Greatbatch, Inc. (NYSE:GB) Q1 2015 Earnings Conference Call - Final Transcript

Apr 30, 2015 • 05:00 pm ET

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Greatbatch, Inc. (NYSE:GB) Q1 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Welcome, everyone, to the first quarter 2015 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 update forward-looking 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 like now to turn the call over to today's host, Vice President of Finance and Treasurer Betsy Cowell. Please proceed.

Executive
Betsy Cowell

Thank you, operator. Hello, everyone, and thank you for joining us today for our first quarter 2015 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 at our website at www.greatbatch.com. Once Tom and Michael have completed their presentations, we will then open up for Q&A session. Both Michael are I available to take questions following the call.

Let me turn the call over to Tom Hook.

Executive
Thomas Hook

Thank you, Betsy, and good afternoon to all of you who are joining the call today. Slide five is an executive summary of our performance for the quarter, our plans, and expectations going forward. We are confirming our guidance, although the first quarter performance was down versus Q1 2014 on every key measurement; sales down 7%, adjusted operating income down 23%, and return on invested capital is down 30 basis points on a trailing 12-month basis.

Our adjusted earnings per share is flat year over year at $0.54 per share, primarily because we have a much lower effective tax rate. On the next few pages, Michael and I will explain the drivers behind this performance so you understand what is happening.

We anticipated a down quarter when we set our guidance to achieve our commitment of at least 5% revenue growth and 2 times adjusted earnings per share growth. We are staying with our guidance for the total year, because of several key drivers that will improve our short-term and long-term results.

First, we are having success with our neurostimulation strategy of becoming the definitive leader of critical technologies for the neurostimulation market. We are establishing a track record of providing reliable and meaningful solutions through a culture of life improving and life-saving technology.

Our success in neurostimulation as we utilize CCC Medical Devices for emerging indications and partnerships through GB Ventures is one of the drivers that are improving our performance for the balance of the year. Today, we announced a proposed tax-free