Hook continued, “During 2012 we were also able to make significant progress on numerous strategic initiatives which included:

  • Completing the integration of Micro Power and Neuro Nexus;
  • Reorganizing our sales and marketing teams to drive core business growth;
  • Refocusing our medical device RD&E investment and discontinuing non-core RD&E projects;
  • Making significant technical progress on our Algostim spinal cord stimulator which is receiving strong interest from numerous world-class medical device companies, who appreciate the unique opportunity to market and distribute this device;
  • Negotiating several long-term agreements with OEM customers and actively filling our pipeline of component and device opportunities with those customers; and
  • Completing construction and successfully transferring manufacturing to our Fort Wayne, Indiana facility.”

“These initiatives are designed to create value for our shareholders through top-line, bottom-line and pipe-line growth. We look forward to providing further details on our strategic initiatives at our Investor Day in New York City on March 18, 2013.”

CFO Comments

“In order to stop the negative impact of our Swiss orthopaedic operations we targeted and completed a transfer of our production to our Fort Wayne, IN and Tijuana, Mexico facilities by year-end. In aggregate we estimate these operational issues had a negative $0.16 per share of adjusted diluted earnings impact for 2012,” commented Michael Dinkins, Senior Vice President & CFO. “We partially offset this with a reduction of our corporate-wide performance-based compensation expense, a reduction in our RD&E expense in the second half of the year and better than expected performance of our portable medical product line. For 2013, we expect revenue, after adjusting for the sale of a portion of our orthopaedic product line, to organically grow 5-8% driven primarily by our portable medical, vascular and orthopaedic product lines along with above market growth in cardiac and neuromodulation. We expect our performance to improve as we progress through 2013, as the first quarter 2013 will be impacted by the startup of our recently transferred orthopaedic production lines. The second half of the year is expected to improve as the orthopaedic backlog is relieved and new product introductions in our portable medical business commercialize. As a result of our consolidation initiatives and refocused medical device R&D investment, we expect improved performance in comparison to the prior year and to achieve adjusted diluted EPS growth of 7-13% for calendar year 2013.”

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