07.27.09
$6.7 Billion
KEY EXECUTIVES:
John W. Brown, Chairman
Stephen P. MacMillan, President and CEO
Andrew G. Fox-Smith, Group President, International
Curt R. Hartman, VP and CFO
James E. Kemler, VP and Group President, Biotech, Osteosythesis
and Development
Timothy J. Scannell, Group President, Spine and Endoscopy
Lonny J. Carpenter, Group President, Instruments and Medical
Michael P. Mogul, President, Orthopaedics
NO. OF EMPLOYEES: 17,594
GLOBAL HEADQUARTERS: Kalamazoo, Mich.
It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.
This theory of survival from attorney Clarence Darrow quickly morphed into a working business strategy at Stryker last year as the orthopedic device firm struggled to overcome “momentous” market challenges and achieve revenue growth.
“By all measures, 2008 was a momentous year,” John W. Brown, Stryker’s board chairman, told shareholders in the 2008 annual report. “The world economy tumbled into a deep recession. Fear gripped Wall Street…Credit sources shut down...Stryker’s market cap was cut almost in half, and it appears that it may take some time for the economies and our stock to completely recover. Yet, we believe there is cause for optimism for the world, the medical device industry and, importantly, for [the] company. Why? We see tremendous desire for change and improvement…”
Stryker took advantage of that desire for change and improvement to achieve double-digit revenue growth for the eighth consecutive year. This accomplishment makes Stryker one of only a dozen Fortune 500 companies to achieve such growth for eight consecutive years.
In 2008, Stryker’s revenue rose 12 percent to $6.71 billion. Its gross profit climbed 11 percent to $4.58 billion, while its operating income jumped 16.2 percent to $1.58 billion. Net earnings totaled $1.14 billion, a 12.7 percent increase compared with the $1 billion the company posted in 2007.
Domestic sales accounted for 64 percent of total revenue in 2008 (ended Dec. 31), while international sales made up 36 percent of annual revenue. Executives attributed the sales increase to higher shipments of orthopedic implants and MedSurg equipment, which includes surgical tools and navigation systems, endoscopic, communications and digital imaging systems, and emergency medical equipment.
Domestic sales totaled $4.28 billion last year, an 11 percent increase compared with the $3.85 billion Stryker reported in 2007.
Despite the challenges posed by last year’s economic meltdown, Stryker posted industry-leading growth rates in six of its eight main franchises last year. “Our commitment to globalization and innovation has been driving our knee, spine, trauma, CMF, instruments and medical franchises to industry-leading levels,” Stephen P. MacMillan, Stryker president and CEO, noted in the company’s 2008 annual report.
Worldwide orthopedic implant sales totaled $3.96 billion in 2008, an 11 percent increase compared with the $3.57 billion in net sales the company generated in 2007. On a constant currency basis, sales of orthopedic implants rose 9 percent due to higher shipments of reconstructive, spinal and craniomaxillofacial (CMF) implant systems and bone cement.
The biggest revenue-generator within Stryker’s Orthopaedic segment was spinal implant systems, where sales grew 19 percent. Executives attributed the increase to solid global sales growth of thoracolumbar implant systems, interbody devices and cervical implants.
Trauma implant system sales came next with sales growing 18 percent (14 percent on a constant currency basis). The growth came from strong global sales of the Gamma3 Hip Fracture System and the SPS Calcaneal Foot Plating System, as well as solid demand for the company’s T2 Nailing System in the United States, Canada and the Pacific region. Significant growth in the HydroSet injectable bone substitute product in the United States and Pacific region also contributed to Stryker’s constant currency sales growth in 2008.
CMF implant system sales jumped 16 percent (15 percent on a constant currency basis) due mainly to higher sales of products for neurological indications and CMF implants, and the HydroSet injectable bone substitute product in the United States and Pacific region, which includes Australia, China, India, Korea, Malaysia, New Zealand, Singapore, Taiwan and Thailand.
Stryker’s growth in hip and knee implants was impressive, considering many patients postponed such surgeries as the economy deteriorated last fall. Knee implant sales grew 14 percent (13 percent on a constant currency basis), fueled by solid sales of the Triathlon Knee System in the United States, Europe, Canada and the Pacific region, and strong demand for the Scorpio Knee System in Japan and Latin America.
Sales of hip implant systems increased 3 percent in 2008 (1 percent on a constant currency basis). U.S. sales growth was driven primarily by increased sales of the Cormet Hip Resurfacing product and increased demand for X3 Polyethylene and Accolade cementless hip products. Sales growth in several hip systems, including Accolade, X3 Polyethylene and ABG II, in Europe and Secur-Fit in Japan and the Pacific region also contributed to the company’s constant currency sales growth in 2008.
Worldwide sales of MedSurg Equipment were $2.75 billion last year, a 14 percent increase compared with the $2.43 billion Stryker posted in 2007. Executives attributed the growth to higher shipments of surgical equipment and surgical navigation systems; endoscopic, communications and digital imaging systems; and patient handling and emergency medical equipment.
The largest revenue-generator within this segment was patient handling and emergency medical equipment, where sales grew 18 percent (17 percent on a constant currency basis). Strong sales of hospital bed products in the United States and Latin America as well as robust sales of stretchers and emergency medical equipment in the United States and Europe contributed to the franchise’s growth.
Sales of surgical equipment and surgical navigation systems increased 17 percent in 2008 (15 percent on a constant currency basis) due to strong worldwide sales of powered surgical and operating room equipment as well as solid sales of interventional pain products in the United States and the Pacific region.
Sales of endoscopic, communications and digital imaging systems jumped 9 percent (8 percent on a constant currency basis) due to strong worldwide sales in arthroscopy and general surgery as well as strong international sales growth of medical video imaging equipment, led by the 1188 HD camera and complimentary products.
The growth was partially offset by lower sales of medical video imaging equipment in the United States. Strong sales of communication products in the United States and Canada, led by the SwitchPoint Infinity 2, contributed to the company’s constant currency sales growth.
Stryker’s results clearly show that the company was successful in overcoming the challenges posed by the crumbling economy last year.
The firm hopes to match that success with the steps it took in 2008 to improve its quality and compliance systems. Stryker’s Biotech division received a warning letter from the U.S. Food and Drug Administration last spring about the quality systems and compliance issues at its Hopkinton, Mass., facility. That warning letter followed two others the company received in 2007 about the quality systems at its facilities in Ireland and New Jersey.
MacMillan said the company worked last year to develop more robust systems to document, investigate and improve deficiencies, and to better manage an increasing number of external suppliers. “We feel that we achieved significant progress in 2008, but we know that much work remains to achieve our goals,” he said. “In the long run, we are confident that taking these steps now will make us even stronger, as well as create efficiencies and cost-savings opportunities in the years ahead.”
KEY EXECUTIVES:
John W. Brown, Chairman
Stephen P. MacMillan, President and CEO
Andrew G. Fox-Smith, Group President, International
Curt R. Hartman, VP and CFO
James E. Kemler, VP and Group President, Biotech, Osteosythesis
and Development
Timothy J. Scannell, Group President, Spine and Endoscopy
Lonny J. Carpenter, Group President, Instruments and Medical
Michael P. Mogul, President, Orthopaedics
NO. OF EMPLOYEES: 17,594
GLOBAL HEADQUARTERS: Kalamazoo, Mich.
It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.
This theory of survival from attorney Clarence Darrow quickly morphed into a working business strategy at Stryker last year as the orthopedic device firm struggled to overcome “momentous” market challenges and achieve revenue growth.
“By all measures, 2008 was a momentous year,” John W. Brown, Stryker’s board chairman, told shareholders in the 2008 annual report. “The world economy tumbled into a deep recession. Fear gripped Wall Street…Credit sources shut down...Stryker’s market cap was cut almost in half, and it appears that it may take some time for the economies and our stock to completely recover. Yet, we believe there is cause for optimism for the world, the medical device industry and, importantly, for [the] company. Why? We see tremendous desire for change and improvement…”
Stryker took advantage of that desire for change and improvement to achieve double-digit revenue growth for the eighth consecutive year. This accomplishment makes Stryker one of only a dozen Fortune 500 companies to achieve such growth for eight consecutive years.
In 2008, Stryker’s revenue rose 12 percent to $6.71 billion. Its gross profit climbed 11 percent to $4.58 billion, while its operating income jumped 16.2 percent to $1.58 billion. Net earnings totaled $1.14 billion, a 12.7 percent increase compared with the $1 billion the company posted in 2007.
Domestic sales accounted for 64 percent of total revenue in 2008 (ended Dec. 31), while international sales made up 36 percent of annual revenue. Executives attributed the sales increase to higher shipments of orthopedic implants and MedSurg equipment, which includes surgical tools and navigation systems, endoscopic, communications and digital imaging systems, and emergency medical equipment.
Domestic sales totaled $4.28 billion last year, an 11 percent increase compared with the $3.85 billion Stryker reported in 2007.
Despite the challenges posed by last year’s economic meltdown, Stryker posted industry-leading growth rates in six of its eight main franchises last year. “Our commitment to globalization and innovation has been driving our knee, spine, trauma, CMF, instruments and medical franchises to industry-leading levels,” Stephen P. MacMillan, Stryker president and CEO, noted in the company’s 2008 annual report.
Worldwide orthopedic implant sales totaled $3.96 billion in 2008, an 11 percent increase compared with the $3.57 billion in net sales the company generated in 2007. On a constant currency basis, sales of orthopedic implants rose 9 percent due to higher shipments of reconstructive, spinal and craniomaxillofacial (CMF) implant systems and bone cement.
The biggest revenue-generator within Stryker’s Orthopaedic segment was spinal implant systems, where sales grew 19 percent. Executives attributed the increase to solid global sales growth of thoracolumbar implant systems, interbody devices and cervical implants.
Trauma implant system sales came next with sales growing 18 percent (14 percent on a constant currency basis). The growth came from strong global sales of the Gamma3 Hip Fracture System and the SPS Calcaneal Foot Plating System, as well as solid demand for the company’s T2 Nailing System in the United States, Canada and the Pacific region. Significant growth in the HydroSet injectable bone substitute product in the United States and Pacific region also contributed to Stryker’s constant currency sales growth in 2008.
CMF implant system sales jumped 16 percent (15 percent on a constant currency basis) due mainly to higher sales of products for neurological indications and CMF implants, and the HydroSet injectable bone substitute product in the United States and Pacific region, which includes Australia, China, India, Korea, Malaysia, New Zealand, Singapore, Taiwan and Thailand.
Stryker’s growth in hip and knee implants was impressive, considering many patients postponed such surgeries as the economy deteriorated last fall. Knee implant sales grew 14 percent (13 percent on a constant currency basis), fueled by solid sales of the Triathlon Knee System in the United States, Europe, Canada and the Pacific region, and strong demand for the Scorpio Knee System in Japan and Latin America.
Sales of hip implant systems increased 3 percent in 2008 (1 percent on a constant currency basis). U.S. sales growth was driven primarily by increased sales of the Cormet Hip Resurfacing product and increased demand for X3 Polyethylene and Accolade cementless hip products. Sales growth in several hip systems, including Accolade, X3 Polyethylene and ABG II, in Europe and Secur-Fit in Japan and the Pacific region also contributed to the company’s constant currency sales growth in 2008.
Worldwide sales of MedSurg Equipment were $2.75 billion last year, a 14 percent increase compared with the $2.43 billion Stryker posted in 2007. Executives attributed the growth to higher shipments of surgical equipment and surgical navigation systems; endoscopic, communications and digital imaging systems; and patient handling and emergency medical equipment.
The largest revenue-generator within this segment was patient handling and emergency medical equipment, where sales grew 18 percent (17 percent on a constant currency basis). Strong sales of hospital bed products in the United States and Latin America as well as robust sales of stretchers and emergency medical equipment in the United States and Europe contributed to the franchise’s growth.
Sales of surgical equipment and surgical navigation systems increased 17 percent in 2008 (15 percent on a constant currency basis) due to strong worldwide sales of powered surgical and operating room equipment as well as solid sales of interventional pain products in the United States and the Pacific region.
Sales of endoscopic, communications and digital imaging systems jumped 9 percent (8 percent on a constant currency basis) due to strong worldwide sales in arthroscopy and general surgery as well as strong international sales growth of medical video imaging equipment, led by the 1188 HD camera and complimentary products.
The growth was partially offset by lower sales of medical video imaging equipment in the United States. Strong sales of communication products in the United States and Canada, led by the SwitchPoint Infinity 2, contributed to the company’s constant currency sales growth.
Stryker’s results clearly show that the company was successful in overcoming the challenges posed by the crumbling economy last year.
The firm hopes to match that success with the steps it took in 2008 to improve its quality and compliance systems. Stryker’s Biotech division received a warning letter from the U.S. Food and Drug Administration last spring about the quality systems and compliance issues at its Hopkinton, Mass., facility. That warning letter followed two others the company received in 2007 about the quality systems at its facilities in Ireland and New Jersey.
MacMillan said the company worked last year to develop more robust systems to document, investigate and improve deficiencies, and to better manage an increasing number of external suppliers. “We feel that we achieved significant progress in 2008, but we know that much work remains to achieve our goals,” he said. “In the long run, we are confident that taking these steps now will make us even stronger, as well as create efficiencies and cost-savings opportunities in the years ahead.”