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TheStreet Open House

Greatbatch, Inc. Reports 2012 Second Quarter Results

Stocks in this article: GB

Second quarter 2012 sales for the Vascular Access product line increased 16% to $12.5 million in comparison to the prior year and was primarily driven by the commercialization of new medical devices. We continue to expect 2012 sales of complete medical devices developed by Greatbatch to be in the range of $10 to $15 million for 2012.

Orthopaedic product line sales of $32.9 million for the second quarter of 2012 declined 13% (-5% constant currency) compared to the second quarter of 2011. Foreign currency exchange rate fluctuations decreased Orthopaedic revenue by approximately $3 million in the second quarter of 2012 in comparison to the prior year. The remaining decline in second quarter 2012 Orthopaedic sales was a result of price concessions provided to customers, as well as fewer customer product launches and development opportunities due to operational issues within our Orthopaedic business, which are aggressively being addressed. In comparison to the sequential first quarter, Orthopaedic revenue increased 6%.

Electrochem

Second quarter 2012 sales for Electrochem increased $21.1 million to $41.2 million versus $20.1 million for the comparable 2011 period. Second quarter 2012 Electrochem sales included $21.3 million of revenue related to the acquisition of Micro Power in December 2011. On an organic basis, Electrochem revenue was consistent with the prior year despite tough comparables with the second quarter of 2011, which included the benefit of customer inventory restocking. The Micro Power acquisition continues to exceed our initial expectations, and is being driven by successful product launches into the higher growth, higher value portable medical market. This market is benefiting from the shifting of patient care from clinical settings to the home and an aging population, which is driving the need for lightweight/portable devices for patients and caregivers. Our funnel of portable medical products from this acquisition continues to be full and is expected to drive high single digit revenue growth for the next several years in this product line.

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