FRISCO, Texas--(BUSINESS WIRE)--Jul. 25, 2012--
Greatbatch, Inc. (NYSE: GB), today announced results for its second
quarter ended June 29, 2012:
-
Sales increased 14% over the prior year to a record $166.5 million,
and included the following:
-
$21.3 million of revenue contributed from the acquisition of Micro
Power Electronics, Inc.;
-
16% Vascular Access growth driven by commercialization of medical
devices;
-
3% increase in CRM/Neuromodulation revenue, ahead of our
expectations;
-
13% decline in Orthopaedics revenue (-5% constant currency) due to
lower customer product launches, pricing pressures and poor
execution at our Swiss facilities;
-
Organic constant currency growth of 1%.
-
Second quarter GAAP diluted EPS decreased 56% versus the prior year
primarily due to higher consolidation and optimization activities. On
an adjusted basis, diluted EPS was $0.43 per share, consistent with
the prior year.
-
Similar to GAAP diluted EPS, GAAP operating income decreased 39% in
comparison to the prior year. Adjusted operating income increased 1%
over the prior year as higher gross profits were offset by increased
RD&E investment in the development of medical devices.
-
Cash flows from operations were $24 million for the second quarter
which enabled the Company to pay down an additional $8 million of
long-term debt.
|
|
|
|
|
Three Months Ended
|
(Dollars in thousands, except per share data)
|
|
|
June 29,
|
|
|
July 1,
|
|
%
|
|
|
March 30,
|
|
%
|
|
|
2012
|
|
|
2011
|
|
Change
|
|
|
2012
|
|
Change
|
Sales
|
|
$
|
166,548
|
|
$
|
146,524
|
|
14%
|
|
$
|
159,103
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
|
|
$
|
11,091
|
|
$
|
18,303
|
|
-39%
|
|
$
|
11,198
|
|
-1%
|
GAAP Operating Income as % of Sales
|
|
|
6.7%
|
|
|
12.5%
|
|
|
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
|
|
$
|
18,589
|
|
$
|
18,417
|
|
1%
|
|
$
|
15,515
|
|
20%
|
Adjusted Operating Income as % of Sales
|
|
|
11.2%
|
|
|
12.6%
|
|
|
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS
|
|
$
|
0.16
|
|
$
|
0.36
|
|
-56%
|
|
$
|
0.19
|
|
-16%
|
Adjusted Diluted EPS*
|
|
$
|
0.43
|
|
$
|
0.43
|
|
0%
|
|
$
|
0.37
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Refer to Tables A and B at the end of this release for a
reconciliation of GAAP to adjusted amounts.
|
|
CEO Comments
“As expected, second quarter adjusted operating income increased 20% in
comparison to the first quarter of 2012 as sales improved,” commented
Thomas J. Hook, President & CEO, Greatbatch Inc. “In comparison to the
prior year, adjusted operating income increased 1% as current quarter
results include the benefit of over 40% Portable Medical pro forma
growth driven by our Micro Power acquisition, as well as above market
growth in our CRM and Vascular Access markets. During the quarter, we
continued to experience operational issues within our Swiss Orthopaedic
facilities; however, we have taken action to improve our performance
over the next 18 months. In addition to the progress we have made on our
current strategic initiatives, during the quarter we announced several
new initiatives which included the following:
-
Opening of our manufacturing facility in Fort Wayne, Indiana, which
will be used to consolidate our Orthopaedic operations;
-
Establishing an R&D center in Singapore with the support of the
Singapore Economic Development Board, which is the first step of our
Asia Pacific strategy;
-
Increasing our strategic focus on sales and marketing to drive core
business growth; and
-
Completing the integration of our Portable Medical product line (Micro
Power), which is performing ahead of expectations.
We remain confident these initiatives will improve the long-term growth
prospects of our Company and are being undertaken with one goal in mind
― to drive shareholder value.”
CFO Comments
“We expect the progress we have made with regards to our financial
performance to carry over into the second half of the year as we
continue to commercialize our medical device pipeline, aggressively
address the operational issues at our Swiss facilities and begin to
optimize our RD&E investment,” commented Michael Dinkins, Senior Vice
President & CFO. “Despite these efforts, we now believe that our full
year adjusted operating income as a percentage of sales and adjusted
diluted EPS will be at the lower end of our guidance provided at the
beginning of the year due to lower than expected profitability from our
Swiss operations. However, we still expect that revenue will be in line
with our original guidance due to stronger than expected performance
from our CRM and Portable Medical product lines. We are committed to
driving operational improvements in our business to achieve our
long-term growth objectives and provide value to our shareholders.”
Second Quarter Results
Second quarter 2012 sales increased 14% over the prior year period to a
record $166.5 million. This increase was driven by the acquisition of
Micro Power, primarily Portable Medical, which added $21.3 million to
sales, as well as a 16% increase in Vascular Access revenue and stronger
than expected growth in our CRM product line. Second quarter results
also included the impact of foreign currency exchange rate fluctuations,
which lowered Orthopaedic sales by approximately $3 million in
comparison to the prior year. On an organic constant currency basis,
sales for the second quarter increased 1% versus the prior year as the
benefits described above were partially offset by continued weakness
within our Orthopaedics product line.
Gross profit was $51.9 million, or 31.2% of sales, in the second quarter
of 2012, compared to $46.6 million, or 31.8% of sales for the comparable
2011 period. The increase in gross profit primarily resulted from the
higher sales volumes discussed above. The decrease in gross profit as a
percentage of sales from the prior year was primarily due to price
concessions made to our larger OEM customers, a higher mix of lower
margin revenue, as well as production inefficiencies at our Swiss
Orthopaedic facilities. As previously discussed, these operational
issues are aggressively being addressed and should improve as the year
progresses and into 2013.
Selling, general and administrative (“SG&A”) expenses increased to $20.7
million, or 12.5% of sales, for the second quarter of 2012 compared to
$17.6 million, or 12.0% of sales, for the same period of 2011. The
majority of this increase can be attributed to the Company’s recent
acquisitions, which added $2.8 million to SG&A.
Net research, development and engineering costs (“RD&E”) for the 2012
second quarter were $14.2 million, compared to $11.3 million for the
comparable 2011 period. Approximately $0.7 million of this increase was
a result of the operations from our recent acquisitions. The remainder
of this increase can be attributed to the investment in the development
of complete medical devices which totaled $7.0 million for the 2012
second quarter compared to $5.6 million for 2011. These amounts include
$1.6 million and $0.6 million, respectively, of design verification
testing (“DVT”) costs in connection with our development of a
neuromodulation platform. For the second half of the year we anticipate
that RD&E costs will be slightly lower than the first half as the
Company begins to optimize its RD&E investment, which will be partially
offset by an increased level of design verification testing.
GAAP operating income for the second quarter of 2012 was $11.1 million,
compared to $18.3 million for the 2011 second quarter. This decrease was
primarily due to an increased level of consolidation and integration
activities, the costs of which are excluded from adjusted amounts.
Adjusted operating income was $18.6 million, or 11.2% of sales in the
second quarter of 2012, compared to $18.4 million, or 12.6% of sales,
for the comparable 2011 period. Refer to Table A at the end of this
release for a reconciliation of GAAP operating income to adjusted
operating income and the “Use of Non-GAAP Financial Information” section
below.
The 2012 second quarter GAAP and adjusted effective tax rates were 43.9%
and 38.7%, respectively, compared to 33.0% and 33.3%, respectively, for
the same periods of 2011. The 2011 effective tax rates include the
benefit of the R&D tax credit, which expired at the end of 2011.
Additionally, 2012 amounts include losses from our Swiss operations,
which are deducted at a lower effective tax rate, thus increasing the
overall effective tax rate of the Company. We currently expect our 2012
annual GAAP effective tax rate to be between 40% and 45%, depending on
the timing of expenses incurred in connection with the closure of
manufacturing operations in Switzerland. On an adjusted basis, which
will exclude the impact of these consolidation costs, we expect our
effective tax rate to be more in line with the U.S. statutory rate of
35%.
GAAP and adjusted diluted EPS for the second quarter of 2012 were $0.16
and $0.43 per share, respectively, compared to $0.36 and $0.43 per
share, respectively, for the second quarter of 2011. Refer to Table B at
the end of this release for a reconciliation of GAAP net income and EPS
to adjusted net income and EPS and the “Use of Non-GAAP Financial
Information” section below.
Cash flows from operations for the second quarter of 2012 were
approximately $24 million compared to $13 million in the 2011 period.
During the second quarter of 2012, the Company repaid $8 million of
long-term debt. Going forward, cash flows from operations will be used
to fund our consolidation and RD&E initiatives, as well as to pay down
long-term debt.
|
Product Line Sales
|
The following table summarizes the Company’s sales by major product
lines (dollars in thousands):
|
|
|
|
Three Months Ended
|
|
|
|
June 29,
|
|
|
July 1,
|
|
%
|
|
|
|
March 30,
|
|
%
|
|
Product Line
|
|
|
2012
|
|
|
2011
|
|
Change
|
|
|
2012
|
|
Change
|
Implantable Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRM/Neuromodulation
|
|
$
|
80,025
|
|
$
|
77,724
|
|
3
|
%
|
|
$
|
75,135
|
|
7
|
%
|
Vascular Access
|
|
|
12,481
|
|
|
10,769
|
|
16
|
%
|
|
|
11,636
|
|
7
|
%
|
Orthopaedic
|
|
|
32,860
|
|
|
37,922
|
|
-13
|
%
|
|
|
31,046
|
|
6
|
%
|
Total Implantable Medical
|
|
|
125,366
|
|
|
126,415
|
|
-1
|
%
|
|
|
117,817
|
|
6
|
%
|
Electrochem
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portable Medical
|
|
|
20,407
|
|
|
2,012
|
|
NA
|
|
|
|
18,720
|
|
9
|
%
|
Energy/Environmental
|
|
|
16,879
|
|
|
16,016
|
|
5
|
%
|
|
|
18,370
|
|
-8
|
%
|
Other
|
|
|
3,896
|
|
|
2,081
|
|
87
|
%
|
|
|
4,196
|
|
-7
|
%
|
Total Electrochem
|
|
|
41,182
|
|
|
20,109
|
|
105
|
%
|
|
|
41,286
|
|
0
|
%
|
Total Sales
|
|
$
|
166,548
|
|
$
|
146,524
|
|
14
|
%
|
|
$
|
159,103
|
|
5
|
%
|
|
Implantable Medical
CRM and Neuromodulation sales for the second quarter of 2012 increased
3% compared to the prior year to a record $80.0 million. CRM and
Neuromodulation revenue for the second quarter of 2012 and 2011 both
included the benefit of customer product launches. The Company continues
to see an increased pace of product development opportunities from its
CRM customers. Management believes that this, combined with our
increased focus on sales and marketing, will allow the Company to grow
this product line faster than the underlying market.
Second quarter 2012 sales for the Vascular Access product line increased
16% to $12.5 million in comparison to the prior year and was primarily
driven by the commercialization of new medical devices. We continue to
expect 2012 sales of complete medical devices developed by Greatbatch to
be in the range of $10 to $15 million for 2012.
Orthopaedic product line sales of $32.9 million for the second quarter
of 2012 declined 13% (-5% constant currency) compared to the second
quarter of 2011. Foreign currency exchange rate fluctuations decreased
Orthopaedic revenue by approximately $3 million in the second quarter of
2012 in comparison to the prior year. The remaining decline in second
quarter 2012 Orthopaedic sales was a result of price concessions
provided to customers, as well as fewer customer product launches and
development opportunities due to operational issues within our
Orthopaedic business, which are aggressively being addressed. In
comparison to the sequential first quarter, Orthopaedic revenue
increased 6%.
Electrochem
Second quarter 2012 sales for Electrochem increased $21.1 million to
$41.2 million versus $20.1 million for the comparable 2011 period.
Second quarter 2012 Electrochem sales included $21.3 million of revenue
related to the acquisition of Micro Power in December 2011. On an
organic basis, Electrochem revenue was consistent with the prior year
despite tough comparables with the second quarter of 2011, which
included the benefit of customer inventory restocking. The Micro Power
acquisition continues to exceed our initial expectations, and is being
driven by successful product launches into the higher growth, higher
value portable medical market. This market is benefiting from the
shifting of patient care from clinical settings to the home and an aging
population, which is driving the need for lightweight/portable devices
for patients and caregivers. Our funnel of portable medical products
from this acquisition continues to be full and is expected to drive high
single digit revenue growth for the next several years in this product
line.
Financial Guidance
At this time, we are reaffirming our sales guidance provided at the
beginning of the year. However, based upon our results for the first two
quarters and projections for the remainder of the year, we now expect
our adjusted operating income as a percentage of sales and adjusted
diluted EPS to be at the lower end of the ranges provided. The guidance
provided at the beginning of the year was as follows:
|
Sales
|
|
$645 million - $665 million
|
Adjusted Operating Income as a % of Sales
|
|
11.5% - 12.5%
|
Adjusted Diluted EPS
|
|
$1.75 - $1.85
|
|
Given the softness that we are seeing in our Orthopaedic product line,
we will not achieve the revenue growth assumptions previously provided
for that product line. With that said, we still expect to achieve our
13% to 17% growth guidance for total sales set at the beginning of the
year given stronger than expected performance from our CRM and Portable
Medical product lines. Additionally, we expect to see operating income
improvements as the year progresses, which will come from the
consolidation of our Orthopaedic operations and optimization of RD&E
investment, as well as from various other measures management has
initiated to manage our cost structure.
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 RD&E expenditures and asset disposition/write-down charges,
totaling approximately $20 million to $30 million, of which
approximately $5 million to $10 million will be non-cash expenses. This
range has been revised upward from our previous expectations of $15
million to $20 million to reflect the additional costs associated with
the announced closure of manufacturing operations in Switzerland.
Conference Call
The Company will host a conference call on Wednesday, July 25, 2012 at
5:00 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 7:30 p.m. ET on
July 25, 2012 until August 1, 2012. To access the replay, dial
888-843-7419 (U.S.) and enter the passcode 3291 3514#.
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 portable medical, energy, military,
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, optimization, 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 for
convertible debt, (vii) unusual or infrequently occurring items, (viii)
certain R&D expenditures (such as medical device DVT expenses in
connection with developing our Neuromodulation platform), (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 investors seeking to
understand the financial and business trends relating to our financial
condition and 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
|
|
Six Months Ended
|
|
|
|
June 29,
|
|
|
July 1,
|
|
|
June 29,
|
|
|
July 1,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Operating income as reported
|
|
$
|
11,091
|
|
|
$
|
18,303
|
|
|
$
|
22,289
|
|
|
$
|
36,269
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization (COS)
|
|
|
-
|
|
|
|
-
|
|
|
|
532
|
|
|
|
-
|
|
Medical device DVT expenses (RD&E)
|
|
|
1,575
|
|
|
|
634
|
|
|
|
2,615
|
|
|
|
1,224
|
|
Consolidation and optimization costs
|
|
|
4,455
|
|
|
|
22
|
|
|
|
6,023
|
|
|
|
261
|
|
Integration expenses
|
|
|
112
|
|
|
|
-
|
|
|
|
1,055
|
|
|
|
-
|
|
Asset dispositions and other
|
|
|
1,356
|
|
|
|
(542
|
)
|
|
|
1,590
|
|
|
|
(614
|
)
|
Adjusted operating income
|
|
$
|
18,589
|
|
|
$
|
18,417
|
|
|
$
|
34,104
|
|
|
$
|
37,140
|
|
Adjusted operating margin
|
|
|
11.2
|
%
|
|
|
12.6
|
%
|
|
|
10.5
|
%
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
June 29,
|
|
|
July 1,
|
|
|
June 29,
|
|
|
July 1,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Income before taxes as reported
|
|
$
|
6,870
|
|
$
|
12,764
|
|
|
$
|
12,989
|
|
$
|
30,591
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory step-up amortization (COS)
|
|
|
-
|
|
|
-
|
|
|
|
532
|
|
|
-
|
|
Medical device DVT expenses (RD&E)
|
|
|
1,575
|
|
|
634
|
|
|
|
2,615
|
|
|
1,224
|
|
Consolidation and optimization costs
|
|
|
4,455
|
|
|
22
|
|
|
|
6,023
|
|
|
261
|
|
Integration expenses
|
|
|
112
|
|
|
-
|
|
|
|
1,055
|
|
|
-
|
|
Asset dispositions and other
|
|
|
1,356
|
|
|
(542
|
)
|
|
|
1,590
|
|
|
(614
|
)
|
(Gain) loss on cost method investments, net
|
|
|
-
|
|
|
317
|
|
|
|
-
|
|
|
(4,232
|
)
|
CSN conversion option discount amortization
|
|
|
2,263
|
|
|
2,101
|
|
|
|
4,484
|
|
|
4,163
|
|
Adjusted income before taxes
|
|
|
16,631
|
|
|
15,296
|
|
|
|
29,288
|
|
|
31,393
|
|
Adjusted provision for income taxes
|
|
|
6,435
|
|
|
5,100
|
|
|
|
10,376
|
|
|
10,378
|
|
Adjusted net income
|
|
$
|
10,196
|
|
$
|
10,196
|
|
|
$
|
18,912
|
|
$
|
21,015
|
|
Adjusted diluted EPS
|
|
$
|
0.43
|
|
$
|
0.43
|
|
|
$
|
0.79
|
|
$
|
0.88
|
|
Number of shares
|
|
|
23,876
|
|
|
23,838
|
|
|
|
23,816
|
|
|
23,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited
|
(in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 29,
|
|
|
July 1,
|
|
|
June 29,
|
|
|
July 1,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
166,548
|
|
|
$
|
146,524
|
|
|
$
|
325,651
|
|
|
$
|
295,358
|
|
Cost of sales
|
|
|
114,615
|
|
|
|
99,920
|
|
|
|
226,830
|
|
|
|
201,584
|
|
Gross profit
|
|
|
51,933
|
|
|
|
46,604
|
|
|
|
98,821
|
|
|
|
93,774
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
20,745
|
|
|
|
17,571
|
|
|
|
39,779
|
|
|
|
36,220
|
|
Research, development and engineering costs, net
|
|
|
14,174
|
|
|
|
11,250
|
|
|
|
28,085
|
|
|
|
21,638
|
|
Other operating (income) expense, net
|
|
|
5,923
|
|
|
|
(520
|
)
|
|
|
8,668
|
|
|
|
(353
|
)
|
Total operating expenses
|
|
|
40,842
|
|
|
|
28,301
|
|
|
|
76,532
|
|
|
|
57,505
|
|
Operating income
|
|
|
11,091
|
|
|
|
18,303
|
|
|
|
22,289
|
|
|
|
36,269
|
|
Interest expense
|
|
|
4,416
|
|
|
|
4,403
|
|
|
|
8,775
|
|
|
|
8,677
|
|
Interest income
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(8
|
)
|
(Gain) loss on cost method investments, net
|
|
|
-
|
|
|
|
317
|
|
|
|
-
|
|
|
|
(4,232
|
)
|
Other (income) expense, net
|
|
|
(194
|
)
|
|
|
819
|
|
|
|
526
|
|
|
|
1,241
|
|
Income before provision for income taxes
|
|
|
6,870
|
|
|
|
12,764
|
|
|
|
12,989
|
|
|
|
30,591
|
|
Provision for income taxes
|
|
|
3,019
|
|
|
|
4,214
|
|
|
|
4,671
|
|
|
|
10,097
|
|
Net income
|
|
$
|
3,851
|
|
|
$
|
8,550
|
|
|
$
|
8,318
|
|
|
$
|
20,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
|
$
|
0.37
|
|
|
$
|
0.35
|
|
|
$
|
0.88
|
|
Diluted
|
|
$
|
0.16
|
|
|
$
|
0.36
|
|
|
$
|
0.35
|
|
|
$
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
23,611
|
|
|
|
23,227
|
|
|
|
23,515
|
|
|
|
23,214
|
|
Diluted
|
|
|
23,876
|
|
|
|
23,838
|
|
|
|
23,816
|
|
|
|
23,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
As of
|
ASSETS
|
|
|
June 29,
|
|
|
December 30,
|
|
|
2012
|
|
|
2011
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
11,133
|
|
$
|
36,508
|
|
Accounts receivable, net
|
|
|
114,135
|
|
|
101,946
|
|
Inventories
|
|
|
113,657
|
|
|
109,913
|
|
Refundable income taxes
|
|
|
-
|
|
|
1,292
|
|
Deferred income taxes
|
|
|
7,641
|
|
|
7,828
|
|
Prepaid expenses and other current assets
|
|
|
7,227
|
|
|
7,469
|
|
Total current assets
|
|
|
253,793
|
|
|
264,956
|
|
Property, plant and equipment, net
|
|
|
156,380
|
|
|
145,806
|
|
Amortizing intangible assets, net
|
|
|
95,362
|
|
|
100,258
|
|
Indefinite-lived intangible assets
|
|
|
20,828
|
|
|
20,288
|
|
Goodwill
|
|
|
347,290
|
|
|
338,653
|
|
Deferred income taxes
|
|
|
2,073
|
|
|
2,450
|
|
Other assets
|
|
|
10,064
|
|
|
8,936
|
|
Total assets
|
|
$
|
885,790
|
|
$
|
881,347
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
44,515
|
|
$
|
40,665
|
|
Deferred income taxes
|
|
|
835
|
|
|
845
|
|
Accrued expenses
|
|
|
36,855
|
|
|
52,539
|
|
Total current liabilities
|
|
|
82,205
|
|
|
94,049
|
|
Long-term debt
|
|
|
233,374
|
|
|
235,950
|
|
Deferred income taxes
|
|
|
75,786
|
|
|
75,203
|
|
Other long-term liabilities
|
|
|
10,382
|
|
|
8,862
|
|
Total liabilities
|
|
|
401,747
|
|
|
414,064
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
Preferred stock
|
|
|
-
|
|
|
-
|
|
Common stock
|
|
|
24
|
|
|
23
|
|
Additional paid-in capital
|
315,252
|
|
|
307,196
|
|
Treasury stock
|
|
|
-
|
|
|
(1,387
|
)
|
Retained earnings
|
|
|
160,840
|
|
|
152,522
|
|
Accumulated other comprehensive income
|
|
|
7,927
|
|
|
8,929
|
|
Total stockholders’ equity
|
|
|
484,043
|
|
|
467,283
|
|
Total liabilities and stockholders’ equity
|
|
$
|
885,790
|
|
$
|
881,347
|
|
Source: Greatbatch, Inc.
Greatbatch, Inc.
Marco Benedetti, 716-759-5856
Vice President
of Finance & Treasurer
mbenedetti@greatbatch.com