Stryker Corporation (NYSE:SYK) Q4 2014 Earnings Conference Call - Final Transcript

Jan 27, 2015 • 04:30 pm ET


Stryker Corporation (NYSE:SYK) Q4 2014 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Welcome to Stryker's Fourth Quarter 2014 Earnings Conference Call. My name is Bakiba [ph], and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Following the conference, we'll conduct a question-and-answer session and we will follow question. (Operator Instructions) This conference call is being recorded for replay purposes.

(Forward Looking Cautionary Statements) Also, the discussions will include certain non-GAAP financial measures. Reconciliations to most directly comparable GAAP financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8-K filed today with the SEC.

I would now turn the call over to Mr. Kevin Lobo, Chairman and CEO. You may proceed, sir.

Kevin Lobo

Good afternoon everyone and welcome to Stryker's fourth quarter 2014 earnings call. Joining me today are Bill Jellison, our CFO and Katherine Owen, Vice President of Strategy and Investor Relations. Following my opening comments Kathy will provide an update on our M&A activity. Bill will then offer details on our quarterly results before turning to questions and answers.

Our top-line performance in Q4 reflected our ongoing goal to grow organic sales at the high end of med tech with both the fourth quarter and full year revenue increasing close to 6% excluding the impact of FX and acquisitions to maintain strong sales momentum and delivered results at the high end of our initial expectations 4.5% to 6% growth.

Q4 results were impacted by one less selling day, which negatively impacted sales by approximately 1%. Similar to prior quarters, our diversified revenue base remains a key advantage as all three business segments Orthopedics, MedSurg and Neurotechnology and Spine again delivered positive year-over-year gains.

In the U.S. Orthopedics, which is up against very tough comparisons from 2013, registered over 7% growth. Trauma and extremities including foot and ankle continued its impressive multi-year track record with healthy double-digit growth. Hips once again posted strong results, while knees came in flat.

Turning to MAKO we are gaining considerable momentum with the sale of 20 robots in the quarter, up from 8 in Q3 and the highest level of quarterly units ever achieved. Q4 also represented the highest MAKO procedure volume, increasing double digits year-over-year. Katherine will provide additional details regarding a number of key milestones for MAKO that we are targeting in 2015.

U.S. MedSurg had a standout quarter, led by impressive organic growth for both instruments and medical. Continued gains for Neptune our strengthening hospital CapEx environment and strong sales force execution drove these results. Our U.S. Neurotechnology businesses continued their momentum with double-digit growth, which more than offset some softness in our core spine business.

Coming off a strong Q3 of this year and strong comps from Q4 of last year, our international businesses grew nearly 4% in constant currency. Our challenges in Japan, which began in Q2 with the difficult ERP implementation continued under most acute in hips and knees. Our other divisions had good performances and we are particularly pleased with our results