“As expected, second quarter adjusted operating income increased 20% in comparison to the first quarter of 2012 as sales improved,” commented Thomas J. Hook, President & CEO, Greatbatch Inc. “In comparison to the prior year, adjusted operating income increased 1% as current quarter results include the benefit of over 40% Portable Medical pro forma growth driven by our Micro Power acquisition, as well as above market growth in our CRM and Vascular Access markets. During the quarter, we continued to experience operational issues within our Swiss Orthopaedic facilities; however, we have taken action to improve our performance over the next 18 months. In addition to the progress we have made on our current strategic initiatives, during the quarter we announced several new initiatives which included the following:
- Opening of our manufacturing facility in Fort Wayne, Indiana, which will be used to consolidate our Orthopaedic operations;
- Establishing an R&D center in Singapore with the support of the Singapore Economic Development Board, which is the first step of our Asia Pacific strategy;
- Increasing our strategic focus on sales and marketing to drive core business growth; and
- Completing the integration of our Portable Medical product line (Micro Power), which is performing ahead of expectations.
We remain confident these initiatives will improve the long-term growth prospects of our Company and are being undertaken with one goal in mind ― to drive shareholder value.”
CFO Comments“We expect the progress we have made with regards to our financial performance to carry over into the second half of the year as we continue to commercialize our medical device pipeline, aggressively address the operational issues at our Swiss facilities and begin to optimize our RD&E investment,” commented Michael Dinkins, Senior Vice President & CFO. “Despite these efforts, we now believe that our full year adjusted operating income as a percentage of sales and adjusted diluted EPS will be at the lower end of our guidance provided at the beginning of the year due to lower than expected profitability from our Swiss operations. However, we still expect that revenue will be in line with our original guidance due to stronger than expected performance from our CRM and Portable Medical product lines. We are committed to driving operational improvements in our business to achieve our long-term growth objectives and provide value to our shareholders.”