approximately 1.5% to 2.5% in the third quarter of 2009 and an unfavorable impact on net sales of approximately 2% to 3% for the full year of 2009.

 

Conference Call

 

As previously announced, the Company will conduct a conference call for financial analysts at 4:30 p.m., Eastern Time, today. To participate in the conference call dial 866-700-0133 (domestic) or 617-213-8831 (international) and enter the participant passcode 77115009. A simultaneous webcast of the call will be accessible via the Company's website at www.stryker.com. The call will be archived on this site for 90 days.

 

A recording of the call will also be available from 7:30 p.m., Eastern Time, on Wednesday, July 22, 2009, until 7:30 p.m. on Tuesday, July 28, 2009. To hear this recording, dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter the passcode 93166153.

 


Forward-Looking Statements

 

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are 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; legislative and 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 and Six Month Periods Ended June 30, 2009

(Unaudited - In Millions Except Per Share Amounts)

Second Quarter

Six Months

CONDENSED STATEMENTS OF EARNINGS

  2009

 2008

% Change

2009

2008

% Change

   Net sales

$

1,634.3

$

1,712.6

(4.6)

$

3,235.6

$

3,347.0

(3.3)

   Cost of sales

536.3

533.2

0.6 

1,051.8

1,033.7

1.8 

      GROSS PROFIT

1,098.0

1,179.4

(6.9)

2,183.8

2,313.3

(5.6)

         % of Sales

67.2

68.9

67.5

69.1

   Research, development and

     engineering expenses

82.6

90.3

(8.5)

163.0

175.4

(7.1)

   Selling, general and

     administrative expenses

617.1

678.2

(9.0)

1,233.7

1,332.7

(7.4)

   Intangibles amortization

8.5

10.0

(15.0)

18.1

20.6

(12.1)

708.2

778.5

(9.0)

1,414.8

1,528.7

(7.5)

      OPERATING INCOME

389.8

400.9

(2.8)

769.0

784.6

(2.0)

         % of Sales

23.9

23.4

23.8

23.4

   Other income (expense)

10.2

19.2

(46.9)

17.4

39.5

(55.9)

      EARNINGS BEFORE INCOME TAXES

400.0

420.1

(4.8)

786.4

824.1

(4.6)

   Income taxes

108.7

114.3

(4.9)

214.0

227.8

(6.1)

      NET EARNINGS

$ 291.3

$ 305.8

(4.7)

$ 572.4

$ 596.3

(4.0)

   Net earnings per share

      Basic

$  0.73 

$  0.74 

(1.4)

$  1.44 

$  1.45 

(0.7)

      Diluted net earnings per share

$  0.73 

$  0.73 

0.0 

$  1.44 

$  1.43 

0.7 

   Average Shares Outstanding

      Basic

397.4 

412.0 

397.1 

411.7 

      Diluted

399.0 

417.9 

398.8 

417.9 

 


STRYKER CORPORATION

For the Three Month and Six Month Periods Ended June 30, 2009

(Unaudited - In Millions)

Second Quarter

Six Months

% Change

% Change

Constant

Constant

CONDENSED SALES ANALYSIS

2009

2008

Reported

Currency

2009

2008

Reported

Currency

Domestic

$ 1,047.2

 $ 1,052.8

(0.5)

(0.5)

 $ 2,089.2

 $ 2,085.7

0.2 

0.2 

International

587.1

659.8

(11.0)

0.6 

1,146.4

1,261.3

(9.1)

3.9 

NET SALES

 $ 1,634.3

 $ 1,712.6

(4.6)

(0.1)

 $ 3,235.6

 $ 3,347.0

(3.3)

1.6 

Orthopaedic Implants

 $ 1,014.2

 $ 1,016.2

(0.2)

5.1 

 $ 1,987.4

 $ 1,987.3

0.0 

5.7 

MedSurg Equipment

620.1

696.4

(11.0)

(7.7)

1,248.2

1,359.7

(8.2)

(4.4)

NET SALES

 $ 1,634.3

 $ 1,712.6

(4.6)

(0.1)

 $ 3,235.6

 $ 3,347.0

(3.3)

1.6 

 

 

Second Quarter

% Change

 

Domestic

  

International

  

Total

Constant

Constant

SUPPLEMENTAL SALES GROWTH ANALYSIS

Reported

Reported

Currency

Reported

Currency

Orthopaedic Implants sales:

   Hips

9 

(12)

1 

(2)

5 

   Knees

11 

(15)

(3)

0 

5 

   Trauma

11 

(8)

1 

(1)

5 

   Spine

14 

(1)

10 

9 

13 

   Craniomaxillofacial

12 

(18)

(8)

1 

5 

   Total Orthopaedic Implants

9 

(11)

0 

0 

5 

MedSurg Equipment sales:

   Surgical equipment and surgical navigation systems

(4)

(12)

(1)

(7)

(3)

   Endoscopic, communications and digital imaging systems

(6)

(6)

7 

(6)

(3)

   Patient handling and emergency medical equipment

(30)

(17)

(6)

(28)

(26)

   Total MedSurg Equipment

(11)

(11)

1 

(11)

(8)

Six Months

% Change

 

Domestic

  

International

  

Total

Constant

Constant

Reported

Reported

Currency

Reported

Currency

Orthopaedic Implants sales:

   Hips

6 

(9)

5 

(2)

5 

   Knees

10 

(13)

0 

0 

6 

   Trauma

11 

(6)

4 

1 

6 

   Spine

13 

(1)

9 

9 

12 

   Craniomaxillofacial

12 

(16)

(4)

2 

6 

   Total Orthopaedic Implants

8 

(9)

3 

0 

6 

MedSurg Equipment sales:

   Surgical equipment and surgical navigation systems

3 

(12)

1 

(2)

3 

   Endoscopic, communications and digital imaging systems

(7)

(3)

11 

(6)

(2)

   Patient handling and emergency medical equipment

(29)

(9)

6 

(25)

(22)

   Total MedSurg Equipment

(8)

(9)

5 

(8)

(4)

 

STRYKER CORPORATION

(Unaudited - In Millions)

June 30

December 31

CONDENSED BALANCE SHEETS

2009

2008

ASSETS

Cash and cash equivalents

$

666.3 

$

701.1 

Marketable securities

1,761.6 

1,494.5 

Accounts receivable (net)

1,097.3 

1,129.5 

Inventories

991.7 

952.7 

Other current assets

723.4 

701.5 

   TOTAL CURRENT ASSETS

5,240.3 

4,979.3 

Property, Plant and Equipment (net)

950.3 

963.8 

Goodwill and Other Intangibles (net)

942.0 

935.5 

Other Assets

790.9 

724.7 

   TOTAL ASSETS

$

7,923.5 

$

7,603.3 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

$

1,075.1 

$

1,462.1 

Other Liabilities

790.9 

734.5 

Shareholders' Equity

6,057.5 

5,406.7 

   TOTAL LIABILITIES AND

   SHAREHOLDERS' EQUITY

$

7,923.5 

$

7,603.3 


STRYKER CORPORATION

For the Three Month and Six Month Periods Ended June 30, 2009

(Unaudited - In Millions)

Second Quarter

Six Months

CONDENSED STATEMENTS OF CASH FLOWS

2009

2008

2009

2008

   OPERATING ACTIVITIES

   Net earnings

$

291.3 

$

305.8 

$

572.4 

$

596.3 

   Depreciation

38.9 

39.8 

76.8 

78.5 

   Amortization

53.3 

58.9 

107.1 

118.4 

   Changes in working capital and other

(201.1)

(164.2)

(301.5)

(362.1)

      NET CASH PROVIDED BY OPERATING ACTIVITIES

182.4 

240.3 

454.8 

431.1 

   INVESTING ACTIVITIES

   Acquisitions, net of cash acquired

(9.1)

(2.4)

(11.7)

(8.6)

   Purchases of marketable securities, net

(153.3)

(202.1)

(251.5)

(110.5)

   Purchases of property, plant and equipment

(30.4)

(41.2)

(61.0)

(72.1)

   Proceeds from sales of property, plant and equipment

0.2 

0.1 

0.9 

0.2 

   NET CASH USED IN INVESTING ACTIVITIES

(192.6)

(245.6)

(323.3)

(191.0)

   FINANCING ACTIVITIES

   Borrowings (repayments) of debt, net

(1.8)

6.3 

(0.9)

7.1 

   Dividends paid

- 

- 

(158.6)

(135.6)

   Other

(24.8)

0.5 

(0.8)

5.0 

      NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(26.6)

6.8 

(160.3)

(123.5)

   Effect of exchange rate changes on cash and cash equivalents

17.3 

(3.4)

(6.0)

14.5 

      CHANGE IN CASH AND CASH EQUIVALENTS

$

(19.5)

$

(1.9)

$

(34.8)

$

131.1 

 

 

CONTACT:

Katherine A. Owen

Vice President, Strategy and Investor Relations

269/385-2600