Synthes, Inc. Announces First Half-Year 2006 Financial Results and FDA PMA approval for ProDisc® -L
H1 2006 Local Currency Sales and Net Earnings up 15.1% and 10.1%, respectively, versus the prior year
Solothurn/Switzerland, August 16, 2006Synthes 2006 consolidated sales for the second quarter of $591.2 million and half-year sales of $1,167.7 million represent increases of 12.9% and 13.8%, respectively, over the prior year (12.9% and 15.1%, respectively, in local currency).
Synthes consolidated net earnings grew by 8.3% for the half-year 2006 versus prior year results (10.1% in local currency).
Key Figures (unaudited)
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Continued growth in all product lines and regions primarily due to successful new product introductions and selling initiatives
All three product lines (Trauma, Spine & CMF) experienced double-digit sales growth for the first half of 2006. Trauma growth was primarily due to the continued expansion of Locking Compression Plate (LCP) products, Trochanteric Fixation Nail (TFN) and the newly introduced Expert Intramedullary Nail system. Spine’s growth was realized over a broad range of products including the Interbody Fusion, Anterior Thoracolumbar and Cervical product portfolios. CMF’s continued strong sales growth was due to solid core fixation growth, especially mandible and neuro, in all regions.
Operational results
2006 first half gross profit margins of 82.0% (as a percentage of sales) represents an improvement versus second half 2005 gross profit of 81.2%; however, it is lower than 1H 2005 of 83.9%. Lower gross profit margins versus first half 2005 are primarily due to increased inventory obsolescence as a result of new product introductions, increased subcontracting costs to support new product launches, and raw material price increases. Increased selling and promotional expenses as a percent of sales primarily reflect a significant expansion and training of a dedicated global sales force, increased depreciation expense on selling investments as well as an increase in education activities focused on surgeons and operating room personnel. Total operating expenses (as a percentage of sales) were held relatively flat while selling and promotional expenses increased.
Other/taxes
Foreign exchange losses of ($3.1) million for the first half 2006 versus first half 2005 foreign exchange gains of $6.0 million were primarily driven by the strengthening of the Swiss Franc. Additionally, foreign exchange losses were partially offset by a lower tax rate in 2006.
Capital investment
Synthes continues to invest heavily in its future growth as evidenced by first half 2006 capital expenditures of $88.0 million. First half 2006 capital expenditures are mostly comprised of continued investments in sales support equipment which grew by 6.1% versus the prior year.
FDA Approves ProDisc®-L PMA
The U.S. Food and Drug Administration (FDA) has approved the ProDisc®-L Total Disc Replace¬ment for commercial distribution in the United States.
ProDisc®-L is intended to treat lower back pain in patients with degenerative disc disease at a single level from L3 – S1.
Synthes: A leading medical device company
Synthes is a leading global medical device company. We develop, produce and market instruments, implants and biomaterials for the surgical fixation, correction and regeneration of the human skeleton and its soft tissues.
For further information please contact
Peter Fehlmann, Investor Relations, Synthes, Inc.
Phone: +41 32 720 48 10 , Fax: +41 32 720 48 11
e-mail: ir.info@synthes.com
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| File | Fileinfo | Date | Filesize | |||
 | | Unaudited Interim Condensed Consolidated Financial Statements | | 16.08.06 | | 76 KB |