St. Jude Medical Reports Record First Quarter Sales and Earnings.Business Editors/Health/Medical Writers ST. PAUL St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery , Minn.--(BUSINESS WIRE)--April 16, 2003 St. Jude Medical St. Jude Medical, Inc. NYSE: STJ is a $2.9 billion global cardiovascular device company, with headquarters in St. Paul, Minnesota, United States. The company sells products in more than 100 countries and has over 20 operations and manufacturing facilities worldwide. , Inc. (NYSE NYSE See: New York Stock Exchange :STJ STJ Superior Tribunal de Justica (Brazil) STJ Supremo Tribunal de Justiça (Portugal) STJ Superconducting Tunnel Junction STJ San Giljan (postal locality, Malta) ) today reported results for the first quarter ended March 31, 2003. The Company reported record net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $441.4 million, an increase of 18.9% compared to the $371.2 million reported in the first quarter of 2002. Sales increased 14.7% on a constant currency basis as favorable currency comparisons increased first quarter sales by about $15.7 million. Earnings for the first quarter of 2003 were $80.0 million, also a record, a $17.9 million or 28.8% increase over net earnings of $62.1 million in the first quarter of 2002. Earnings per diluted share were $.43 in the first quarter of 2003, a 26.5% increase over the $.34 reported in the first quarter of 2002. Commenting on first quarter 2003 results, St. Jude Medical Chairman and Chief Executive Officer Terry L. Shepherd said, "We are pleased with this strong first quarter performance. The markets we participate in continue to be robust and our first quarter results reflect strong sales in several product categories led by implantable cardioverter 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 (ICD ICD International Classification of Diseases (of the World Health Organization); intrauterine contraceptive device. ICD abbr. ) and vascular closure devices. Total sales increased approximately 19% over a strong first quarter of 2002. Gross margin and SG&A productivity gains were right on track reflecting our commitment to continuous improvement and operating discipline. 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. of $.43 increased more than 26% compared to the first quarter of 2002. Another strong cash flow quarter allowed us to increase our cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. prior to financing the Getz transaction." Shepherd added, "Our high-voltage 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. product line continued the strong momentum we saw throughout last year with first quarter ICD sales of $102 million, an increase of 55% over the first quarter of 2002. Our down-sized Epic(TM) ICD family, launched in October, is now our best selling ICD product family in 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. and contributed to our continued excellent growth and share gain in the ICD market. Epic(TM) ICDs are the smallest, lightest ICDs to deliver 30 joules of energy. The European launch of the single coil A single coil pickup is a type of magnetic transducer for the electric guitar and the electric bass. It electromagnetically converts the vibration of the strings to sound. version of the Riata(R) ICD lead contributed to first quarter results as well. The Epic(TM) Plus, our next generation ICD family incorporating our clinically proven AF Suppression(TM) technology, remains on track for worldwide launch during the second quarter." Shepherd continued, "We passed another important milestone in our CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. business on March 28 when we announced that the number of implants in our RHYTHM study had reached the minimum number required by the protocol. The RHYTHM study is designed to test the safety and efficacy of the Model V-338 Epic(TM) HF ICD system which is used to treat heart failure patients who are also at risk of dangerously fast ventricular tachyarrhythmias. We believe the complex nature of heart failure and ventricular tachyarrhythmias can benefit from an advanced product such as the Epic(TM) HF ICD, which combines many of St. Jude Medical's most sophisticated cardiac rhythm management technologies - pacemaker therapy, defibrillation Defibrillation Definition Defibrillation is a process in which an electronic device sends an electric shock to the heart to stop an extremely rapid, irregular heartbeat, and restore the normal heart rhythm. therapy, and left-heart stimulation - in one device. We remain on track for U.S. approval of the Epic(TM) HF in the first half of 2004. We also received an Investigational Device Exemption An Investigational Device Exemption (IDE) allows the investigational device to be used in a clinical study in order to collect safety and effectiveness data required to support a Premarket Approval (PMA) application or a Premarket Notification [510(k)] submission to Food and (IDE) from the 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. ) authorizing the addition of the QuickSite(TM) Left Heart Pacing Lead to the system of devices being studied in its RHYTHM study. The QuickSite(TM) 1056K lead is St. Jude Medical's latest pacing lead designed specifically for placement in the coronary sinus coronary sinus n. A short trunk receiving most of the veins of the heart, running in the posterior part of the coronary sulcus and emptying into the right atrium between the inferior vena cava and the atrioventricular orifice. to enable left ventricular pacing in cardiac resynchronization applications. The lead incorporates a number of unique and important new features. "In our low-voltage cardiac rhythm management product line, first quarter worldwide pacing sales of $192 million represented an increase of 6%, consistent with our expectations and guidance," Shepherd stated. "U.S. pacemaker sales decreased 3%, reflecting an emerging trend in this market that some patients may now be indicated for ICD therapy who previously might have received a pacemaker. We expect this trend to continue in the U.S. for the balance of 2003. International pacing sales were strong, up about 21%. We recently announced FDA approval for market release of the Identity(R) ADx DR and Identity(R) ADx XL DR pacemakers. U.S. launch of these Identity(R) ADx DR models, the world's most advanced pacemakers, is planned next month. The St. Jude Medical Identity(R) ADx pacemakers are the first models in the Company's Team ADx product family, incorporating unique AT/AF discrimination and diagnostic features. This product family builds upon innovations in previous St. Jude Medical pacemakers including the AF Suppression(TM) algorithm and the Beat-by-Beat(TM) AutoCapture(TM) Pacing System. Other Team ADx models and the Integrity(R) ADx and Verity(TM) ADx pacemakers will follow the Identity(R) ADx later this year, offering physicians more choices in feature sets and header configurations. Earlier this week, we announced FDA approval of the IsoFlex(R) S pacing lead and the first implant of the IsoFlex(R) P pacing lead. "Completing our array of product technologies for managing cardiac rhythm Noun 1. cardiac rhythm - the rhythm of a beating heart heart rhythm regular recurrence, rhythm - recurring at regular intervals atrioventricular nodal rhythm, nodal rhythm - the normal cardiac rhythm when the heart is controlled by the disorders, sales of our electrophysiology (EP) catheter line increased about 17% over last year in line with our expectations. The Livewire Cannulator(TM), a unique steerable catheter designed to access the coronary sinus in conjunction with a guiding introducer, like the Seal-Away(TM) CS, during permanent lead placement for cardiac resynchronization therapy is the latest addition to our full line of electrophysiology (EP) catheter products," Shepherd continued. "First quarter sales in our Cardiology and Vascular Access vascular access Clinical medicine The ability to enter the vascular system; the ease with which the vascular system can be entered for administering therapy or obtaining blood for testing business increased $16 million to $56.5 million, a 40% increase compared to last year, driven by continuing strong growth in our Angio-Seal product line," Shepherd stated. "During the quarter, we announced FDA approval of the Angio-Seal(TM) STS (Synchronous Transport Signal) The electrical equivalent of the SONET optical signal. In SDH, the European counterpart of SONET, STS is known as STM (Synchronous Transport Module). Plus, the Company's latest-generation vascular closure device. A mid-year global launch of this product is planned. The STS Plus builds on the STS Platform which features a self-tightening suture suture /su·ture/ (soo´cher) 1. sutura. 2. a stitch or series of stitches made to secure apposition of the edges of a surgical or traumatic wound. 3. to apply such stitches. 4. allowing the arterial closure procedure to be completed in the catheterization catheterization Threading of a flexible tube (catheter) through a channel in the body to inject drugs or a contrast medium, measure and record flow and pressures, inspect structures, take samples, diagnose disorders, or clear blockages. lab as well as further enhancements directed toward more efficient device positioning, smoother arterial access and simplified deployment." Shepherd added, "We also announced approval of new labeling for the Angio-Seal(TM) STS 6F vascular closure devices following completion of an IDE study which demonstrated how the Angio-Seal(TM) STS device significantly reduces the time to patient ambulation am·bu·late intr.v. am·bu·lat·ed, am·bu·lat·ing, am·bu·lates To walk from place to place; move about. [Latin ambul and discharge following diagnostic procedures. This new labeling is supported by clinical data demonstrating that many patients can be safely ambulated in less than 20 minutes and discharged one hour post-ambulation following diagnostic procedures using our Angio-Seal technology. "In our 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, sales were $66 million, up about 5% compared to the first quarter of 2002 with sales particularly strong in international markets," Shepherd stated. Shepherd continued, "Finally, on April 1, we announced the completion of the acquisition of Getz Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) . Co., Ltd., the largest distributor of St. Jude Medical's products in Japan. This is an important milestone for our business in Japan. The Getz Bros. acquisition strengthens our presence in Japan, the world's second largest medical technology market, at a critical time in the growth of our international business. For more than 20 years, we have enjoyed a strong partnership with Getz Bros., a well managed and effective organization. In the past few months, integration teams from both companies worked to integrate our operations and systems which will facilitate a smooth transition. With the close of this transaction, we now have a significant direct presence in Japan, which will be complemented by our other long-standing Japanese distributor relationships. In the coming year, we plan to introduce key products into the Japanese market, accelerating growth across all of our business segments. "It's been a very productive start to the year, and our outlook for the remainder of 2003 remains positive. All of our businesses are well positioned to support the Company's financial expectations for the second quarter and 2003. We look forward to a complete review of our technology and product portfolios at our upcoming analyst meeting on April 24 in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. which will be web-cast for interested investors," Shepherd concluded. The previously disclosed acquisition of St. Jude Medical's largest distributor in Japan, Getz Bros., closed on April 1, 2003. The Company anticipates absorbing the higher cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold associated with the Getz acquisition accounting in the second quarter of 2003. Including the absorption of this higher cost of goods sold, the Company expects consolidated EPS for the second quarter to be in the range of $0.41 - $0.43. For the second half of 2003, the higher cost of goods sold arising from the acquisition of Getz will moderate. For the full year 2003, the Company expects this acquisition will be neutral to EPS. The Company expects consolidated EPS for the full year 2003 to be in the range of $1.75 to $1.80. During a teleconference scheduled today and available on http://phx.corporate-ir.net/phoenix.zhtml?c=73836&p=irol- calendardetails&Eventld=717421, the Company will review first quarter results and its earnings and revenue forecasts for the second quarter and remainder of 2003. (Due to the length of this URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. , it may be necessary to copy and paste To copy files from one location to another or to copy text and images from one document to another. All modern operating systems and applications have a copy and paste capability that is typically selected from an Edit menu. See cut and paste and Win Copy between windows. this hyperlink into your Internet browser's URL address field.) Any statements made regarding the Company's anticipated product approvals, sales, expenses and earnings are forward-looking statements which are subject to risks and uncertainties, such as those described in the Financial Report section of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2002 (see pages 6-8). Actual results may differ materially from anticipated results. St. Jude Medical, Inc. (www.sjm.com) is dedicated to the design, manufacture and distribution of innovative medical devices of the highest quality, offering physicians, patients and payers unmatched clinical performance and demonstrated economic value.
St. Jude Medical, Inc.
Condensed Consolidated Statements of Earnings
(Data in Thousands, Except EPS)
(Unaudited)
Three Months Three Months
Ended Ended
March 31, 2003 March 31, 2002
Net sales $441,384 $371,193
Cost of sales 139,464 118,788
Gross profit 301,920 252,405
Selling, general & administrative 139,084 122,687
Research & development 55,942 46,465
Operating profit 106,894 82,253
Other income (expense) 1,197 (485)
Earnings before taxes 108,091 82,768
Income tax provision 28,104 20,692
Net earnings $79,987 $62,076
Earnings per share
Basic $0.45 $0.35
Diluted $0.43 $0.34
Basic shares outstanding 178,888 175,223
Diluted shares outstanding 186,326 182,385
Condensed Consolidated Balance Sheets
(Data in Thousands)
(Unaudited)
March 31, 2003 Dec. 31, 2002
Cash & equivalents $497,103 $401,860
Accounts receivable, net 405,287 381,246
Inventories 231,794 227,024
Other current assets 103,479 104,187
Property, plant & equipment, net 295,340 300,481
Other assets 543,515 536,581
Total assets $2,076,518 $1,951,379
Current liabilities $362,401 $374,652
Debt 0 0
Total equity 1,714,117 1,576,727
Total liabilities & equity $2,076,518 $1,951,379
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion