Published:
Symmetry Medical Reports Third Quarter 2009 Financial Results
WARSAW, Ind., Nov. 5 /PRNewswire-FirstCall/ -- Symmetry Medical Inc. (NYSE: SMA), a leading independent provider of products to the global orthopaedic device industry and other medical markets, announced third quarter 2009 financial results for the period ended October 3, 2009.
(in millions, except Third Quarter Vs Prior Quarter
share data) 2009 2008 Change 3Q'09 2Q'09 Change
----- ------ ------ ----- ------ ------
Revenue $87.2 $112.1 -22% $87.2 $101.0 -14%
Operating Income 10.4 10.5 -1% 10.4 13.5 -23%
Net Income 5.4 2.5 116% 5.4 9.0 -40%
EPS $0.15 $0.07 114% $0.15 $0.25 -40%
Revenue by Product:
Instruments $41.3 $48.7 -15% $41.3 $46.9 -12%
Implants 24.2 31.5 -23% 24.2 29.9 -19%
Cases 16.4 23.0 -29% 16.4 18.9 -13%
Other 5.3 8.9 -40% 5.3 5.3 0%
----- ------ ------ ----- ------ ------
Total Revenue $87.2 $112.1 -22% $87.2 $101.0 -14%
Revenue for the third quarter 2009 was $87.2 million, compared to $112.1 million reported in the third quarter 2008. Revenues during the quarter were unfavorably impacted by reduced customer demand across all segments of the business as well as a foreign currency translation effect of $2.7 million.
Gross profit for the third quarter 2009 was $21.2 million, compared to $25.7 million in the third quarter 2008. The year-over-year decrease was driven by lower customer demand as well as a one-time expense of $1.0 million for facility consolidation and staff reductions in the third quarter 2009.
Gross margin percentage for the third quarter 2009 was 24.4% compared to gross margin percentage of 22.9% in the same period last year. Gross margin improved despite the significantly lower volume. Aggressive cost cutting actions as well as significant improvements at the Sheffield, UK operating site drove the increase.
Selling, general and administrative expenses declined in the third quarter 2009 to $10.8 million, a 28.7% reduction from $15.2 million in the third quarter 2008. The year-over-year decrease in the third quarter 2009 was driven primarily by aggressive cost controls as well as a $1.6 million reduction in performance based compensation and restricted stock expense. Additionally, the third quarter 2008 included $0.9 million from Sheffield, UK investigation costs which did not repeat in 2009.
Operating income for the third quarter 2009 was $10.4 million compared to $10.5 million for the third quarter 2008. Operating margin of 12.0% for the third quarter 2009 was up from 9.4% for the third quarter 2008.
The third quarter 2009 included a non-cash gain of $0.2 million for the mark to market of the Company's interest rate derivative, compared to a non-cash gain of $1.0 million in the third quarter 2008. Other expense of $0.7 million in the third quarter 2009 compares to $3.1 million in the third quarter 2008. The primary driver of this expense is realized and unrealized foreign exchange.
Income tax expense for the third quarter 2009 was $2.9 million, compared to $3.2 million for the third quarter of 2008.
Net income for the third quarter 2009 was $5.4 million, or $0.15 per diluted share, up from net income of $2.5 million, or $0.07 per diluted share, for the third quarter of 2008.
The weighted average number of diluted shares outstanding during the third quarter of 2009 was 35,620,317.
Brian Moore, President and Chief Executive Officer of Symmetry Medical, stated, "While revenue declined in the third quarter 2009 due to softness across our sectors and broader economic conditions, we are pleased to significantly grow the bottom line year-over-year. This reflects the initiatives we undertook in anticipation of customer order softness in the second half of 2009. As our October 26, press release stated, we continue to see softness in the market and have revised our full year 2009 financial guidance to reflect current conditions. Despite this recent volatility across all segments of the business, we are encouraged by gains in market share we have realized as our customers consolidate suppliers and focus on assuring product quality and strong suppliers. We believe Symmetry has an advantage during this period as a result of our strong business model, strong cash position and our customer relationships."
Financial Guidance
The following forward-looking estimates regarding 2009 guidance reflect current market conditions and foreign currency rates. Actual results may differ materially, and we refer you to forward-looking statements located at the end of the press release.
Based on current order flow and anticipated customer demand for the remainder of the 2009, Symmetry is adjusting its previously stated annual revenue guidance to a range of $355 million to $365 million, from $385 million to $405 million. The Company now expects full year 2009 earnings per share to be in the range of $0.63 to $0.68 per diluted share, from $0.77 to $0.85.
Conference Call
Symmetry Medical will host a conference call to discuss the third quarter 2009 earnings at 8:00 a.m. ET on November 5, 2009. A live Web cast of the conference call will be available online from the investor relations page of the Company's corporate website at www.symmetrymedical.com. The dial-in numbers are (866) 383-8003 for domestic callers and (617) 597-5330 for international. The reservation number for both is 89255155. After the live webcast, the call will remain available on Symmetry Medical's web site through January 5, 2010. In addition, a telephonic replay of the call will be available until November 19, 2009. The replay numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use reservation code 69959746.
About Symmetry Medical Inc.
Symmetry Medical Inc. is a leading independent provider of implants and related instruments and cases to the orthopaedic device industry. The Company also designs, develops and produces these products for companies in other segments of the medical device market, including arthroscopy, dental, laparoscopy, osteobiologic and endoscopy sectors and provides limited specialized products and services to non-healthcare markets, such as the aerospace market.
Forward-Looking Statements
Statements in the press release regarding Symmetry Medical Inc.'s business which are not historical facts may be "forward-looking statements" that involve risks and uncertainties, within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictive in nature and are frequently identified by the use of terms such as "may," "might," "will," "should," "expect," "believe," "anticipate," "plan," "estimate," "intend," and similar words indicating possible future expectations, events or actions. Such predictive statements are not guarantees of future performance, and actual outcomes and results could differ materially from our current expectations. We refer you to the "Risk Factors" and "Forward Looking-Statements" sections in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission as well as the Company's other filings with the SEC, which are available on the SEC's Web site at www.sec.gov.
Symmetry Medical Reports Third Quarter 2009 Financial Results
Consolidated Statements of Operations
Three Months Ended Nine Month Ended
--------------------- ----------------------
October 3, October 4, October 3, October 4,
2009 2008 2009 2008
--------- --------- --------- ---------
(In Thousands, Except Per Share Data)
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue $87,164 $112,095 $289,540 $323,744
Cost of Revenue 65,917 86,445 216,964 246,733
--------- --------- --------- ---------
Gross Profit 21,247 25,650 72,576 77,011
Selling, general and
administrative
expenses 10,813 15,165 37,395 44,474
--------- --------- --------- ---------
Operating Income 10,434 10,485 35,181 32,537
Other (income)/expense:
Interest expense 1,666 2,683 5,050 8,300
Derivatives valuation
gain (178) (972) (746) (1,041)
Other 687 3,079 379 2,581
--------- --------- --------- ---------
Income before
income taxes 8,259 5,695 30,498 22,697
Income tax expense 2,851 3,162 9,268 9,995
--------- --------- --------- ---------
Net income $5,408 $2,533 $21,230 $12,702
Net income per share: ========= ========= ========= =========
Basic $0.15 $0.07 $0.60 $0.36
========= ========= ========= =========
Diluted $0.15 $0.07 $0.59 $0.36
========= ========= ========= =========
Weighted average common
shares and equivalent
shares outstanding:
Basic 35,326 35,174 35,289 35,161
Diluted 35,620 35,402 35,486 35,354
Symmetry Medical Reports Third Quarter 2009 Financial Results
Consolidated Balance Sheets
October 3, January 3,
2009 2009
-------- --------
(In Thousands)
(unaudited)
Assets:
Current Assets:
Cash and cash equivalents $16,432 $10,191
Accounts receivable, net 43,205 52,845
Inventories 65,697 61,111
Refundable income taxes 2,884 6,610
Deferred income taxes 5,493 3,993
Other current assets 2,710 3,154
-------- --------
Total current assets 136,421 137,904
Property and equipment, net 116,933 115,045
Goodwill 153,721 153,521
Intangible assets, net of
accumulated amortization 43,387 45,039
Other assets 1,260 1,728
-------- --------
Total Assets $451,722 $453,237
======== ========
Liabilities and Shareholders' Equity:
Current Liabilities:
Accounts payable $20,074 $26,929
Accrued wages and benefits 7,764 12,784
Other accrued expenses 4,808 5,186
Income tax payable 574 2,637
Deferred income taxes 115 -
Revolving line of credit 5,479 2,495
Current portion of capital lease obligations 558 1,034
Current portion of long-term debt 19,525 16,900
-------- --------
Total current liabilities 58,897 67,965
Deferred income taxes 23,848 18,131
Derivative valuation liability 3,458 3,771
Capital lease obligations, less current portion 2,983 3,356
Long-term debt, less current portion 81,678 107,600
-------- --------
Total Liabilities 170,864 200,823
-------- --------
Commitments and contingencies (Note 14)
Shareholders' Equity:
Common Stock, $.0001 par value;
75,000 shares authorized; shares
issued October 3, 2009--35,806;
January 3, 2009--35,801 4 4
Additional paid-in capital 278,031 275,890
Accumulated deficit (277) (21,507)
Accumulated other comprehensive income (loss) 3,100 (1,973)
Total Shareholders' Equity 280,858 252,414
Total Liabilities and Shareholders' Equity $451,722 $453,237
Contact: Investors:
Symmetry Medical Inc. The Ruth Group
Fred L. Hite Nick Laudico/R.J. Pellegrino
Senior Vice President (646) 536-7030/7009
Chief Financial Officer nlaudico@theruthgroup.com
(574) 371-2218 rpellegrino@theruthgroup.com
Media:
Jason Rando
The Ruth Group
(646) 536-7025
jrando@theruthgroup.com
SOURCE Symmetry Medical Inc.
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