SECOND QUARTER 2011 EARNINGS CALL July 27 2011 July 27, 2011 - PDF document

1 SECOND QUARTER 2011 EARNINGS CALL July 27 2011 July 27, 2011

FORWARD-LOOKING STATEMENTS Some of the statements made in the presentation whether written or Some of the statements made in the presentation whether written or oral may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are based on the company’s current expectations. The company’s actual results could differ materially from those stated or implied in such forward looking statements those stated or implied in such forward-looking statements. The The company assumes no obligations to update forward-looking information, including information in this presentation, to reflect changed assumptions changed assumptions, the occurrence of unanticipated events or the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects. 2

EARNINGS CALL PARTICIPANTS › Thomas J Hook › Thomas J. Hook • President & CEO › Thomas J. Mazza • Senior Vice President & CFO › Marco F. Benedetti • Corporate Controller & Treasurer C t C t ll & T 3

AGENDA › Second Quarter 2011 Review – Tom Hook › Second Quarter 2011 Review – Tom Hook • Financial Highlights • Strategic Initiatives Update g p › Second Quarter 2011 Financial Results - Tom Mazza • Financial Results • Guidance › Question & Answer 4

SECOND QUARTER 2011 FINANCIAL HIGHLIGHTS › Sales of $146 5 Million › Sales of $146.5 Million • 4% increase over the prior year (1% constant currency) • 24% Orthopaedic growth (8% constant currency) p g ( y) • Maintained CRM revenue despite declining market • Vascular Access & Electrochem tough comparables › Operating Results • 8% increase in adjusted EPS • Driving operational and financial leverage • Continued RD&E investment 5

STRATEGIC INITIATIVES UPDATE › Grow & Diversify Revenue › Grow & Diversify Revenue • Diversified revenue offsetting contracting CRM market • Investments in Orthopaedic operations driving market share gains • Establishing long-term agreements in Electrochem • Medical device strategy broadens product portfolio and M di l d i t t b d d t tf li d deepens customer relationships 6

STRATEGIC INITIATIVES UPDATE › Drive Operating Performance • Adjusted operating income 12.6% of sales • Strong cash generation • Strong cash generation • Renegotiated revolving credit facility to provide increased financial flexibility 7

STRATEGIC INITIATIVES UPDATE › Deliver Innovative Solutions › Deliver Innovative Solutions - Medical device strategy continues to build momentum • Sales of new medical devices over $1 million for 1H11 • 3 medical device distribution agreements signed in 2Q11 • 27 medical device patents filed in 1H11 (4 granted) • In total 48 medical device patents pending (10 granted) • 2 medical device regulatory submissions made in 2Q11 • 3 medical device regulatory approvals received in 2Q11 • 3 medical device regulatory approvals received in 2Q11 8

SECOND QUARTER 2011 SALES › CRM & Neuromodulation revenue › Tough comparable vs. 2Q’10 includes benefit of inventory builds & includes benefit of inventory builds & › Continued strength in energy & C ti d t th i & product launches environmental markets › Vascular Access tough comparable vs. › Expect 2H’11 to be below 1H’11 run-rate 2Q’10 › Continue to develop industry leading p y g › 24% Orthopaedic growth (8% cc) technology for Energy & Portable • Customer product launches Medical customers › Secured long-term supply agreements • Expanded capabilities enabling market share gains market share gains 9

10 10 SECOND QUARTER 2011 FINANCIAL RESULTS

FINANCIAL GUIDANCE › 2011 annual guidance ranges revised as follows: › 2011 annual guidance ranges revised as follows: Previous Revised Revenue (in millions) $540 - $560 $550 - $570 Adjusted OI as % of Sales* 12% - 13% 12% - 13% Adjusted EPS* $1.55 - $1.65 $1.60 - $1.70 * Excludes non-recurring, unusual or infrequently occurring items such as consolidation and integration charges, certain R&D expenditures, asset disposition and write-down charges. See appendix for reconciling items to GAAP GAAP. 11 11

12 12 APPENDIX

13 13 GAAP RECONCILIATION

14 14 GAAP RECONCILIATION

CONTACT INFORMATION M Marco F. Benedetti F B d tti Corporate Controller & Treasurer G Greatbatch tb t h 10000 Wehrle Drive Clarence, NY 14031 T l Tel 716-759-5856 716 759 5856 mbenedetti@greatbatch.com www.greatbatch.com 15 15