Kalamazoo, Michigan - January 24, 2017 -
Stryker Corporation (NYSE:SYK) reported 2016 operating results for
the fourth quarter and full year and 2017 outlook:
Fourth Quarter
Highlights
Net sales grew 16.2% to $3.2 billion (16.8%
constant currency)
Orthopaedics |
5.3 |
% |
or |
5.7% constant currency |
MedSurg |
31.1 |
% |
or |
32.1% constant currency |
Neurotechnology and Spine |
8.7 |
% |
or |
8.6% constant currency |
Reported net earnings per diluted
share decreased 2.9% to $1.34
Adjusted net earnings per diluted share(1) increased
14.1% to $1.78
Full Year
Highlights
Net sales grew 13.9% to $11.3 billion (14.3%
constant currency)
Orthopaedics |
4.7 |
% |
or |
5.1% constant currency |
MedSurg |
25.6 |
% |
or |
26.3% constant currency |
Neurotechnology and Spine |
9.9 |
% |
or |
9.8% constant currency |
Reported net earnings per diluted
share increased 15.1% to $4.35
Adjusted net earnings per diluted share(1) increased
13.3% to $5.80
"I am pleased with our performance
in both the fourth quarter and the full year 2016," said Kevin A.
Lobo, Chairman and Chief Executive Officer. "Fourth quarter
organic sales growth of 6.7% versus a strong prior year is
impressive and was balanced across Orthopaedics, MedSurg and
Neurotechnology and Spine. In addition, we executed well on
acquisitions and delivered leveraged adjusted earnings
gains. We enter 2017 with good momentum across our businesses
and look forward to building on this success."
Sales
Analysis
Consolidated net sales of $3.2
billion and $11.3 billion increased 16.2% and 13.9% as reported in
the quarter and full year and 16.8% and 14.3% in constant currency,
as foreign currency exchange rates negatively impacted net sales by
0.6% and 0.4%. Excluding the 10.1% and 7.9% impact of acquisitions,
net sales increased 6.7% and 6.4% in constant currency, including
8.2% and 7.8% from increased unit volumes partially offset by 1.5%
and 1.4% in lower prices. The acquisitions of Sage Products LLC and
Physio-Control International, Inc., contributed $258 million and
$740 million to our consolidated net sales in the quarter and full
year.
Orthopaedics net sales of $1.2
billion and $4.4 billion increased 5.3% and 4.7% as reported in the
quarter and full year and 5.7% and 5.1% in constant currency, as
foreign currency exchange rates negatively impacted net sales by
0.4% in both periods. Excluding the 0.4% and 0.3% impact of
acquisitions, net sales increased 5.3% and 4.8% in constant
currency, including 7.8% and 6.9% from increased unit volumes
partially offset by 2.5% and 2.1% in lower prices.
MedSurg net sales of $1.4 billion
and $4.9 billion increased 31.1% and 25.6% as reported in the
quarter and full year and 32.1% and 26.3% in constant currency in
the quarter and full year, as foreign currency exchange rates
negatively impacted net sales by 1.0% and 0.7%. Excluding the 23.8%
and 19.1% impact of acquisitions, net sales increased 8.3% and 7.2%
in constant currency, including 8.9% and 7.8% from increased unit
volumes partially offset by 0.6% in lower prices in both
periods.
Neurotechnology and Spine net
sales of $526 million and $2.0 billion increased 8.7% and 9.9% as
reported in the quarter and full year and 8.6% and 9.8% in constant
currency, as foreign currency exchange rates positively impacted
net sales by 0.1% in both periods. Excluding the 1.9% and
1.4% impact of acquisitions, net sales increased 6.7% and 8.4% in
constant currency, including 8.1% and 9.8% from increased unit
volumes partially offset by 1.4% in lower prices in both
periods.
Earnings
Analysis
Reported net earnings decreased
2.3% in the quarter to $510 million and increased 14.5% to $1.6
billion in the full year. Reported net earnings per diluted share
decreased 2.9% in the quarter to $1.34 and increased 15.1% to $4.35
in the full year. Reported net earnings includes charges for the
amortization of purchased intangible assets, restructuring-related
activities, Rejuvenate and ABG II recall, acquisition and
integration related activities and certain tax matters. The effect
of each of these matters on reported net earnings and net earnings
per diluted share appears in the reconciliation of actual results
to adjusted results. Excluding the impact of these charges
increases gross profit margin in the quarter from 66.1% to 66.3%
and for the full year from 66.2% to 66.6% and increases operating
income margin in the quarter from 20.9% to 27.7% and for the full
year from 19.1% to 25.5%.
Excluding the impact of the items
described above, adjusted net earnings(2) of $675
million and $2.2 billion increased 14.2% and 12.6%, in the quarter
and full year. Adjusted net earnings per diluted share(1) of $1.78
and $5.80 increased 14.1% and 13.3% in the quarter and full
year.
2017
Outlook
We expect 2017 organic sales
growth to be in the range of 5.5% to 6.5% and adjusted net earnings
per diluted share(3) to be in
the range of $1.40 to $1.45 in the first quarter and $6.35 to $6.45
in the full year. If foreign currency exchange rates hold near
current levels, we expect net sales in the first quarter and full
year to be negatively impacted by approximately 1.0% and adjusted
net earnings per diluted share to be negatively impacted by
approximately $0.03 to $0.04 in the first quarter and $0.10 to
$0.12 in the full year. On January 1, 2017 we adopted the
updated accounting guidance required by ASU 2016-09 Stock
Compensation. If our share price remains at current levels and
stock option exercises remain at historical levels we expect the
changes in accounting for excess tax benefits on stock compensation
to positively impact net earnings per diluted share by
approximately $0.07 to $0.09 in the full year, about half of which
we expect in the first quarter.
(1) A
reconciliation of reported net earnings per diluted share to
adjusted net earnings per diluted share, a non-GAAP financial
measure, and other important information, appears
below.
(2) A reconciliation of reported net earnings to
adjusted net earnings, a non-GAAP financial measure, and other
important information, appears below.
(3) A reconciliation of expected net earnings per
diluted share to expected adjusted net earnings per diluted share
for the first quarter and full year and other important information
appears below.
Conference Call
on Tuesday, January 24, 2017
As previously announced, the
Company will host a conference call on Tuesday, January 24,
2017 at 4:30 p.m., Eastern Time, to discuss the Company's operating
results for the quarter and year ended December 31, 2016 and
provide an operational update.
To participate in the conference
call dial (844) 826-0610 (domestic) or (973) 453-3249
(international) and be prepared to provide confirmation number
26013694 to the operator.
A simultaneous webcast of the call
will be accessible via the Company's website at www.stryker.com.
The call will be archived on the Investors page of this site.
A recording of the call will also
be available from 8:00 p.m., Eastern Time, on Tuesday,
January 24, 2017, until 11:59 p.m., Eastern Time, on Tuesday,
January 31, 2017. To hear this recording you may dial (855)
859-2056 (domestic) or (404) 537-3406 (international) and enter
conference ID number 26013694.
Caution
Concerning Forward-Looking Statements
This press release contains
information that includes or is based on forward-looking statements
within the meaning of the federal securities laws that are subject
to various risks and uncertainties that could cause our actual
results to differ materially from those expressed or implied in
such statements. Such factors include, but are not limited to:
weakening of economic conditions that could adversely affect the
level of demand for our products; pricing pressures generally,
including cost-containment measures that could adversely affect the
price of or demand for our products; changes in foreign exchange
markets; legislative and regulatory actions; unanticipated issues
arising in connection with clinical studies and otherwise that
affect U.S. Food and Drug Administration approval of new products;
changes in reimbursement levels from third-party payors; a
significant increase in product liability claims; the ultimate
total cost with respect to the Rejuvenate and ABG II matter; the
impact of investigative and legal proceedings and compliance risks;
resolution of tax audits; the impact of the federal legislation to
reform the United States healthcare system; changes in financial
markets; changes in the competitive environment; our ability to
integrate acquisitions; and our ability to realize anticipated cost
savings. Additional information concerning these and other factors
is contained in our filings with the U.S. Securities and Exchange
Commission, including our Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
Stryker is one of the world's
leading medical technology companies and, together with our
customers, we are driven to make healthcare better. The Company
offers a diverse array of innovative products and services
in Orthopaedics, Medical and Surgical, and
Neurotechnology and Spine that help improve patient and
hospital outcomes. Stryker is active in over 100 countries around
the world. Please contact us for more information
at www.stryker.com.
For investor inquiries please
contact:
Katherine A. Owen, Stryker Corporation, 269-385-2600 or
katherine.owen@stryker.com
For media inquiries please
contact:
Yin Becker, Stryker Corporation, 269-385-2600 or
yin.becker@stryker.com
STRYKER
CORPORATION
For the Three Months and Full Year Ended December
31
(Unaudited - Millions of Dollars, Except Per Share
Amounts)
CONDENSED STATEMENTS OF EARNINGS |
|
Three
Months |
|
Full
Year |
|
2016 |
|
2015 |
|
% Change |
|
2016 |
|
2015 |
|
% Change |
Net sales |
$ |
3,157 |
|
|
$ |
2,715 |
|
|
16.2 |
% |
|
$ |
11,325 |
|
|
$ |
9,946 |
|
|
13.9 |
% |
Cost
of sales |
1,071 |
|
|
895 |
|
|
19.7 |
|
|
3,830 |
|
|
3,344 |
|
|
14.5 |
|
Gross profit |
$ |
2,086 |
|
|
$ |
1,820 |
|
|
14.6 |
% |
|
$ |
7,495 |
|
|
$ |
6,602 |
|
|
13.5 |
% |
% of
sales |
66.1 |
% |
|
67.0 |
% |
|
|
|
66.2 |
% |
|
66.4 |
% |
|
|
Research, development and engineering expenses |
189 |
|
|
164 |
|
|
15.2 |
|
|
715 |
|
|
625 |
|
|
14.4 |
|
Selling, general and administrative expenses |
1,093 |
|
|
970 |
|
|
12.7 |
|
|
4,137 |
|
|
3,610 |
|
|
14.6 |
|
Recall charges |
54 |
|
|
(20 |
) |
|
(370.0 |
) |
|
158 |
|
|
296 |
|
|
(46.6 |
) |
Intangible asset amortization |
89 |
|
|
58 |
|
|
53.4 |
|
|
319 |
|
|
210 |
|
|
51.9 |
|
Total operating expenses |
$ |
1,425 |
|
|
$ |
1,172 |
|
|
21.6 |
% |
|
$ |
5,329 |
|
|
$ |
4,741 |
|
|
12.4 |
% |
Operating income |
$ |
661 |
|
|
$ |
648 |
|
|
2.0 |
% |
|
$ |
2,166 |
|
|
$ |
1,861 |
|
|
16.4 |
% |
% of sales |
20.9 |
% |
|
23.9 |
% |
|
|
|
19.1 |
% |
|
18.7 |
% |
|
|
Other
income (expense), net |
(73 |
) |
|
(36 |
) |
|
102.8 |
|
|
(245 |
) |
|
(126 |
) |
|
94.4 |
|
Earnings before income
taxes |
$ |
588 |
|
|
$ |
612 |
|
|
(3.9 |
)% |
|
$ |
1,921 |
|
|
$ |
1,735 |
|
|
10.7 |
% |
Income
Taxes |
78 |
|
|
90 |
|
|
(13.3 |
) |
|
274 |
|
|
296 |
|
|
(7.4 |
) |
Net earnings |
$ |
510 |
|
|
$ |
522 |
|
|
(2.3 |
)% |
|
$ |
1,647 |
|
|
$ |
1,439 |
|
|
14.5 |
% |
Net earnings per share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.36 |
|
|
$ |
1.39 |
|
|
(2.2 |
)% |
|
$ |
4.40 |
|
|
$ |
3.82 |
|
|
15.2 |
% |
Diluted |
$ |
1.34 |
|
|
$ |
1.38 |
|
|
(2.9 |
)% |
|
$ |
4.35 |
|
|
$ |
3.78 |
|
|
15.1 |
% |
Weighted-average shares outstanding - in
millions: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
374.5 |
|
|
374.3 |
|
|
|
|
374.1 |
|
|
376.6 |
|
|
|
Diluted |
379.1 |
|
|
378.4 |
|
|
|
|
378.5 |
|
|
380.9 |
|
|
|
CONDENSED
BALANCE SHEETS |
|
December |
|
2016 |
|
2015 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
3,316 |
|
|
$ |
3,379 |
|
Marketable securities |
68 |
|
|
700 |
|
Accounts receivable, net |
1,967 |
|
|
1,662 |
|
Inventories |
2,030 |
|
|
1,639 |
|
Other current assets |
480 |
|
|
563 |
|
Total current assets |
$ |
7,861 |
|
|
$ |
7,943 |
|
Property, plant and equipment, net |
1,569 |
|
|
1,199 |
|
Goodwill and other intangibles, net |
9,864 |
|
|
5,930 |
|
Other assets |
1,141 |
|
|
1,151 |
|
Total assets |
$ |
20,435 |
|
|
$ |
16,223 |
|
Liabilities and shareholders' equity |
|
|
|
Current liabilities |
$ |
2,554 |
|
|
$ |
2,808 |
|
Accrued recall expenses |
594 |
|
|
694 |
|
Other noncurrent liabilities |
1,051 |
|
|
980 |
|
Long-term debt, excluding current maturities |
6,686 |
|
|
3,230 |
|
Shareholders' equity |
9,550 |
|
|
8,511 |
|
Total liabilities and shareholders'
equity |
$ |
20,435 |
|
|
$ |
16,223 |
|
CONDENSED
STATEMENTS OF CASH FLOWS |
|
2016 |
|
2015 |
Operating activities |
|
|
|
Net earnings |
$ |
1,647 |
|
|
$ |
1,439 |
|
Depreciation |
227 |
|
|
187 |
|
Amortization of intangible assets |
319 |
|
|
210 |
|
Changes in operating assets and liabilities and other, net |
(381 |
) |
|
(937 |
) |
Net cash provided by operating
activities |
$ |
1,812 |
|
|
$ |
899 |
|
Investing activities |
|
|
|
Acquisitions, net of cash acquired |
$ |
(4,332 |
) |
|
$ |
(153 |
) |
Purchases of property, plant and equipment |
(490 |
) |
|
(270 |
) |
Change in marketable securities, net |
634 |
|
|
2,379 |
|
Other
investing, net |
(3 |
) |
|
- |
|
Net cash (used in) provided by
investing activities |
$ |
(4,191 |
) |
|
$ |
1,956 |
|
Financing activities |
|
|
|
Borrowings/repayments of debt, net |
$ |
2,912 |
|
|
$ |
48 |
|
Dividends paid |
(568 |
) |
|
(521 |
) |
Repurchase of common stock |
(13 |
) |
|
(700 |
) |
Other
financing |
30 |
|
|
32 |
|
Net cash provided by (used in)
financing activities |
$ |
2,361 |
|
|
$ |
(1,141 |
) |
Effect
of exchange rate changes on cash and cash equivalents |
(45 |
) |
|
(130 |
) |
Change in cash and cash
equivalents |
$ |
(63 |
) |
|
$ |
1,584 |
|
STRYKER
CORPORATION
Three Months and Full Year Ended December
31
(Unaudited - Millions of Dollars)
CONDENSED SALES ANALYSIS |
|
Three
Months |
|
Full
Year |
|
|
|
% Change |
|
|
|
% Change |
|
2016 |
2015 |
As Reported |
Constant
Currency |
|
2016 |
2015 |
As Reported |
Constant
Currency |
Geographic: |
|
|
|
|
|
|
|
|
|
United States |
$ |
2,325 |
|
$ |
1,971 |
|
18.0 |
% |
18.0 |
% |
|
$ |
8,247 |
|
$ |
7,116 |
|
15.9 |
% |
15.9 |
% |
International |
832 |
|
744 |
|
11.7 |
|
13.7 |
|
|
3,078 |
|
2,830 |
|
8.8 |
|
10.2 |
|
Total |
$ |
3,157 |
|
$ |
2,715 |
|
16.2 |
% |
16.8 |
% |
|
$ |
11,325 |
|
$ |
9,946 |
|
13.9 |
% |
14.3 |
% |
Segment: |
|
|
|
|
|
|
|
|
|
Orthopaedics |
$ |
1,206 |
|
$ |
1,145 |
|
5.3 |
% |
5.7 |
% |
|
$ |
4,422 |
|
$ |
4,223 |
|
4.7 |
% |
5.1 |
% |
MedSurg |
1,425 |
|
1,087 |
|
31.1 |
|
32.1 |
|
|
4,894 |
|
3,895 |
|
25.6 |
|
26.3 |
|
Neurotechnology and Spine |
526 |
|
483 |
|
8.7 |
|
8.6 |
|
|
2,009 |
|
1,828 |
|
9.9 |
|
9.8 |
|
Total |
$ |
3,157 |
|
$ |
2,715 |
|
16.2 |
% |
16.8 |
% |
|
$ |
11,325 |
|
$ |
9,946 |
|
13.9 |
% |
14.3 |
% |
SUPPLEMENTAL
SALES GROWTH ANALYSIS |
|
Three
Months |
|
|
|
Percentage Change |
|
|
|
|
|
United States |
International |
|
2016 |
2015 |
As Reported |
Constant Currency |
As Reported |
As Reported |
Constant Currency |
Orthopaedics: |
|
|
|
|
|
|
|
Knees |
$ |
405 |
|
$ |
380 |
|
6.8 |
% |
7.2 |
% |
5.9 |
% |
9.3 |
% |
11.0 |
% |
Hips |
334 |
|
324 |
|
2.8 |
|
3.5 |
|
1.5 |
|
5.0 |
|
7.0 |
|
Trauma and Extremities |
366 |
|
350 |
|
4.5 |
|
4.6 |
|
9.0 |
|
(2.4 |
) |
(2.0 |
) |
Other |
101 |
|
91 |
|
11.1 |
|
11.4 |
|
11.5 |
|
9.2 |
|
10.6 |
|
Total Orthopaedics |
$ |
1,206 |
|
$ |
1,145 |
|
5.3 |
% |
5.7 |
% |
6.1 |
% |
3.5 |
% |
4.8 |
% |
MedSurg: |
|
|
|
|
|
|
|
Instruments |
$ |
431 |
|
$ |
408 |
|
5.6 |
% |
5.9 |
% |
6.0 |
% |
4.2 |
% |
5.4 |
% |
Endoscopy |
421 |
|
398 |
|
5.9 |
|
6.5 |
|
6.0 |
|
5.7 |
|
8.1 |
|
Medical |
511 |
|
226 |
|
126.0 |
|
129.2 |
|
127.3 |
|
120.1 |
|
138.5 |
|
Sustainability |
62 |
|
55 |
|
12.1 |
|
12.1 |
|
11.9 |
|
94.2 |
|
93.9 |
|
Total MedSurg |
$ |
1,425 |
|
$ |
1,087 |
|
31.1 |
% |
32.1 |
% |
32.8 |
% |
24.7 |
% |
29.4 |
% |
Neurotechnology and Spine: |
|
|
|
|
|
|
|
Neurotechnology |
$ |
331 |
|
$ |
289 |
|
14.3 |
% |
13.9 |
% |
12.8 |
% |
17.0 |
% |
15.9 |
% |
Spine |
195 |
|
194 |
|
0.5 |
|
0.8 |
|
0.2 |
|
1.3 |
|
2.7 |
|
Total Neurotechnology and
Spine |
$ |
526 |
|
$ |
483 |
|
8.7 |
% |
8.6 |
% |
7.3 |
% |
12.0 |
% |
11.6 |
% |
Total |
$ |
3,157 |
|
$ |
2,715 |
|
16.2 |
% |
16.8 |
% |
18.0 |
% |
11.7 |
% |
13.7 |
% |
|
Full
Year |
|
|
|
Percentage Change |
|
|
|
|
|
United States |
International |
|
2016 |
2015 |
As Reported |
Constant Currency |
As Reported |
As Reported |
Constant Currency |
Orthopaedics: |
|
|
|
|
|
|
|
Knees |
$ |
1,490 |
|
$ |
1,403 |
|
6.2 |
% |
6.7 |
% |
6.8 |
% |
4.6 |
% |
6.5 |
% |
Hips |
1,283 |
|
1,263 |
|
1.5 |
|
2.3 |
|
2.0 |
|
0.8 |
|
2.9 |
|
Trauma and Extremities |
1,364 |
|
1,291 |
|
5.7 |
|
5.7 |
|
9.1 |
|
0.4 |
|
0.4 |
|
Other |
285 |
|
266 |
|
7.3 |
|
7.6 |
|
8.1 |
|
4.1 |
|
5.6 |
|
Total Orthopaedics |
$ |
4,422 |
|
$ |
4,223 |
|
4.7 |
% |
5.1 |
% |
6.2 |
% |
1.8 |
% |
3.1 |
% |
MedSurg: |
|
|
|
|
|
|
|
Instruments |
$ |
1,553 |
|
$ |
1,466 |
|
5.9 |
% |
6.3 |
% |
7.2 |
% |
1.5 |
% |
3.1 |
% |
Endoscopy |
1,470 |
|
1,390 |
|
5.8 |
|
6.3 |
|
8.8 |
|
(3.1 |
) |
(1.0 |
) |
Medical |
1,633 |
|
823 |
|
98.4 |
|
99.9 |
|
94.9 |
|
114.0 |
|
122.1 |
|
Sustainability |
238 |
|
216 |
|
9.9 |
|
9.9 |
|
9.8 |
|
33.3 |
|
37.6 |
|
Total MedSurg |
$ |
4,894 |
|
$ |
3,895 |
|
25.6 |
% |
26.3 |
% |
27.3 |
% |
19.6 |
% |
22.5 |
% |
Neurotechnology and Spine: |
|
|
|
|
|
|
|
Neurotechnology |
$ |
1,255 |
|
$ |
1,088 |
|
15.4 |
% |
15.1 |
% |
14.5 |
% |
17.0 |
% |
16.2 |
% |
Spine |
754 |
|
740 |
|
1.8 |
|
2.0 |
|
3.9 |
|
(4.1 |
) |
(3.5 |
) |
Total Neurotechnology and
Spine |
$ |
2,009 |
|
$ |
1,828 |
|
9.9 |
% |
9.8 |
% |
9.8 |
% |
9.9 |
% |
9.6 |
% |
Total |
$ |
11,325 |
|
$ |
9,946 |
|
13.9 |
% |
14.3 |
% |
15.9 |
% |
8.8 |
% |
10.2 |
% |
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
We supplement the reporting of our
financial information determined under accounting principles
generally accepted in the United States (GAAP) with certain
non-GAAP financial measures, including percentage sales growth in
constant currency; percentage organic sales growth; adjusted gross
profit; cost of sales excluding specified items; adjusted selling,
general and administrative expenses; adjusted operating income;
adjusted effective income tax rate; adjusted net earnings; and
adjusted net earnings per diluted share. We believe that these
non-GAAP measures provide meaningful information to assist
investors and shareholders in understanding our financial results
and assessing our prospects for future performance. Management
believes percentage sales growth in constant currency and the other
adjusted measures described above are important indicators of our
operations because they exclude items that may not be indicative of
or are unrelated to our core operating results and provide a
baseline for analyzing trends in our underlying businesses.
Management uses these non-GAAP financial measures for reviewing the
operating results of reportable business segments and analyzing
potential future business trends in connection with our budget
process and bases certain management incentive compensation on
these non-GAAP financial measures.
To measure percentage sales growth
in constant currency, we remove the impact of changes in foreign
currency exchange rates that affect the comparability and trend of
sales. Percentage sales growth in constant currency is calculated
by translating current year results at prior year average foreign
currency exchange rates. To measure percentage organic sales
growth, we remove the impact of changes in foreign currency
exchange rates and acquisitions that affect the comparability and
trend of sales. Percentage organic sales growth is calculated
by translating current year results at prior year average foreign
currency exchange rates excluding the impact of acquisitions.
To measure earnings performance on a consistent and comparable
basis, we exclude certain items that affect the comparability of
operating results and the trend of earnings.
Because non-GAAP financial
measures are not standardized, it may not be possible to compare
these financial measures with other companies' non-GAAP financial
measures having the same or similar names. These adjusted financial
measures should not be considered in isolation or as a substitute
for reported sales growth, gross profit, selling, general and
administrative expenses, operating income, effective income tax
rate, net earnings and net earnings per diluted share, the most
directly comparable GAAP financial measures. These non-GAAP
financial measures are an additional way of viewing aspects of our
operations that, when viewed with our GAAP results and the
reconciliations to corresponding GAAP financial measures below,
provide a more complete understanding of our business. We strongly
encourage investors and shareholders to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure.The following reconciles the
non-GAAP financial measures discussed above with the most directly
comparable GAAP financial measures:
STRYKER
CORPORATION
Three Months and Year Ended December 31, 2016 and
2015
(Unaudited - Millions of Dollars, Except Per Share
Amounts)
RECONCILIATION OF ACTUAL RESULTS TO ADJUSTED
RESULTS |
Three Months 2016 |
Gross Profit |
Selling, General & Administrative
Expenses |
Amortization of Intangible
Assets |
Operating Income |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
2,086 |
|
$ |
1,093 |
|
$ |
89 |
|
$ |
661 |
|
$ |
510 |
|
13.3 |
% |
$ |
1.34 |
|
Acquisition and integration related charges: (a) |
|
|
|
|
|
|
|
Inventory stepped up to fair value |
(1 |
) |
- |
|
- |
|
(1 |
) |
- |
|
(0.1 |
) |
- |
|
Other
acquisition and integration related |
- |
|
(12 |
) |
- |
|
12 |
|
8 |
|
0.3 |
|
0.01 |
|
Amortization of purchased intangible assets |
- |
|
- |
|
(89 |
) |
89 |
|
61 |
|
2.2 |
|
0.17 |
|
Restructuring-related charges (b) |
8 |
|
(50 |
) |
- |
|
58 |
|
44 |
|
0.7 |
|
0.12 |
|
Rejuvenate and other recall matters (c) |
- |
|
- |
|
- |
|
54 |
|
45 |
|
- |
|
0.12 |
|
Tax
Matters (e) |
- |
|
- |
|
- |
|
- |
|
7 |
|
0.3 |
|
0.02 |
|
Adjusted |
$ |
2,093 |
|
$ |
1,031 |
|
$ |
- |
|
$ |
873 |
|
$ |
675 |
|
16.7 |
% |
$ |
1.78 |
|
Three Months 2015 |
Gross Profit |
Selling, General & Administrative
Expenses |
Amortization of Intangible
Assets |
Operating Income |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
1,820 |
|
$ |
970 |
|
$ |
58 |
|
$ |
648 |
|
$ |
522 |
|
14.7 |
% |
$ |
1.38 |
|
Acquisition and integration related charges: (a) |
|
|
|
|
|
|
|
Other acquisition and integration related |
- |
|
(4 |
) |
- |
|
4 |
|
2 |
|
0.1 |
|
- |
|
Amortization of purchased intangible assets |
- |
|
- |
|
(58 |
) |
58 |
|
40 |
|
1.4 |
|
0.10 |
|
Restructuring-related charges (b) |
3 |
|
(51 |
) |
- |
|
54 |
|
39 |
|
1.4 |
|
0.10 |
|
Rejuvenate and other recall matters (c) |
- |
|
- |
|
- |
|
(20 |
) |
(12 |
) |
(1.0 |
) |
(0.02 |
) |
Adjusted |
$ |
1,823 |
|
$ |
915 |
|
$ |
- |
|
$ |
744 |
|
$ |
591 |
|
16.6 |
% |
$ |
1.56 |
|
Full Year 2016 |
Gross Profit |
Selling, General & Administrative
Expenses |
Amortization of Intangible
Assets |
Operating Income |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
7,495 |
|
$ |
4,137 |
|
$ |
319 |
|
$ |
2,166 |
|
$ |
1,647 |
|
14.3 |
% |
$ |
4.35 |
|
Acquisition and integration related charges: (a) |
|
|
|
|
|
|
|
Inventory stepped up to fair value |
36 |
|
- |
|
- |
|
36 |
|
23 |
|
0.4 |
|
0.06 |
|
Other
acquisition and integration related |
- |
|
(95 |
) |
- |
|
95 |
|
77 |
|
0.1 |
|
0.20 |
|
Amortization of purchased intangible assets |
- |
|
- |
|
(319 |
) |
319 |
|
221 |
|
2.2 |
|
0.59 |
|
Restructuring-related charges (b) |
15 |
|
(110 |
) |
- |
|
125 |
|
98 |
|
0.3 |
|
0.26 |
|
Rejuvenate and other recall matters (c) |
- |
|
- |
|
- |
|
158 |
|
128 |
|
0.1 |
|
0.34 |
|
Legal
matters (d) |
- |
|
12 |
|
- |
|
(12 |
) |
(7 |
) |
(0.2 |
) |
(0.02 |
) |
Tax Matters (e) |
- |
|
- |
|
- |
|
- |
|
7 |
|
0.1 |
|
0.02 |
|
Adjusted |
$ |
7,546 |
|
$ |
3,944 |
|
$ |
- |
|
$ |
2,887 |
|
$ |
2,194 |
|
17.3 |
% |
$ |
5.80 |
|
Full Year 2015 |
Gross Profit |
Selling, General & Administrative
Expenses |
Amortization of Intangible
Assets |
Operating Income |
Net Earnings |
Effective Tax Rate |
Diluted EPS |
Reported |
$ |
6,602 |
|
$ |
3,610 |
|
$ |
210 |
|
$ |
1,861 |
|
$ |
1,439 |
|
17.1 |
% |
$ |
3.78 |
|
Acquisition and integration related charges: (a) |
|
|
|
|
|
|
|
Inventory stepped up to fair value |
7 |
|
- |
|
- |
|
7 |
|
4 |
|
0.1 |
|
0.01 |
|
Other
acquisition and integration related |
- |
|
(28 |
) |
- |
|
28 |
|
20 |
|
0.2 |
|
0.05 |
|
Amortization of purchased intangible assets |
- |
|
- |
|
(210 |
) |
210 |
|
147 |
|
1.5 |
|
0.39 |
|
Restructuring-related charges (b) |
7 |
|
(125 |
) |
- |
|
132 |
|
97 |
|
0.7 |
|
0.26 |
|
Rejuvenate and other recall matters (c) |
- |
|
- |
|
- |
|
296 |
|
210 |
|
2.0 |
|
0.55 |
|
Legal
matters (d) |
- |
|
53 |
|
- |
|
(53 |
) |
(46 |
) |
0.1 |
|
(0.12 |
) |
Tax Matters (e) |
- |
|
- |
|
- |
|
- |
|
78 |
|
(4.4 |
) |
0.20 |
|
Adjusted |
$ |
6,616 |
|
$ |
3,510 |
|
$ |
- |
|
$ |
2,481 |
|
$ |
1,949 |
|
17.3 |
% |
$ |
5.12 |
|
(a) |
Charges represent certain acquisition and
integration related costs associated with acquisitions. |
(b) |
Charges represent the cost associated with certain
restructuring-related charges associated with workforce reductions,
facility rationalizations and other restructuring-related
activities. |
(c) |
Charges represent changes in our best estimate of the
minimum end of the range of probable loss to resolve the Rejuvenate
and ABG II recall and other recall matters. |
(d) |
Amount represents gains associated with legal
settlements in 2016 and 2015. |
(e) |
Charges represent certain significant and discrete
tax items and adjustments to interest expense related to the
settlement of certain tax matters. |
STRYKER
CORPORATION
Three Months Ended March 31, 2017 and Full Year
December 31, 2017
RECONCILIATION OF EXPECTED NET EARNINGS PER
DILUTED SHARE TO EXPECTED ADJUSTED NET EARNINGS PER DILUTED
SHARE |
|
Three Months |
|
Full Year |
|
Low |
High |
|
Low |
High |
Expected - Reported |
$ |
1.15 |
|
$ |
1.26 |
|
|
$ |
5.44 |
|
$ |
5.69 |
|
Acquisition and integration related charges |
0.05 |
|
0.02 |
|
|
0.10 |
|
0.05 |
|
Amortization of purchased intangible assets |
0.15 |
|
0.15 |
|
|
0.61 |
|
0.61 |
|
Restructuring-related charges |
0.05 |
|
0.02 |
|
|
0.20 |
|
0.10 |
|
Rejuvenate and other recall matters |
- |
|
- |
|
|
- |
|
- |
|
Legal
matters |
- |
|
- |
|
|
- |
|
- |
|
Expected - Adjusted |
$ |
1.40 |
|
$ |
1.45 |
|
|
$ |
6.35 |
|
$ |
6.45 |
|
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Stryker Corporation via Globenewswire
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