KALAMAZOO, Mich., Oct. 16 /PRNewswire-FirstCall/ --
Stryker Corporation (NYSE:
SYK -
News) reported today that net sales were $745.6
million for the third quarter of 2002, representing a 20% increase over net
sales of $619.3 million in the third quarter of 2001 and $2,182.4 million for
the first nine months of 2002, representing a 15% increase over sales of
$1,892.5 million for the first nine months of 2001. Excluding the impact of
foreign currency, net sales increased 19% for the third quarter and 15% for
the first nine months.
Net earnings for the third quarter of 2002 were $72.5 million,
representing a 20% increase over net earnings of $60.6 million in the third
quarter of 2001. Diluted net earnings per share increased 20% to $.36
compared to $.30 in the third quarter of 2001. For the first nine months of
2002, net earnings were $239.5 million, representing a 26% increase over net
earnings of $190.4 million in 2001. Diluted net earnings per share increased
26% to $1.18 compared to $.94 in the first nine months of 2001.
Excluding nonrecurring items, net earnings for the third quarter of 2002
were $84.0 million, representing a 30% increase over net earnings of $64.5
million in the third quarter of 2001 and diluted net earnings per share
increased 28% to $.41 compared to $.32 in the third quarter of 2001.
Excluding nonrecurring items, net earnings for the first nine months of 2002
were $251.0 million, representing a 26% increase over net earnings of $199.7
million in 2001 and diluted net earnings per share increased 26% to $1.23
compared to $.98 in the first nine months of 2001.
Sales Analysis
Domestic sales were $493.9 million for the third quarter and $1,437.2
million for the first nine months of 2002, representing increases of 20% and
17%, respectively, primarily as a result of strong shipments of Orthopaedic
Implants and MedSurg Equipment and higher revenue from Physical Therapy
Services. The July 1, 2002 acquisition of the spinal implant business of
Surgical Dynamics Inc. added $11.8 million to domestic sales in the third
quarter and first nine months of 2002.
International sales were $251.7 million for the third quarter and $745.2
million for the first nine months of 2002, representing increases of 21% and
13%, respectively, primarily as a result of higher shipments of Orthopaedic
Implants and MedSurg Equipment. The acquisition of the spinal implant
business added $1.5 million to international sales in the third quarter and
first nine months of 2002. The impact of foreign currency comparisons to the
dollar value of international sales was favorable by $10.3 million in the
third quarter and unfavorable by $.8 million for the first nine months.
Excluding the impact of foreign currency, international sales increased 16% in
the third quarter and 13% for the first nine months.
Worldwide sales of Orthopaedic Implants were $420.4 million for the third
quarter and $1,230.2 million for the first nine months of 2002, representing
increases of 24% and 17%, respectively, based on higher shipments of
reconstructive (hip, knee and shoulder), trauma and spinal implants and the
acquisition of the spinal implant business in the third quarter. Excluding
the impact of foreign currency, sales of Orthopaedic Implants increased 22% in
the third quarter and 17% for the first nine months.
Worldwide sales of MedSurg Equipment were $275.2 million for the third
quarter and $801.6 million for the first nine months of 2002, representing
increases of 16% and 14%, respectively, based on higher shipments of
endoscopic systems, hospital beds and stretchers, powered surgical instruments
and Leibinger craniomaxillofacial implants and image guided surgical systems.
Excluding the impact of foreign currency, sales of MedSurg Equipment increased
15% in the third quarter and 14% for the first nine months.
Physical Therapy Services revenues were $50.0 million for the third
quarter and $150.6 million for the first nine months of 2002, representing
increases of 13% in both periods as a result of new physical therapy centers
and higher revenues from existing centers.
Nonrecurring Items
Restructuring and acquisition-related items were $17.2 million ($11.5
million net of tax) for the third quarter and first nine months of 2002 as
follows:
- A charge of $21.0 million ($14.1 million net of tax) for employment-
related costs to close the Rutherford, New Jersey manufacturing facility.
- A credit of $3.8 million ($2.6 million net of tax) to close out a
Howmedica acquisition-related expense reserve.
The adoption of FASB No. 142 "Goodwill and Other Intangibles" prohibited
the amortization of goodwill and certain intangible assets beginning in 2002.
The amortization expense for goodwill and assembled workforce intangibles was
$5.8 million ($3.9 million net of tax) in the third quarter of 2001 and $13.9
million ($9.3 million net of tax) in the first nine months of 2001.
Conference Call
As previously announced, the Company will conduct a conference call for
financial analysts at 5:00 p.m., Eastern Time, today. To hear the call, dial
800-215-4598. A simultaneous webcast of the call may be accessed via the
Company's website at www.strykercorp.com . The call will be archived on this
site for 90 days. A recording of the call may also be accessed from
7:00 p.m., Eastern Time, today until 7:00 p.m., Eastern Time, on Friday,
October 18, 2002. To hear this recording dial 800-633-8284 (domestic) or
402-977-9140 (international) and enter the registration number 20956731.
Stryker Corporation develops, manufactures and markets specialty surgical
and medical products, including orthopaedic reconstructive, trauma, spinal and
craniomaxillofacial implants, the bone growth factor osteogenic protein-1,
powered surgical instruments, endoscopic systems, patient care and handling
equipment for the global market, and provides outpatient physical therapy
services in the United States.
STRYKER CORPORATION
For the Three Month and Nine Month Periods Ended September 30, 2002
(Unaudited - In Millions Except Per Share Amounts)
Third Quarter Nine Months
CONDENSED STATEMENTS OF % %
EARNINGS 2002 2001 Change 2002 2001 Change
Net sales $745.6 $619.3 20.4 $2,182.4 $1,892.5 15.3
Cost of sales 279.9 228.8 22.3 801.9 698.4 14.8
GROSS PROFIT 465.7 390.5 19.3 1,380.5 1,194.1 15.6
% of Sales 62.5 63.1 63.3 63.1
Research, development
and engineering
expenses 35.9 35.1 2.3 103.9 105.9 (1.9)
Selling, general and
administrative
expenses 284.3 238.5 19.2 849.4 723.9 17.3
Restructuring and
acquisition-related
items 17.2 -- 17.2 --
337.4 273.6 23.3 970.5 829.8 17.0
Other expense
(income):
Interest expense 10.9 16.8 (35.1) 31.5 53.1 (40.7)
Intangibles
amortization 8.5 9.4 (9.6) 20.3 28.6 (29.0)
Other 0.7 0.3 133.3 0.8 (1.6) --
20.1 26.5 (24.2) 52.6 80.1 (34.3)
EARNINGS BEFORE
INCOME TAXES 108.2 90.4 19.7 357.4 284.2 25.8
Income taxes 35.7 29.8 19.8 117.9 93.8 25.7
NET EARNINGS $72.5 $60.6 19.6 $239.5 $190.4 25.8
Net Earnings per Share
Basic $0.37 $0.31 19.4 $1.21 $0.97 24.7
Diluted $0.36 $0.30 20.0 $1.18 $0.94 25.5
Average Shares
Outstanding
Basic 197.7 196.3 0.7 197.4 196.1 0.7
Diluted 203.4 203.0 0.2 203.6 202.9 0.3
RECONCILIATION OF REPORTED NET EARNINGS TO NET EARNINGS BEFORE
NONRECURRING ITEMS
Third Quarter Nine Months
% %
2002 2001 Change 2002 2001 Change
NET EARNINGS
Reported net earnings $72.5 $60.6 19.6 $239.5 $190.4 25.8
Restructuring and acquisition-
related items 11.5 -- 11.5 --
Goodwill and assembled
workforce amortization 3.9 -- 9.3 --
NET EARNINGS BEFORE
NONRECURRING ITEMS $84.0 $64.5 30.2 251.0 199.7 25.7
DILUTED NET EARNINGS PER SHARE
Reported diluted net earnings
per share $0.36 $0.30 20.0 $1.18 $0.94 25.5
Restructuring and acquisition-
related items 0.06 -- 0.06 --
Goodwill and assembled
workforce amortization 0.02 -- 0.05 --
DILUTED NET EARNINGS PER
SHARE BEFORE
NONRECURRING ITEMS $0.41 $0.32 28.1 $1.23 $0.98 25.5
STRYKER CORPORATION
For the Three Month and Nine Month Periods Ended September 30, 2002
(Unaudited - In Millions)
Third Quarter Nine Months
CONDENSED SALES ANALYSIS 2002 2001 % %
Change 2002 2001 Change
Domestic $493.9 $410.5 20.3 $1,437.2 $1,231.4 16.7
International 251.7 208.8 20.5 745.2 661.1 12.7
NET SALES $745.6 $619.3 20.4 $2,182.4 $1,892.5 15.3
Orthopaedic Implants $420.4 $338.3 24.3 $1,230.2 $1,053.2 16.8
MedSurg Equipment 275.2 236.9 16.2 801.6 706.0 13.5
Physical Therapy
Services 50.0 44.1 13.4 150.6 133.3 13.0
NET SALES $745.6 $619.3 20.4 $2,182.4 $1,892.5 15.3
STRYKER CORPORATION
(Unaudited - In Millions)
September 30 December 31
CONDENSED BALANCE SHEETS 2002 2001
ASSETS
Cash and cash equivalents $38.7 $50.1
Accounts receivable (net) 380.3 332.1
Inventories 435.3 399.8
Other current assets 278.1 211.1
TOTAL CURRENT ASSETS 1,132.4 993.1
Property, Plant and Equipment (net) 483.3 444.0
Goodwill and Other Intangibles (net) 892.8 802.3
Other Assets 214.6 184.2
TOTAL ASSETS $2,723.1 $2,423.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $643.2 $533.4
Long-Term Debt 595.1 720.9
Other Liabilities 106.0 113.1
Stockholders' Equity 1,378.8 1,056.2
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,723.1 $2,423.6
STRYKER CORPORATION
For the Three Month and Nine Month Periods Ended September 30, 2002
(Unaudited - In Millions)
Third Quarter Nine Months
CONDENSED STATEMENTS OF CASH FLOWS 2002 2001 2002 2001
OPERATING ACTIVITIES
Net earnings $72.5 $60.6 $239.5 $190.4
Depreciation 22.5 18.7 62.8 55.4
Amortization 26.6 25.2 71.7 71.2
Changes in working capital 9.6 25.8 (67.9) (34.7)
Other 16.8 2.8 14.7 2.8
NET CASH PROVIDED BY OPERATING
ACTIVITIES 148.0 133.1 320.8 285.1
INVESTING ACTIVITIES
Business acquisitions, net of cash
acquired (135.2) (28.4) (146.5) (32.4)
Purchases of property, plant and
equipment (34.6) (17.5) (87.9) (56.7)
Other 0.1 6.2 0.3 8.7
NET CASH USED IN INVESTING
ACTIVITIES (169.7) (39.7) (234.1) (80.4)
FINANCING ACTIVITIES
Proceeds from (repayments on)
borrowings, net 2.8 (84.6) (108.4) (197.2)
Dividends (19.7) (15.7)
Other 7.1 9.1 26.1 13.2
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 9.9 (75.5) (102.0) (199.7)
Effect of exchange rate changes on
cash and cash equivalents (1.7) 3.5 3.9 5.0
CHANGE IN CASH AND CASH EQUIVALENTS $(13.5) $21.4 $(11.4) $10.0