Greatbatch, Inc. (NYSE:GB) Q4 2014 Earnings Conference Call - Final Transcript

Feb 24, 2015 • 05:00 pm ET

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Greatbatch, Inc. (NYSE:GB) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome everyone to the Fourth Quarter 2014 Greatbatch Incorporated Conference Call.

Before we begin I would like to read the Safe Harbor statement. This presentation and our press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involves a number of risks and uncertainties. These risks and uncertainties are described in the company's Annual Report on Form 10-K. The statements are based upon Greatbatch Incorporated current expectations and actual results could differ materially from those stated or implied. The company assumes no obligations to forward-looking statements information included in this conference call to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions, or prospects.

I would now like to turn the call over to today's host, Vice President of Finance and Treasurer, Betsy Cowell. Please proceed.

Executive
Betsy Cowell

Hello, everyone, and thank you for joining us today for our fourth quarter 2014 earnings call. With us on the call are Thomas J. Hook, President and Chief Executive Officer, as well as Michael Dinkins, Executive Vice President and Chief Financial Officer.

As we have done in the past, we are including slide visuals to accompany the presentation which you can access on our website at www.greatbatch.com. Once Tom and Michael have completed their presentation, we will then open up for Q&A session. Both Michael and I are available to take further questions following the call.

Let me turn the call over to Tom Hook.

Executive
Thomas J. Hook

Thank you, Betsy, and good afternoon to all of you who are joining our call today. We are very pleased with our operating results for the year. For the second year in a row, we have exceeded our commitment to return two times our revenue growth to the bottom line. On the top line, we had record revenues of $688 million, recognizing double-digit growth in orthopaedics and vascular, and mid-single-digit growth rates in energy, military, and environmental. Our adjusted operating margins expanded 80 basis points to 13.3%, reflecting our sustained productivity and cost control efforts.

Michael will provide additional information about our lower taxes. We believe we will continue to benefit from a lower overall effective tax rate into 2015 and beyond. We were able to increase our adjusted diluted earnings per share by over 15% this year, while driving key strategic objectives of growing our intellectual property portfolio with a 134 new patents, positioning Algovita for FDA approval in the first half of 2015, executing our strategy to become a leading manufacturer in the growing neuromodulation market, and positioning us for continued margin expansion by building our new facility in Mexico.

We are confirming our 2015 guidance. There are a lot of numbers in Slide 6, but at the bottom is the key measurement. Operating cash flow of $81.3 million and ROIC improvement of 50 basis points to 8.4% for 2014. As you can see, across all of our metrics we showed improvement. Most importantly, we made the investments to continue our success. We