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Stryker reports third quarter 2022 operating results

10/31/2022

Kalamazoo, Michigan, Oct. 31, 2022 (GLOBE NEWSWIRE) -- Stryker (NYSE:SYK) reported operating results for the third quarter of 2022:

Third Quarter Results

  • Reported net sales increased 7.7% to $4.5 billion
  • Organic net sales increased 9.9%
  • Reported operating income margin of 18.0%
  • Adjusted operating income margin (1) contracted 310 bps to 22.3%
  • Reported EPS increased 87.7% to $2.14
  • Adjusted EPS (1) decreased 3.6% to $2.12
  Third Quarter Net Sales Growth Overview
  Reported   Foreign Currency Exchange   Constant Currency   Acquisitions / Divestitures   Organic
MedSurg and Neurotechnology         10.2 %           (3.3)   %           13.5 %           2.7  %           10.8 %
Orthopaedics and Spine         4.4                              (4.3)                  8.7             —              8.7  
Total         7.7 %           (3.7)   %           11.4 %           1.5  %           9.9 %

"We delivered strong organic sales growth in the quarter, despite product shortages and disruptions to full return of surgeries," said Kevin A. Lobo, Chair and CEO. "Worsening foreign currency and ongoing inflation, including premiums on spot buys for key components, pressured our adjusted earnings and will impact our full year results. We are taking additional actions to address these persistent issues."

Sales Analysis

Consolidated net sales of $4.5 billion increased 7.7% in the quarter and 11.4% in constant currency. Organic net sales increased 9.9% in the quarter including 10.6% from increased unit volume partially offset by 0.7% from lower prices.

MedSurg and Neurotechnology net sales of $2.6 billion increased 10.2% in the quarter and 13.5% in constant currency. Organic net sales increased 10.8% in the quarter including 9.8% from increased unit volume and 1.0% from higher prices.

Orthopaedics and Spine net sales of $1.9 billion increased 4.4% in the quarter and 8.7% in constant currency. Organic net sales increased 8.7% in the quarter including 11.6% from increased unit volume partially offset by 2.9% from lower prices.

Earnings Analysis

Reported net earnings of $816 million increased 86.3% in the quarter. Reported net earnings per diluted share of $2.14 increased 87.7% in the quarter. Reported gross profit margin and reported operating income margin were 62.1% and 18.0% in the quarter. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, asset write-offs and impairments and restructuring-related and other charges, costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin(1) was 62.6% in the quarter, and adjusted operating income margin(1) was 22.3% in the quarter. Adjusted net earnings(1) of $810 million decreased 3.8% in the quarter. Adjusted net earnings per diluted share(1) of $2.12 decreased 3.6% in the quarter.

2022 Outlook

Considering our third quarter results, the strong order book for capital equipment and the sales momentum in our implant and capital businesses, we now expect full year 2022 organic net sales growth(2) to be in the range of 8.5% to 9.0%. If foreign currency exchange rates hold near current levels, we now expect net sales in the full year to be adversely impacted by approximately 4% and adjusted net earnings per diluted share(2) to be adversely impacted by approximately $0.35 to $0.40 in the full year. Based on our performance in the third quarter including consideration of continued inflationary pressures, together with our strong sales and additional cost reduction actions, and most significantly, the anticipated future impact of foreign currency, we now expect adjusted net earnings per diluted share(2) in the range of $9.15 to $9.25 per share.

(1) A reconciliation of the non-GAAP financial measures: adjusted gross profit margin, adjusted operating income and adjusted operating income margin, adjusted net earnings and adjusted net earnings per diluted share, to the most directly comparable GAAP measures: gross profit margin, operating income and operating income margin, net earnings and net earnings per diluted share, and other important information accompanies this press release.

(2) We are unable to present a quantitative reconciliation of our expected net sales growth to expected organic net sales growth as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisitions and divestitures and the impact of foreign currency exchange rates. We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of restructuring-related and other charges, acquisition-related expenses and fair value adjustments to inventory and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.

Conference Call on Monday, October 31, 2022

As previously announced, Stryker will host a conference call on Monday, October 31, 2022 at 4:30 p.m., Eastern Time, to discuss the Company's operating results for the quarter ended September 30, 2022 and provide an operational update.

Please register for this conference call at: https://www.netroadshow.com/events/login?show=ef1f360c&confId=40138. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry. Registration is open throughout the live call. To ensure you are connected prior to the beginning of the call, the Company suggests registering a minimum of 15 minutes before the start of the call.

A simultaneous webcast of the call will be accessible via the Investor Relations page of the Company's website at www.stryker.com. For those not planning to ask a question of management, the Company recommends listening via the webcast. Please allow 15 minutes to register, download and install any necessary software.

Following the conference call, a replay will be available at (866) 813-9403 (Toll Free) or (929) 458-6194 (International). The replay passcode is 382708. An archive of the webcast will also be available on the Company's website two hours after the live call ends.

Caution Concerning 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 our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: the impact on our operations and financial results of the COVID-19 pandemic and any related policies and actions by governments or other third parties; unexpected liabilities, costs, charges or expenses in connection with the acquisition of Vocera Communications, Inc. (Vocera); the effects of the Vocera transaction on the relationships of the parties with employees, customers, other business partners or governmental entities; weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect United States Food and Drug Administration approval of new products, including Vocera products; inflationary pressures; supply chain disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to recall-related matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; costs to comply with medical device regulations; changes in financial markets; changes in the competitive environment; our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes, including the acquisition of Vocera; our ability to realize anticipated cost savings; and potential negative impacts resulting from environmental, social and governance (ESG) and sustainability related matters. Additional information concerning these and other factors is contained in our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.

Stryker is one of the world's leading medical technology companies and, together with its customers, is driven to make healthcare better. The company offers innovative products and services in Medical and Surgical, Neurotechnology, Orthopaedics and Spine that help improve patient and hospital outcomes. Alongside its customers around the world, Stryker impacts more than 100 million patients annually. More information is available at www.stryker.com.

For investor inquiries please contact:

Jason Beach, Vice President, Investor Relations at 269-385-2600 or jason.beach@stryker.com

For media inquiries please contact:

Yin Becker, Vice President, Chief Corporate Affairs Officer at 269-385-2600 or yin.becker@stryker.com

STRYKER CORPORATION
For the Three and Nine Months September 30
(Unaudited - Millions of Dollars, Except Per Share Amounts)
CONSOLIDATED STATEMENTS OF EARNINGS
               
  Three Months   Nine Months
    2022       2021     % Change     2022       2021     % Change
Net sales $         4,479     $         4,160              7.7  %   $         13,247     $         12,407             6.8 %
Cost of sales           1,697               1,518              11.8                4,905               4,484             9.4  
Gross profit $         2,782     $         2,642              5.3  %   $         8,342     $         7,923             5.3 %
% of sales           62.1 %             63.5  %                 63.0  %             63.9 %    
Research, development and engineering expenses           364                306              19.0                1,128                904              24.8  
Selling, general and administrative expenses           1,455                1,602              (9.2)               4,704                4,682              0.5  
Recall charges           (4 )                16     nm                  14               98     nm      
Amortization of intangible assets           159                144              10.4               469                474              (1.1)  
Total operating expenses $         1,974      $         2,068              (4.5)  %   $         6,315      $         6,158              2.5  %
Operating income $         808     $         574              40.8 %   $         2,027      $         1,765              14.8  %
% of sales           18.0  %             13.8  %                 15.3  %             14.2  %    
Other income (expense), net           8                (79)      nm                   (105)               (241)             (56.4)  
Earnings before income taxes $         816      $         495              64.8 %   $         1,922      $         1,524              26.1  %
Income taxes           —                57              (100.0)               127                192              (33.9)  
Net earnings $         816     $         438              86.3 %   $         1,795      $         1,332              34.8  %
Net earnings per share of common stock:                      
Basic $         2.16     $         1.17              84.6 %   $         4.75      $         3.54              34.2 %
Diluted $         2.14     $         1.14              87.7 %   $         4.70      $         3.48              35.1 %
Weighted-average shares outstanding (in millions):                      
Basic   378.4       377.1           378.1       376.8      
Diluted   381.8       382.7           382.2       382.3      


CONDENSED CONSOLIDATED BALANCE SHEETS
  September 30   December 31
    2022     2021
Assets      
Cash and cash equivalents $         1,420   $         2,944
Marketable securities           77             75
Accounts receivable, net           3,103             3,022
Inventories           3,883             3,314
Prepaid expenses and other current assets           835             662
Total current assets $         9,318   $         10,017
Property, plant and equipment, net           2,798             2,833
Goodwill and other intangibles, net           20,046             17,758
Noncurrent deferred income tax assets           1,390             1,760
Other noncurrent assets           2,431             2,263
Total assets $         35,983   $         34,631
Liabilities and shareholders' equity      
Current liabilities $         4,571   $         4,549
Long-term debt, excluding current maturities           12,751             12,472
Income taxes           621             913
Other noncurrent liabilities           1,577             1,820
Shareholders' equity           16,463             14,877
Total liabilities and shareholders' equity $         35,983   $         34,631


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Nine Months
    2022       2021  
Operating activities      
Net earnings $         1,795     $         1,332  
Depreciation           276               278  
Amortization of intangible assets           469               474  
Changes in operating assets, liabilities, income taxes payable and other, net           (919)               179  
Net cash provided by operating activities $         1,621     $         2,263  
Investing activities      
Acquisitions, net of cash acquired $         (2,563)     $         (226)  
Purchases of property, plant and equipment           (400)               (319)  
Other investing, net           201               —          
Net cash used in investing activities $         (2,762)     $         (545)  
Financing activities      
Borrowings (payments) of debt, net $         622     $         (1,139)  
Payments of dividends           (788)               (713)  
Other financing, net           (137)               (225)  
Net cash provided by (used in) financing activities $         (303)     $         (2,077)  
Effect of exchange rate changes on cash and cash equivalents           (80)               (21)  
Change in cash and cash equivalents $         (1,524)     $         (380)  

nm - not meaningful

STRYKER CORPORATION
For the Three and Nine Months September 30
(Unaudited - Millions of Dollars)


SALES GROWTH ANALYSIS
  Three Months   Nine Months
        Percentage Change         Percentage Change
    2022   2021   As Reported Constant
Currency
    2022   2021   As Reported Constant
Currency
Geographic:                      
United States $         3,360 $         3,019           11.3 %         11.3 %   $         9,776 $         8,903           9.8  %         9.8 %
International           1,119           1,141           (1.9)           11.7               3,471           3,504           (0.9)           9.1  
Total $         4,479 $         4,160           7.7  %         11.4 %   $         13,247 $         12,407           6.8 %         9.6 %
Segment:                      
MedSurg and Neurotechnology $         2,588 $         2,349           10.2 %         13.5 %   $         7,560 $         6,899           9.6 %         12.1 %
Orthopaedics and Spine           1,891           1,811           4.4           8.7               5,687           5,508           3.2           6.5  
Total $         4,479 $         4,160            7.7 %         11.4 %   $         13,247 $         12,407           6.8 %         9.6 %


SUPPLEMENTAL SALES GROWTH ANALYSIS
  Three Months
            United States   International
      Percentage Change
    2022   2021   As Reported Constant Currency   As Reported   As Reported Constant Currency
MedSurg and Neurotechnology:                    
Instruments $         535 $         525           1.8 %         4.8 %           2.3  %           —  %         14.4 %
Endoscopy           590           525           12.4           14.9             14.8              3.1           15.6  
Medical           765           636           20.1           22.9             25.8              —            12.7  
Neurovascular           294           295           (0.3)           7.6             (2.0)             0.7           13.6  
Neuro Cranial           332           299           11.3           13.9             12.7             5.0           19.6  
Other           72           69           5.9           6.0             5.8             12.9           16.4  
  $         2,588 $         2,349           10.2 %         13.5 %           13.2 %           1.3 %         14.4 %
Orthopaedics and Spine:                    
Knees $         481 $         439                   9.6 %         13.4 %           13.7  %          (1.7)     %         12.3 %
Hips           347           328                   5.6           11.3             12.4              (5.0)           9.6  
Trauma and Extremities           672           639                   5.1           9.5             10.4              (7.1)           7.3  
Spine           280           282                   (1.0)           2.6              2.0              (8.7)           3.9  
Other           111           123                   (9.2)           (5.6)             (11.2)             (1.7)           15.5  
  $         1,891         $         1,811                   4.4 %         8.7  %           8.6 %           (5.4)     %         8.8 %
Total $         4,479         $         4,160                   7.7 %         11.4  %           11.3 %           (1.9)     %         11.7 %


 
  Nine Months
              United States   International
        Percentage Change
    2022   2021   As Reported Constant Currency   As Reported   As Reported Constant Currency
MedSurg and Neurotechnology:                    
Instruments


$
        1,626 $         1,511           7.6 %         9.9 %           10.1 %           (1.0)%           9.4%  
Endoscopy           1,728           1,512           14.3           16.6             16.3             7.2           17.8  
Medical           2,095           1,898           10.4           12.4             15.7             (7.3)           1.2  
Neurovascular           901           885           1.7           7.1             (1.7)             3.8           12.7  
Neuro Cranial           992           890           11.5           13.4             13.2             4.2           14.3  
Other           218           203           7.8           7.8             7.3             42.1           45.2  
  $         7,560 $         6,899           9.6 %         12.1 %           12.7 %           1.0   %         10.4 %
Orthopaedics and Spine:                    
Knees $         1,445 $         1,325           9.1 %         12.1 %           11.8  %           1.6 %         12.8 %
Hips           1,038           990           4.8           9.2             8.3              (0.7)           10.5  
Trauma and Extremities           2,033           1,953           4.1           7.2             7.9              (4.8)           5.6  
Spine           849           867           (2.1)           0.6             0.6              (8.5)           0.7  
Other           322           373           (13.4)           (10.6)             (16.0)             (4.3)           9.0  
  $         5,687 $         5,508           3.2 %         6.5  %           6.0 %           (3.0)        %         7.7 %
Total $         13,247 $         12,407           6.8 %         9.6  %           9.8 %           (0.9)        %         9.1 %

Note: The three and nine months 2022 had the same number of selling days as 2021.

SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including: percentage sales growth; percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted effective income tax rate; adjusted net earnings; adjusted net earnings per diluted share (Diluted EPS); free cash flow; and free cash flow conversion. We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. To measure free cash flow, we adjust cash provided by operating activities by the amount of purchases of property, plant and equipment and proceeds from long-lived asset disposals and remove the impact of certain legal settlements and recall payments. To measure free cash flow conversion we divide free cash flow by adjusted net earnings.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of our business. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures. The weighted-average diluted shares outstanding used in the calculation of non-GAAP net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.

STRYKER CORPORATION
For the Three and Nine Months September 30
(Unaudited - Millions of Dollars, Except Per Share Amounts)
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Net Earnings Effective
Tax Rate
Diluted EPS
Reported $         2,782   $         1,455   $         364   $         808   $         8   $         816             % $         2.14  
Reported percent net sales           62.1 %           32.5 %           8.1 %           18.0 %           0.2 %           18.2 %    
Acquisition and integration-related costs (a)                
Inventory stepped-up to fair value           —              —              —              —              —              —            —              —  
Other acquisition and integration-related           —              78             —              (78)             —              (82)           2.0             (0.21)  
Amortization of purchased intangible assets           —              —              —              159             —              132           0.5             0.34  
Restructuring-related and other charges (b)           19             (31)             (8)             58             —              50           —              0.13  
Medical device regulations (c)           1             2             (39)             38             —              32           0.1             0.08  
Recall-related matters (d)           —              —              —              (4)             —              (4)           —              (0.01)  
Regulatory and legal matters (e)           —              (20)             —              20             —              15            0.2             0.04  
Tax matters (f)           —              —              —              —              (62)             (149)           11.7             (0.39)  
Adjusted $         2,802   $         1,484   $         317   $         1,001   $         (54)   $         810           14.5 % $         2.12  
Adjusted percent net sales           62.6 %           33.1 %           7.1 %           22.3 %         (1.2)     %           18.1 %    


Three Months 2021 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Net Earnings Effective
Tax Rate
Diluted EPS
Reported $         2,642   $         1,602   $         306   $         574   $         (79)   $         438           11.5 % $         1.14  
Reported percent net sales           63.5 %           38.5 %           7.4 %           13.8 %         (1.9) %           10.5 %    
Acquisition and integration-related costs (a)                
Inventory stepped-up to fair value           94             —              —              94             —              73           1.9             0.19  
Other acquisition and integration-related           —             (32)                     —              32             —              24           0.8             0.06  
Amortization of purchased intangible assets           —             —              —              144             —              114           2.0             0.30  
Restructuring-related and other charges (b)           20             (158)             —              178             —              165           (2.6)             0.44  
Medical device regulations (c)           1             —              (26)             27             —              23           (0.1)             0.06  
Recall-related matters (d)           —             —              —              16             —              12           0.3             0.03  
Regulatory and legal matters (e)           —             7              —              (7)             —              (7)           0.2             (0.02)  
Tax matters (f)           —             —              —              —              —              —            —              —   
Adjusted $         2,757   $         1,419   $         280   $         1,058   $         (79)   $         842           14.0 % $         2.20  
Adjusted percent net sales           66.3 %           34.1  %           6.7 %           25.4 %         (1.9) %           20.2 %    


Nine Months 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Net Earnings Effective
Tax Rate
Diluted EPS
Reported $         8,342   $         4,704   $         1,128   $         2,027   $         (105)   $         1,795           6.6 % $         4.70  
Reported percent net sales           63.0 %           35.5 %           8.5 %           15.3 %         (0.8) %           13.6  %    
Acquisition and integration-related costs (a)                
Inventory stepped-up to fair value           12             —              —              12             —              9           —              0.02  
Other acquisition and integration-related           —              (96)             —              96             —              46           1.9             0.12  
Amortization of purchased intangible assets           —              —              —              469             —              371           1.7             0.97  
Restructuring-related and other charges (b)           29             (113)             (87)             229             —              190           0.4             0.50  
Medical device regulations (c)           3             —              (95)             98             —              82           0.1             0.21  
Recall-related matters (d)           —              —              —              14             —              10           0.1             0.03  
Regulatory and legal matters (e)           —              (53)             —              53             —              39           0.3             0.10  
Tax matters (f)           —              —              —              —              (74)             (120)           3.0             (0.31)  
Adjusted $         8,386   $         4,442   $         946   $         2,998   $         (179)   $         2,422           14.1 % $         6.34  
Adjusted percent net sales           63.3 %           33.5 %           7.1 %           22.6 %         (1.4) %           18.3 %    


Nine Months 2021 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Net Earnings Effective
Tax Rate
Diluted EPS
Reported $         7,923   $         4,682   $         904   $         1,765   $         (241)   $         1,332           12.6 % $         3.48  
Reported percent net sales           63.9 %           37.7 %           7.3 %           14.2 %         (1.9) %           10.7 %    
Acquisition and integration-related costs (a)                
Inventory stepped-up to fair value           231             —              —              231             —              176           1.4             0.46  
Other acquisition and integration-related           —              (264)             —              264             —              204           1.4             0.53  
Amortization of purchased intangible assets           —              —              —              474             —              378           1.7              0.99  
Restructuring-related and other charges (b)           20             (189)             —              209             11             198           (0.7)             0.52  
Medical device regulations (c)           2             —              (70)             72             —              60           0.1             0.16  
Recall-related matters (d)           —              —              —              98             —              85           (0.1)             0.22  
Regulatory and legal matters (e)           —              16              —              (16)             (3)             (19)           0.2             (0.05 )
Tax matters (f)           —              —              —              —             —              26           (1.8)             0.07  
Adjusted $         8,176   $         4,245   $         834   $         3,097   $         (233)   $         2,440           14.8 % $         6.38  
Adjusted percent net sales           65.9 %           34.2 %           6.7 %           25.0 %         (1.9) %           19.7 %    


(a) Charges represent certain acquisition and integration-related costs associated with acquisitions including changes in the fair value of contingent consideration.
(b) Charges represent the costs associated with the termination of sales relationships in certain countries, workforce reductions, elimination of product lines, certain long-lived and intangible asset write-offs and impairments and associated costs and other restructuring-related activities.
(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
(d) Charges represent changes in our best estimate of the minimum end of the range of probable loss to resolve certain recall-related matters.
(e) Our best estimate of the minimum of the range of probable loss to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(f) Benefits and charges represent the accounting impact of certain significant and discrete tax items, including adjustments related to the transfer of certain intellectual properties between tax jurisdictions and certain significant tax audit settlements.


Nine Months   2022       2021  
Cash provided by operating activities $         1,621     $         2,263  
Net earnings           1,795               1,332  
Conversion           90.3 %             169.9 %
       
Cash provided by operating activities $         1,621     $         2,263  
Purchases of property, plant and equipment           (400)               (319)  
Proceeds from long-lived asset disposals           10               7  
Recall payments           26               180  
Free cash flow $         1,257     $         2,131  
Adjusted net earnings           2,422               2,440  
Free cash flow conversion           51.9 %             87.3 %


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Source: Stryker Corporation
Categories: Press Releases
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