CLARENCE, N.Y.--(BUSINESS WIRE)--Feb. 23, 2012--
Greatbatch, Inc. (NYSE: GB), today announced results for its fourth
quarter and full year ended December 30, 2011:
-
Sales of $141.7 million for the fourth quarter increased 6% over the
prior year, driven by 28% Vascular Access and 27% Electrochem organic
revenue growth.
-
Full year 2011 sales of $568.8 million increased 7% over the prior
year and included 19% Vascular Access, 11% Orthopaedic and 6%
Electrochem organic revenue growth.
-
Fourth quarter sales included approximately $3 million of medical
device sales ($5 million Full Year) and $2.5 million of revenue from
the acquisition of Micro Power Electronics in December 2011.
-
Fourth quarter GAAP and Adjusted Diluted EPS were $0.24 and $0.39 per
share, respectively.
-
Full year GAAP and Adjusted Diluted EPS were $1.40 and $1.68 per
share, respectively.
-
Cash flow from operations remained strong at $31 million for the
fourth quarter and $90 million for the full year 2011.
|
|
Three months ended
|
(Dollars in thousands, except EPS data)
|
|
December 30,
|
|
December 31,
|
|
%
|
|
September 30,
|
|
%
|
|
2011
|
|
2010
|
|
Change
|
|
2011
|
|
Change
|
Sales
|
|
$
|
141,746
|
|
$
|
133,111
|
|
6%
|
|
$
|
131,718
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
|
|
$
|
12,542
|
|
$
|
24,512
|
|
-49%
|
|
$
|
12,888
|
|
-3%
|
GAAP Operating Income as % of Sales
|
|
|
8.8%
|
|
|
18.4%
|
|
|
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
|
|
$
|
15,748
|
|
$
|
17,758
|
|
-11%
|
|
$
|
14,714
|
|
7%
|
Adjusted Operating Income as % of Sales
|
|
|
11.1%
|
|
|
13.3%
|
|
|
|
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
|
|
$
|
0.24
|
|
$
|
0.59
|
|
-59%
|
|
$
|
0.30
|
|
-20%
|
Adjusted Diluted EPS*
|
|
$
|
0.39
|
|
$
|
0.46
|
|
-15%
|
|
$
|
0.41
|
|
-5%
|
|
|
Year ended
|
(Dollars in thousands, except EPS data)
|
|
December 30,
|
|
December 31,
|
|
%
|
|
2011
|
|
2010
|
|
Change
|
Sales
|
|
$
|
568,822
|
|
$
|
533,425
|
|
7%
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
|
|
$
|
61,699
|
|
$
|
68,994
|
|
-11%
|
GAAP Operating Income as % of Sales
|
|
|
10.8%
|
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
|
|
$
|
67,602
|
|
$
|
64,937
|
|
4%
|
Adjusted Operating Income as % of Sales
|
|
|
11.9%
|
|
|
12.2%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
|
|
$
|
1.40
|
|
$
|
1.40
|
|
0%
|
Adjusted Diluted EPS*
|
|
$
|
1.68
|
|
$
|
1.51
|
|
11%
|
|
|
|
|
|
|
|
|
|
* See Tables A and B at the end of this release for a reconciliation
of adjusted amounts to GAAP.
|
CEO Comments
“Overall, 2011 was a very successful year for Greatbatch,” stated Thomas
J. Hook, President & CEO, Greatbatch, Inc. “Our diversified revenue base
increased 7% for the year, which included significant growth from our
Vascular Access, Orthopaedic and Electrochem product lines, and was
achieved despite a contracting CRM market. This sales growth, combined
with our strong cash generation and debt reduction, drove an 11%
increase in adjusted diluted EPS for the year and continued to fund our
medical device initiatives. During 2011, we continued to make
significant progress on the development of these devices, and saw the
first returns on our investments. Additionally, during 2011 we were able
to close on the strategic acquisition of Micro Power Electronics, which
provides us with a leadership position within the portable medical
market and further diversifies our revenue base. Going forward, we are
well positioned to accelerate our growth, as we gain market share in our
non-CRM markets, commercialize our medical device projects and benefit
from potential acquisitions.”
Fourth Quarter and Full Year Results
Fourth quarter 2011 sales increased 6% over the prior year period to
$141.7 million, led by 28% Vascular Access and 44% Electrochem growth.
Fourth quarter results included the benefit of approximately $3 million
of medical device sales and $2.5 million of revenue from the acquisition
of Micro Power Electronics (“Micro Power”) in December 2011. Excluding
the impact of the Micro Power acquisition, organic revenue growth for
the 2011 fourth quarter was 5% led by Vascular Access growth of 28%, and
Electrochem revenue growth of 27%. For the year, sales increased 7% to
$568.8 million and included the favorable impact of approximately $8
million from foreign currency exchange rate fluctuations. Excluding the
impact of these exchange rate fluctuations, as well as the Micro Power
acquisition, organic revenue growth for 2011 was 5%, which was led by
Vascular Access growth of 19%, Orthopaedic revenue growth of 11% and
Electrochem revenue growth of 6%. Sales for 2011 benefitted from the
first sales of medical devices developed under the Greatbatch name,
which totaled $5 million for the year.
Gross profit of $44.7 million for the fourth quarter of 2011 was
consistent with the comparable 2010 period. For the full year, gross
profit increased $6.8 million to $180.4 million. Fourth quarter 2011
cost of sales includes $0.2 million of acquisition related inventory
step-up amortization. Excluding this amortization, gross profit as a
percentage of sales was 31.7% for the fourth quarter of 2011 and 31.7%
for the full year 2011 compared to 33.4% and 32.5% for the same periods
of 2010, respectively. The decrease in gross profit margin for the
fourth quarter and full year 2011 was due to price concessions given to
our larger OEM customers near the end of 2010, an increase in
performance-based compensation, and a lower mix of higher margin
CRM/Neuromodulation revenue partially offset by higher production volume
and productivity initiatives.
Selling, general and administrative (“SG&A”) expenses increased to $18.6
million, or 13.1% of sales, for the fourth quarter of 2011 compared to
$15.3 million, or 11.5% of sales, for the same period of 2010. For the
year, SG&A costs were $72.5 million, or 12.8% of sales, versus $64.5
million, or 12.1% of sales for 2010. The change in SG&A expenses for the
quarter and full year included the impact of higher legal and regulatory
consulting costs incurred in connection with our medical device
initiatives ($1.6 million quarter, $4.0 million full year), higher
performance based compensation ($0.8 million quarter, $3.9 million full
year), and the negative impact of strengthening foreign currencies on
the cost of our international operations ($0.09 million quarter, $1.1
million full year) in comparison to the prior year. Additionally, SG&A
for the fourth quarter of 2011 included approximately $0.4 million of
costs related to the operations of Micro Power.
Net research, development and engineering costs (“RD&E”) for the 2011
fourth quarter were $12.8 million, or 9.0% of sales, compared to $11.4
million, or 8.6% of sales, for the corresponding 2010 period. For 2011,
net RD&E costs totaled $45.5 million, or 8.0% of sales, versus $45.0
million, or 8.4% of sales for 2010. During the fourth quarter of 2011,
the Company incurred $6.7 million ($23.3 million full year) of RD&E
expenses related to the development of complete medical devices,
compared to $3.7 million ($20.3 million full year) for the corresponding
2010 periods, respectively. More specifically, included in fourth
quarter 2011 amounts are $2.3 million ($5.1 million full year) of design
verification testing (“DVT”) costs related to the QiG Group’s
development of a neuromodulation platform. Partially offsetting these
increases was a higher level ($0.7 million quarter, $2.4 million full
year) of customer cost reimbursements in comparison to the 2010 period.
These cost reimbursements can vary significantly due to the timing of
the achievement of milestones on development projects.
GAAP operating income for the fourth quarter and full year 2011 was
$12.5 million and $61.7 million, respectively, compared to $24.5 million
and $69.0 million for the respective periods of 2010. During the fourth
quarter of 2010, the Company recognized a $9.5 million gain from the
settlement of a lawsuit related to its Electrochem subsidiary. Full year
2011 results reflect a $4.2 million gain from the sale of one of the
Company’s cost method investments. Adjusted operating income, which
excludes these gains, as well as other charges, was $15.7 million and
$67.6 million for the 2011 fourth quarter and full year compared to
$17.8 million and $64.9 million for the comparable 2010 periods. See
Table A at the end of this release for a reconciliation of the
differences between GAAP operating income and adjusted operating income
and the “Use of Non-GAAP Financial Information” section below.
The 2011 fourth quarter and full year effective tax rates were 34.1% and
31.6%, respectively, compared to 32.6% and 32.8% for the same periods of
2010. For 2012, the Company currently expects the GAAP effective tax
rate to approximate the statutory rate of 35% due to the expiration of
the R&D tax credit at the end of 2011. There is a potential for
volatility of the effective tax rate due to several factors, including
changes in the mix of pre-tax income and the jurisdictions to which it
relates, business acquisitions, settlements with taxing authorities and
foreign currency fluctuations.
GAAP diluted EPS for the fourth quarter and full year 2011 were $0.24
and $1.40 per share, respectively, compared to $0.59 and $1.40 per share
for the respective 2010 periods. As indicated above the fourth quarter
of 2010 and full year 2011 periods include the impact of the Electrochem
litigation and cost method investment gains, respectively. Adjusted
diluted EPS for the fourth quarter and full year 2011 were $0.39 and
$1.68 per share, respectively, compared to $0.46 and $1.51 per share for
the corresponding 2010 periods. See Table B at the end of this release
for a reconciliation of GAAP net income and diluted EPS to adjusted net
income and adjusted diluted EPS and the “Use of Non-GAAP Financial
Information” section below.
Cash flows from operations for the fourth quarter and full year 2011
were $31 million and $90 million, respectively, compared to $5 million
and $77 million, respectively, for the comparable 2010 periods. Cash
flows from operations for the fourth quarter of 2010 included the
payment of the Electrochem litigation settlement of $25 million ($16.3
million net of tax). During 2011, the Company repaid $40 million of its
long-term debt and borrowed an additional $45 million under its
revolving credit facility in order to partially fund the Micro Power
acquisition.
CFO Comments
“Overall, we are very pleased with our 2011 results,” commented Thomas
J. Mazza, Senior Vice President & CFO. “Despite the challenges that our
markets and the macroeconomic environment presented, we were able to
exceed our revenue and adjusted earnings per share targets set at the
beginning of the year. Our efficient operations continue to generate
significant cash flow which allows us to execute on our strategic
initiatives. These strategic initiatives will continue to drive our
growth in the future.”
Product Line Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the Company’s sales by major product
lines (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
%
|
|
2011
|
|
%
|
|
2011
|
|
2010
|
|
%
|
Product Line
|
4th Qtr.
|
|
4th Qtr.
|
|
Chg.
|
|
3rd Qtr.
|
|
Chg.
|
|
Year
|
|
Year
|
|
Chg.
|
Greatbatch Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRM/Neuromodulation
|
$
|
77,198
|
|
$
|
78,382
|
|
-2%
|
|
$
|
70,731
|
|
9%
|
|
$
|
303,690
|
|
$
|
303,521
|
|
0%
|
Vascular Access
|
|
12,459
|
|
|
9,768
|
|
28%
|
|
|
11,396
|
|
9%
|
|
|
45,098
|
|
|
38,000
|
|
19%
|
Orthopaedic
|
|
31,635
|
|
|
30,773
|
|
3%
|
|
|
31,131
|
|
2%
|
|
|
140,277
|
|
|
118,748
|
|
18%
|
Total
|
|
121,292
|
|
|
118,923
|
|
2%
|
|
|
113,258
|
|
7%
|
|
|
489,065
|
|
|
460,269
|
|
6%
|
Electrochem
|
|
20,454
|
|
|
14,188
|
|
44%
|
|
|
18,460
|
|
11%
|
|
|
79,757
|
|
|
73,156
|
|
9%
|
Total sales
|
$
|
141,746
|
|
$
|
133,111
|
|
6%
|
|
$
|
131,718
|
|
8%
|
|
$
|
568,822
|
|
$
|
533,425
|
|
7%
|
Greatbatch Medical
In comparison to the prior year, CRM and Neuromodulation sales for the
fourth quarter of 2011 decreased 2% but were consistent for the full
year period. During the first half of 2011, CRM revenue included the
benefit of customer inventory builds and product launches, which did not
recur in the second half of 2011. Additionally, CRM and Neuromodulation
sales continue to be impacted by pricing pressures and a slowdown in the
underlying market. As a result of these headwinds, we expect CRM and
Neuromodulation revenue for 2012 to be lower in the first half of 2012
but begin to rebound in the second half of the year as the CRM market
stabilizes.
Fourth quarter and full year 2011 Vascular Access sales increased 28%
and 19%, respectively, over the prior year periods. These increases were
primarily attributable to growth in the underlying market and market
share gains. Additionally, Vascular Access revenue for the quarter
included approximately $2 million ($4 million full year) from sales of
medical devices that were developed under the Greatbatch name.
In comparison to the prior year, Orthopaedic product line sales
increased 3% and 18%, respectively, for the fourth quarter and full year
periods. Full year 2011 Orthopaedic sales included the favorable impact
of approximately $8 million from foreign currency exchange rate
fluctuations. Foreign currency exchange rate fluctuations did not have a
material impact on fourth quarter revenue. On a constant currency basis,
Orthopaedic sales for 2011 were up 11% over the prior year period. These
increases were across substantially all of our product lines and were a
direct result of the investments made over the last several years to
expand capabilities, shorten lead times, and improve quality and on-time
delivery.
Electrochem
Fourth quarter 2011 sales for the Electrochem business segment increased
44% in comparison to the prior year and were up 9% for the full year.
Fourth quarter 2011 sales for Electrochem included $2.5 million of
additional revenue from the Micro Power acquisition. Excluding the
additional revenue provided by Micro Power, sales for the 2011 fourth
quarter and full year increased 27% and 6%, respectively. During 2011,
Electrochem revenue varied from quarter to quarter due to the timing of
various customer inventory pulls. For the full year, the increase in
Electrochem revenue was a result of an increased investment in sales and
marketing, which resulted in market share gains and several new customer
contracts, as well as continued strength in the energy markets.
Financial Guidance
For 2012, Greatbatch estimates annual
revenue growth rates for its product lines as follows:
CRM & Neuromodulation:
|
|
|
-3% to 0%
|
Vascular Access:
|
|
|
10% to 20%
|
Orthopaedic:
|
|
|
5% to 15%
|
Electrochem(1):
|
|
|
Approximately 5%
|
(1) Percentage increase assuming full year pro forma Micro Power revenue
in 2011.
Based upon these growth rates, consolidated annual sales for 2012 are
projected to be approximately $645 million to $665 million. This would
equate to an increase of 13% to 17% over 2011 actual sales.
Additionally, this guidance assumes that revenue from the sale of
medical devices will be up to $15 million for 2012. Given the underlying
weakness in the healthcare markets, as well as the tough comparables
versus the first and second quarters of 2011, we currently expect
revenue for Greatbatch Medical for the first half of 2012 to be below
2011 levels, but rebound in the second half of the year as the
healthcare markets stabilize.
Adjusted operating income for 2012 is projected to be between 11.5% and
12.5% of sales. Adjusted operating income for 2012 is expected to
consist of GAAP operating income minus non-recurring, unusual or
infrequently occurring items such as acquisition, consolidation and
integration charges, certain R&D expenditures and asset
disposition/write-down charges, totaling approximately $15 million to
$20 million, of which approximately $5 million are non-cash expenses.
Additionally, our adjusted operating income guidance assumes net RD&E
expenditures will be in the range of 8.5% to 9% of sales.
The net result of the above guidance is that the Company expects 2012
adjusted diluted EPS to be in the range of $1.75 to $1.85 per diluted
share. This would equate to an increase of 4% to 10% over 2011 adjusted
diluted EPS. Adjusted diluted EPS is GAAP diluted EPS excluding the
after-tax impact of the adjusted amounts described above and $9.1
million ($5.9 million net of tax) of non-cash convertible debt interest
expense. This guidance also assumes the Company’s effective tax rate
will be approximately 35% and assumes approximately 24 million average
diluted shares outstanding.
Conference Call
The Company will host a conference call on Thursday, February 23, 2012
at 4:30 p.m. ET to discuss these 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 6:30 p.m. ET on
February 23, 2012 until March 2, 2012. To access the replay, dial
888-286-8010 (U.S.) or 617-801-6888 (International) and enter the
passcode 58704071.
About Greatbatch, Inc.
Greatbatch, Inc. (NYSE: GB) provides top-quality technologies to
industries that depend on reliable, long-lasting performance through its
brands, Greatbatch Medical, Electrochem and QiG Group. Greatbatch
Medical develops and manufactures critical medical device technologies
for the cardiac, neurology, vascular and orthopaedic markets.
Electrochem designs and manufactures battery and wireless sensing
technologies for high-end niche applications in the energy, military,
portable medical, and other markets. The QiG Group empowers the design
and development of new medical devices for our core markets. Additional
information about the Company is available at www.greatbatch.com.
Use of Non-GAAP Financial Information
In addition to our results reported in accordance with GAAP, we provide
adjusted operating income and margin, adjusted net income and adjusted
earnings per diluted share. These adjusted amounts consist of GAAP
amounts excluding the following adjustments to the extent occurring
during the period: (i) acquisition-related charges, (ii) facility
consolidation, manufacturing transfer and system integration charges,
(iii) asset write-down and disposition charges, (iv) severance charges
in connection with corporate realignments or a reduction in force, (v)
litigation charges and gains, (vi) the impact of non-cash charges to
interest expense due to the accounting change governing convertible
debt, (vii) unusual or infrequently occurring items, (viii) certain R&D
expenditures (such as medical device DVT expenses), (ix) gain/loss on
the sale of investments and (x) the income tax (benefit) related to
these adjustments. Adjusted earnings per diluted share were calculated
by dividing adjusted net income for diluted earnings per share by
diluted weighted average shares outstanding. We believe that the
presentation of adjusted operating income and margin, adjusted net
income and adjusted diluted earnings per share provides important
supplemental information to management and to investors seeking to
understand the financial and business trends relating to our results of
operations.
Forward-Looking Statements
Some of the statements in this press release, including the information
provided under the caption “Financial Guidance,” 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: our dependence upon a limited
number of customers; customer ordering patterns; product obsolescence;
our inability to market current or future products; pricing/vertical
integration pressure from customers; our ability to timely and
successfully implement our cost reduction and plant consolidation
initiatives; our reliance on third party suppliers for raw materials,
products and subcomponents; our inability to maintain high quality
standards for our products; challenges to our intellectual property
rights; product liability claims; our inability to successfully
consummate and integrate acquisitions and to realize synergies; our
unsuccessful expansion into new markets; our ability to realize a return
on our substantial RD&E investments, including system and device
products; our inability to obtain licenses to key technology; regulatory
changes or consolidation in the healthcare industry; global economic
factors including currency exchange rates and interest rates; the
resolution of various legal actions and other risks and uncertainties
described in the Company’s Annual Report on Form 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.
Table A: Operating Income Reconciliation:
|
|
A reconciliation of GAAP operating income to adjusted amounts is as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Year ended
|
|
|
December 30,
|
|
December 31,
|
|
December 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
Operating income as reported
|
|
$
|
12,542
|
|
$
|
24,512
|
|
$
|
61,699
|
|
$
|
68,994
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization (COS)
|
|
|
177
|
|
|
-
|
|
|
177
|
|
|
-
|
Executive death benefits (SG&A)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
885
|
Neuromodulation platform DVT expense (RD&E)
|
|
|
2,270
|
|
|
-
|
|
|
5,133
|
|
|
-
|
Litigation settlement
|
|
|
-
|
|
|
(9,500)
|
|
|
-
|
|
|
(9,500)
|
Consolidation costs
|
|
|
-
|
|
|
493
|
|
|
425
|
|
|
1,573
|
Integration costs
|
|
|
-
|
|
|
(93)
|
|
|
-
|
|
|
42
|
Asset dispositions, severance and other
|
|
|
759
|
|
|
2,346
|
|
|
168
|
|
|
2,943
|
Adjusted operating income
|
|
$
|
15,748
|
|
$
|
17,758
|
|
$
|
67,602
|
|
$
|
64,937
|
Adjusted operating margin
|
|
|
11.1%
|
|
|
13.3%
|
|
|
11.9%
|
|
|
12.2%
|
|
Table B: Net Income and Diluted EPS Reconciliation
|
|
A reconciliation of GAAP net income and diluted EPS to adjusted
amounts is as follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Year ended
|
|
|
December 30,
|
|
December 31,
|
|
December 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
Income before taxes as reported
|
|
$
|
8,562
|
|
$
|
20,520
|
|
$
|
48,392
|
|
$
|
49,325
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization (COS)
|
|
|
177
|
|
|
-
|
|
|
177
|
|
|
-
|
Executive death benefits (SG&A)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
885
|
Neuromodulation platform DVT expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(RD&E)
|
|
|
2,270
|
|
|
-
|
|
|
5,133
|
|
|
-
|
Litigation settlement
|
|
|
-
|
|
|
(9,500)
|
|
|
-
|
|
|
(9,500)
|
Consolidation costs
|
|
|
-
|
|
|
493
|
|
|
425
|
|
|
1,573
|
Integration costs
|
|
|
-
|
|
|
(93)
|
|
|
-
|
|
|
42
|
Asset dispositions, severance and other
|
|
|
759
|
|
|
2,346
|
|
|
168
|
|
|
2,943
|
(Gain) loss on cost method investments, net
|
|
|
-
|
|
|
150
|
|
|
(4,232)
|
|
|
150
|
Note conversion option discount amortization
|
|
|
2,180
|
|
|
2,024
|
|
|
8,483
|
|
|
7,876
|
Adjusted income before taxes
|
|
|
13,948
|
|
|
15,940
|
|
|
58,546
|
|
|
53,294
|
Adjusted provision for income taxes
|
|
|
4,808
|
|
|
5,078
|
|
|
18,824
|
|
|
17,576
|
Adjusted net income
|
|
$
|
9,140
|
|
$
|
10,862
|
|
$
|
39,722
|
|
$
|
35,718
|
Adjusted diluted EPS
|
|
$
|
0.39
|
|
$
|
0.46
|
|
$
|
1.68
|
|
$
|
1.51
|
Number of shares
|
|
|
23,607
|
|
|
23,532
|
|
|
23,636
|
|
|
23,802
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited
|
(in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Year ended
|
|
|
December 30,
|
|
December 31,
|
|
December 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
141,746
|
|
$
|
133,111
|
|
$
|
568,822
|
|
$
|
533,425
|
Cost of sales
|
|
|
97,074
|
|
|
88,647
|
|
|
388,469
|
|
|
359,844
|
Gross profit
|
|
|
44,672
|
|
|
44,464
|
|
|
180,353
|
|
|
173,581
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
18,568
|
|
|
15,290
|
|
|
72,548
|
|
|
64,510
|
Research, development and engineering costs, net
|
|
|
12,803
|
|
|
11,416
|
|
|
45,513
|
|
|
45,019
|
Litigation settlement
|
|
|
-
|
|
|
(9,500)
|
|
|
-
|
|
|
(9,500)
|
Other operating (income) expenses, net
|
|
|
759
|
|
|
2,746
|
|
|
593
|
|
|
4,558
|
Total operating expenses
|
|
|
32,130
|
|
|
19,952
|
|
|
118,654
|
|
|
104,587
|
Operating income
|
|
|
12,542
|
|
|
24,512
|
|
|
61,699
|
|
|
68,994
|
Interest expense
|
|
|
4,126
|
|
|
3,655
|
|
|
16,928
|
|
|
18,519
|
Interest income
|
|
|
(12)
|
|
|
(1)
|
|
|
(21)
|
|
|
(10)
|
(Gain) loss on cost method investments, net
|
|
|
-
|
|
|
150
|
|
|
(4,232)
|
|
|
150
|
Other (income) expense, net
|
|
|
(134)
|
|
|
188
|
|
|
632
|
|
|
1,010
|
Income before provision for income taxes
|
|
|
8,562
|
|
|
20,520
|
|
|
48,392
|
|
|
49,325
|
Provision for income taxes
|
|
|
2,923
|
|
|
6,681
|
|
|
15,270
|
|
|
16,187
|
Net income
|
|
$
|
5,639
|
|
$
|
13,839
|
|
$
|
33,122
|
|
$
|
33,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.24
|
|
$
|
0.60
|
|
$
|
1.42
|
|
$
|
1.44
|
Diluted
|
|
$
|
0.24
|
|
$
|
0.59
|
|
$
|
1.40
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
23,309
|
|
|
23,099
|
|
|
23,258
|
|
|
23,070
|
Diluted
|
|
|
23,607
|
|
|
23,532
|
|
|
23,636
|
|
|
23,802
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
As of
|
ASSETS
|
|
December 30,
|
|
December 31,
|
|
2011
|
|
2010
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
36,508
|
|
$
|
22,883
|
Accounts receivable, net
|
|
|
101,946
|
|
|
70,947
|
Inventories
|
|
|
109,913
|
|
|
101,440
|
Refundable income taxes
|
|
|
1,292
|
|
|
2,763
|
Deferred income taxes
|
|
|
7,828
|
|
|
7,398
|
Prepaid expenses and other current assets
|
|
|
7,469
|
|
|
6,078
|
Total current assets
|
|
|
264,956
|
|
|
211,509
|
Property, plant and equipment, net
|
|
|
145,806
|
|
|
146,380
|
Amortizing intangible assets, net
|
|
|
100,258
|
|
|
75,114
|
Indefinite-lived intangible assets
|
|
|
20,288
|
|
|
20,288
|
Goodwill
|
|
|
338,653
|
|
|
307,451
|
Deferred income taxes
|
|
|
2,450
|
|
|
2,427
|
Other assets
|
|
|
8,936
|
|
|
13,807
|
Total assets
|
|
$
|
881,347
|
|
$
|
776,976
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
40,665
|
|
$
|
27,989
|
Deferred income taxes
|
|
|
845
|
|
|
514
|
Accrued expenses
|
|
|
52,539
|
|
|
32,084
|
Total current liabilities
|
|
|
94,049
|
|
|
60,587
|
Long-term debt
|
|
|
235,950
|
|
|
220,629
|
Deferred income taxes
|
|
|
75,203
|
|
|
64,290
|
Other long-term liabilities
|
|
|
8,862
|
|
|
4,641
|
Total liabilities
|
|
|
414,064
|
|
|
350,147
|
Stockholders’ equity:
|
|
|
|
|
|
|
Preferred stock
|
|
|
-
|
|
|
-
|
Common stock
|
|
|
23
|
|
|
23
|
Additional paid-in capital
|
307,196
|
|
|
298,405
|
Treasury stock
|
|
|
(1,387)
|
|
|
(1,469)
|
Retained earnings
|
|
|
152,522
|
|
|
119,400
|
Accumulated other comprehensive income
|
|
|
8,929
|
|
|
10,470
|
Total stockholders’ equity
|
|
|
467,283
|
|
|
426,829
|
Total liabilities and stockholders’ equity
|
|
$
|
881,347
|
|
$
|
776,976
|
Source: Greatbatch, Inc.
Greatbatch, Inc.
Marco Benedetti, 716-759-5856
Corporate
Controller & Treasurer
mbenedetti@greatbatch.com