Third Quarter Sales
The Company reported net sales of $1.383 billion in the third quarter of 2011, an increase of 12 percent compared with the $1.240 billion in the third quarter of 2010. Revenue for the third quarter increased 6 percent after adjusting for the impact of foreign currency. Foreign currency translation comparisons increased third quarter sales by approximately $73 million.
Commenting on the Company's results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "We made good progress during the third quarter implementing numerous new growth drivers. We are supporting these new growth drivers with robust comparative effectiveness data. We simultaneously are reducing costs and increasing productivity. St. Jude Medical's program for delivering superior growth over the long-term is on track."
Cardiac Rhythm Management (CRM)
Total CRM sales, which include ICD and pacemaker products, were $751 million for the third quarter of 2011, a 2 percent increase compared with the third quarter of 2010.
Of that total, ICD product sales were $445 million in the third quarter, a 1 percent increase compared with the third quarter of 2010.
Third quarter pacemaker sales were $306 million, up 2 percent from the comparable quarter in 2010.
Atrial Fibrillation (AF)
AF product sales for the third quarter of 2011 totaled $202 million, a 20 percent increase over the third quarter of 2010.
Neuromodulation
Neuromodulation product sales were $102 million in the third quarter of 2011, up 10 percent from the comparable quarter of 2010.
Cardiovascular
Total cardiovascular sales, which primarily include vascular and structural heart products, were $328 million for the third quarter of 2011, a 37 percent increase over the third quarter of 2010 on a reported basis. This division now includes sales from AGA Medical, Inc., which St. Jude Medical acquired in November 2010.
Sales of vascular products in the third quarter of 2011 were $177 million, up 10 percent from the comparable quarter in 2010.
Structural heart product sales for the third quarter of 2011 were $151 million, a 91 percent increase over the third quarter of 2010, with the addition of AGA Medical products to the business.
Third Quarter Earnings Results
In the third quarter, the Company recorded after-tax charges of $21 million, or $0.06 per diluted share, related primarily to ongoing restructuring actions that began in the second quarter to realign certain activities in our CRM business as well as employee termination and other costs primarily associated with continuing efforts to improve our international sales and sales support organization. Also during the third quarter, the Company recorded after-tax charges of $9 million, or $0.03 per share, related to increased collection risk for accounts receivable related to one customer in Europe.
Including these items, reported net earnings for the third quarter of 2011 were $226 million, or $0.69 per share. This compares to reported net earnings for the third quarter of 2010 of $208 million or $0.63 per share. Excluding these items, adjusted net earnings for the third quarter of 2011 were $256 million, or $0.78 per diluted share. A reconciliation of the Company's non-GAAP adjusted net earnings per share to the Company's GAAP net earnings per share is provided in the schedule at the end of the press release.
Fourth Quarter and Full-Year 2011 Sales and Earnings Guidance
During a conference call today, St. Jude Medical will provide its range for revenue expectations for the fourth quarter and full-year by product category and update its expectations related to full-year earnings per share.
The Company expects its consolidated adjusted net earnings for the fourth quarter of 2011 to be in the range of $0.83 to $0.85 per diluted share and for full-year 2011 consolidated adjusted net earnings to now be in the range of $3.26 to $3.28 per diluted share. A reconciliation of the Company's quarterly and annual guidance is provided in the schedule below.
Non-GAAP Financial Measures
The Company provides adjusted net earnings and adjusted net earnings per share because St. Jude Medical management believes that in order to properly understand the Company's short-term and long-term financial trends, investors may wish to consider the impact of certain adjustments (such as in-process research and development charges, acquisition-related charges, impairment charges, restructuring charges, litigation charges or litigation reserve adjustments and income tax adjustments). These adjustments result from facts and circumstances (such as business development activities, acquisitions, restructuring activities, asset impairment events or developments, settlements and other developments relating to litigation and resolution of audits by tax authorities) that vary in frequency and impact on the Company's results of operations. St. Jude Medical management uses adjusted net earnings and adjusted net earnings per share to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consolidated basis.
Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.
Conference Call/Webcast
St. Jude Medical's third quarter 2011 earnings call can be heard live today beginning at 7 a.m. CDT (also archived for 90 days) on the Investor Relations section of our website sjm.com.
About St. Jude Medical
St. Jude Medical develops medical technology and services that focus on putting more control into the hands of those who treat cardiac, neurological and chronic pain patients worldwide. The company is dedicated to advancing the practice of medicine by reducing risk wherever possible and contributing to successful outcomes for every patient. St. Jude Medical is headquartered in St. Paul, Minn. and has four major focus areas that include: cardiac rhythm management, atrial fibrillation, cardiovascular and neuromodulation. For more information, please visit sjm.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the Company are based upon management's current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company's control and the risk factors and other cautionary statements described in the Company's filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 2011 and Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2011. The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
SOURCE: St. Jude Medical, Inc.
St. Jude Medical, Inc.
Rachel Ellingson
Investor and Media Relations
651-756-2295
rellingson02@sjm.com
or
J.C. Weigelt
Investor Relations
651-756-4347
jweigelt@sjm.com
