07.27.09
$8.9 Billion ($9.9B total)
KEY EXECUTIVES:
Richard J. Meelia, Chairman, President and CEO
Charles J. Dockendorff, Exec. VP and CFO
Jose E. Almeida, Sr. VP and President, Medical Devices
Timothy R. Wright, Sr. VP and Presidnent, Pharmaceutical Products
and Imaging Solutions
NO. OF EMPLOYEES: 41,700
GLOBAL HEADQUARTERS: Dublin, Ireland
Fiscal 2008 marked an anniversary for Covidien—its first full year as an independent medical technology firm. Its days as Tyco Healthcare now a distant memory, the company has moved forward to establish a new brand, a better reputation and solid portfolio of products and services.
The new approach seems to be working based on sales growth for the year.
Covidien derives its revenue from four groups.
Its Medical Devices group includes the development, manufacture and sale of endomechanical instruments, soft-tissue repair products, energy devices, oximetry and monitoring products, airway and ventilation products, vascular devices, sharps safety products, clinical care products and other medical device products.
The Imaging Solutions unit includes the development, manufacture and marketing of radiopharmaceuticals and contrast products.
Pharmaceutical Products includes the development, manufacture and distribution of dosage pharmaceuticals and active pharmaceutical ingredients.
The Medical Supplies division includes the development, manufacture and sale of nursing care products, medical surgical products and original equipment manufacturer products (OEM).
Higher volume and new products drove sales growth for fiscal 2008 (ended Sept. 26), according to the company. Net sales for all business divisions was $9.9 billion, 11 percent more than the $8.9 billion in 2007, with favorable foreign exchange contributing four percentage points to the sales increase.
(Editor’s note: Net sales reported in 2008 for fiscal 2007 were adjusted. The figure does not include $1.275 billion in net sales from discontinued operations. In its 2007 annual report, Covidien reported $10.170 billion in net sales. The company divested its Retail Products segment and European Incontinence business.)
Approximately 55 percent of sales in 2008 were generated in the United States. Net income was $1.36 billion for 2008, compared with a net loss of $342 million in fiscal 2007, the company reported.
“We finished fiscal 2008 with our strongest quarterly operational results since becoming a public company in mid-2007,” said Chairman, President and CEO Richard J. Meelia. “Growth was broad-based, with three of our four segments reporting double-digit increases. Our performance was especially strong in markets outside the U.S., as we continued to benefit from the incremental investments made over the last few years to augment our sales force and expand geographically. Our Imaging segment, however, posted disappointing fourth-quarter results, but we have plans in place designed to improve its performance going forward.”
For fiscal 2008, Medical Devices sales grew 12 percent to $6.8 billion from $6 billion a year ago. Sales for the company’s Endomechanical products were well above those of a year ago, led by sharply higher sales of laparoscopic instruments, the company reported. Sales of soft-tissue repair products climbed significantly, driven by stronger sales of hernia mesh products.
For the fiscal year, Imaging Solutions sales climbed 13 percent to $1.2 billion compared to $1.1 billion last year. Favorable foreign exchange contributed five percentage points to the sales increase. Pharmaceutical Products sales were up 12 percent to $1 billion from $908 million last year.
For the fiscal year, Medical Supplies sales, at $920 million, were 4 percent above last year’s $887 million. Total revenue tied to medical devices was roughly $8.9 billion.
This figure includes revenues from Medical Devices, Medical Supplies and Imaging Solutions. While Imaging Solutions incorporates a significant pharmaceutical element, it also includes a substantial device component as well.
While Covidien’s research and development expenditures were $341 million for 2008, up substantially from $260 million in 2007, many new product offerings came through acquisitions.
During fiscal 2008, the company’s Medical Devices segment acquired Tissue Science Laboratories plc for $74 million.
TSL is a medical device company dedicated to the research, development and commercialization of tissue implant products for surgical and wound care therapies. The acquisition of TSL provided Covidien with a leading tissue repair technology and accelerates its entry into the biologic hernia-repair market. TSL’s Permacol product complements Covidien’s current soft tissue product offerings and allowed the company to expand its line of differentiated hernia repair products. In November 2007, the company’s Medical Devices segment acquired Littleton, Mass.-based Scandius Biomedical Inc., a developer of medical devices for sports-related surgeries, for $27 million. The acquisition of Scandius enabled the company to offer customers innovative soft tissue repair devices for common sports injuries. Covidien also acquired technology assets from Portland, Ore.-headquartered CardioDigital Inc., a developer of advanced signal processing techniques for patient monitoring. They will be incorporated into Covidien's Respiratory and Monitoring Solutions business unit.
The number of buyouts didn’t quite meet management’s expectations for the year, however.
“Overall, however, we were disappointed in the pace of activity and the number of acquisitions we made in 2008,” according to the most recent annual report. “While acquisitions are typically opportunistic, we intend to vigorously pursue those opportunities that will leverage our global footprint, enlarge our geographic presence and facilitate our participation in adjacent product categories to accelerate growth.”
For 2009, the company was quick to rectify its acquisition goals in a big way.
In June, Covidien completed a deal to purchase VNUS Medical Technologies Inc., a San Jose, Calif.-based firm that manufactures devices for the minimally invasive treatment of venous reflux disease, for approximately $440 million. VNUS had 2008 revenues of $101 million. Both companies’ boards unanimously approved the move.
Covidien paid $29 in cash for each share of VNUS stock—a 36 percent premium compared to the closing price of the stock on the day the deal was announced. “The acquisition of VNUS will allow Covidien to expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons and interventional radiologists,” said Joe Almeida, president of Covidien’s Medical Devices division. “The VNUS product line will be an important addition to our innovative portfolio of vascular intervention products.”
VNUS business became part of Covidien’s Vascular product line in the medical devices segment. Fiscal 2009 also brought a new home, of sorts, for the company. In December 2008, Covidien’s board approved moving the firm’s tax residency from Bermuda to Ireland. The move, finalized in June, was part of a reorganization creating a new Irish company dubbed Covidien plc. Covidien has a well-established presence in Ireland, where it has had operations for nearly 30 years. The company has five factories serving its Medical Devices and Imaging Solutions segments, as well as sales and customer service facilities. In total, Covidien has almost 2,000 employees in the country. The company’s U.S. base remains in Mansfield, Mass.
KEY EXECUTIVES:
Richard J. Meelia, Chairman, President and CEO
Charles J. Dockendorff, Exec. VP and CFO
Jose E. Almeida, Sr. VP and President, Medical Devices
Timothy R. Wright, Sr. VP and Presidnent, Pharmaceutical Products
and Imaging Solutions
NO. OF EMPLOYEES: 41,700
GLOBAL HEADQUARTERS: Dublin, Ireland
Fiscal 2008 marked an anniversary for Covidien—its first full year as an independent medical technology firm. Its days as Tyco Healthcare now a distant memory, the company has moved forward to establish a new brand, a better reputation and solid portfolio of products and services.
The new approach seems to be working based on sales growth for the year.
Covidien derives its revenue from four groups.
Its Medical Devices group includes the development, manufacture and sale of endomechanical instruments, soft-tissue repair products, energy devices, oximetry and monitoring products, airway and ventilation products, vascular devices, sharps safety products, clinical care products and other medical device products.
The Imaging Solutions unit includes the development, manufacture and marketing of radiopharmaceuticals and contrast products.
Pharmaceutical Products includes the development, manufacture and distribution of dosage pharmaceuticals and active pharmaceutical ingredients.
The Medical Supplies division includes the development, manufacture and sale of nursing care products, medical surgical products and original equipment manufacturer products (OEM).
Higher volume and new products drove sales growth for fiscal 2008 (ended Sept. 26), according to the company. Net sales for all business divisions was $9.9 billion, 11 percent more than the $8.9 billion in 2007, with favorable foreign exchange contributing four percentage points to the sales increase.
(Editor’s note: Net sales reported in 2008 for fiscal 2007 were adjusted. The figure does not include $1.275 billion in net sales from discontinued operations. In its 2007 annual report, Covidien reported $10.170 billion in net sales. The company divested its Retail Products segment and European Incontinence business.)
Approximately 55 percent of sales in 2008 were generated in the United States. Net income was $1.36 billion for 2008, compared with a net loss of $342 million in fiscal 2007, the company reported.
“We finished fiscal 2008 with our strongest quarterly operational results since becoming a public company in mid-2007,” said Chairman, President and CEO Richard J. Meelia. “Growth was broad-based, with three of our four segments reporting double-digit increases. Our performance was especially strong in markets outside the U.S., as we continued to benefit from the incremental investments made over the last few years to augment our sales force and expand geographically. Our Imaging segment, however, posted disappointing fourth-quarter results, but we have plans in place designed to improve its performance going forward.”
For fiscal 2008, Medical Devices sales grew 12 percent to $6.8 billion from $6 billion a year ago. Sales for the company’s Endomechanical products were well above those of a year ago, led by sharply higher sales of laparoscopic instruments, the company reported. Sales of soft-tissue repair products climbed significantly, driven by stronger sales of hernia mesh products.
For the fiscal year, Imaging Solutions sales climbed 13 percent to $1.2 billion compared to $1.1 billion last year. Favorable foreign exchange contributed five percentage points to the sales increase. Pharmaceutical Products sales were up 12 percent to $1 billion from $908 million last year.
For the fiscal year, Medical Supplies sales, at $920 million, were 4 percent above last year’s $887 million. Total revenue tied to medical devices was roughly $8.9 billion.
This figure includes revenues from Medical Devices, Medical Supplies and Imaging Solutions. While Imaging Solutions incorporates a significant pharmaceutical element, it also includes a substantial device component as well.
While Covidien’s research and development expenditures were $341 million for 2008, up substantially from $260 million in 2007, many new product offerings came through acquisitions.
During fiscal 2008, the company’s Medical Devices segment acquired Tissue Science Laboratories plc for $74 million.
TSL is a medical device company dedicated to the research, development and commercialization of tissue implant products for surgical and wound care therapies. The acquisition of TSL provided Covidien with a leading tissue repair technology and accelerates its entry into the biologic hernia-repair market. TSL’s Permacol product complements Covidien’s current soft tissue product offerings and allowed the company to expand its line of differentiated hernia repair products. In November 2007, the company’s Medical Devices segment acquired Littleton, Mass.-based Scandius Biomedical Inc., a developer of medical devices for sports-related surgeries, for $27 million. The acquisition of Scandius enabled the company to offer customers innovative soft tissue repair devices for common sports injuries. Covidien also acquired technology assets from Portland, Ore.-headquartered CardioDigital Inc., a developer of advanced signal processing techniques for patient monitoring. They will be incorporated into Covidien's Respiratory and Monitoring Solutions business unit.
The number of buyouts didn’t quite meet management’s expectations for the year, however.
“Overall, however, we were disappointed in the pace of activity and the number of acquisitions we made in 2008,” according to the most recent annual report. “While acquisitions are typically opportunistic, we intend to vigorously pursue those opportunities that will leverage our global footprint, enlarge our geographic presence and facilitate our participation in adjacent product categories to accelerate growth.”
For 2009, the company was quick to rectify its acquisition goals in a big way.
In June, Covidien completed a deal to purchase VNUS Medical Technologies Inc., a San Jose, Calif.-based firm that manufactures devices for the minimally invasive treatment of venous reflux disease, for approximately $440 million. VNUS had 2008 revenues of $101 million. Both companies’ boards unanimously approved the move.
Covidien paid $29 in cash for each share of VNUS stock—a 36 percent premium compared to the closing price of the stock on the day the deal was announced. “The acquisition of VNUS will allow Covidien to expand its presence in the vascular market and is in line with our strategy of becoming a leading partner with vascular surgeons and interventional radiologists,” said Joe Almeida, president of Covidien’s Medical Devices division. “The VNUS product line will be an important addition to our innovative portfolio of vascular intervention products.”
VNUS business became part of Covidien’s Vascular product line in the medical devices segment. Fiscal 2009 also brought a new home, of sorts, for the company. In December 2008, Covidien’s board approved moving the firm’s tax residency from Bermuda to Ireland. The move, finalized in June, was part of a reorganization creating a new Irish company dubbed Covidien plc. Covidien has a well-established presence in Ireland, where it has had operations for nearly 30 years. The company has five factories serving its Medical Devices and Imaging Solutions segments, as well as sales and customer service facilities. In total, Covidien has almost 2,000 employees in the country. The company’s U.S. base remains in Mansfield, Mass.