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Greatbatch, Inc. Reports 2013 Second Quarter Results

Stocks in this article: GB

“Over the last eight years Greatbatch successfully integrated and consolidated its businesses and facilities,” continued Hook. “This has led us to an inflection point in which the Company can build upon our strong operations foundation to establish Greatbatch as a growth company where we have a competitive advantage in the markets we serve, continue to introduce innovative product offerings into the market place and our organic growth represents a significant percentage of recurring revenues.

We are laying the foundation for this growth strategy through our investment in sales and marketing, which has resulted in more robust commercialization plans, an infusion of sales and marketing talent linked to complementary compensation plans, and a revamped decision making processes for selecting and building our deal pipelines. We are excited about our future as we seek to maintain at least 5% constant currency organic annual revenue growth. I would like to thank our Associates for their continued commitment to making Greatbatch a growth company.”

CFO Comments

“Aided by our solid second quarter growth in sales, our gross margin rates continued to be strong,” commented Michael Dinkins, Executive Vice President & CFO, Greatbatch, Inc. “Our revenue of $171.3 million was a 3% increase over the second quarter 2012 and 16% above our first quarter 2013 performance, bringing our year-to-date revenues to $319.6 million representing 1% organic growth over the prior year. Orthopaedics, portable medical and cardiac/neuromodulation are driving our organic sales improvement. Cardiac/neuromodulation grew 5% by leveraging our existing portfolio of intellectual property with our OEM customers; Portable medical was up 9% driven by the carryover of new product introductions; and we continued to have success with our orthopaedic implants. This volume leverage along with continued productivity efforts, functional alignment and excellent execution resulted in adjusted operating margins improving 180 basis points to 13.0% in the quarter. Additionally, adjusted EBITDA improved 10% as adjusted operating income increased $3.6 million. As a result, we are increasing our adjusted diluted earnings per share guidance as we expect sustained operating efficiency, continued cost discipline and lower interest expense levels through the end of the year, partially offset by lower reimbursements from customers for R&D initiatives.”

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