Synthes, Inc. Today Announces Full Year 2005 Financial Results: 2005 Sales up 16.8%, net profit up 34.7% versus the prior year.
Solothurn/Switzerland, Februar 24, 2006Synthes 2005 consolidated sales for the fourth quarter of $537.3 million and full year sales of $2,078.2 million represent increases of 14.5% and 16.8%, respectively, over the prior year (16.7% and 16.2%, respectively, in local currency). Synthes consolidated profits grew by 34.7% for the full year 2005 versus prior year results (34.6% in local currency).
Pro forma for the acquisition of Mathys’ Osteosynthesis business as though the acquisition had occurred on January 1, 2004, consolidated sales represent an increase over the prior year of 15.7% for the full year and 14.5% for the fourth quarter (15.1% and 16.7%, respectively, in local currency). Pro forma consolidated profits grew by 20.3% for the full year 2005 versus prior year results (20.3% in local currency).
Key Figures
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Return on total assets of 19.4% increased by 30.7% in 2005.
Continued growth in all segments and regions primarily due to successful product development and selling initiatives
Sales growth for all three divisions (Trauma, CMF & Spine) in the fourth quarter outpaced the market in local currency. 2005 Trauma growth was primarily due to expansion of Locking Compression Plate (LCP) products, Trochanteric Fixation Nail (TFN) and the newly introduced Expert Intramedullary Nail system. CMF 2005 sales were strong due to the introduction of the Low Profile Neuro System in global markets. The Spine division showed continued growth over the prior year primarily due to increased sales in the Anterior Thoracolumbar and Cervical product portfolios. All regions experienced double-digit growth with Asia Pacific representing the strongest regional growth at 17.4% (pro forma local currency).
Operational results
2005 gross profit margins (pro forma) improved by 140 basis points versus prior year primarily due to integration efforts and manufacturing continuous improvement programs. 2005 increases in operating expenses were primarily the result of investments in selling related activities, ERP system implementations, and legal expenses. The increased selling and promotional expenses reflect the continued expansion and training of a dedicated global sales force as well as education activities focused on surgeons and operating room personnel.
Capital investment
Synthes continues to invest heavily into its future growth as evidenced by 2005 capital expenditures of $184.0 million, up 30.2% compared to the prior year. This increase is due to continued investments in sales support equipment and manufacturing capacity.
Job creation
On December 31, 2005, Synthes, Inc. employed 7,627 people worldwide, an increase of 916 employees compared to the prior year. The majority of the staffing increases were in the areas of manufacturing and sales.
Dividend Approval
The Board of Directors of Synthes, Inc. has approved a dividend of CHF 0.7000 per share for the year 2005 payable on April 24, 2006. The stock will trade ex-dividend on March 21, 2006. Stock positions held on the record date, also March 21, 2006, are entitled to dividend payments.
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