Synthes-Stratec continues accelerated sales growth for the third quarter 2003
Oberdorf/Switzerland, October 14, 2003
Synthes-Stratec's consolidated sales were $316.3 million for the third quarter and $908.2 million for the nine-month year-to-date period. Third quarter sales growth versus prior year is 21.3% (18.6% in local currencies from continuing operations). Year-to-date sales growth versus prior year is 20.6% (18.7% in local currencies from continuing operations).
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| 1 | Local currency - 2003 results translated at 2002 foreign exchange rates excluding the divested Prosthetics and Medivision businesses. |
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, sales of the Trochanteric Fixation Nail (TFN) continues to be strong. The TFN with its unique helical blade design continues to capture market share in its first full year of release.
The Spine division experienced significant growth for the fifth consecutive quarter. Several new product lines, including the dual opening USS, were the primary growth drivers for the Spine Business. The Spine division continues to grow at market rates.
Cranio-maxillofacial sales performance for the first nine months 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.
Change of reporting currency
As of January 1, 2003, the Company elected to report its financial information in U.S. dollars.
Acquisitions/Divestitures
Spine Solutions
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 company is pleased to confirm that the Pro-Disc Cervical IDE study began in August 2003.
The company expects, data permitting, a final FDA approval of the ProDisc® lumbar 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.
Mathys Medical
On August 13, 2003, Mathys Medizinaltechnik AG (Mathys) and Synthes-Stratec Inc. (Synthes-Stratec) announced that they had an agreement to combine the two companies to create a global osteosynthesis medical device company.
Mathys, a family-owned company, has worked closely with the AO/ASIF Foundation (Arbeits-gemeinschaft für Osteosynthese/Association for the study of internal fixation) since 1958, and is comprised of osteosynthesis and prosthetics businesses, with over 1800 employees. In 2002 the osteosynthesis business contributed CHF 383 million in revenues to Mathys. The company designs, manufactures, and markets instruments and implants for trauma, spine, craniomaxillofacial and orthopedic surgeons. Mathys' prosthetics business will not be part of the combination. Before closing, the Mathys family will transfer all prosthetic operations into an independent company under the name Mathys Ltd. Bettlach. and the Dr. h.c. Robert Mathys Foundation will remain an independent research and testing institution located in Bettlach.
Closing of the transaction is subject to a number of conditions, in particular, regulatory approvals. Regulatory approval has already been obtained in the United States of America, but is still outstanding in Germany, Slovakia and Russia. Closing is expected to occur in the fourth quarter of 2003 or in the first quarter of 2004, depending on the status of regulatory approvals.
Medivision
An agreement to sell the Medivision division (computer-assisted surgery) to Praxim was signed in June 2003 and closed in September 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