Stephen P. MacMillan, Chairman, President & CEO
Curt R. Hartman, VP & Chief Financial Officer
James E. Kemler, Group President, Biotech & Development
Michael P. Mogul, Group President, Orthopaedics
Timothy J. Scannell, Group President, MedSurg & Spine
NO. OF EMPLOYEES: 20,036
GLOBAL HEADQUARTERS: Kalamazoo, Mich.
Though not immune to challenges presented by the economic climate, Stryker Corp. delivered a solid fiscal 2010, with sales totaling $7.3 billion—an almost 8 percent increase over the previous year.
“In 2010 we augmented our unique sales footprint by leveraging our balance sheet through several key acquisitions that both strengthen our core product offering while also allowing us to expand into fast growing adjacent medical technology markets,” said Stephen P. MacMillan, chairman, president and CEO of the Kalamazoo, Mich.-based company. “Combined with the continued double-digit increase in our annual dividend and ongoing share repurchases, we believe these moves optimized shareholder return and position our company for long term growth.”
By year’s end, Stryker had increased its quarterly dividend 20 percent, to $0.18 per share, and achieved increases in each of its segments. Worldwide sales of orthopedic implants totaled $4.3 billion, a 3.3 percent (4.6 percent on an as-reported basis) increase over fiscal 2009 on a constant currency basis, due to high sales of hips, knees and trauma implant systems. Medical surgical (MedSurg) equipment sales increased 15 percent on a constant currency basis (15.7 increase on an as-reported basis). Worldwide sales totaled $3 billion. The company attributed this increase to higher shipments of surgical equipment, surgical navigation systems, endoscopic and communications systems, patient handling and emergency medical equipment in addition to growth through acquisitions.
Adjusted net earnings increased 13 percent, from $1.1 billion to $1.3 billion. Reported net earnings increased 15 percent, from $1.1 billion to $1.2 billion.
First quarter (ended March 31, 2010) net sales totaled $1.8 billion, a 12 percent increase on a constant currency basis. Orthopedic implants sales increased 6.4 percent, and MedSurg equipment sales increased 12.2 percent. Net earnings were $322 million, a 14.5 percent increase compared with 2009.
Second quarter (ended June 30, 2010) net sales increased 6.9 percent to $1.7 billion, a 4.2 percent increase. Orthopedic implants sales increased 1.4 percent (2.2 percent as reported), and MedSurg equipment sales increased 15.9 percent (16.4 percent as reported). Net earnings were $319 million, a 9.5 percent increase over 2009. In the third quarter (ended Sept. 30, 2010) net sales increased 7 percent on a constant currency basis from the same quarter the previous year (6.9 percent as reported), to 1.7 billion. Orthopedic implants sales increased 1.3 percent (1.2 percent as reported), and MedSurg equipment sales increased 16.3 percent (16.1 percent as reported). Net earnings were $338 million, a 47.6 percent increase over 2009. Stryker sold its Caen, France-based orthopedic manufacturing facility, which resulted in a gain of $13 million for third quarter net earnings. In the fourth quarter (ended Dec. 31, 2010), net sales increased 8.7 percent on a constant currency basis (8.8 percent increase as reported) to $1.9 billion. Orthopedic implants sales increased 4.3 percent (4.5 percent as reported), and MedSurg equipment sales increased 15.4 percent (15.3 percent as reported). Net earnings were $295 million, a 3.6 percent decrease from 2009. At this time, the company repurchased 6.1 million shares at a cost of $314 million bringing total 2010 share repurchases to 8.3 million shares at a cost of $426 million.
For the year, domestic sales totaled $4.7 billion, aided by increases of 11 percent in both the fourth quarter and entire year as a result of higher shipments of orthopedic implants and MedSurg equipment. International sales totaled $2.5 billion.
In October, Stryker announced that it would purchase assets of Boston Scientific’s neurovascular division. The all-cash $1.5 billion transaction included $100 million in milestone payments, and was completed in January 2011.
“The acquisition of Boston Scientific Neurovascular is an important strategic move as it positions us as a leader in the highly attractive neurovascular space, which we believe is well positioned to remain one of the fastest growing and most innovative sectors in medical technology,” MacMillan said at the time of the announcement. The deal had no effect on fiscal year
The company also announced plans to acquire Orchard Park, N.Y.-based Gaymar Industries Inc., for $150 million cash, and Porex Surgical, a division of Fairburn, Ga.-based Porex Corporation, for an undisclosed sum.
Additionally, Stryker announced a $60 million agreement with Center Valley, Pa.-headquartered Olympus Healthcare for the sale of its OP-1 bone growth putty product family, including OP-1 Implant, OP-1 Putty, Opgenra and Osigraft. The deal was part of the company’s efforts to refocus its biologic research and development activities.
The company also closed several ongoing issues with the U.S. Food and Drug Administration (FDA). In March, it was announced that compliance issues with certain quality system requirements at Stryker’s Mahwah, N.J. office have been resolved after a re-inspection by the FDA.
The issues were initially raised in 2007. The company received similar letters regarding its reconstructive implant manufacturing facility in Cork, Ireland, that same year, and regarding craniomaxillofacial (CMF) implant products that were previously sold through its CMF distribution facility in Portage, Mich. in 2009. Stryker announced that these issues sufficiently have been addressed according to FDA requirements.
“We took a number of important steps to reshape our company and enhance our competitive position by executing on several strategic acquisitions that are strengthening our core product offerings while also allowing us to further diversify our sales footprint in some of the highest growth segments in medical technology,” MacMillan said.