Synthes-Stratec’s first half-year 2003: Sales growth of 20.2% driven by new products
Oberdorf/Switzerland, August 13, 2003
Synthes-Stratec consolidated sales for the first half of 2003 grew by 20.2% to $591.9 million (18.7% in local currencies continuing operations). Consolidated net profit (before non-recurring charges) grew to $144 million or 22.7% (21.3% in local currencies, continuing operations). Non-recurring charges include a $215 million write-off of in-process R&D associated with the acquisition of Spine Solutions, Inc. as well as a $4.6 million write-off associated with the divestiture of the Medivision business resulting in a consolidated net loss of $(75.6) million.
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 Key Figures (unaudited) |
| 1 | Local currency - 2003 results translated at 2002 Foreign exchange rates. |
| 2 | Excluding divested Prosthetics and Medivision businesses. Prosthetics was divested in 2001, and an agreement of sale was signed in June of this year for the Medivision business. |
| 3 | Includes a one-time $215 million write-off of in-process R&D associated with the acquisition of Spine Solutions, Inc. |
| 4 | Excludes $215 million write-off of in-process R&D associated with the acquisition of Spine Solutions, Inc. |
Business performance
In general trauma, the Company continued to strengthen its number one position. The Locking Compression Plate (LCP) plate and screw system roll-out continues to be very strong. The LCP system allows either conventional compression or an angular stable fixation of the plate to the fractured bone and is especially suited to secure fragments in osteoporotic bone. Norian SRS continues to grow at a significant pace. SRS’s unique comprehensive strength characteristics make it the preferred choice for surgeons as a bone void filler. Additionally, the roll-out of the Trochanteric Fixation Nail (TFN) continues to be strong.
The Spine division experienced an acceleration of growth for the fourth consecutive quarter. Several new product lines, including the dual opening USS, were significant growth drivers for the Spine Business.
Cranio-maxillofacial sales performance for the first half of 2003 continues to be above market growth rates. The maxillofacial division’s growth was enhanced by the recently introduced low profile Neuro Fixation System as well as the latest development in bone cement - Norian CRS Fast Set Putty.
The Company continues to add dedicated sales consultants in all markets to provide the highest level of service and technical expertise to hospitals, surgery centers, and operating room personnel.
Change of reporting currency
As of January 1, 2003, the Company elected to report its financial information in U.S. dollars.
Acquisitions/Divestitures
The acquisition of Spine Solutions, Inc., (SSI), closed on April 4, 2003. SSI is a developer and marketer of the revolutionary and unique total artificial disc system designed to significantly reduce spinal disorders, back pain, and restore mobility to the lumbar and cervical spine after surgery.
Spine Solutions, Inc., received FDA notification on July 23, 2003 that it may begin the ProDisc® Cervical IDE disc replacement clinical trial study.
The ProDisc® system (lumbar and cervical artificial discs and instrumentation), which is made of proven materials with more than a 20 year history of use in hip and knee replacement, was first developed by Dr. Thierry Marnay in the late 1980s. It was subsequently refined in close cooperation with Aesculap AG. To date, SSI has obtained CE Mark approval in Europe. Through various distributors, Spine Solutions is currently selling the ProDisc® system throughout 26 countries in Europe, Asia Pacific, Latin America and South Africa. The ProDisc® system (lumbar), which has been evaluated in a retrospective clinical study of 64 patients dating back more than 10 years with excellent follow-up results, has now been implanted in more than 3,800 patients worldwide.
Spine Solutions is one of only two companies which is currently conducting an FDA approved multi-center pivotal IDE study for a lumbar total disc replacement. The company expects, data permitting, a final FDA approval within a reasonable timeframe based on the large number of patients already treated with the ProDisc® system.
The company believes the global market potential for total disc replacement (spine arthroplasty) will grow to $3 billion by 2008.
An agreement to sell the Medivision division (computer-assisted surgery) to Praxim was signed in June 2003.
Synthes-Stratec: A leading orthopedic trauma company
Synthes-Stratec is a leading provider of instruments, implants and power tools for the orthopedic trauma market. The company competes in North and Latin America and parts of Europe. The company develops, manufactures, and distributes products for the surgical treatment of bone fractures, cranio-maxillofacial trauma or deformities, and a full range of products and systems for spine surgery.
For further information please contact
Peter Fehlmann, Investor Relations, Synthes-Stratec, Inc.
Phone: +41 61 965 63 39, Fax: +41 61 965 66 06
e-mail: ir.info@synthes.com