Greatbatch Inc. (GB, Financial) filed Quarterly Report for the period ended 2012-03-30.
Greatbatch Inc has a market cap of $578.9 million; its shares were traded at around $22.61 with a P/E ratio of 15.4 and P/S ratio of 1. Greatbatch Inc had an annual average earning growth of 11.7% over the past 10 years.
GAAP operating income for the first quarter of 2012 was $11.2 million, compared to $18.0 million for the 2011 first quarter. This decrease was primarily due to production inefficiencies incurred at our European Orthopaedic facilities, increased investment in the research and development of complete medical devices, as well as cost incurred in connection with our cost savings and consolidation initiatives. Adjusted operating income was $15.5 million, or 9.8% of sales in the first quarter of 2012, compared to $18.7 million, or 12.6% of sales, for the comparable 2011 period. Similar to GAAP operating income, this decrease reflects the production inefficiencies at our European Orthopaedic facilities and increased investment in the research and development of complete medical devices. The decline in both GAAP and adjusted operating income during the quarter were partially offset by the operating income from the acquired Micro Power business, as well as lower performance-based compensation.
Greatbatch Medical CRM and Neuromodulation sales of $75.1 million for the first quarter 2012 decreased 4% compared to the prior year period. During the quarter, CRM revenue continued to be impacted by the overall slowdown in the underlying market. Additionally, first quarter 2011 CRM sales included the benefit of customer inventory builds to support their product launches, which did not reoccur in the 2012 period.
First quarter 2012 sales for our Vascular Access product line increased 11% to $11.6 million, compared to prior year sales of $10.5 million. This increase was primarily due to increased introducer sales as a result of a combination of market growth and new business, including the sales of complete medical devices that were developed under the Greatbatch name.
Net RD&E for the 2012 first quarter increased $3.5 million to $13.9 million compared to 2011. First quarter 2012 results include lower cost reimbursements from customers of $1.0 million, primarily due to the timing of the achievement of contractual milestones, as well as $0.8 million of incremental expense from our acquisitions. Additionally, the 2012 first quarter includes $7.0 million of RD&E related to the development of medical devices, compared to $4.8 million in 2011, and included $1.0 million and $0.6 million, respectively, of DVT costs in connection with the QiG Groups development of a neuromodulation platform. Over the long-term, we expect net RD&E to remain around 8.5% to 9.0% of sales.
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Greatbatch Inc has a market cap of $578.9 million; its shares were traded at around $22.61 with a P/E ratio of 15.4 and P/S ratio of 1. Greatbatch Inc had an annual average earning growth of 11.7% over the past 10 years.
Highlight of Business Operations:
Greatbatch Medical customers include leading OEMs, in alphabetical order here and throughout this report, such as Biotronik, Boston Scientific, Johnson & Johnson, Medtronic, Smith & Nephew, Sorin Group, St. Jude Medical, Stryker and Zimmer. The nature and extent of our selling relationships with each OEM varies in terms of breadth of products purchased, purchased product volumes, length of contractual commitment, ordering patterns, inventory management and selling prices. During the three months ended March 30, 2012, Boston Scientific, Johnson & Johnson, Medtronic and St. Jude Medical collectively accounted for 50% of total Greatbatch consolidated sales.GAAP operating income for the first quarter of 2012 was $11.2 million, compared to $18.0 million for the 2011 first quarter. This decrease was primarily due to production inefficiencies incurred at our European Orthopaedic facilities, increased investment in the research and development of complete medical devices, as well as cost incurred in connection with our cost savings and consolidation initiatives. Adjusted operating income was $15.5 million, or 9.8% of sales in the first quarter of 2012, compared to $18.7 million, or 12.6% of sales, for the comparable 2011 period. Similar to GAAP operating income, this decrease reflects the production inefficiencies at our European Orthopaedic facilities and increased investment in the research and development of complete medical devices. The decline in both GAAP and adjusted operating income during the quarter were partially offset by the operating income from the acquired Micro Power business, as well as lower performance-based compensation.
Greatbatch Medical CRM and Neuromodulation sales of $75.1 million for the first quarter 2012 decreased 4% compared to the prior year period. During the quarter, CRM revenue continued to be impacted by the overall slowdown in the underlying market. Additionally, first quarter 2011 CRM sales included the benefit of customer inventory builds to support their product launches, which did not reoccur in the 2012 period.
First quarter 2012 sales for our Vascular Access product line increased 11% to $11.6 million, compared to prior year sales of $10.5 million. This increase was primarily due to increased introducer sales as a result of a combination of market growth and new business, including the sales of complete medical devices that were developed under the Greatbatch name.
Net RD&E for the 2012 first quarter increased $3.5 million to $13.9 million compared to 2011. First quarter 2012 results include lower cost reimbursements from customers of $1.0 million, primarily due to the timing of the achievement of contractual milestones, as well as $0.8 million of incremental expense from our acquisitions. Additionally, the 2012 first quarter includes $7.0 million of RD&E related to the development of medical devices, compared to $4.8 million in 2011, and included $1.0 million and $0.6 million, respectively, of DVT costs in connection with the QiG Groups development of a neuromodulation platform. Over the long-term, we expect net RD&E to remain around 8.5% to 9.0% of sales.
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