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St. Jude Medical Reports Third Quarter 2013 Results
ST. PAUL, Minn.--(BUSINESS WIRE)--St. Jude Medical, Inc. (NYSE:STJ) today reported sales and net earnings for the third quarter ended September 28, 2013.
Third quarter highlights:
Net sales increased by approximately 3 percent on a currency neutral basis from the third quarter of 2012
Completed the acquisition of Endosense, which brings an innovative cardiac ablation catheter technology to St. Jude Medical
Adjusted net earnings per share increased by approximately 8 percent compared to the third quarter of 2012, and 12 percent on a currency neutral basis
Third Quarter Sales
The Company reported net sales of $1.338 billion in the third quarter of 2013, a one percent increase over net sales of $1.326 billion in the third quarter of 2012. Unfavorable foreign currency translation comparisons decreased third quarter sales by approximately $26 million. On a currency neutral basis, net sales increased by approximately 3 percent from the third quarter of 2012.
Commenting on the Company’s financial results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, “Our third quarter results demonstrate that we are successfully implementing our program to accelerate sales growth on a sustainable basis while strengthening our program with selective and disciplined acquisitions.”
Cardiac Rhythm Management (CRM)
Total CRM sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $682 million for the third quarter of 2013, a 1 percent decrease compared to the third quarter of 2012. After adjusting for the impact of foreign currency, total CRM sales were flat.
Of that total, ICD product sales were $418 million in the third quarter, a 1 percent increase compared to the third quarter of 2012. ICD revenue increased 2 percent after adjusting for the impact of foreign currency.
Second quarter pacemaker sales were $264 million, a 5 percent decrease compared to the third quarter of 2012. On a currency neutral basis, pacemaker revenue declined 3 percent.
Atrial Fibrillation (AF)
AF product sales for the third quarter totaled $235 million, a 7 percent increase over the third quarter of 2012. On a constant currency basis, AF product sales increased 10 percent in the third quarter of 2013.
Cardiovascular
Total cardiovascular sales, which primarily include vascular and structural heart products, were $317 million for the third quarter of 2013, a 1 percent increase compared to the third quarter of 2012. On a constant currency basis, cardiovascular sales increased 4 percent compared to the third quarter of 2012.
Total structural heart product sales for the third quarter of 2013 were $149 million, up approximately 3 percent compared with the third quarter of 2012. On a constant currency basis, structural heart sales increased approximately 5 percent.
Sales of vascular products in the third quarter of 2013 were $168 million, a 1% decrease compared to the third quarter of 2012. On a constant currency basis, vascular product sales were up approximately 4 percent.
Neuromodulation
St. Jude Medical sales of neuromodulation products were $104 million in the third quarter of 2013, up approximately 3 percent from the prior year on a reported and currency neutral basis.
Third Quarter Earnings Results
In the third quarter, the Company recognized after-tax charges of $15 million, or $0.05 per share, primarily relating to acquisition-related costs and continued actions associated with our previously announced restructuring activities. The Company also recognized an income tax benefit of $15 million, or $0.05 per share, related to the settlement of domestic tax audits. Including these items, reported net earnings for the third quarter of 2013 were $262 million or $0.90 per share compared to reported net earnings for the third quarter of 2012 of $176 million or $0.56 per share. This represents a 61 percent increase in reported net earnings per share for the third quarter of 2013 compared to reported net earnings per share for the third quarter of 2012.
Adjusted net earnings for the third quarter of 2013 were $262 million, or $0.90 per share, an 8 percent increase compared to adjusted net earnings for the third quarter of 2012 of $0.83 per 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 schedules at the end of the press release.
Fourth Quarter and Full-Year 2013 Sales and Earnings Guidance
For the fourth quarter, St. Jude Medical expects revenue to be in the range of $1.315 billion to $1.395 billion. For the full year 2013, we expect total revenue to be in the range of $5.394 billion to $5.474 billion. During a conference call today, St. Jude Medical will provide its range for revenue expectations for the fourth quarter and full-year 2013 by product category.
The Company expects its consolidated adjusted net earnings for the fourth quarter of 2013 to be in the range of $0.95 to $0.97 per share and for full-year 2013 consolidated adjusted net earnings to now be in the range of $3.72 to $3.74, increasing the lower end of the range by $0.02 and higher end by $0.01. 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 acquisition-related costs, 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 acquisitions, 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.
The Company provides constant currency sales growth 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 foreign currency translation on net sales. St. Jude Medical management uses constant currency sales growth to forecast and evaluate the operational performance of the Company as well as to compare sales of current periods to prior periods.
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 2013 earnings call can be heard live via webcast today beginning at 7 a.m. CDT (also archived for 90 days) on the Investor Relations section of our website sjm.com.
St. Jude Medical will also be tweeting live during the call on our Investor Relations Twitter account, @StJudeMedicalIR.
About St. Jude Medical
St. Jude Medical is a global medical device manufacturer dedicated to transforming the treatment of some of the world’s most expensive, epidemic diseases. The company does this by developing cost-effective medical technologies that save and improve lives of patients around the world. Headquartered in St. Paul Minn., St. Jude Medical has four major clinical 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 December 29, 2012 and Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2013. The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.
Contacts
St. Jude Medical, Inc.
Media Contact:
Amy Jo Meyer, 651-756-3029
ameyer@sjm.com
or
Investor Contact:
J.C. Weigelt, 651-756-4347
jweigelt@sjm.com
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