Second Quarter Results
The Company reported net sales of $1.136 billion in the second quarter of 2008, an increase of 20% compared to the $947 million in the second quarter of 2007. Favorable foreign currency translation comparisons increased second quarter sales by approximately $64 million, within the range of the Company’s previous guidance related to the impact of foreign currency.
Reported net earnings for the second quarter of 2008 were $201 million, or $0.58 per diluted share. This compares to reported net earnings for the second quarter of 2007 of $135 million, or $0.39 per diluted share. In accordance with GAAP, reported net earnings for the second quarter of 2008 do not include any benefit from the federal research and development tax credit, which has yet to be extended for 2008. Including the benefit of this adjustment, which the Company continues to expect will be approved later this year, adjusted net earnings for the second quarter of 2008 were $209 million, or $0.60 per diluted share. This compares to $0.45 per diluted share of adjusted net earnings in the second quarter of 2007. A further reconciliation of the Company’s non-GAAP adjusted diluted net earnings per share to the Company’s GAAP diluted earnings per share is provided in the schedule below.
Commenting on the second quarter results and the Company’s growth program, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, “These are outstanding results across the board, with revenue exceeding our guidance in every business category, and especially strong ICD sales both in the U.S. and internationally. These results confirm the strength of the total St. Jude Medical program, driven by our people, products and multiple growth platforms. We therefore are increasing both our revenue and earnings guidance for 2008.”
Cardiac Rhythm Management (CRM)
Total Cardiac Rhythm Management sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $712 million for the second quarter of 2008, a 20% increase compared to the second quarter of 2007.
Of that total, ICD product sales were $406 million in the second quarter, a 24% increase compared to the second quarter of 2007.
Second quarter pacemaker sales were $306 million, an increase of 14% from the comparable quarter of 2007.
Atrial Fibrillation (AF)
AF product sales for the second quarter totaled $135 million, a 35% increase over the second quarter of 2007.
Neuromodulation
St. Jude Medical sales of neuromodulation products were $61 million in the second quarter of 2008, up 17% from the comparable quarter of 2007.
Cardiovascular
Total cardiovascular sales, which include primarily vascular closure and heart valve products, were $228 million for the second quarter of 2008, a 14% increase over the second quarter of 2007.
Sales of vascular closure products in the second quarter of 2008 were $97 million, a 9% increase over the second quarter of 2007.
Total heart valve product sales for the second quarter of 2008 were $87 million, a 14% increase over the second quarter of 2007.
Third Quarter and Full Year 2008 Sales and Earnings Guidance
During a conference call today, St. Jude Medical will provide its range for revenue expectations for the third quarter and raise its guidance for full-year revenue and earnings per share as a result of the strength of the business.
The Company expects its consolidated earnings for the third quarter of 2008 to be in the range of $0.56 to $0.58 per diluted share and is raising its guidance for the full-year 2008 to the range of $2.28 to $2.33. In addition to reflecting the strength in the business, this increased guidance assumes that the federal research and development tax credit is approved and the benefit is recognized during 2008. A further 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, 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, 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 second quarter earnings call can be heard live today beginning at 7:00 a.m. CT (also archived for 90 days) on the following website:
http://phx.corporate-ir.net/ phoenix.zhtml?p=irol-eventDetails&c=73836&eventID=1882479
(Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
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. Headquartered in St. Paul, Minn., St. Jude Medical employs more than 12,500 people worldwide and has five major focus areas that include: cardiac rhythm management, atrial fibrillation, cardiac surgery, cardiology and neuromodulation. For more information, please visit www.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 filed on February 27, 2008. The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
Contact:
St. Jude Medical Investor Relations: Angela Craig, 651-481-7789 or Media Relations: Kathleen Janasz, 651-415-7042
Source: St. Jude Medical
