2013-08-20 13:17:01 -
* Revenue of $4.1 Billion Grew 3% at Constant Currency; 2% as Reported
* International Revenue Grew 9% at Constant Currency; 6% as Reported
* Non-GAAP Diluted EPS of $0.88; GAAP Diluted EPS of $0.93
MINNEAPOLIS - August 20, 2013 - Medtronic, Inc. (NYSE: MDT) today announced
financial results for its first quarter of fiscal year 2014, which ended July
The company reported worldwide first quarter revenue of $4.083 billion, compared
to the $4.008 billion reported in the first quarter of fiscal year 2013, an
increase of 3 percent on a constant currency basis after adjusting for a $55
million foreign currency impact or 2 percent as reported. As reported, first
quarter net earnings were $953 million, or $0.93 per diluted share, an increase
10 percent and 12 percent, respectively, over the same period in the prior
year. As detailed in the attached table, first quarter net earnings and diluted
earnings per share on a non-GAAP basis were $898 million and $0.88, an increase
of 2 percent and 4 percent, respectively, over the same period in the prior
First quarter international revenue of $1.887 billion increased 9 percent on a
constant currency basis or 6 percent as reported. International sales accounted
for 46 percent of Medtronic's worldwide revenue in the quarter. Emerging market
revenue of $504 million increased 15 percent on both a constant currency and as
reported basis, and represents 12 percent of company revenue.
"Our Q1 results reflect that we are broadly outperforming our sector," said Omar
Ishrak, Medtronic chairman and chief executive officer. "At the same time, we
continue to strengthen and geographically diversify our business and remain
confident in both our outlook for the remainder of the year and our long-term
competitive position in the changing healthcare environment."
Cardiac and Vascular Group
The Cardiac and Vascular Group includes the Cardiac Rhythm Disease Management
(CRDM), Coronary, Structural Heart, and Endovascular businesses. The Group had
worldwide sales in the quarter of $2.160 billion, representing an increase of 4
percent on a constant currency basis or 2 percent as reported. Group revenue
performance on a constant currency basis was driven by solid growth in
Structural Heart, Pacing, Endovascular, AF Solutions, and Coronary, partially
offset by a modest decline in Implantable Cardioverter Defibrillators (ICDs).
Group international sales of $1.234 billion increased 9 percent on a constant
currency basis or 6 percent as reported.
CRDM revenue of $1.193 billion grew 2 percent on a constant currency basis or
flat as reported. First quarter revenue from ICDs was $655 million, a decrease
of 2 percent on a constant currency basis in a market that continues to show
relative stability. Pacing revenue was $474 million, an increase of 6 percent
on a constant currency basis. International revenues were driven by the
continued strength of the Advisa DR MRI(TM) SureScan(®) pacing system in Japan.
Coronary revenue of $435 million grew 3 percent on a constant currency basis or
flat as reported. Sales of drug-eluting stents increased 10 percent on a
constant currency basis, driven by continued worldwide share gains of the
Resolute(®) Integrity(®) drug-eluting stent.
Structural Heart revenue of $313 million grew 13 percent on a constant currency
basis or 12 percent as reported. Growth was driven by the continued strength of
CoreValve(®) across global markets, including strong customer demand in Germany
in anticipation of potential legal action, which could limit options for
physicians and their patients who need transcatheter aortic valve procedures.
Endovascular revenue of $219 million grew 7 percent on a constant currency basis
or 5 percent as reported. Growth was driven by the launch of Endurant(®) II in
Japan, continued strength in the Thoracic business, and strong double-digit
growth in Drug Eluting Balloons.
Restorative Therapies Group
The Restorative Therapies Group includes the Spine, Neuromodulation, and
Surgical Technologies businesses. The Group had worldwide sales in the quarter
of $1.554 billion, representing an increase of 3 percent on a constant currency
basis or 2 percent as reported. Group revenue performance on a constant
currency basis was driven by growth in Surgical Technologies, Neuromodulation,
and Core Spine, partially offset by declines in BMP. Group international sales
of $492 million increased 9 percent on a constant currency basis or 5 percent as
Spine revenue of $765 million declined 1 percent on a constant currency basis or
3 percent as reported. Core Spine revenue of $641 million grew 1 percent on a
constant currency basis. The Core Spine business continues to show signs of
stability, with growth driven by new products and procedures, as well as
enabling technologies, including imaging, navigation, and powered surgical
instruments. BMP revenue of $124 million declined 11 percent on a constant
Surgical Technologies revenue of $361 million grew 13 percent on a constant
currency basis or 11 percent as reported. Revenue growth was broad-based across
all businesses, driven by strong performances in Image-Guided Surgery, sales of
the StealthStation(®) S7(®) surgical navigation system, and robust sales of
Advanced Energy products.
Neuromodulation revenue of $428 million increased 3 percent on a constant
currency basis or 2 percent as reported. Growth was driven by strong
performance from Activa(®) deep brain stimulation systems and InterStim(®)
Therapy for both urinary and bowel indications in key geographies. The
RestoreSensor(®) SureScan(®) MRI-safe system contributed to international growth
in the first quarter and launched this month in the United States.
Diabetes group revenue of $369 million grew 1 percent on both a constant
currency and an as reported basis. International sales of $161 million
increased 8 percent on both a constant currency and an as reported basis driven
by strong adoption of the Veo(TM) insulin pump with its low-glucose suspend
feature and the Enlite(®) continuous glucose monitoring (CGM) sensor. Slow
insulin pump system sales continued in the United States due to the delayed
launch of the MiniMed(®) 530G.
Revenue Outlook and Earnings per Share Guidance
The company reiterated its revenue outlook and diluted earnings per share (EPS)
guidance for fiscal year 2014. In fiscal year 2014, the company continues to
expect full-year revenue growth in the range of 3 to 4 percent on a constant
currency basis, and diluted EPS in the range of $3.80 to $3.85, which implies
annual diluted non-GAAP EPS growth in the range of 6 to 8 percent after
adjusting for certain items.
"We continue to make progress on our transformational opportunities of
globalization and economic value, which we believe will establish durability in
our long-term performance and create potential upside to our baseline
expectations," said Ishrak. "Ultimately, we intend to transform Medtronic from
being primarily a device provider today into the premier global medical
technology solutions partner of tomorrow."
Medtronic will host a webcast today, August 20, at 8 a.m. EDT (7 a.m. CDT), to
provide information about its businesses for the public, analysts, and news
media. This quarterly webcast can be accessed by clicking on the Investors link
on the Medtronic home page at www.medtronic.com and this earnings release will
be archived at www.medtronic.com/newsroom. Within 24 hours, a replay of the
webcast and a transcript of the company's prepared remarks will be available in
the "Events & Presentations" section of the Investors portion of the Medtronic
To view the first quarter financial schedules, click here or visit
Medtronic, Inc., headquartered in Minneapolis is the global leader in medical
technology - alleviating pain, restoring health, and extending life for millions
of people around the world. The company provides up-to-date news and information
via Twitter @Medtronic or its website at www.medtronic.com.
This press release contains forward-looking statements related to product growth
drivers, market position, strategies for growth, and Medtronic's future results
of operations, which are subject to risks and uncertainties, such as competitive
factors, difficulties and delays inherent in the development, manufacturing,
marketing and sale of medical products, government regulation and general
economic conditions and other risks and uncertainties described in Medtronic's
periodic reports on file with the Securities and Exchange Commission. Actual
results may differ materially from anticipated results. Medtronic does not
undertake to update its forward-looking statements.
Earnings per share guidance excludes adjustments relating to the fair value of
contingent consideration payments, charitable donations to the Medtronic
Foundation, restructuring charges, and any unusual charges or gains that might
occur during the fiscal year. The guidance provided only reflects information
available to Medtronic at this time.
Unless otherwise noted, all comparisons made in this news release are on an "as
reported basis," and not on a constant currency basis. References to quarterly
figures increasing or decreasing are in comparison to the first quarter of
fiscal year 2013.
View FY14 First Quarter Financial Schedules
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originality of the information contained therein.
Source: Medtronic, Inc. via Thomson Reuters ONE