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TheStreet Open House

Greatbatch, Inc. Reports 2013 Second Quarter Results

Stock quotes in this article: GB

Orthopaedic sales of $32.3 million for the second quarter of 2013 declined 2% compared to the second quarter of 2012. During the first quarter of 2013, the Company divested certain non-core orthopaedic product lines which reduced second quarter 2013 orthopaedic revenue by approximately $4.4 million in comparison to the prior year period. Foreign currency exchange rate fluctuations did not have a material impact on the current quarter. On a constant currency organic basis, orthopaedic product line sales increased 14% in comparison to the prior year second quarter, which was primarily due to orthopaedic implant market share gains and new customer wins, partially offset by the timing of plant validations in connection with the transfer of operations from our Swiss facilities to other Greatbatch facilities. This consolidation is expected to benefit the next two quarters as backlog is relieved.

Second quarter 2013 vascular sales decreased 2% to $12.2 million compared to $12.5 million for the prior year and was primarily due to the previously communicated voluntary recall of two vascular medical devices near the end of 2012, which are on track to be back on the market in the second half of 2013.

Electrochem

Second quarter 2013 Electrochem sales increased 4% to $42.7 million compared to $41.2 million for the comparable 2012 period. This increase was primarily due to a 9% increase in portable medical sales, which is benefitting from new product launches into this higher growth market. We expect this higher growth rate in our portable medical product line to continue for the remainder of the year given the favorable market demographics and new product launches.

Financial Guidance

Based upon our results for the first half of the year, as well as our expectations for the remainder of 2013, at this time we are raising our 2013 adjusted diluted EPS guidance ranges to $2.05 to $2.15 per share from the previously communicated $2.00 to $2.05 per share. For the year, we continue to believe that revenue will be at the lower end of our original sales guidance of $660 million to $680 million provided at the beginning of the year. If achieved, this would result in organic revenue growth of 5% - 8% after adjusting for the disposition of $15 million of non-core orthopaedic product lines at the end of 2012. Further details will be provided on our earnings call later today.

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