STRYKER CORPORATION 
By
Fourth Quarter Highlights
-- Net sales increased 3.6% (7.7% constant currency) to $1,718 million
-- Orthopaedic Implant sales increased 4.2% (8.9% constant currency)
-- MedSurg Equipment sales increased 2.8% (6.2% constant currency)
-- Net earnings from continuing operations increased 0.6% to $278 million
and adjusted net earnings from continuing operations increased 8.4% to
$299 million
-- Diluted net earnings per share from continuing operations increased
4.5% to $0.69 from $0.66 and adjusted diluted net earnings per share
from continuing operations increased 12.1% to $0.74 from $0.66
-- $250 million share repurchase program was initiated and completed
during the quarter
Highlights for the Year Ended December 31, 2008
-- Net sales increased 12.0% (10.5% constant currency) to $6,718 million
-- Orthopaedic Implant sales increased 10.6% (8.8% constant currency)
-- MedSurg Equipment sales increased 14.0% (13.2% constant currency)
-- Net earnings from continuing operations increased 16.3% to $1,148
million and adjusted net earnings from continuing operations increased
17.0% to $1,170 million
-- Diluted net earnings per share from continuing operations increased
17.3% to $2.78 from $2.37 and adjusted diluted net earnings per share
from continuing operations increased 17.9% to $2.83 from $2.40
-- $1.0 billion of share repurchase programs were initiated and completed
during the year resulting in 17.4 million shares being purchased in the
open market
"We are pleased to report our eighth consecutive year of double-digit
sales growth for 2008 despite the slowdown in capital purchases by our
hospital customers during the fourth quarter," commented
Net sales increased 3.6% to
Net earnings from continuing operations for the fourth quarter and year
ended
Excluding the impact of the 2008 restructuring charges, adjusted net
earnings from continuing operations for the fourth quarter of 2008 of
Net earnings for the fourth quarter of 2008 were
Net earnings for the year ended
Net earnings for the year ended
Sales Analysis
Domestic sales increased 7.0% in the fourth quarter and 11.2% for the
year. International sales decreased 2.3% in the fourth quarter and increased
13.3% for the year. The impact of foreign currency comparisons to the dollar
value of international sales was unfavorable by
Worldwide sales of Orthopaedic Implants increased 4.2% in the fourth quarter and 10.6% for the year. On a constant currency basis, sales of Orthopaedic Implants increased 8.9% in the fourth quarter and 8.8% for the year.
Worldwide sales of MedSurg Equipment increased 2.8% in the fourth quarter and 14.0% for the year. On a constant currency basis, sales of MedSurg Equipment increased 6.2% in the fourth quarter and 13.2% for the year.
Income Taxes
The Company's effective income tax rates on earnings from continuing
operations for the fourth quarter and year ended
Outlook for 2009
The Company projects that diluted net earnings per share for 2009 will be
in the range of
Conference Call
As previously announced, the Company will conduct a conference call for
financial analysts at
A recording of the call will also be available from
Forward-Looking Statements
This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause the Company's actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: further weakening of economic conditions that could adversely affect the level of demand for the Company's products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for the Company's products; changes in foreign exchange markets; regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; changes in financial markets; and changes in the competitive environment. Additional information concerning these and other factors is contained in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Stryker Corporation is one of the world's leading medical technology companies with the most broadly based range of products in orthopaedics and a significant presence in other medical specialties. Stryker works with respected medical professionals to help people lead more active and more satisfying lives. The Company's products include implants used in joint replacement, trauma, craniomaxillofacial and spinal surgeries; biologics; surgical, neurologic, ear, nose & throat and interventional pain equipment; endoscopic, surgical navigation, communications and digital imaging systems; as well as patient handling and emergency medical equipment. For more information about Stryker, please visit www.stryker.com.
STRYKER CORPORATION
For the Three Month Period and Year Ended December 31, 2008
(Unaudited - In Millions Except Per Share Amounts)
Fourth Quarter
CONDENSED STATEMENTS OF EARNINGS 2008 2007 % Change
Net sales $1,718.2 $1,658.1 3.6
Cost of sales 556.0 524.5 6.0
GROSS PROFIT 1,162.2 1,133.6 2.5
% of Sales 67.6 68.4
Research, development and
engineering expenses 99.8 101.8 (2.0)
Selling, general and
administrative expenses 647.6 658.9 (1.7)
Intangibles amortization 9.6 10.0 (4.0)
Restructuring charges 34.9 - -
Intangible asset impairment - - -
791.9 770.7 2.8
OPERATING INCOME 370.3 362.9 2.0
% of Sales 21.6 21.9
Other income (expense) 9.8 21.1 (53.6)
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 380.1 384.0 (1.0)
Income taxes 102.4 107.9 (5.1)
NET EARNINGS FROM CONTINUING
OPERATIONS 277.7 276.1 0.6
Net earnings from discontinued
operations - - -
Net gain on sale of discontinued
operations - - -
NET EARNINGS $277.7 $276.1 0.6
Basic net earnings per share
Net earnings from continuing
operations $0.70 $0.67 4.5
Net earnings from discontinued
operations $- $- -
Net gain on sale of discontinued
operations $- $- -
Basic net earnings per share $0.70 $0.67 4.5
Diluted net earnings per share
Net earnings from continuing
operations $0.69 $0.66 4.5
Net earnings from discontinued
operations $- $- -
Net gain on sale of discontinued
operations $- $- -
Diluted net earnings per share $0.69 $0.66 4.5
Average Shares Outstanding
Basic 399.5 410.7
Diluted 402.9 418.2
STRYKER CORPORATION
For the Three Month Period and Year Ended December 31, 2008
(Unaudited - In Millions Except Per Share Amounts)
Year Ended December 31
CONDENSED STATEMENTS OF EARNINGS 2008 2007 % Change
Net sales $6,718.2 $6,000.5 12.0
Cost of sales 2,131.4 1,865.2 14.3
GROSS PROFIT 4,586.8 4,135.3 10.9
% of Sales 68.3 68.9
Research, development and
engineering expenses 367.8 375.3 (2.0)
Selling, general and
administrative expenses 2,625.1 2,391.5 9.8
Intangibles amortization 40.0 41.4 (3.4)
Restructuring charges 34.9 - -
Intangible asset impairment - 19.8 (100.0)
3,067.8 2,828.0 8.5
OPERATING INCOME 1,519.0 1,307.3 16.2
% of Sales 22.6 21.8
Other income (expense) 61.2 62.8 (2.5)
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 1,580.2 1,370.1 15.3
Income taxes 432.4 383.4 12.8
NET EARNINGS FROM CONTINUING
OPERATIONS 1,147.8 986.7 16.3
Net earnings from discontinued
operations - 5.0 (100.0)
Net gain on sale of discontinued
operations - 25.7 (100.0)
NET EARNINGS $1,147.8 $1,017.4 12.8
Basic net earnings per share
Net earnings from continuing
operations $2.81 $2.41 16.6
Net earnings from discontinued
operations $- $0.01 (100.0)
Net gain on sale of discontinued
operations $- $0.06 (100.0)
Basic net earnings per share $2.81 $2.48 13.3
Diluted net earnings per share
Net earnings from continuing
operations $2.78 $2.37 17.3
Net earnings from discontinued
operations $- $0.01 (100.0)
Net gain on sale of discontinued
operations $- $0.06 (100.0)
Diluted net earnings per share $2.78 $2.44 13.9
Average Shares Outstanding
Basic 408.1 409.7
Diluted 413.6 417.2
RECONCILIATION OF REPORTED NET EARNINGS FROM CONTINUING OPERATIONS TO
ADJUSTED NET EARNINGS FROM CONTINUING OPERATIONS
Fourth Quarter Year Ended December 31
% %
2008 2007 Change 2008 2007 Change
NET EARNINGS FROM
CONTINUING OPERATIONS
Reported net earnings
from continuing
operations $277.7 $276.1 0.6 $1,147.8 $986.7 16.3
Restructuring charges 21.7 - - 21.7 - -
Intangible asset
impairment - - - - 12.7 (100.0)
Adjusted net earnings
from continuing
operations $299.4 $276.1 8.4 $1,169.5 $999.4 17.0
DILUTED NET EARNINGS PER
SHARE FROM CONTINUING
OPERATIONS
Reported diluted net
earnings per share from
continuing operations $0.69 $0.66 4.5 $2.78 $2.37 17.3
Restructuring charges $0.05 $- - $0.05 $- -
Intangible asset
impairment $- $- - $- $0.03 (100.0)
Adjusted diluted net
earnings per share from
continuing operations $0.74 $0.66 12.1 $2.83 $2.40 17.9
STRYKER CORPORATION
For the Three Month Period and Year Ended December 31, 2008
(Unaudited - In Millions)
Fourth Quarter
% Change
Constant
CONDENSED SALES ANALYSIS 2008 2007 Reported Currency
Domestic $1,128.7 $1,054.6 7.0 7.0
International 589.5 603.5 (2.3) 9.0
NET SALES $1,718.2 $1,658.1 3.6 7.7
Orthopaedic Implants $1,016.9 $976.1 4.2 8.9
MedSurg Equipment 701.3 682.0 2.8 6.2
NET SALES $1,718.2 $1,658.1 3.6 7.7
STRYKER CORPORATION
For the Three Month Period and Year Ended December 31, 2008
(Unaudited - In Millions)
Year Ended December 31
% Change
Constant
CONDENSED SALES ANALYSIS 2008 2007 Reported Currency
Domestic $4,282.2 $3,850.3 11.2 11.2
International 2,436.0 2,150.2 13.3 9.4
NET SALES $6,718.2 $6,000.5 12.0 10.5
Orthopaedic Implants $3,967.5 $3,587.3 10.6 8.8
MedSurg Equipment 2,750.7 2,413.2 14.0 13.2
NET SALES $6,718.2 $6,000.5 12.0 10.5
Fourth Quarter
% Change
Domestic International Total
Report- Report- Constant Report- Constant
ed ed Currency ed Currency
SUPPLEMENTAL SALES GROWTH ANALYSIS
Orthopaedic Implants sales:
Hips 0 (12) 0 (6) 0
Knees 16 (1) 13 9 15
Trauma 18 3 8 9 12
Spine 20 2 10 15 17
Craniomaxillofacial 13 (2) 11 8 12
Total Orthopaedic Implants 10 (4) 7 4 9
MedSurg Equipment sales:
Surgical equipment and surgical
navigation systems 18 (8) 3 9 13
Endoscopic, communications and
digital imaging systems (7) 1 15 (5) (2)
Patient handling and emergency
medical equipment (2) 35 54 4 7
Total MedSurg Equipment 3 1 14 3 6
Year Ended December 31
% Change
Domestic International Total
Report- Report- Constant Report- Constant
ed ed Currency ed Currency
Orthopaedic Implants sales:
Hips 2 3 0 3 1
Knees 15 13 10 14 13
Trauma 20 17 10 18 14
Spine 22 14 8 19 18
Craniomaxillofacial 21 6 3 16 15
Total Orthopaedic Implants 11 10 6 11 9
MedSurg Equipment sales:
Surgical equipment and surgical
navigation systems 16 18 14 17 15
Endoscopic, communications and
digital imaging systems 6 18 15 9 8
Patient handling and emergency
medical equipment 13 43 41 18 17
Total MedSurg Equipment 11 22 18 14 13
STRYKER CORPORATION
(Unaudited - In Millions)
December 31 December 31
CONDENSED BALANCE SHEETS 2008 2007
ASSETS
Cash and cash equivalents $701.1 $290.5
Marketable securities 1,494.5 2,120.3
Accounts receivable (net) 1,129.5 1,030.7
Inventories 952.7 796.2
Other current assets 701.5 667.2
TOTAL CURRENT ASSETS 4,979.3 4,904.9
Property, Plant and Equipment
(net) 963.8 991.6
Goodwill and Other Intangibles
(net) 935.5 925.5
Other Assets 724.7 532.0
TOTAL ASSETS $7,603.3 $7,354.0
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities $1,462.1 $1,333.0
Other Liabilities 734.5 642.5
Shareholders' Equity 5,406.7 5,378.5
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $7,603.3 $7,354.0
STRYKER CORPORATION
For the Three Month Period and Year Ended December 31, 2008
(Unaudited - In Millions)
Fourth Quarter Year Ended Dec. 31
CONDENSED STATEMENTS OF CASH FLOWS 2008 2007 2008 2007
OPERATING ACTIVITIES
Net earnings from continuing
operations $277.7 $276.1 $1,147.8 $986.7
Depreciation 37.4 36.4 155.4 137.1
Amortization 55.7 59.1 232.2 229.5
Restructuring charges 34.9 - 34.9 -
Intangible asset impairment - - - 19.8
Gain on sale of discontinued
operations - - - (40.7)
Changes in working capital and
other 13.6 (4.1) (394.4) (304.1)
NET CASH PROVIDED BY OPERATING
ACTIVITIES 419.3 367.5 1,175.9 1,028.3
INVESTING ACTIVITIES
Acquisitions, net of cash acquired (3.4) (8.5) (14.2) (54.8)
Proceeds from sale of discontinued
operations - - - 144.7
Proceeds from (purchases of)
marketable securities, net 36.3 (207.2) 470.9 (1,079.5)
Purchases of property, plant and
equipment (46.1) (65.0) (155.2) (187.7)
Proceeds from sales of property,
plant and equipment 8.2 0.3 8.6 0.7
Other - - - (1.6)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (5.0) (280.4) 310.1 (1,178.2)
FINANCING ACTIVITIES
Borrowings (repayments) of debt,
net 0.8 (0.9) 6.7 0.8
Dividends paid - - (135.6) (89.7)
Repurchase and retirement of common
stock (404.0) - (1,000.0) -
Other 38.1 31.3 82.8 102.5
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (365.1) 30.4 (1,046.1) 13.6
Effect of exchange rate changes on
cash and cash equivalents (16.1) 2.1 (29.3) 10.2
CHANGE IN CASH AND CASH
EQUIVALENTS $33.1 $119.6 $410.6 $(126.1)
SOURCE Stryker Corporation
