Greatbatch, Inc. Reports First Quarter 2007 Results of 43 Cents per Share.Quarterly Sales Reach All-time Record High of $77 million CLARENCE, N.Y. -- Greatbatch, Inc. (the "Company") (NYSE NYSE See: New York Stock Exchange : GB) today reported its results for the first quarter ended March 30, 2007. Business Highlights * Total Company - record sales of $76.9 million, an increase of 13% compared to $68.1 million in 2006.
-- Implantable Medical Components ("IMC") - record sales of
$65.2 million, an increase of 13% compared to $57.6 million
in 2006, driven by growth of ICD capacitors, feedthroughs and
assembly products partially offset by a decrease in ICD
battery sales.
-- Electrochem Commercial Power ("ECP") - sales of $11.7
million, an increase of 11% compared to $10.5 million in
2006, driven by growth in oil & gas, pipeline inspection, and
military products.
* Earnings per share increased by 54% to $0.43, inclusive of inclusive of prep. Taking into consideration or account; including. an $0.11 gain on the exchange of $118 million of convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. . * Final production run for Carson City Carson City, city (1990 pop. 40,443), state capital, W Nev., in the Eagle valley; inc. 1875. The city is a trade center for a mining and agricultural area. State government is the major employer, and tourism is economically important. plant is scheduled for June '07. * Columbia, Maryland Columbia is a census-designated place and planned community in Howard County, Maryland, United States. It is a suburb of Baltimore, and, to a lesser degree, Washington, DC. It began with the idea that a city could enhance its residents' quality of life. shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down scheduled to be completed by the third quarter of 2007. * Completed the acquisition of Biomec, Inc. for $11.4 million on April 3, 2007. * ECP (Enhanced Capabilities Port) See IEEE 1284. 1. ECP - Engineering Change Proposal. 2. ECP - Enhanced Capabilities Port. 3. ECP - Extended Capabilities Port. 4. ECP - Extended Concurrent Prolog. expansion on track for completion in mid - 2008. * Completed the exchange of $118 million of the existing $170 million convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before outstanding. Issued an additional $80 million of new convertible subordinated debentures and received cash of $74 million (net of fees and discount). * Received commitments for a new revolving bank credit facility of $235 million with the ability to expand to $335 million. Commenting on the first quarter results, Thomas Hook Thomas Hook was an Ontario real estate agent and political figure. He represented Toronto Southeast in the Legislative Assembly of Ontario from 1914 to 1919 as a Conservative member. He was born in England and came to Canada with his family around 1867. , President & Chief Executive Officer, said: "I'm very pleased with the start to the new year. We achieved broad-based sales growth in our medical and commercial segments. Our Medical Power team did a great job in responding to the surge in ICD ICD International Classification of Diseases (of the World Health Organization); intrauterine contraceptive device. ICD abbr. capacitor capacitor or condenser, device for the storage of electric charge. Simple capacitors consist of two plates made of an electrically conducting material (e.g., a metal) and separated by a nonconducting material or dielectric (e.g. demand we experienced in the first quarter. On the commercial side, we continue to see double-digit growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. due to market growth and share gains. "On a strategic front, we completed a number of important transactions in the first quarter that are key to fuel our continued growth. First, we successfully exchanged approximately 70% of our existing subordinated notes and concurrently issued an additional $80 million of new convertible debentures. Second, we have received commitments to replace our existing revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. line with a new $235 million facility, which combined with our existing cash and investments, gives us over $400 million of cost-effective liquidity to fund our organic and in-organic growth strategies. The exchange offering and the 2nd quarter sale of an investment, combined with operations as planned have allowed us to increase our guidance for the year. "In April we completed the acquisition of Biomec, Inc., a medical device design and engineering company, located in Cleveland, Ohio "Cleveland" redirects here. For the Cleveland metropolitan area, see . For other uses, see Cleveland (disambiguation). Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, the most populous county in the state. . With the addition of Biomec we are now in position to offer our customers a suite of value add services that include system design and integration, rapid prototyping Building a part one layer at a time using a method of additive fabrication such as 3D printing. Such parts are used for concept modeling to determine if the product design meets the customer's expectations. and assembly services," Hook concluded. 1st Quarter Sales Summary The following table summarizes the Company's sales by business unit and major product line for the first quarters of 2007 and 2006 (in thousands):
> > 2007 >
2006
%
Business Unit/Product Lines > > 1st Qtr. >
1st Qtr.
Change
Implantable Medical Components: > > >
ICD Batteries > > $11,651 >
$12,679
-8%
Pacemaker & Other Batteries > > 5,845 >
5,787
+1%
ICD Capacitors > > 8,514 >
3,568
+139%
Feedthroughs > > 18,393 >
16,288
+13%
Enclosures > > 5,706 >
6,340
-10%
Other Medical > > 15,087 >
12,918
+17%
Total Implantable Medical Components > > 65,196 >
57,580
+13%
Electrochem Commercial Power > > 11,664 >
10,527
+11%
Total Sales > > $76,860 >
$68,107
+13%
1st Quarter Profit & Loss Summary The following table summarizes selected information derived from the condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of operations for the first quarters in 2007 and 2006 (in thousands):
> > 2007 >
2006
%
> > 1st Qtr. >
1st Qtr.
Change
Cost of Sales > > $48,236 >
$40,473
+19%
Cost of Sales as % of Sales > > 62.8% >
59.4%
> > >
SG&A Expenses > > $10,033 >
$9,015
+11%
SG&A Expenses as % of Sales > > 13.1% >
13.2%
> > >
RD&E Expenses, net > > $6,452 >
$5,898
+9%
RD&E Expenses, net as % of Sales > > 8.4% >
8.7%
> > >
Operating Income > > $10,606 >
$10,052
+6%
Operating Margin > > 13.8% >
14.8%
> > >
Effective Tax Rate > > 32.5% >
34.5%
The cost of sales percentage increased from last year due to unfavorable product mix and lower ICD battery production volume in the current quarter. The increase in SG&A expenses is primarily due to legal fees, non-cash directors' fees, executive transition costs and sales & marketing costs. The increase in net RD&E expenses is primarily due to a planned increase in spending on new development programs. The other operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. in the current quarter consists of: -- Carson City and Columbia closures/relocations $ 1.7 million -- ECP building expansion $ 0.1 million -- Asset dispositions and other ($ 0.3) million As a result of an estimated increase in R&D tax credits and the Qualified Production Activities Deduction for 2007, the effective tax rate for 2007 is now expected to be approximately 32.5%. Full-Year 2007 Financial Guidance Our GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. guidance for 2007 has been increased by $0.24 to include the following: 1) Gain on exchange of converts - $0.11; 2) 2nd quarter gain on sale of investment - $0.11; 3) Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax rate change - $0.04; 4) Net interest expense - ($0.04); and 5) EPS impact of converts $0.02 [TABLE OMITTED] (1) Includes the impact of stock-based compensation under FAS123(R) of $0.12 to $0.15. (2) Excludes plant relocation/asset dispositions of $0.10 to $0.13. Includes continued excess capacity costs associated with delayed closure of filtered feedthrough feed·through n. A conductor connecting two circuits on opposite sides of a printed circuit board. facility. (3) Excludes gain on exchange of debentures of $0.11. (4) Current guidance includes $0.11 gain on sale of investment realized in Q2 2007. (5) Includes expansion of commercial power facility of approximately $20 million. [TABLE OMITTED] [TABLE OMITTED] Conference Call The Company will host a conference call on Friday, April 27, 2007 at 8:00 a.m. E.T. to discuss its quarterly results. The scheduled conference call will be webcast live and is accessible through the Company's website at www.greatbatch.com. An audio replay will also be available beginning from 11:00 a.m. E.T. on April 27, 2007 until May 4, 2007. To access the replay, dial 888-286-8010 (U.S.) or 617-801-6888 (International) and enter the passcode 31168389. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Some of the statements in this press release and other written and oral statements made from time to time by the Company and its representatives are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these terms or other comparable terminology. These statements are based on the Company's current expectations. The Company's actual results could differ materially from those stated or implied in such forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements include, among others, the following matters affecting the Company: dependence upon a limited number of customers; customer ordering patterns; product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; inability to market current or future products; pricing pressure from customers; our ability to timely and successfully implement our cost reduction and plant consolidation initiatives; reliance on third party suppliers for raw materials, products and subcomponents; fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. operating results; inability to maintain high quality standards for our products; challenges to our intellectual property rights; product liability claims; inability to successfully consummate and integrate acquisitions; unsuccessful expansion into new markets; competition; inability to obtain licenses to key technology; regulatory changes or consolidation in the healthcare industry; and other risks and uncertainties described in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and in other periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise. About Greatbatch, Inc. Greatbatch, Inc. (NYSE: GB) is a leading developer and manufacturer of critical components used in implantable medical devices and other technically demanding applications. Additional information about the Company is available at www.greatbatch.com. [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion