PRESS RELEASE
Investors/Media: The Ruth Group Nick Laudico/Jason Rando 646-536-7030/7025 nlaudico@theruthgroup.com jrando@theruthgroup.com | | Contact: Symmetry Medical Inc. Fred Hite Senior Vice President Chief Financial Officer (574) 371-2218 |
Symmetry Medical Reports First Quarter 2009 Financial Results
Reaffirms Full Year 2009 Revenue and Increases Low-end of EPS Guidance
First Quarter 2009 Highlights:
| | · | Revenue of $101.4 million, comparable year-over-year and up 6.8% on a constant currency basis |
| | · | Gross margin of 24.2%, up 70 basis points year-over-year and up 80 basis points over the fourth quarter of 2008 |
| | · | Operating income of $11.2 million, up 17.2% year-over-year and up 18.2% over the fourth quarter of 2008 |
| | · | Net income of $6.8 million or $0.19 per diluted share, compared to $4.0 million or $0.11 per diluted share in the first quarter 2008 |
WARSAW, Ind., May 7, 2009 - Symmetry Medical Inc. (NYSE: SMA), a leading independent provider of products to the global orthopaedic device industry and other medical markets, announced today first quarter 2009 financial results for the period ended April 4, 2009.
| | | First Quarter | | | Vs Prior Quarter | |
| (in millions, except share data) | | 2009 | | | 2008 | | | Change | | | 1Q'09 | | | 4Q'08 | | | Change | |
| Revenue | | $ | 101.4 | | | $ | 101.9 | | | | 0 | % | | $ | 101.4 | | | $ | 99.7 | | | | 2 | % |
| Operating Income | | | 11.2 | | | | 9.6 | | | | 17 | % | | | 11.2 | | | | 9.5 | | | | 18 | % |
| Net Income | | | 6.8 | | | | 4.0 | | | | 73 | % | | | 6.8 | | | | 4.4 | * | | | 56 | % |
| EPS | | $ | 0.19 | | | $ | 0.11 | | | | 73 | % | | $ | 0.19 | | | $ | 0.12 | * | | | 62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue by Product: | | | | | | | | | | | | | | | | | | | | | | | | |
| Instruments | | $ | 46.5 | | | $ | 39.3 | | | | 18 | % | | $ | 46.5 | | | $ | 44.4 | | | | 5 | % |
| Implants | | | 29.1 | | | | 30.3 | | | | -4 | % | | | 29.1 | | | | 29.6 | | | | -2 | % |
| Cases | | | 18.5 | | | | 21.5 | | | | -14 | % | | | 18.5 | | | | 18.5 | | | | 0 | % |
| Other | | | 7.3 | | | | 10.8 | | | | -32 | % | | | 7.3 | | | | 7.2 | | | | 1 | % |
| Total Revenue | | $ | 101.4 | | | $ | 101.9 | | | | 0 | % | | $ | 101.4 | | | $ | 99.8 | | | | 2 | % |
* non-gaap basis, excluding tax benefit of $6.9 million / $0.20 of EPS
| Symmetry Medical Reports First Quarter 2009 Financial Results | Page 2 |
Revenue for the first quarter 2009 was $101.4 million, compared to $101.9 million reported in the first quarter 2008. Foreign currency had a $7.4 million unfavorable impact on the first quarter of 2009 compared to the first quarter of 2008. On a constant currency basis, revenue increased 6.8% for the period. First quarter 2009 includes a full quarter results from the Company’s New Bedford, Massachusetts manufacturing facility, which was acquired from DePuy Orthopaedics, Inc. in January 2008. Adjusting for the acquisition and the foreign exchange, revenue grew 4.2%.
Gross profit for the first quarter 2009 was $24.6 million, compared to $24.0 million in the first quarter 2008. Gross margin percentage for the first quarter 2009 was 24.2% compared to gross margin percentage of 23.5% in the same period last year and 23.4% in the fourth quarter 2008.
Selling, general and administrative expenses were $13.4 million for the first quarter 2009, a decrease of 7.2% from $14.4 million for the first quarter 2008. The first quarter of 2008 expenses included approximately $2.2 million of professional fees related to the Sheffield, UK investigation. The Company did not incur further investigation expenses in the first quarter of 2009. Lower expenses were partially offset by an increase in non-cash stock based compensation and increased expenses associated with the addition of the New Bedford facility, which was acquired at the end of January 2008.
Operating income for the first quarter 2009 was $11.2 million compared to $9.6 million for the first quarter 2008. Operating margin for the first quarter 2009 was 11.0%, an increase from 9.4% for the first quarter 2008.
Net income for the first quarter 2009 was $6.8 million, or $0.19 per diluted share, compared to net income of $4.0 million, or $0.11 per diluted share, for the first quarter of 2008.
The weighted average number of diluted shares outstanding during the first quarter of 2009 was 35,380,503.
Brian Moore, President and Chief Executive Officer of Symmetry Medical, stated, “Our first quarter results represent an excellent start for 2009. We remain encouraged by our improved operational performance and efficiencies and continue to expect to reach profitability at our Sheffield facility in the second half of 2009.”
Mr. Moore continued, “Although the overall global economy remains challenging we are encouraged by the performance and strength of our business model. Despite our positive outlook, we will continue to manage operations conservatively, control costs, generate cash and improve efficiencies. Our focus for the remainder of the year is to build on our global presence in the orthopaedic industry and deliver improved results.”
| Symmetry Medical Reports First Quarter 2009 Financial Results | Page 3 |
Financial Guidance
The following forward-looking estimates regarding 2009 guidance are based on current market conditions and foreign currency comparisons. Actual results may differ materially, and we refer you to forward-looking statements located at the end of the press release.
For the full year 2009, the Company is reaffirming its previously stated annual revenue guidance to be in the range of $405 million to $420 million. On a constant currency basis, the Company expects revenue to increase 2%-6% for the full year. For the full year 2009, the Company is increasing the low-end of earnings per diluted share guidance from $0.75 to $0.77 and reaffirming the high-end guidance of $0.85.
The Company continues to expect the Sheffield, UK operating unit to report smaller net operating losses during the second quarter 2009 and operating profitability in the second half of 2009.
Conference Call
Symmetry Medical will host a conference call at 8:00 a.m. ET on May 7, 2009. A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate web site at www.symmetrymedical.com. The dial-in numbers are (800) 706-7745 for domestic callers and (617) 614-3472 for international. The reservation number for both is 96482121. After the live webcast, the call will remain available on Symmetry Medical’s web site through July 7, 2009. In addition, a telephonic replay of the call will be available until May 14, 2009. The replay numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use reservation code 90966491.
About Symmetry Medical Inc.
Symmetry Medical Inc. is a leading independent provider of implants and related instruments and cases to the orthopaedic device industry. The Company also designs, develops and produces these products for companies in other segments of the medical device market, including arthroscopy, dental, laparoscopy, osteobiologic and endoscopy sectors and provides limited specialized products and services to non-healthcare markets, such as the aerospace market.
Forward-Looking Statements
Statements in the press release regarding Symmetry Medical Inc.'s business, which are not historical facts, may be "forward-looking statements" that involve risks and uncertainties, within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictive in nature and are frequently identified by the use of terms such as "may," "might," "will," "should," "expect," "believe," "anticipate," "plan," "estimate," "intend," and similar words indicating possible future expectations, events or actions. Such predictive statements are not guarantees of future performance, and actual outcomes and results could differ materially from our current expectations. We refer you to the "Risk Factors" and "Forward Looking-Statements" sections in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission as well as the Company's other filings with the SEC, which are available on the SEC's Web site at www.sec.gov.
| Symmetry Medical Reports First Quarter 2009 Financial Results | Page 4 |
Symmetry Medical Inc.
Consolidated Statements of Operations
| | | Three Months Ended | |
| | | April 4, | | | March 29, | |
| | | 2009 | | | 2008 | |
| | | (In Thousands, Except Per Share Data) | |
| | | (unaudited) | |
| | | | | | | |
| Revenue | | $ | 101,422 | | | $ | 101,862 | |
| Cost of Revenue | | | 76,864 | | | | 77,916 | |
| | | | | | | | | |
| Gross Profit | | | 24,558 | | | | 23,946 | |
| | | | | | | | | |
| Selling, general and administrative expenses | | | 13,353 | | | | 14,382 | |
| | | | | | | | | |
| Operating Income | | | 11,205 | | | | 9,564 | |
| Other (income)/expense: | | | | | | | | |
| Interest expense | | | 1,820 | | | | 2,700 | |
| Derivatives valuation (gain)/loss | | | (394 | ) | | | 1,165 | |
| Other | | | (296 | ) | | | (162 | ) |
| | | | | | | | | |
| Income before income taxes | | | 10,075 | | | | 5,861 | |
| Income tax expense | | | 3,228 | | | | 1,894 | |
| | | | | | | | | |
| Net income | | $ | 6,847 | | | $ | 3,967 | |
| | | | | | | | | |
| Net income per share: | | | | | | | | |
| Basic | | $ | 0.19 | | | $ | 0.11 | |
| | | | | | | | | |
| Diluted | | $ | 0.19 | | | $ | 0.11 | |
| | | | | | | | | |
| Weighted average common shares and equivalent shares outstanding: | | | | | | | | |
| Basic | | | 35,286 | | | | 35,153 | |
| Diluted | | | 35,381 | | | | 35,335 | |
| Symmetry Medical Reports First Quarter 2009 Financial Results | Page 5 |
Symmetry Medical Inc.
Consolidated Balance Sheets
| | | April 4, | | | January 3, | |
| | | 2009 | | | 2009 | |
| | | (In Thousands) | |
| | | (unaudited) | | | | |
| Assets: | | | | | | |
| Current Assets: | | | | | | |
| Cash and cash equivalents | | $ | 18,957 | | | $ | 10,191 | |
| Accounts receivable, net | | | 52,510 | | | | 52,845 | |
| Inventories | | | 68,942 | | | | 61,111 | |
| Refundable income taxes | | | 1,272 | | | | 6,610 | |
| Deferred income taxes | | | 4,509 | | | | 3,993 | |
| Other current assets | | | 4,253 | | | | 3,154 | |
| | | | | | | | | |
| Total current assets | | | 150,443 | | | | 137,904 | |
| Property and equipment, net | | | 115,737 | | | | 115,045 | |
| Goodwill | | | 153,003 | | | | 153,521 | |
| Intangible assets, net of accumulated amortization | | | 44,414 | | | | 45,039 | |
| Other assets | | | 1,558 | | | | 1,728 | |
| | | | | | | | | |
| Total Assets | | $ | 465,155 | | | $ | 453,237 | |
| | | | | | | | | |
| Liabilities and Shareholders' Equity: | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payable | | $ | 30,254 | | | $ | 26,929 | |
| Accrued wages and benefits | | | 8,757 | | | | 12,784 | |
| Other accrued expenses | | | 4,606 | | | | 5,186 | |
| Income tax payable | | | 3,969 | | | | 2,637 | |
| Deferred income taxes | | | 105 | | | | - | |
| Revolving line of credit | | | 3,265 | | | | 2,495 | |
| Current portion of capital lease obligations | | | 813 | | | | 1,034 | |
| Current portion of long-term debt | | | 17,775 | | | | 16,900 | |
| | | | | | | | | |
| Total current liabilities | | | 69,544 | | | | 67,965 | |
| Deferred income taxes | | | 18,966 | | | | 18,131 | |
| Derivative valuation liability | | | 3,377 | | | | 3,771 | |
| Capital lease obligations, less current portion | | | 3,228 | | | | 3,356 | |
| Long-term debt, less current portion | | | 110,500 | | | | 107,600 | |
| | | | | | | | | |
| Total Liabilities | | | 205,615 | | | | 200,823 | |
| | | | | | | | | |
| Shareholders' Equity: | | | | | | | | |
| Common Stock, $.0001 par value; 72,410 shares authorized; shares issued April 4, 2009—35,799; January 3, 2009—35,801 | | | 4 | | | | 4 | |
| Additional paid-in capital | | | 276,629 | | | | 275,890 | |
| Accumulated deficit | | | (14,660 | ) | | | (21,507 | ) |
| Accumulated other comprehensive loss | | | (2,433 | ) | | | (1,973 | ) |
| | | | | | | | | |
| Total Shareholders' Equity | | | 259,540 | | | | 252,414 | |
| | | | | | | | | |
| Total Liabilities and Shareholders' Equity | | $ | 465,155 | | | $ | 453,237 | |
