Cash flows from operations for the fourth quarter and full year 2011 were $31 million and $90 million, respectively, compared to $5 million and $77 million, respectively, for the comparable 2010 periods. Cash flows from operations for the fourth quarter of 2010 included the payment of the Electrochem litigation settlement of $25 million ($16.3 million net of tax). During 2011, the Company repaid $40 million of its long-term debt and borrowed an additional $45 million under its revolving credit facility in order to partially fund the Micro Power acquisition.

CFO Comments

“Overall, we are very pleased with our 2011 results,” commented Thomas J. Mazza, Senior Vice President & CFO. “Despite the challenges that our markets and the macroeconomic environment presented, we were able to exceed our revenue and adjusted earnings per share targets set at the beginning of the year. Our efficient operations continue to generate significant cash flow which allows us to execute on our strategic initiatives. These strategic initiatives will continue to drive our growth in the future.”
Product Line Sales              
The following table summarizes the Company’s sales by major product lines (dollars in thousands):
 
2011 2010 % 2011 % 2011 2010 %
Product Line 4th Qtr. 4th Qtr. Chg. 3rd Qtr. Chg. Year Year Chg.
Greatbatch Medical
CRM/Neuromodulation $ 77,198 $ 78,382 -2% $ 70,731 9% $ 303,690 $ 303,521 0%
Vascular Access 12,459 9,768 28% 11,396 9% 45,098 38,000 19%
Orthopaedic   31,635   30,773 3%   31,131 2%   140,277   118,748 18%
Total 121,292 118,923 2% 113,258 7% 489,065 460,269 6%
Electrochem   20,454   14,188 44%   18,460 11%   79,757   73,156 9%
Total sales $ 141,746 $ 133,111 6% $ 131,718 8% $ 568,822 $ 533,425 7%

Greatbatch Medical

In comparison to the prior year, CRM and Neuromodulation sales for the fourth quarter of 2011 decreased 2% but were consistent for the full year period. During the first half of 2011, CRM revenue included the benefit of customer inventory builds and product launches, which did not recur in the second half of 2011. Additionally, CRM and Neuromodulation sales continue to be impacted by pricing pressures and a slowdown in the underlying market. As a result of these headwinds, we expect CRM and Neuromodulation revenue for 2012 to be lower in the first half of 2012 but begin to rebound in the second half of the year as the CRM market stabilizes.

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