plc (NYSE: COV) today reported results for the fourth quarter of fiscal 2013 (July - September 2013). Fourth-quarter net sales of $2.56 billion increased 2% from the $2.50 billion in the fourth quarter a year ago. Foreign exchange rate movement lowered the quarterly sales growth rate by three percentage points.
“We delivered a solid performance in the fourth quarter and finished 2013 in line with our expectations. That said, reported sales growth were negatively impacted by the strength of the U.S. dollar against most foreign currencies,” said José E. Almeida, Chairman, President and CEO.
“We had strong growth in Endomechanical Instruments and Energy, as well as in all major product lines in emerging markets resulting from investments in these regions,” Mr. Almeida said. “We also registered double-digit sales growth for Oridion, superDimension, BÂRRX and Newport during the quarter, which demonstrates our continued success in operating these businesses acquired in 2012.”
Fourth-quarter 2013 gross margin of 58.1% increased 0.2 percentage points from the 57.9% of the prior-year period. On an adjusted basis, excluding the specified items shown on the attached quarterly Non-GAAP reconciliations table, fourth-quarter 2013 gross margin of 58.2% was 0.7 percentage points below that of a year ago. The decline was primarily due to unfavorable foreign exchange, partially offset by the positive net impact of price, volume and mix.
Selling, general and administrative expenses for the fourth quarter of 2013 were above those of the comparable quarter of the year before. This was due to spending on growth initiatives and the medical device tax, partially offset by productivity improvements. Research and development (R&D) expense in the fourth quarter of 2013 represented 5.7% of net sales, versus 4.6% of sales in the fourth quarter a year ago. Excluding specified items, fourth-quarter 2013 R&D spending increased 11% and represented 5.0% of sales.