Greatbatch (GB) Expects Strong FY13 Results

January 8, 2013 8:14 AM EST
Greatbatch, Inc. (NYSE: GB), today announced preliminary sales results for its fiscal year ended December 28, 2012, and provided fiscal 2013 guidance. The 2013 guidance will be referenced in a presentation by Thomas J. Hook, Chief Executive Officer and President of Greatbatch Inc., on Thursday January 10, 2013, at the 31st Annual J.P. Morgan Healthcare Conference in San Francisco. The company will be discussing its strategy for long term growth and profitability.

Preliminary revenue for 2012 increased approximately 13.5% over the prior year to $645 million driven primarily by the acquisition of MicroPower, a provider of portable medical solutions, in December 2011.

Preliminary 2012 Adjusted Operating Margin and Adjusted Diluted EPS are in line with previously discussed guidance of the lower-end of 11.5% to 12.5% and $1.75 to $1.85 ranges, respectively, as a result of expense management during the year and a decrease in estimated incentive compensation payout.

Fiscal 2013 sales are expected to increase in the range of 2% to 5% primarily driven by growth in the Portable Medical and Vascular product lines. Organic growth is expected to be in the range of 5% to 8% for 2013, after adjusting for the disposition of certain Orthopaedic products as previously announced.

Adjusted Operating Margin in 2013 is targeted to be 12.0% to 12.5%.

Adjusted Diluted EPS growth in 2013 is expected to be in the range of 7% to 13%.

Adjusted Operating Income as a % of Sales 12.0% - 12.5%

Annual Medical Device Tax impact approximately - $1.5M - $2.5M

Adjusted Effective Tax Rate (includes only the 2013 benefit of
the recently reenacted R&D Tax Credit) -33% to 35%

Company Sees Sales of $660 to $680 million and Adjusted Diluted EPS of $1.90 - $2.00

(***Street expects 2013 EPS of $1.90 on $676.28 in revenue.)

Adjusted operating income for 2013 is expected to consist of GAAP operating income minus non-recurring, unusual or infrequently occurring items such as acquisition, consolidation and integration charges, certain RD&E expenditures and asset disposition/write-down charges, totaling approximately $11.5 million to $14.0 million. This range has been significantly reduced from the prior year as we have essentially completed our productivity and consolidation initiatives. Included in the above range are residual design verification testing (“DVT”) costs in the range of $4.8 to $5.8 million to complete the Algostim project. We have included a table below showing the estimated Other Operating Expenses (“OOE”) for 2012 compared to 2013.

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