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 MINNEAPOLIS, Aug. 17 /PRNewswire/ -- Medtronic, Inc. (NYSE: MDT) today reported first-quarter net earnings of $52.5 million, or $0.91 a share, on revenues of $331.3 million.
 After adjusting for the effect o ? ?accounting changes made last year, net earnings increased 15.2 percent over results in the comparable period and earnings per share increased 18.2 percent. Earnings were enhanced by improved margins and effective spending and hiring controls.
 Revenue in the quarter a year ago was $329.9 million. After adjusting for effects of foreign currency translation, previously announced divestitures of certain businesses and reduced OEM sales, revenue increased 10.8 percent over the comparable period last year.
 First-quarter results include a $14.0 million gain from the sale in July of Medtronic Andover Medical (AMI), the company's external electrode business based in Haverhill, Mass. This sale effectively completes the company's strategic divestitures. Management will continue to focus on adding businesses and venture activities that fit its strategic direction. The company also recorded non-recurring charges of $14.3 million which include primarily the impact of adoption of a new accounting principle and a provision for potentially uncollectible trade and other receivables.
 "Medtronic is pleased with its overall financial performance, especially the contributions of its newer businesses serving the tachyarrhythmia and interventional vascular markets," said William W. George, president and chief executive officer. "While revenues fell somewhat short of our expectations due to the sluggish global economy and the changing world health care environment, we are pleased that strong cost and expense controls enabled Medtronic to realize excellent results."
 The Tachyarrhythmia Management business posted strong increases resulting from U.S. commercial release in February of the PCD(R) implantable cardioverter-defibrillator. Earlier this month, an advisory panel to the U.S. Food and Drug Administration unanimously recommended clearance for the Transvene(R) lead system which enables physicians to implant the PCD without open-chest surgery. Meanwhile, in international markets, clinical evaluation of the PCD model 7219D, a newer, more advanced but smaller version, is proceeding with more than 100 implants. Most European implants capitalize on the smaller size by implanting in the chest area and employing Transvene leads to reduce cost and patient trauma.
 The Medtronic Interventional Vascular business gained market share and continued the profitability that began in the fourth quarter of last year. Worldwide sales of its 14K(R) balloon catheter grew significantly during the quarter as did sales of its Gold Xchange(TM) catheter outside the United States.
 Bradycardia pacing sales increased at a rate consistent with the market. Medtronic dual chamber pacemaker lines made especially strong contributions. Two products in Medtronic's new multi-product Thera(TM) pacemaker system have begun clinical evaluation. The Thera DR, a dual chamber rate responsive pacemaker, was implanted in Canada on July 26 and the first implants of Thera VDD took place August 10 in Europe. The Thera VDD is designed to use only one lead -- the new CapSure(R) VDD -- to sense in the upper and lower chambers of the heart and to provide synchronized pacing to the ventricle, the lower chamber of the heart. Conventional single-lead pacemaker systems pace and sense only in the ventricle.
 In Cardiac Surgery, sales of the Medtronic Bio-pump(R) maintained solid momentum as the market continued its shift from roller devices to centrifugal pumps. Prosthetic heart valves also recorded sales gains, led by strong market acceptance of tissue valves.
 The Medtronic Neurological business maintained a long record of double-digit sales gains with its implantable Itrel II(R) Spinal Cord Stimulation System and the SynchroMed(R) Implantable Drug Infusion System.
 Medtronic, Inc., headquartered in Minneapolis, is the world's leading therapeutic medical device company.
 (In thousands, except per share data)
 Three Months Ended
 7/31/93 7/31/92
 Net sales $331,306 $329,914
 Costs and expenses:
 Cost of products sold 101,257 104,663
 Research and development expense 37,329 30,827
 Selling, general and administrative expense 127,931 125,122
 Interest expense 2,069 3,617
 Interest income (1,676) (2,357)
 Gain on sale of subsidiary (13,962) --
 Total costs and expenses 252,948 261,872
 Earnings before income taxes 78,358 68,042
 Provision for income taxes 25,858 22,454
 Net earnings before cumulative effect
 of accounting changes 52,500 45,588
 Cumulative effect of accounting changes:
 Postretirement benefits (net of
 deferred taxes of $5,674) -- 9,256
 Income taxes -- 5,100
 Net earnings $52,500 $31,232
 Weighted average shares outstanding 57,713 59,490
 Earnings per share:
 Earnings before cumulative effect
 of accounting changes $.91 $.77
 Cumulative effect of accounting changes -- (.24)
 Net earnings $.91 $.53
 -0- 8/17/93
 /CONTACT: Dale Beumer, Investor Relations, 612-574-3038, or Dick Reid, Public Relations, 612-574-3052, both of Medtronic/

CO: Medtronic, Inc. ST: Minnesota IN: MTC SU: ERN

KH -- MN006 -- 3694 08/17/93 16:07 EDT
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Publication:PR Newswire
Date:Aug 17, 1993

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