Symmetry Medical Reports Fourth Quarter and Full Year 2004 Financial Results

Symmetry Medical Reports Fourth Quarter and Full Year 2004 Financial Results
WARSAW, Ind., Feb. 23 /PRNewswire-FirstCall/ -- Symmetry Medical Inc. (NYSE: SMA), an independent provider of products to the global orthopedic device industry, announced today fourth quarter and full year 2004 financial results for the period ended January 1, 2005.
Fourth Quarter Highlights:
* Revenue increased to $52.3 million, up 40% over fourth quarter 2003
* Operating income increased to $10.0 million, up 102% over fourth
quarter 2003
Full Year Highlights:
* Revenue increased 68% to $205.4 million; and grew 30% compared to pro-
forma(1) 2003
* Operating income increased 101% to $37.7 million; and grew 68% compared
to pro-forma(1) 2003
* Completed major facility expansions to meet customer demand
The Company reported fourth quarter 2004 revenue of $52.3 million, a 40.3% increase over revenues of $37.3 million for the fourth quarter of 2003.
Gross profit for the fourth quarter of 2004 was $15.6 million, a 53.4% increase over gross profit of $10.2 million for the fourth quarter of 2003. Gross margin for the fourth quarter was 29.8%, compared to a gross margin of 27.3% for the fourth quarter 2003.
Operating income for the fourth quarter of 2004 was $10.0 million, a 102.2% increase over operating income of $5.0 million for the fourth quarter of 2003. Operating margin for the fourth quarter was 19.2%, compared with an operating margin of 13.3% for the fourth quarter 2003.
For the fourth quarter ended January 1, 2005, the Company reported a net loss applicable to common shareholders of $2.0 million, or $0.10 per diluted share, compared to a net loss applicable to common shareholders of $0.9 million, or $0.06 per diluted share, for the quarter ended January 3, 2004. The net loss for the fourth quarter ended January 1, 2005, included a loss on the extinguishment of debt of $5.4 million, net of tax, and preferred stock dividends of $1.9 million. The net loss for the fourth quarter ended January 3, 2004 included preferred stock dividends of $2.3 million. Proceeds from the recent IPO were used in part to repay the long-term debt and redeem a portion of the preferred stock. The remaining preferred stock was converted to common stock. Management believes that excluding these items provides a more meaningful basis for comparison for the periods presented. Excluding these items, net income for the quarter would be $5.3 million, or $0.25 per diluted share, as compared to net income of $1.4 million, or $0.09 per diluted share, for the quarter ended January 3, 2004.
Full year 2004 revenues were $205.4 million, a 68.3% increase over full year 2003; and a 29.7% increase over the pro-forma(1) $158.4 million for the full year 2003. As a percentage of total revenue, the Company's full year 2004 revenues are broken down into the following product categories: implants 36.6%; instruments 33.0%; cases 23.0%; other 7.4%.
For the full year 2004, gross profit was $60.3 million, a 68.0% increase over full year 2003; and a 31.2% increase over pro-forma(1) gross profit of $46.0 million for the full year 2003. Gross margin for the full year 2004 was 29.4%, compared with 29.4% for the full year 2003; and with pro-forma(1) gross margin of 29.0% for the full year 2003.
Operating income for the full year 2004 was $37.7 million, a 100.9% increase over full year 2003; and a 68.1% increase over pro-forma(1) operating income of $22.5 million for the full year 2003. Operating margin for the full year 2004 was 18.4%, compared to operating margin of 15.4% for the full year 2003; and pro-forma(1) operating margin of 14.2% for the full year 2003.
For the full year ended January 1, 2005, the Company reported net income applicable to common shareholders of $2.7 million, or $0.15 per diluted share, compared to net loss applicable to common shareholders of $1.1 million, or $0.10 per diluted share for the year ended January 3, 2004. The results for the full year ended January 1, 2005, included a loss on the extinguishment of debt of $5.4 million, net of tax, and preferred dividends of $9.0 million. The results for the full year ended January 3, 2004 included a loss on the extinguishment of debt of $0.9 million, net of tax, and preferred dividends of $7.0 million. Proceeds from the recent IPO were used in part to repay the long-term debt and redeem a portion of the preferred stock. The remaining preferred stock was converted to common stock. Management believes that excluding these items provides a more meaningful basis for comparison for the periods presented. Excluding these items, net income for the full year would be $17.1 million, or $0.96 per diluted share, as compared to net income of $6.8 million, or $0.56 per diluted share, for the year ended January 3, 2004.
In the fourth quarter, Symmetry Medical completed its initial public offering of approximately 9.2 million common shares at $15.00 per share, for gross proceeds of $138 million. For the fourth quarter, the weighted average basic shares outstanding, which include conversion of the preferred stock into common stock in connection with the Symmetry Medical initial public offering, were 20,346,705. At the end of the quarter, the total shares outstanding were 33,174,056. The adjusted earnings per share figures in this press release are not indicative of future earnings per share due to, among other things, the diluted effect on earnings per share of the increase in the number of shares outstanding as a result of the Company's initial public offering.
In January 2005, the Company completed the expansion of two existing facilities and the development of two new facilities. The addition of nearly 60,000 square feet reflects the demand for Symmetry Medical's Total Solutions(TM) business model. The total cost of the expansion and development was $8.5 million.
Brian Moore, President and Chief Executive Officer, stated, "Our strong growth in annual revenues and operating income reflect the momentum building across the orthopedic industry. Favorable demographics, broad adoption of minimally invasive surgery, and technologically improved implants and instruments have facilitated robust industry expansion. Leading orthopedic companies continue to leverage our Total Solutions business model."