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Stryker Operating Results for Quarter and Year Ended December 31, 2001

01/28/2002

KALAMAZOO, Mich., Jan. 28 /PRNewswire-FirstCall/ -- Stryker Corporation (NYSE: SYK) reported today that net sales were $709.8 million for the fourth quarter of 2001, representing a 16% increase over net sales of $612.4 million in the fourth quarter of 2000, and $2,602.3 million for the year ended December 31, 2001, representing a 14% increase over net sales of $2,289.4 million in 2000. Excluding the impact of foreign currency, net sales increased 17% for the fourth quarter and 16% for the year.

Earnings before extraordinary item for the fourth quarter of 2001 increased 22% to $81.4 million from $66.5 million in 2000 and diluted earnings per share before extraordinary item for the quarter increased 21% to $.40 compared to $.33 in the prior year. For the year ended December 31, 2001, earnings before extraordinary item increased 23% to $271.8 million from $221.0 million in 2000 and diluted earnings per share before extraordinary item increased 22% to $1.34 compared to $1.10 in the prior year.

Net earnings were $76.6 million ($.38 per diluted share) for the fourth quarter of 2001 and $267.0 million ($1.32 per diluted share) for the year ended December 31, 2001.

Sales Analysis

Domestic sales were $457.0 million for the fourth quarter and $1,688.4 million for the year ended December 31, 2001, representing increases of 20% in both periods as a result of strong shipments of Orthopaedic Implants and MedSurg Equipment and higher revenue from Physical Therapy Services.

International sales were $252.8 million for the fourth quarter and $913.9 million for the year ended December 31, 2001, representing increases of 9% and 4%, respectively, as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment. The impact of foreign currency comparisons to the dollar value of international sales was unfavorable by $8.9 million in the fourth quarter and $62.1 million for the year ended December 31, 2001. Excluding the impact of foreign currency, international sales increased 13% in the fourth quarter and 11% for the year ended December 31, 2001.

Worldwide sales of Orthopaedic Implants were $392.3 million for the fourth quarter and $1,442.5 million for the year ended December 31, 2001, representing increases of 15% and 10%, respectively, as a result of higher shipments of reconstructive (hip, knee and shoulder), trauma and spinal implants. Excluding the impact of foreign currency, sales of Orthopaedic Implants increased 17% in the fourth quarter and 13% for the year.

Worldwide sales of MedSurg Equipment were $269.9 million for the fourth quarter and $978.9 million for the year ended December 31, 2001, representing increases of 17% and 18%, respectively, as a result of higher shipments of powered surgical instruments, endoscopic systems, hospital beds and stretchers and Leibinger craniomaxillofacial implants and image guided surgical systems. Excluding the impact of foreign currency, sales of MedSurg Equipment increased 18% in the fourth quarter and 20% for the year.

Physical Therapy Services revenues were $47.6 million for the fourth quarter and $180.9 million for the year ended December 31, 2001, representing increases of 17% and 23%, respectively, as a result of new physical therapy centers and higher revenue from existing centers.

Extraordinary Item

The fourth quarter and year ended December 31, 2001 included an extraordinary loss, net of income taxes, of $4.8 million for the write-off of unamortized debt syndication fees on the 1998 Credit Facility which was refinanced on December 21, 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 conference call, dial 800-252-8302. 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 website 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. on January 30, 2002 by calling 800-633-8284 (domestic) or 858-812-6440 (international) and entering the reservation number 20171530.

Stryker Corporation develops, manufactures and markets specialty surgical and medical products, including orthopaedic reconstructive, trauma, spinal and craniomaxillofacial implants, 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 Period and Year Ended December 31, 2001
                (Unaudited - In Millions Except Per Share Amounts)


                                 Fourth Quarter         Year Ended December 31
    CONDENSED STATEMENT OF
     EARNINGS                 2001    2000     %        2001      2000    %
                                             Change                     Change

      Net sales             $709.8  $612.4    15.9  $2,602.3  $2,289.4   13.7
      Cost of sales          265.4   215.9    22.9     963.8     815.2   18.2

       GROSS PROFIT          444.4   396.5    12.1   1,638.5   1,474.2   11.1
         % of Sales           62.6    64.7              63.0      64.4

      Research, development
       and engineering
        expenses              36.2    33.4     8.4     142.1     122.2   16.3
      Selling, general and
       administrative
        expenses             261.5   232.2    12.6     985.4     885.6   11.3
      Restructuring charges
       (credits)               0.6    (1.0)     --       0.6      (1.0)    --

                             298.3   264.6    12.7   1,128.1   1,006.8   12.0

      Other expense (income):
       Interest expense       14.8    20.7   (28.5)     67.9      96.6  (29.7)
       Intangibles
        amortization           9.8     8.4    16.7      38.4      34.7   10.7
       Other                   0.0     2.0  (100.0)     (1.6)      1.2     --

                              24.6    31.1   (20.9)    104.7     132.5  (21.0)


       EARNINGS BEFORE INCOME
        TAXES AND
        EXTRAORDINARY ITEM   121.5   100.8    20.5     405.7     334.9   21.1

      Income taxes            40.1    34.3    16.9     133.9     113.9   17.6


       EARNINGS BEFORE
        EXTRAORDINARY ITEM    81.4    66.5    22.4     271.8     221.0   23.0

      Extraordinary loss,
       net of income taxes    (4.8)             --      (4.8)              --

       NET EARNINGS          $76.6   $66.5    15.2    $267.0    $221.0   20.8

      Basic Earnings Per Share
       Before Extraordinary
        Item                 $0.41   $0.34    20.6     $1.38     $1.13   22.1
       Extraordinary Loss   $(0.02)  $  --      --    $(0.02)    $  --     --
       Net Earnings          $0.39   $0.34    14.7     $1.36     $1.13   20.4

      Diluted Earnings Per Share
       Before Extraordinary
        Item                 $0.40   $0.33    21.2     $1.34     $1.10   21.8
       Extraordinary Loss   $(0.02)  $  --      --    $(0.02)    $  --     --
       Net Earnings          $0.38   $0.33    15.2     $1.32     $1.10   20.0

      Average Shares Outstanding
       Basic                 196.6   195.8     0.4     196.3     195.1    0.6
       Diluted               203.4   202.4     0.5     203.0     201.1    0.9


                                  Fourth Quarter        Year Ended December 31
    CONDENSED SALES ANALYSIS  2001    2000     %        2001      2000    %
                                             Change                     Change

      Domestic              $457.0  $380.9    20.0  $1,688.4  $1,408.2   19.9
      International          252.8   231.5     9.2     913.9     881.2    3.7

       NET SALES            $709.8  $612.4    15.9  $2,602.3  $2,289.4   13.7

      Orthopaedic Implants  $392.3  $341.0    15.0  $1,442.5  $1,313.0    9.9
      MedSurg Equipment      269.9   230.7    17.0     978.9     829.1   18.1
      Physical Therapy
       Services               47.6    40.7    17.0     180.9     147.3   22.8

       NET SALES            $709.8  $612.4    15.9  $2,602.3  $2,289.4   13.7


                               STRYKER CORPORATION
                            (Unaudited - In Millions)

                                                  December 31      December 31
    CONDENSED BALANCE SHEET                           2001              2000

       ASSETS

       Cash and investments                          $50.1             $54.0

       Accounts receivable (net)                     332.1             343.7

       Inventories                                   399.8             392.1

       Other current assets                          211.1             207.2

       TOTAL CURRENT ASSETS                          993.1             997.0

       Property, Plant and Equipment (net)           444.0             378.1

       Goodwill and Other Intangibles (net)          802.3             839.3

       Other Assets                                  184.2             216.4

       TOTAL ASSETS                               $2,423.6          $2,430.8


       LIABILITIES AND STOCKHOLDERS' EQUITY

       Current Liabilities                          $533.4            $617.4

       Long-Term Debt                                720.9             876.5

       Other Liabilities                             113.1              82.0

       Stockholders' Equity                        1,056.2             854.9

       TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY                      $2,423.6          $2,430.8



                               STRYKER CORPORATION
                            (Unaudited - In Millions)


                                                      Year Ended December 31
    CONDENSED STATEMENT OF CASH FLOWS                 2001              2000

       OPERATING ACTIVITIES

       Net earnings                                 $267.0            $221.0

       Depreciation                                   74.5              74.7

       Amortization                                   97.5              93.9

       Proceeds from accounts receivable
        securitization                                 2.7              30.3

       Changes in working capital                    (32.6)           (123.7)

       Other                                          59.2              35.6

       NET CASH PROVIDED BY OPERATING ACTIVITIES     468.3             331.8


       INVESTING ACTIVITIES

       Purchases of property, plant and equipment   (161.9)            (80.7)

       Business acquisitions, net of cash acquired   (43.0)            (24.5)

       Other                                           9.0              11.9

       NET CASH USED IN INVESTING ACTIVITIES        (195.9)            (93.3)


       FINANCING ACTIVITIES

       Repayments on borrowings, net                (275.6)           (253.4)

       Dividends                                     (15.7)            (12.7)

       Other                                          13.7               7.4

       NET CASH USED IN FINANCING ACTIVITIES        (277.6)           (258.7)

       Effect of exchange rate changes on
        cash and cash equivalents                      1.3              (5.8)

       CHANGE IN CASH AND CASH EQUIVALENTS           $(3.9)           $(26.0)


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SOURCE Stryker Corporation
Web site: http: //www.strykercorp.com
CONTACT: David J. Simpson, Vice President, Chief Financial Officer and Secretary of Stryker Corporation, +1-616-385-2600

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