WARSAW, Ind., May 3 /PRNewswire-FirstCall/ -- Symmetry Medical Inc. , an independent provider of products to the global orthopedic device industry, announced today first quarter 2006 financial results for the period ended April 1, 2006.
The Company reported first quarter 2006 revenue of $69.6 million, an increase of 9.2% reported and 11.6% constant currency, over the first quarter of 2005.
Gross profit for the first quarter of 2006 was $20.3 million, a 4.9% increase over gross profit of $19.4 million for the first quarter of 2006. Gross margin for the first quarter 2006 was 29.2%, compared to a gross margin of 30.4% for the first quarter 2005. The lower gross margin rate was a result of increased material and fixed costs across the Company's global facilities.
Operating income for the first quarter of 2006 was $13.3 million, a 6.9% increase over operating income of $12.4 million for the first quarter of 2005. Operating margin for the first quarter 2006 was 19.1%, compared to an operating margin of 19.5% for the first quarter 2005.
Income before income taxes for the first quarter of 2006 was $12.9 million, a 10.9% increase over income before income taxes of $11.6 million for the first quarter of 2005.
Net income for the first quarter 2006 was $8.4 million, or $0.24 per diluted share, compared to a net income of $7.7 million, or $0.22 per diluted share, for the first quarter 2005. Earnings per diluted share were negatively impacted by $0.01 per share by the expiration of the Section 41 research tax credit on December 31, 2005, as the Company was not able to include this credit in the first quarter. Legislation to reinstate this tax credit has not been enacted.
The weighted average number of diluted shares outstanding during the first quarter of 2006 was 35,137,000.
Brian Moore, President and Chief Executive Officer, stated, "Reflecting current orthopedic industry order patterns, we expect to achieve our stated full-year revenue and EPS guidance. As the world's largest provider to the orthopedic sector, we remain positive about the long-term fundamentals across the sector. We continue to pursue multiple avenues for incremental revenue growth both organically as well as through acquisitions."
On May 3, 2006, Symmetry Medical opened its previously announced 30,000 square foot Design & Development Center (DDC) in Warsaw, IN.
Financial Guidance
The following estimates regarding 2006 earnings guidance are based on current market conditions and foreign currency comparisons and are forward-looking. Actual results may differ materially and we refer you to the statement on forward-looking statements that appears at the end of the release. These statements do not include the potential impact of new business or license agreements the Company may enter in future periods. The factors discussed above are not intended to be an exhaustive list of the factors that may affect our future performance.
For the full year 2006, the Company reconfirmed its expected revenue to be in the range of $295 million to $303 million. The Company reconfirmed its expected full year 2006 earnings per diluted share in the range of $1.08 to $1.11.
Conference Call
Symmetry Medical will host a conference call at 8:00 a.m. EDT on Thursday, May 4, 2006. A live Web cast of the conference call will be available online from the investor relations page of the Company's corporate Web site at http://www.symmetrymedical.com. The dial-in numbers are (866) 700-0133 for domestic callers and (617) 213-8831 for international callers. The reservation number for both is 15822604. After the live Web cast, the call will remain available on Symmetry's Web site through June 1, 2006. In addition, a telephonic replay of the call will be available until May 18, 2006. The replay dial-in numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use reservation code 92836985.
About Symmetry Medical Inc.
Symmetry Medical Inc. is an independent provider of implants and related instruments and cases to the orthopedic device industry. The Company also designs, develops and produces these products for companies in other segments of the medical device market, including dental, osteobiologic and endoscopy sectors and provides limited specialized products and services to non-healthcare markets, such as the aerospace market.
Forward Looking Statements
Statements in this press release regarding Symmetry Medical Inc.'s business, which are not historical facts, may be "forward-looking statements" that involve risks and uncertainties, within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictive in nature and are frequently identified by the use of terms such as "may," "will," "should," "expect," "believe," "estimate," "intend" and similar words indicating possible future expectations, events or actions. Such predictive statements are not guarantees of future performance, and actual results could differ materially from our current expectations. Certain factors that could cause actual results to differ include: the loss of one or more customers; the development of new products or product innovations by our competitors; product liability; changes in management; changes in conditions affecting the economy, orthopedic device manufacturers or the medical device industry generally; and changes in government regulation of medical devices and third-party reimbursement practices. We refer you to the "Risk Factors" and "Forward Looking Statements" sections in the Company's most recent Annual Report on Form 10-k Filed with the Securities and Exchange Commission, as well as the Company's other filings with the Securities and Exchange Commission, which are available on the SEC's website at www.sec.gov.
Selected Financial Information: Symmetry Medical Inc. Condensed Consolidated Balance Sheets (In Thousands, Except Per Share Data) April 1, December 31, 2006 2005 (unaudited) Assets: Current Assets: Cash and cash equivalents $10,916 $12,471 Accounts receivables, net 51,020 44,908 Inventories 39,625 38,783 Refundable income taxes 147 185 Deferred income taxes 2,003 1,867 Other current assets 3,998 4,032 Total current assets 107,709 102,246 Property and equipment, net 94,895 93,106 Derivatives valuation asset 585 584 Goodwill 124,877 124,518 Intangible assets, net of accumulated amortization 16,217 16,327 Other assets 815 864 Total Assets $345,098 $337,645 Liabilities and Shareholders' Equity: Current Liabilities: Accounts payable $16,533 $18,983 Accrued wages and benefits 9,213 10,997 Other accrued expenses 2,768 2,696 Income tax payable 2,811 1,241 Revolving line of credit 1,601 - Current portion of capital lease obligations 3,194 3,239 Current portion of long-term debt 1,750 1,313 Total current liabilities 37,870 38,469 Deferred income taxes 11,042 11,139 Capital lease obligations, less current portion 7,539 8,532 Long-term debt, less current portion 24,500 26,250 Total Liabilities 80,951 84,390 Shareholders' Equity: Common Stock, $.0001 par value; 72,410 shares authorized; shares issued (April 1, 2006 -- 34,880; December 31, 2005 -- 34,704) 3 3 Additional paid-in capital 270,546 268,973 Retained earnings (deficit) (9,001) (17,378) Accumulated other comprehensive income 2,599 1,657 Total Shareholders' Equity 264,147 253,255 Total Liabilities and Shareholders' Equity $345,098 $337,645 Symmetry Medical Inc. Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Data) Three Months Ended April 1, April 2, 2006 2005 (unaudited) (unaudited) Revenue $69,613 $63,760 Cost of Revenue 49,272 44,373 Gross Profit 20,341 19,387 Selling, general, and administrative expenses 7,040 6,948 Operating Income 13,301 12,439 Other (income) expense: Interest expense 661 939 Derivatives valuation (gain)/loss (1) (296) Other (219) 202 Income before income taxes 12,860 11,594 Income tax expense 4,483 3,930 Net income applicable to common shareholders $8,377 $7,664 Net income (loss) applicable to common shareholders per share: Basic $0.24 $0.23 Diluted $0.24 $0.22 Weighted average common shares and equivalent shares outstanding: Basic 34,717 33,175 Diluted 35,137 34,116 Contact: Investors/Media: Symmetry Medical Inc. The Ruth Group Andrew Miclot Stephanie Carrington/Jason Rando Senior Vice President 646-536-7017/7025 Marketing, Sales & Business Development scarrington@theruthgroup.com Investor Relations Officer jrando@theruthgroup.com 574-269-7390 ext. 1002
Symmetry Medical Inc.CONTACT: Investors, Media, Stephanie Carrington, +1-646-536-7017,scarrington@theruthgroup.com, or Jason Rando, +1-646-536-7025,jrando@theruthgroup.com, both of The Ruth Group; or Andrew Miclot, SeniorVice President, Marketing, Sales & Business Development, Investor RelationsOfficer, Symmetry Medical Inc., +1-574-269-7390, ext. 1002
Web site: http://www.symmetrymedical.com/
