Synthes Reported Fourth-Quarter and Fiscal Year 2004 Earnings Results
BY HUYEN NGUYEN, FEBRUARY 7, 2005
Synthes, Inc. (SYST.VX), a worldwide maker, developer and distributor of orthopedic trauma implants, biological devices and spinal hardware, reported financial results for fourth-quarter and fiscal year 2004 on January 20/2005.
SYST reported sales for 4Q:04 at $469.4 million, an increase of 46.3% compared to $320.9 million in 4Q:03. Pro forma sales including acquisition of Mathys' Osteosynthesis, excluding Mathys' German subsidiary, which the company did not acquire. Pro forma sales are reported as if the acquisition took place on January 1, 2003, in which case, total sales grew by 19.2%. Foreign currency exchange had a favorable impact on sales growth of approximately 3.9% for the quarter.
For the FY2004, SYST reported sales of $1.78 billion compared to $1.23 billion, a 44.8% increase yr./yr. Pro forma sales (including acquisition of Mathys, excluding its Germany division) grew by 20.7%. Foreign currency exchange added approximately 4% to sales growth for the year.
Source: Company reports
In North America, The Company experienced 20.7% revenue growth for 2004 (both on an "as is" and "pro forma" basis). In Europe, revenue growth was a similar 20.6% on a pro forma basis and performance in the Asia Pacific region was very strong with 2004 pro forma revenue growth coming in at 26.5%.
Product Summary
Synthes' Locking Compression Plate (LCP) and screw system, and the Trochanteric Fixation Nail (TFN) products led trauma growth for the quarter and the year.
Locking Compression Plate (LCP) and screw system
Growth in spine was strong largely as a result of new product introductions (particularly in cervical). Management noted demand for the Company's top loading Axon system and the Anterior Tension Band system, which is used to stabilize the spine. During Management's conference call, Hansjorg Wyss (Chairman & CEO) commented that excluding Medtronic's (MDT:NYSE) InFuse, SYST had a higher growth rate than both MDT and JNJ (JNJ:NYSE) in the traditional spine business. Management also noted that the Charite has had no meaningful impact on SYST's spine market share. To us, it's still too early to tell how Charite is going to effect competitor revenues in the immediate term. SYST is currently working on several motion preservation projects.
