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STRYKER'S 28% INCREASE IN FIRST QUARTER INTERNATIONAL SALES HELPED BOOST OVERALL VOLUME 20.1% TO $135.2 MIL.; PROFITS ADVANCE 31% TO $14.5 MIL.

This article was originally published in The Gray Sheet

Executive Summary

Stryker's 28% jump in international sales for the fiscal 1993 first quarter (ended March 31) helped push overall sales ahead 20.1% to $135.2 mil. from $112.6 mil. in the same period a year ago, the firm reported April 16. The international growth was led by Osteonics orthopaedic implant and endoscopic system sales made by the company's Pacific division, as well as by Dimso spinal implant sales generated by the firm's Europe division. International sales were 35% of total volume for the quarter, up from 33% a year earlier, according to the firm. Sales of Stryker surgical group products increased 20% from the year ago quarter. "The leading surgical sales gains came from orthopaedic implants, endoscopic systems and powered surgical instruments," the firm said. Medical group volume was ahead 22% as a result of "increased shipments of patient handling products and increased revenues from physical therapy services." The Kalamazoo, Michigan-based company's sales performance helped power profits up 31% to $14.5 mil. for the three months compared to $11 mil. in the comparable 1992 period. Bausch & Lomb healthcare segment revenues increased 7% to $248 mil. for the first quarter (ended March 27) from $232.2 mil. in the same period a year ago. The medical sector of that segment saw a 45% increase in U.S. sales of SeeQuence and Medalist lines of contact lenses. B&L's worldwide contact lens sales were flat for the period, however, "due primarily to weak market conditions in Europe and Japan," according to the firm. Despite the flat lens sales, the firm explains that "profitability for soft contact lenses and lens care products improved" and sales of lens care products increased 14%, with shipments rising "at an especially good rate in the [U.S.] and Latin America." Overall sales for the quarter at B&L showed a 9.6% gain to $407.6 mil., up from $371.9 mil. in the same period in 1992. Earnings in the first quarter were up 14.6% to $32.9 mil., advancing from $28.7 mil. in the year ago period. Commenting on the results, Daniel Gill, chairman and CEO of the Rochester, New York firm, said that "weak economies in Europe and Japan are clearly going to be the most significant challenges [B&L] faces in 1993. As we work to overcome these factors, we should be aided by significantly improved performance in the [U.S.] and our western hemisphere region which led [B&L's] sales growth in the first quarter." Nellcor reported sales of $56.2 mil. for its fiscal 1993 third quarter (ended April 4), a 6.2% gain over sales of $52.9 mil. in the year-ago period. Income advanced 14.7% to $6.9 mil. for the three months compared to $6 mil. in the same period in fiscal 1992. The Hayward, California-based firm says that the increase in revenue "reflects continued strength in the company's oximetry business. Growth in the installed base of monitors compatible with the company's sensor products contributed to increased volume in patient-dedicated sensor sales." The manufacturer of high performance monitoring equipment, sensors and accessories also cites "sales of the new Ultra Cap combination pulse oximeter and capnograph, higher sales by [the] EdenTec [business] and increased sales of the EasyCap EtCO[2] detector" as contributors to revenue growth. Despite the increase in sales over the year ago period, Nellcore notes that volume growth has been higher in the recent past and that uncertainty over pending "health care reform proposals has led to a slowdown in capital purchases by hospitals which is affecting the U.S. medical equipment industry." Nellcor adds that the U.S. market uncertainty, "continuing delays in FDA regulatory clearance to market new products" and "potential reductions in health care spending in certain European countries, contributed to the slower growth rate in Nellcor's third quarter revenue." St. Jude Medical recorded sales of $68.2 mil. for the first three months of fiscal 1993, a 13.5% gain over first quarter 1992 volume of $60.1 mil. Earnings of $29.2 mil. were up 16.5% compared to $25.1 mil. in the year ago quarter. The St. Paul, Minnesota- based heart valve maker says in an April 21 release that the sales increase "reflected continued market penetration in all of the company's major markets." The firm adds that "foreign currency exchange rates negatively impacted the net sales increase by .9% as the U.S. dollar was stronger against European currencies in the first quarter 1993 compared to the first quarter 1992, especially relative to the Spanish peseta and British pound sterling." U.S. Surgical announced a sales increase of 17.8% to $326.3 mil. for the first quarter (ended March 31), from $277.1 mil. in the same period of the preceding year. First quarter net income surged 21.1% to $36 mil. from $29.7 mil. in 1992. The minimally invasive device maker adopted a "just-in-time" distribution system at the end of the quarter and indicated in an April 7 press release that sales and earnings in the second quarter would be "significantly reduced" as a result ("The Gray Sheet" April 12, I&W-8). Among the diversified firms reporting financial results, Baxter had sales of $2 bil. for the first quarter (ended March 31), up 3.5%. First quarter earnings of $120 mil. were up 10.1%. The firm saw "strong" sales in biotech and renal businesses during the period, according to Chairman and CEO Vernon Loucks. Pfizer's first quarter sales were $1.9 bil., a 6% gain over the year ago period; earnings spurted up 10.6% to $329 mil. Lilly's sales were down .2% to $1.6 bil., with earnings off 16% to $373.5 mil. The firm noted that sales of its medical devices and diagnostics division "were down 8% due to competition pressures and the continued production halt at Physio-Control." Bard reported sales of $236.4 mil. for the first three months of the year, a .5% decline from $237.5 mil. in the same period last year; income was $26.9 mil., a 60.1% increase that includes a gain from the sale of MedSystems division to Baxter during the period ("The Gray Sheet" Feb. 15, I&W-2). Bard reported that on March 31, it completed the acquisition of Solco Hospital Products Group, a deal through which it gained blood salvaging products. Collagen sales plunged 42.3% to $10 mil., with a loss of $830,000 for the three months ended March 31. The firm earned $6.5 mil. on sales of $17.3 mil. in the year-ago quarter. Datascope's earnings fell 6.3% for the third quarter (ended March 31) to $3.3 mil. on sales of $41.9 mil., a 1.9% gain. The Montvale, New Jersey-based firm reported that "continued growth of patient monitoring and intervascular sales [was] offset by a decrease in cardiac assist sales." Patient monitoring sales increases were driven by "sharp demand" for Passport portable monitor models. International sales of collagen-coated vascular grafts propelled intravascular sales.

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