Medtronic Reports 14 Percent Growth in Second-Quarter Revenue and 56 Percent Growth in Earnings Per Share.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Nov. 12, 2003 Record Quarter Led by Continued Strong Growth in Implantable Defibrillator defibrillator, device that delivers an electrical shock to the heart in order to stop certain forms of rapid heart rhythm disturbances (arrhythmias). The shock changes a fibrillation to an organized rhythm or changes a very rapid and ineffective cardiac rhythm to a and Spinal Revenues, Together With Accelerated Growth in Diabetes; All Businesses Showed Year-Over-Year Quarterly Growth Reflecting the continued benefits of its broad and diversified business, along with expanded market leadership and share gains in several key segments, Medtronic, Inc. (NYSE NYSE See: New York Stock Exchange :MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → ), today announced quarterly revenues of $2.164 billion, up 14 percent over the $1.891 billion of the comparable period a year ago. Reflecting the weaker dollar outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , foreign currency translation, when compared to the prior year, had a positive effect on revenue of $59.1 million. The company announced second-quarter net earnings of $476.1 million, or $0.39 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, an increase in net earnings of 58 percent over the $301.7 million in net earnings and 56 percent above the $0.25 per diluted share recorded in the comparable period last year. Excluding charges taken in the second quarter of both the current and prior year, net earnings and net earnings per diluted share grew 14 percent and 15 percent, respectively. "Medtronic delivered another record quarter of solid growth, with especially noteworthy contributions from our implantable defibrillator, spinal and diabetes product lines," stated Art Collins, Medtronic chairman and chief executive officer. "Looking ahead, our new product pipeline and continued market development efforts bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for both patients and the financial performance of the company during the second half of this fiscal year." Cardiac Rhythm Management Cardiac rhythm management is a field of treatment in cardiology. The purpose is managing cardiac rhythm disorders. Usually it involves artificial pacemakers and/or implantable cardioverter-defibrillator therapy as well as antiarrhythmia drugs. Business Cardiac Rhythm Management reported revenues of $1.024 billion for the quarter, a 13 percent increase when compared to the same quarter one year ago. Capturing more than 80 percent of the market's sequential growth and extending its clear market leadership through share gains, worldwide implantable defibrillator revenues grew 22 percent in the quarter. Growth was fueled by rapid uptake of the InSync II Marquis(TM) - the fourth high-powered heart failure device introduced by Medtronic within the last 18 months - and continued enthusiasm for the Marquis(R) family of implantable defibrillators. Other milestones for the quarter included the U.S. introduction of the high-output Maximo(TM) implantable defibrillator, the addition of the Marquis VR to the CareLink(TM) Network and the conclusion of the patient follow-up period for the landmark SCD-HeFT (Sudden Cardiac Death Sudden Cardiac Death Definition Sudden cardiac death (SCD) is an unexpected death due to heart problems, which occurs within one hour from the start of any cardiac-related symptoms. SCD is sometimes called cardiac arrest. in Heart Failure) trial. Worldwide pacing revenues were up 9 percent for the second quarter. Quarterly growth was driven by market share gains and continued acceptance of the company's unique low-powered heart failure offerings, the InSync(R) and the InSync(R) III, as well as preference for its full suite of pacemakers Pacemakers Definition A pacemaker is a surgically-implanted electronic device that regulates a slow or erratic heartbeat. Purpose Pacemakers are implanted to regulate irregular contractions of the heart (arrhythmia). . Additional highlights included the U.S. introduction of the Vitatron C-series, the world's first fully digital pacemaker pacemaker Source of rhythmic electrical impulses that trigger heart contractions. In the heart's electrical system, impulses generated at a natural pacemaker are conducted to the atria and ventricles. , and the European introduction of the EnPulse(TM), the world's first fully automatic pacing system. Medtronic anticipates both the U.S. launch of the EnPulse pacemaker and the addition of cardiac resynchronization therapy devices to the CareLink Network by the end of the calendar year. Collectively, implantable defibrillator and pacing revenues (Arrhythmia arrhythmia (ārĭth`mēə), disturbance in the rate or rhythm of the heartbeat. Various arrhythmias can be symptoms of serious heart disorders; however, they are usually of no medical significance except in the presence of Management) increased more than 15 percent. Medtronic Physio-Control revenues were down 5 percent for the quarter. In support of its goal to create greater public awareness and access to automated external defibrillators automated external defibrillator Emergency medicine A portable device designed for use by first-response personnel for out-of-hospital emergency treatment of Pts suffering from cardiac arrest. See First-response personnel. (AEDs), Medtronic recently launched LIFEPAK(R) Heart Safe Schools, a complete, ready-to-use package of services that integrates the components necessary to bring lifesaving AED AED - Automated Engineering Design technology to schools across the country. Vascular Business Vascular posted quarterly revenues of $194.2 million, with growth up slightly versus the same period one year ago. Significant share gains in several segments of the market contributed to the quarter's performance. Continued strong preference for both the Driver(TM) coronary stent coronary stent Intracoronary stent Cardiology An expandable tubular device which can be inserted percutaneously, and left within a coronary artery lumen to maintain its patency Pros Clinical and angiographic outcomes are better with intracoronary artery stent and the Micro-Driver small vessel coronary stent in Europe complemented the rapid acceptance of Medtronic's latest balloon and guide catheter catheter /cath·e·ter/ (kath´e-ter) 1. a tubular, flexible surgical instrument that is inserted into a cavity of the body to withdraw or introduce fluid. 2. urethral c. products, the NC Stormer Stormer may refer to:
A stent graft is a tubular device, which is composed of special fabric supported by a rigid structure, usually metal. The rigid structure is called a stent. . Additional highlights for the quarter included the presentation of positive four-month results from the ENDEAVOR I trial for Medtronic's drug-coated coronary stent, and strong physician acceptance of the Driver coronary stent following U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) approval in October. Medtronic continues to enroll patients in the ENDEAVOR II study, already surpassing the halfway mark with the enrollment of its 600th patient earlier this week. The company anticipates both the completion of enrollment in this study and the start of the ENDEAVOR III study by the end of the calendar year. Earlier this week, the company announced the start of an additional clinical trial, VALOR valor a rodenticide no longer marketed because of toxicity in horses causing dehydration, abdominal pain, hindlimb weakness, inappetence, fishy smell in urine. Called also N-3-pyridyl methyl N1-p-nitrophenyl urea. , to evaluate the use of its Talent (TM) Thoracic thoracic /tho·rac·ic/ (thah-ras´ik) pectoral; pertaining to the thorax (chest). tho·rac·ic adj. Of, relating to, or situated in or near the thorax. Stent Graft in the treatment of thoracic aortic aneurysms Aortic Aneurysm Definition An aneurysm is an abnormal bulging or swelling of a portion of a blood vessel. The aorta, which can develop these abnormal bulges, is the large blood vessel that carries oxygen-rich blood away from the heart to the rest of the . Reflecting continued investments in its broader product portfolio, Medtronic expects to introduce its new Sprinter balloon catheter balloon catheter n. A catheter with an inflatable balloon at its tip, used especially to expand a partially obstructed blood vessel or bodily passage and to measure blood pressure in a blood vessel. Also called balloon-tip catheter. series and its new Exponent exponent, in mathematics, a number, letter, or algebraic expression written above and to the right of another number, letter, or expression called the base. In the expressions x2 and xn, the number 2 and the letter n self-expanding carotid carotid /ca·rot·id/ (kah-rot´id) pertaining to the carotid artery, the principal artery of the neck. ca·rot·id n. stent stent (stent) 1. a device or mold of a suitable material, used to hold a skin graft in place. 2. a slender rodlike or threadlike device used to provide support for tubular structures that are being anastomosed, or with the unique Interceptor(TM) distal distal /dis·tal/ (-t'l) remote; farther from any point of reference. dis·tal adj. 1. Anatomically located far from a point of reference, such as an origin or a point of attachment. protection filter in Europe during the third fiscal quarter. The company will also introduce the Racer biliary stent biliary stent Biliary endoprosthesis Surgery A tube inserted into a stenosed or obstructed narrowed or blocked bile duct to improve bile flow , the market's first peripheral stent comprised of a cobalt-based alloy, in the United States. Cardiac Surgery Cardiac surgery is surgery on the heart and/or great vessels performed by a cardiac surgeon. Frequently, it is done to treat complications of ischemic heart disease (for example, coronary artery bypass grafting), correct congenital heart disease, or treat valvular heart disease Business Cardiac Surgery achieved revenues of $146.2 million for the quarter, a 10 percent increase when compared to the same quarter one year ago. Worldwide revenues for Heart Valves Heart valves Valves that regulate blood flow into and out of the heart chambers. Mentioned in: Heart Failure were up 14 percent due to continued market share gains and the strength of Medtronic's broad portfolio of tissue heart valves and products used in valve repair. Cardiac Surgery Technologies reported revenue growth of 16 percent, driven by strong acceptance of the Cardioblate(R) BP Surgical Ablation ablation /ab·la·tion/ (-shun) 1. separation or detachment; extirpation; eradication. 2. removal or destruction, especially by cutting. ab·la·tion n. System and products used to facilitate the practice of beating heart bypass surgery Bypass surgery A surgical procedure that grafts blood vessels onto arteries to reroute the blood flow around blockages in the arteries (arteriosclerosis). . In addition, Medtronic expects to launch the Cardioblate(R) XL by the end of the calendar year. Perfusion perfusion /per·fu·sion/ (-zhun) 1. the act of pouring over or through, especially the passage of a fluid through the vessels of a specific organ. 2. a liquid poured over or through an organ or tissue. Systems' revenue grew 5 percent in the quarter, marked by continued market share gains and preference for its core products. Neurological neurological, neurologic pertaining to or emanating from the nervous system or from neurology. neurological assessment evaluation of the health status of a patient with a nervous system disorder or dysfunction. and Diabetes Business Neurological and Diabetes posted quarterly revenues of $393.6 million, a 17 percent increase versus the same period one year ago. Neurological revenues grew 17 percent in the quarter, led by strong sales of neurostimulation systems to treat pain and InterStim(R) Therapy for Urinary Control. Quarterly revenue growth was also supported by continued market preference for both the Legend(R) high-speed surgical drill system and the Bravo BRAVO Cardiology A clinical trial–Blockade of the GP IIB/IIIA Receptor to Avoid Vascular Occlusion– which evaluated lotrafiban in preventing strokes and acute MI. See GP IIB/IIIA. (TM) pH Monitoring System for the diagnosis of acid reflux acid reflux n. See heartburn. . Milestones for the quarter included the 10,000th implant of the company's novel InterStim therapy and the publication of a multi-center European clinical trial demonstrating that TUNA(R) Therapy is effective over the long term with sustained responses in more than 75 percent of the men treated after five years. Looking ahead, Medtronic expects to initiate U.S. clinical trials for its innovative Gatekeeper In an H.323 IP telephony or video environment, a gatekeeper is a device that manages domains and provides call control. It is used to translate user names into IP addresses, to authenticate users and to manage network resources. (TM) Reflux reflux /re·flux/ (re´fluks) a backward or return flow. duodenogastric reflux reflux of the contents of the duodenum into the stomach; it may occur normally, especially during fasting. Repair System during the third fiscal quarter. Drawing upon the strength of a broad product pipeline and the first full quarter of sales of the industry's first "wireless" insulin pump insulin pump n. A portable device for people with diabetes that injects insulin at programmed intervals in order to regulate blood sugar levels. system, Diabetes quarterly revenues grew 18 percent. Strong market acceptance of the Paradigm(R) 512 insulin pump and the Paradigm Link(TM) blood glucose blood glucose Diabetology The principal sugar produced by the body from food–especially carbohydrates, but also from proteins and fats; glucose is the body's major source of energy, is transported to cells via the circulation and used by cells in the presence meter fueled growth and extended Medtronic's technological leadership in the marketplace. Medtronic recently announced the market introduction of the Paradigm 712 insulin pump, which incorporates a larger reservoir for diabetes patients requiring more insulin to keep their blood sugar levels within a normal range. Over the next several months, Medtronic anticipates a further expansion of its leading product line with the U.S. introductions of both the Quick-set(R) Plus(TM) Infusion Set An infusion set is used with an insulin pump as part of intensive insulin therapy. The purpose of an infusion set is to deliver insulin under the skin. It is a complete tubing system to connect an insulin pump to the pump user: it includes a subcutaneous cannula, adhesive mount, and the Guardian(TM) Glucose Monitoring glucose monitoring Lab medicine The periodic evaluation of any analyte abnormal in Pts with DM, to assess short and long-term control with antiglycemic agents. See Glucose, Glycated hemoglobin. System, which features an alarm to signal high or low blood glucose levels blood glucose level, n level of glu-cose in the bloodstream, normally about 70 to 115 mg/dL after fasting overnight. Higher levels may indicate diseases such as diabetes mellitus. in people with diabetes. Spinal, ENT ENT ears, nose, and throat (otorhinolaryngology). ENT abbr. ear, nose, and throat ENT ear, nose and throat. ENT Ears, nose & throat; formally, otorhinolaryngology and SNT SNT Safer Neighbourhood Team (UK) SNT Scalable Network Technologies, Inc. SNT Syntrophin SNT Serial Number Tracking SNT Surgical Navigation Technologies (Medtronic) SNT Serum Neutralization Test Business Spinal, Ear, Nose and Throat (ENT) and Surgical Navigation Technologies (SNT) reported quarterly revenues of $406.2 million, a 26 percent increase over the same quarter one year ago. Spinal revenues grew 29 percent, led by continued robust acceptance of INFUSE in·fuse v. 1. To steep or soak without boiling in order to extract soluble elements or active principles. 2. To introduce a solution into the body through a vein for therapeutic purposes. (TM) Bone Graft bone graft Orthopedic surgery Sterilized bony tissue, often of cadaveric origin, used to fill and/or 'sculpt' bone defects Indications Spinal fusion, revision of failed articular prostheses, filling traumatic or malignant bone defects, or periodontal defects. and physician preference for the company's market-leading Minimal Access Spinal Technologies (MAST). During the quarter, Medtronic secured additional worldwide rights for rhBMP-2 for spine, orthopaedic and trauma indications, as well as the exclusive license for orthopaedic surgery in Japan and Asia. The company also further strengthened its MAST portfolio with the European introduction of the DIAM(TM) Spinal Stabilization System and the U.S. introduction of the CD-HORIZON(R) SEXTANT sextant, instrument for measuring the altitude of the sun or another celestial body; such measurements can then be used to determine the observer's geographical position or for other navigational, surveying, or astronomical applications. (TM) Multi-Level Technique. In addition, Medtronic today announced its acquisition of Vertelink, a company that is pioneering the development of innovative materials and techniques for over-the-wire spinal fixation devices A spinal fixation device is a rigid or semi-rigid mechanical support system which is surgically implanted into the vertebral column in order to obtain stabilization of spinal fractures, correction of spinal deformities, or treatment of degenerative spinal disease. - this acquisition is expected to close during the third fiscal quarter. ENT revenue growth of 12 percent for the quarter was aided by contributions from a broad range of market-leading products. The business also launched its PITA(TM) (Powered Intracapsular Tonsillectomy and Adenoidectomy Tonsillectomy and Adenoidectomy Definition Tonsillectomy and adenoidectomy (T & A) are surgical procedures to remove the tonsils from the back of the mouth or adenoids from the back of the nasal cavity—both are are part of the lymphatic ) procedure to treat obstructive sleep apnea Obstructive sleep apnea (OSA) A potentially life-threatening condition characterized by episodes of breathing cessation during sleep alternating with snoring or disordered breathing. , which promotes less pain and faster recovery for patients. SNT revenues increased 11 percent. Recently, Medtronic launched the PoleStar(TM) N20, a compact intraoperative MRI 1. (application) MRI - Magnetic Resonance Imaging. 2. MRI - Measurement Requirements and Interface. system. Stock Buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. Authorization As discussed in a separate press release, Medtronic's board of directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: management to repurchase an additional 30 million shares of Medtronic stock. This authorization was necessary as the company has almost completed the repurchase of 25 million shares, the amount authorized by the board on June 28, 2001. Webcast Information Medtronic will host a webcast today, November 12, 2003, at 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. (3:30 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. ), to provide more information about its businesses for the public, analysts and the media. This quarterly presentation will be webcast through the company's website at www.medtronic.com/corporate/invest.html. Replay will be available until midnight CST on November 19, 2003. This earnings release will be archived at www.medtronic.com/newsroom, and a transcript of the webcast will be available at www.medtronic.com/corporate/invest.html. Medtronic, Inc., headquartered in Minneapolis, is the world's leading medical technology company, providing lifelong solutions for people with chronic disease. Its Internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. is www.medtronic.com. Any statements made about the company's anticipated financial results and regulatory approvals are 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. subject to risks and uncertainties such as the risks inherent in the development, manufacturing, marketing and sale of medical products, competitive factors, general economic conditions, legal disputes and government actions as more fully described in Medtronic'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. for the year ended April 25, 2003. Actual results may differ materially from anticipated results.
MEDTRONIC, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Oct. 24, Apr. 25,
2003 2003
---------- ----------
(in millions of
dollars,
except per share
data)
ASSETS
------
Current assets:
Cash and cash equivalents..................... $971.0 $1,470.1
Short-term investments........................ 219.3 22.7
Accounts receivable, less allowances of $116.7
and $99.5, respectively...................... 1,930.2 1,761.4
Inventories................................... 977.6 942.4
Deferred tax assets, net...................... 208.3 194.0
Prepaid expenses and other current assets..... 86.6 214.9
---------- ----------
Total current assets......................... 4,393.0 4,605.5
Property, plant, and equipment.................. 3,026.6 2,872.9
Accumulated depreciation........................ (1,411.2) (1,289.9)
---------- ----------
Net property, plant, and equipment........... 1,615.4 1,583.0
Goodwill........................................ 4,233.2 4,183.8
Other Intangible Assets, net.................... 1,037.9 1,033.0
Long-term investments........................... 1,303.2 594.0
Other assets.................................... 318.4 321.5
---------- ----------
Total assets................................. $12,901.1 $12,320.8
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings......................... $2,464.1 $385.3
Accounts payable.............................. 294.0 269.4
Accrued compensation.......................... 380.0 402.1
Accrued income taxes.......................... 505.8 444.4
Other accrued expenses........................ 303.1 312.1
---------- ----------
Total current liabilities.................... 3,947.0 1,813.3
Long-term debt.................................. 2.1 1,980.3
Deferred tax liabilities, net................... 326.6 304.3
Long-term accrued compensation.................. 110.9 101.9
Other long-term liabilities..................... 212.6 214.6
---------- ----------
Total liabilities............................ 4,599.2 4,414.4
Commitments and contingencies................... -- --
Shareholders' equity:
Preferred stock -- par value $1.00............ -- --
Common stock -- par value $0.10............... 121.1 121.8
Retained earnings............................. 8,166.0 7,808.4
Accumulated other non-owner changes in equity. 21.6 (12.1)
---------- ----------
8,308.7 7,918.1
Receivable from Employee Stock Ownership Plan. (6.8) (11.7)
---------- ----------
Total shareholders' equity................... 8,301.9 7,906.4
---------- ----------
Total liabilities and shareholders' equity... $12,901.1 $12,320.8
========== ==========
MEDTRONIC, INC.
RECONCILIATION OF CONSOLIDATED GAAP EARNINGS
TO CONSOLIDATED NON-GAAP EARNINGS
(Unaudited)
(in millions, except per share data)
Three months ended
October 24, 2003
-------------------------------
Before
Special, Special,
IPR&D, IPR&D,
and Other and Other As
Charges Charges(a) Reported
--------- ----------- ---------
Net sales $2,163.8 $- $2,163.8
Costs and expenses:
Cost of products sold 536.0 - 536.0
Research and development expense 202.4 - 202.4
Selling, general, and administrative
expense 673.3 - 673.3
Special charges - (4.8) (4.8)
Purchased in-process research and
development (IPR&D) - 1.9 1.9
Other (income)/expense 72.4 - 72.4
Interest (income)/expense 1.1 - 1.1
--------- ----------- ---------
Total costs and expenses 1,485.2 (2.9) 1,482.3
--------- ----------- ---------
Earnings before income taxes 678.6 2.9 681.5
Provision for income taxes 203.6 1.8 205.4
--------- ----------- ---------
Net earnings (loss) $475.0 $1.1 $476.1
========= =========== =========
Earnings per share:
Basic $0.39 $0.00 $0.39
========= =========== =========
Diluted $0.39 $0.00 $0.39
========= =========== =========
Weighted average shares outstanding:
Basic 1,214.5 1,214.5
Diluted 1,227.6 1,227.6
Three months ended
October 25, 2002
-------------------------------
Before
Special, Special,
IPR&D, IPR&D,
and Other and Other As
Charges Charges(a) Reported
--------- ----------- ---------
Net sales $1,891.0 $- $1,891.0
Costs and expenses:
Cost of products sold 460.7 - 460.7
Research and development expense 193.5 - 193.5
Selling, general, and administrative
expense 598.6 - 598.6
Special charges - (8.0) (8.0)
Purchased in-process research and
development (IPR&D) - 114.2 114.2
Other (income)/expense 45.3 - 45.3
Interest (income)/expense (1.3) - (1.3)
--------- ----------- ---------
Total costs and expenses 1,296.8 106.2 1,403.0
--------- ----------- ---------
Earnings before income taxes 594.2 (106.2) 488.0
Provision for income taxes 178.2 8.1 186.3
--------- ----------- ---------
Net earnings (loss) $416.0 $(114.3) $301.7
========= =========== =========
Earnings per share:
Basic $0.34 $(0.09) $0.25
========= =========== =========
Diluted $0.34 $(0.09) $0.25
========= =========== =========
Weighted average shares outstanding:
Basic 1,215.6 1,215.6
Diluted 1,223.8 1,223.8
(a) - Medtronic management believes that in order to properly
understand Medtronic's short-term and long-term financial trends,
investors may wish to consider the impact of special (such as
certain litigation and restructuring charges), IPR&D, and other
charges. These charges result from facts and circumstances that
vary in frequency and/or impact on continuing operations. In
addition, Medtronic management uses results of operations before
special, IPR&D, and other charges to evaluate the operational
performance of the Company and as a basis for strategic planning.
Investors should consider these non-GAAP measures in addition to,
and not as a substitute for, financial performance measures
prepared in accordance with GAAP.
MEDTRONIC, INC.
RECONCILIATION OF CONSOLIDATED GAAP EARNINGS
TO CONSOLIDATED NON-GAAP EARNINGS
(Unaudited)
(in millions, except per share data)
Six months ended
October 24, 2003
-------------------------------
Before
Special, Special,
IPR&D, IPR&D,
and Other and Other As
Charges Charges(a) Reported
--------- ----------- ---------
Net sales $4,228.0 $- $4,228.0
Costs and expenses:
Cost of products sold 1,050.0 - 1,050.0
Research and development expense 400.3 - 400.3
Selling, general, and administrative
expense 1,317.2 - 1,317.2
Special charges - (4.8) (4.8)
Purchased in-process research and
development (IPR&D) - 1.9 1.9
Other (income)/expense 136.0 - 136.0
Interest (income)/expense 2.5 - 2.5
--------- ----------- ---------
Total costs and expenses 2,906.0 (2.9) 2,903.1
--------- ----------- ---------
Earnings before income taxes 1,322.0 2.9 1,324.9
Provision for income taxes 396.6 1.8 398.4
--------- ----------- ---------
Net earnings $925.4 $1.1 $926.5
========= =========== =========
Earnings per share:
Basic $0.76 $0.00 $0.76
========= =========== =========
Diluted $0.75 $0.00 $0.75
========= =========== =========
Weighted average shares outstanding:
Basic 1,216.0 1,216.0
Diluted 1,228.7 1,228.7
Six months ended
October 25, 2002
-------------------------------
Before
Special, Special,
IPR&D, IPR&D,
and Other and Other As
Charges Charges(a) Reported
--------- ----------- ---------
Net sales $3,604.9 $- $3,604.9
Costs and expenses:
Cost of products sold 874.9 - 874.9
Research and development expense 372.9 - 372.9
Selling, general, and administrative
expense 1,134.7 - 1,134.7
Special charges - 2.5 2.5
Purchased in-process research and
development (IPR&D) - 114.2 114.2
Other (income)/expense 71.1 - 71.1
Interest (income)/expense 0.2 - 0.2
--------- ----------- ---------
Total costs and expenses 2,453.8 116.7 2,570.5
--------- ----------- ---------
Earnings before income taxes 1,151.1 (116.7) 1,034.4
Provision for income taxes 345.2 4.2 349.4
--------- ----------- ---------
Net earnings $805.9 $(120.9) $685.0
========= =========== =========
Earnings per share:
Basic $0.66 $(0.10) $0.56
========= =========== =========
Diluted $0.66 $(0.10) $0.56
========= =========== =========
Weighted average shares outstanding:
Basic 1,215.6 1,215.6
Diluted 1,224.1 1,224.1
(a) - Medtronic management believes that in order to properly
understand Medtronic's short-term and long-term financial trends,
investors may wish to consider the impact of special (such as
certain litigation and restructuring charges), IPR&D, and other
charges. These charges result from facts and circumstances that
vary in frequency and/or impact on continuing operations. In
addition, Medtronic management uses results of operations before
special, IPR&D, and other charges to evaluate the operational
performance of the Company and as a basis for strategic planning.
Investors should consider these non-GAAP measures in addition to,
and not as a substitute for, financial performance measures
prepared in accordance with GAAP.
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