Exhibit 99.1
St. Jude Medical, Inc.
One Lillehei Plaza
St. Paul, Minnesota 55117
(651) 483.2000
www.sjm.com
Contacts: | Angela Craig | Kathleen Janasz |
| Investor Relations | Media Relations |
| (651) 481-7789 | (651) 415-7042 |
St. Jude Medical Reports Third Quarter Results
St. Paul, Minn. – October 18, 2007 – St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the third quarter ended September 29, 2007.
Third Quarter Results
The Company reported net sales of $927 million in the third quarter of 2007, an increase of 13% compared to the $821 million in the third quarter of 2006. Favorable foreign currency translation comparisons increased third quarter sales by approximately $20 million.
Reported net earnings for the third quarter of 2007 were $160 million, or $0.46 per diluted share. This compares to reported net earnings for the third quarter of 2006 of $116 million, or $0.32 per diluted share, which included a special charge of $0.06 per share related to various restructuring activities.
Commenting on the third quarter results and overall program, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, “Our third quarter results reinforce our confidence that our long-term growth program is on track. We are raising our earnings per share guidance for 2007 and expect to enter 2008 well positioned to deliver earnings per share growth of at least 15%.”
Cardiac Rhythm Management (CRM)
Total Cardiac Rhythm Management sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $588 million for the third quarter of 2007, a 13% increase compared to the third quarter of 2006.
Of that total, ICD product sales were $318 million in the third quarter, a 17% increase compared to the third quarter of 2006.
Third quarter pacemaker sales were $270 million, an increase of 9% from the comparable quarter of 2006.
Atrial Fibrillation (AF)
AF product sales for the third quarter totaled $100 million, a 23% increase over the third quarter of 2006.
Neuromodulation
St. Jude Medical sales of neuromodulation products were $51 million in the third quarter of 2007, up 16% from the comparable quarter of 2006.
Cardiovascular
Total cardiovascular sales, which include primarily vascular closure and heart valve products, were $188 million for the third quarter of 2007, a 6% increase over the third quarter of 2006.
Sales of vascular closure products in the third quarter of 2007 were $85 million, a 1% increase over the third quarter of 2006.
Total heart valve product sales for the third quarter of 2007 were $68 million, a 6% increase over the third quarter of 2006.
Fourth Quarter and Full Year 2007 Sales and Earnings Guidance
During a conference call today, St. Jude Medical will provide its range for revenue expectations for the fourth quarter and full-year by product category.
The Company expects its consolidated earnings for the fourth quarter of 2007 to be in the range of $0.47 to $0.48 per diluted share and for the full-year 2007 to the range of $1.78 to $1.79. This guidance does not include the impact on earnings per share of the special charge recorded in the second quarter of 2007. A further reconciliation of the Company’s annual guidance is provided in the schedule below.
Non-GAAP Financial Measures
The Company provides adjusted net earnings and adjusted earnings per share because St. Jude Medical management believes that in order to properly understand the Company’s short-term and long-term financial trends, investors may wish to consider the impact of certain adjustments (such as in-process research and development charges, restructuring charges, litigation charges or litigation reserve adjustments and income tax adjustments). These adjustments result from facts and circumstances (such as business development activities, restructuring activities, settlements and other developments relating to litigation and resolution of audits by tax authorities) that vary in frequency and impact on the Company’s results of operations. St. Jude Medical management uses adjusted net earnings and adjusted earnings per share to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consolidated basis.
Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.
Conference Call/Webcast
St. Jude Medical’s third quarter earnings call can be heard live today beginning at 8:00 a.m. CT (also archived for 90 days) on the following website:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=73836&eventID=1651781
About St. Jude Medical
St. Jude Medical is dedicated to making life better for cardiac, neurological and chronic pain patients worldwide through excellence in medical device technology and services. The Company has five major focus areas that include: cardiac rhythm management, atrial fibrillation, cardiac surgery, cardiology and neuromodulation. Headquartered in St. Paul, Minn., St. Jude Medical employs approximately 12,000 people worldwide. For more information, please visit www.sjm.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings, and market shares. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company’s control and the risk factors and other cautionary statements described in the Company’s filings with the SEC, including those described in the Company’s Annual Report on Form 10-K filed on February 28, 2007 (see pages 13-20) and Quarterly Report on Form 10-Q filed on August 9, 2007 (see pages 26-29). The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
St. Jude Medical, Inc.
Condensed Consolidated Statements of Earnings
(in thousands, except per share amounts)
(Unaudited)
| | Three Months Ended | | | | Nine Months Ended | | |
| | Sept. 29, 2007 | | | | Sept. 30, 2006 | | | | Sept. 29, 2007 | | | | Sept. 30, 2006 | | |
Net sales | | $ | 926,840 | | | | $ | 821,278 | | | | $ | 2,761,154 | | | | $ | 2,438,616 | | |
Cost of sales: | | | | | | | | | | | | | | | | | | | | |
Cost of sales before special charges | | | 244,859 | | | | | 225,179 | | | | | 736,859 | | | | | 660,590 | | |
Special charges | | | 0 | | | | | 15,108 | | | | | 0 | | | | | 15,108 | | |
Total cost of sales | | | 244,859 | | | | | 240,287 | | | | | 736,859 | | | | | 675,698 | | |
Gross profit | | | 681,981 | | | | | 580,991 | | | | | 2,024,295 | | | | | 1,762,918 | | |
| | | | | | | | | | | | | | | | | | | | |
Selling, general & administrative | | | 337,823 | | | | | 290,424 | | | | | 1,014,857 | | | | | 875,654 | | |
Research & development | | | 117,027 | | | | | 108,674 | | | | | 352,443 | | | | | 322,772 | | |
Special charges | | | 0 | | | | | 19,719 | | | | | 35,000 | | | | | 19,719 | | |
Operating profit | | | 227,131 | | | | | 162,174 | | | | | 621,995 | | | | | 544,773 | | |
Other income (expense) | | | (7,625 | ) | | | | (9,159 | ) | | | | (23,243 | ) | | | | (15,082 | ) | |
Earnings before taxes | | | 219,506 | | | | | 153,015 | | | | | 598,752 | | | | | 529,691 | | |
Income tax expense | | | 59,267 | | | | | 37,475 | | | | | 157,988 | | | | | 136,050 | | |
Net earnings | | $ | 160,239 | | | | $ | 115,540 | | | | $ | 440,764 | | | | $ | 393,641 | | |
| | | | | | | | | | | | | | | | | | | | |
Adjusted net earnings (Non-GAAP) | | | | | | | $ | 137,554 | | (2) | | $ | 462,639 | | (1) | | $ | 415,655 | | (2) |
| | | | | | | | | | | | | | | | | | | | |
Diluted net earnings per share | | $ | 0.46 | | | | $ | 0.32 | | | | $ | 1.25 | | | | $ | 1.05 | | |
Adjusted diluted net earnings per share (Non-GAAP) | | | | | | | $ | 0.38 | | (2) | | $ | 1.31 | | (1) | | $ | 1.11 | | (2) |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding- diluted | | | 350,238 | | | | | 365,171 | | | | | 353,027 | | | | | 375,110 | | |
| (1) | First nine months 2007 adjusted net earnings and adjusted diluted net earnings per share exclude an after tax charge of $21,875, or $0.06 per share, related to the settlement of a patent litigation matter. |
| (2) | Third quarter and first nine months 2006 adjusted net earnings and adjusted diluted net earnings per share exclude an after tax charge of $22,014, or $0.06 per share, related to restructuring plans. |
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
| | September 29, 2007 | | December 30, 2006 | |
Cash and cash equivalents | | $ | 90,048 | | $ | 79,888 | |
Accounts receivable, net | | | 987,187 | | | 882,098 | |
Inventories | | | 498,655 | | | 452,812 | |
Other current assets | | | 347,434 | | | 275,367 | |
Property, plant & equipment, net | | | 748,032 | | | 617,851 | |
Goodwill | | | 1,655,783 | | | 1,649,581 | |
Other intangible assets, net | | | 533,684 | | | 560,276 | |
Other assets | | | 295,389 | | | 271,921 | |
Total assets | | $ | 5,156,212 | | $ | 4,789,794 | |
| | | | | | | |
Current liabilities | | $ | 587,676 | | $ | 676,207 | |
Long-term debt | | | 1,414,064 | | | 859,376 | |
Deferred income taxes, net | | | 154,710 | | | 163,336 | |
Long-term other liabilities | | | 240,517 | | | 121,888 | |
Total equity | | | 2,759,245 | | | 2,968,987 | |
Total liabilities & equity | | $ | 5,156,212 | | $ | 4,789,794 | |
Full-Year 2007 Earnings Guidance Reconciliation
Estimated 2007 diluted net earnings per share | $1.72 - $1.73 |
Estimated 2007 adjusted diluted net earnings per share (Non-GAAP) | $1.78 - $1.79 (3) |
| (3) | The Company recorded a special charge in the second quarter of 2007 related to the settlement of a patent litigation matter that reduced earnings by $0.06 per diluted share. The Company’s above estimated 2007 adjusted diluted net earnings per share (Non-GAAP) of $1.78 - $1.79 excludes the impact of this charge. |
