Exhibit 99.1
STRYKER OPERATING RESULTS
FOR QUARTER ENDED MARCH 31, 2003
Kalamazoo, Michigan -- April 16, 2003 - -- Stryker Corporation (NYSE: SYK) reported today that net sales were $846.9 million for the first quarter of 2003, representing a 20% increase over net sales of $702.9 million in the first quarter of 2002. Excluding the impact of foreign currency, net sales increased 15% for the first quarter.
Net earnings for the first quarter of 2003 were $104.1 million, representing a 28% increase over net earnings of $81.1 million in the first quarter of 2002. Diluted net earnings per share for the quarter increased 28% to $.51 compared to $.40 in the first quarter of 2002.
Sales Analysis
Domestic sales of $546.2 million increased 17% in the first quarter as a result of strong shipments of Orthopaedic Implants and MedSurg Equipment and higher revenue from Physical Therapy Services.
International sales of $300.7 million increased 27% in the first quarter as a result of higher shipments of Orthopaedic Implants and MedSurg Equipment. The impact of foreign currency comparisons to the dollar value of international sales was favorable by $36.7 million in the quarter. Excluding the impact of foreign currency, international sales increased 11% in the quarter.
Worldwide sales of Orthopaedic Implants of $490.8 million increased 24% in the first quarter based on higher shipments of reconstructive (hip, knee and shoulder), trauma and spinal implants. Excluding the impact of foreign currency, sales of Orthopaedic Implants increased 17% in the quarter.
Worldwide sales of MedSurg Equipment of $304.1 million increased 18% in the first quarter based on higher shipments of powered surgical instruments, endoscopic systems, hospital beds and stretchers and craniomaxillofacial implants. Excluding the impact of foreign currency, sales of MedSurg Equipment increased 14% in the quarter.
Physical Therapy Services revenues of $52.0 million increased 5% in the first quarter as a result of new physical therapy centers.
Income Tax Rate
The Company's effective income tax rate for the first quarter of 2003 was reduced to 31.0% as compared to a 33.0% effective income tax rate for the first quarter of 2002 and an effective annual income tax rate of 31.8% for the year ended December 31, 2002. The income tax rate reduction results primarily from increased manufacturing in lower tax jurisdictions.
Conference Call
As previously announced, the Company will conduct a conference call for financial analysts at 5:00 p.m. Eastern Time, today. To hear the conference call, dial 888/391-0099. A simultaneous webcast of the call may be accessed via the Company's website at www.strykercorp.com . The call will be archived on this website for 90 days. A recording of the call may also be accessed from 7:00 p.m., Eastern Time, today until 7:00 p.m. on April 18, 2003 by calling 800/633-8284 (domestic) or 402/977-9140 (international) and entering the reservation number 21136103.
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Stryker Corporation develops, manufactures and markets specialty surgical and medical products worldwide, including reconstructive implants, spinal, trauma and craniomaxillofacial systems, the bone growth factor osteogenic protein-1, powered surgical instruments, endoscopic and surgical navigation systems and patient care and handling equipment and provides outpatient physical therapy services in the United States.
STRYKER CORPORATION |
For the Three Month Period Ended March 31, 2003 |
(Unaudited - In Millions Except Per Share Amounts) |
| | | | | | | | | |
| | | | | | | | | |
| | | | | First Quarter |
CONDENSED STATEMENTS OF EARNINGS | 2003 | | 2002 | | % Change |
| | | | | | | | | |
| Net sales | $ 846.9 | | $ 702.9 | | 20.5 |
| Cost of sales | 300.8 | | 254.9 | | 18.0 |
| | | | | | | | | |
| | GROSS PROFIT | 546.1 | | 448.0 | | 21.9 |
| | | | % of Sales | 64.5 | | 63.7 | | |
| | | | | | | | | |
| Research, development and | | | | | |
| | engineering expenses | 43.2 | | 33.6 | | 28.6 |
| Selling, general and | | | | | |
| | administrative expenses | 337.5 | | 277.2 | | 21.8 |
| | | | | | | | | |
| | | | | 380.7 | | 310.8 | | 22.5 |
| | | | | | | | | |
| Other expense (income): | | | | | |
| | Interest expense | 7.0 | | 10.6 | | (34.0) |
| | Intangibles amortization | 9.0 | | 6.0 | | 50.0 |
| | Other | (1.5) | | (0.4) | | -- |
| | | | | | | | | |
| | | | | 14.5 | | 16.2 | | (10.5) |
| | | | | | | | | |
| | EARNINGS BEFORE INCOME TAXES | 150.9 | | 121.0 | | 24.7 |
| | | | | | | | | |
| Income taxes | 46.8 | | 39.9 | | 17.3 |
| | | | | | | | | |
| | NET EARNINGS | $ 104.1 | | $ 81.1 | | 28.4 |
| | | | | | | | | |
| Net Earnings Per Share | | | | | |
| | Basic | $ 0.52 | | $ 0.41 | | 26.8 |
| | Diluted | $ 0.51 | | $ 0.40 | | 27.5 |
| | | | | | | | | |
| Average Shares Outstanding | | | | | |
| | Basic | 198.3 | | 197.0 | | |
| | Diluted | 202.8 | | 203.8 | | |
| | | | | | | | | |
| | | | | First Quarter |
CONDENSED SALES ANALYSIS | 2003 | | 2002 | | % Change |
| | | | | | | | | |
| Domestic | $ 546.2 | | $ 465.2 | | 17.4 |
| International | 300.7 | | 237.7 | | 26.5 |
| | | | | | | | | |
| | NET SALES | $ 846.9 | | $ 702.9 | | 20.5 |
| | | | | | | | | |
| Orthopaedic Implants | $ 490.8 | | $ 395.0 | | 24.3 |
| MedSurg Equipment | 304.1 | | 258.6 | | 17.6 |
| Physical Therapy Services | 52.0 | | 49.3 | | 5.5 |
| | | | | | | | | |
| | NET SALES | | | | | 20.5 |
| | | | | | | | | |
STRYKER CORPORATION |
(Unaudited - In Millions) |
| | | |
| | | |
| | March 31 | December 31 |
CONDENSED BALANCE SHEETS | 2003 | 2002 |
| | | |
| ASSETS | | |
| | | |
| Cash and cash equivalents | $ 39.6 | $ 37.8 |
| | | |
| Accounts receivable (net) | 427.6 | 406.7 |
| | | |
| Inventories | 455.2 | 426.5 |
| | | |
| Other current assets | 302.5 | 280.3 |
| | | |
| TOTAL CURRENT ASSETS | 1,224.9 | 1,151.3 |
| | | |
| Property, Plant and Equipment (net) | 534.4 | 519.2 |
| | | |
| Goodwill and Other Intangibles (net) | 942.7 | 935.1 |
| | | |
| Other Assets | 213.3 | 209.9 |
| | | |
| TOTAL ASSETS | $ 2,915.3 | $ 2,815.5 |
| | | |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| | | |
| Current Liabilities | $ 708.9 | $ 707.5 |
| | | |
| Long-Term Debt | 441.4 | 491.0 |
| | | |
| Other Liabilities | 118.0 | 118.8 |
| | | |
| Stockholders' Equity | 1,647.0 | 1,498.2 |
| | | |
| TOTAL LIABILITIES AND | | |
| STOCKHOLDERS' EQUITY | $ 2,915.3 | $ 2,815.5 |
| | | |
STRYKER CORPORATION |
For the Three Month Period Ended March 31, 2003 |
(Unaudited - In Millions) |
| | | |
| | | |
| | First Quarter |
CONDENSED STATEMENTS OF CASH FLOWS | 2003 | 2002 |
| | | |
| OPERATING ACTIVITIES | | |
| | | |
| Net earnings | $ 104. 1 | $ 81.1 |
| | | |
| Depreciation | 23.1 | 18.8 |
| | | |
| Amortization | 29.6 | 21.4 |
| | | |
| Changes in working capital | (54.4) | (57.0) |
| | | |
| Other | 1.8 | (1.6) |
| | | |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 104.2 | 62.7 |
| | | |
| | | |
| INVESTING ACTIVITIES | | |
| | | |
| Business acquisitions, net of cash acquired | (4.3) | (5.1) |
| | | |
| Purchases of property, plant and equipment | (29.2) | (21.6) |
| | | |
| Other | 0.1 | 0.2 |
| | | |
| NET CASH USED IN INVESTING ACTIVITIES | (33.4) | (26.5) |
| | | |
| | | |
| FINANCING ACTIVITIES | | |
| | | |
| Repayments on borrowings, net | (53.0) | (15.5) |
| | | |
| Dividends | (23.8) | (19.7) |
| | | |
| Other | 6.2 | 13.6 |
| | | |
| NET CASH USED IN FINANCING ACTIVITIES | (70.6) | (21.6) |
| | | |
| Effect of exchange rate changes on cash and cash equivalents | 1.6 | (3.8) |
| | | |
| CHANGE IN CASH AND CASH EQUIVALENTS | $ 1.8 | $ 10.8 |
| | | |
Contact Information:
Dean H. Bergy, Vice President, Chief Financial Officer and Secretary, (269) 385-2600
