Symmetry Medical reports gross profit of $14.0M for fourth-quarter 2009

Symmetry Medical Inc. (NYSE: SMA), a leading independent provider of products to the global orthopaedic device industry and other medical markets, announced fourth quarter and full year 2009 financial results for the period ended January 2, 2010.

Revenue for the fourth quarter 2009 was $76.4 million, compared to $99.7 million reported in the fourth quarter 2008. Revenues during the quarter were unfavorably impacted by reduced customer demand across all segments of the business.

Gross profit for the fourth quarter 2009 was $14.0 million, compared to $23.3 million in the fourth quarter 2008. Gross margin percentage for the fourth quarter 2009 was 18.3% compared to gross margin percentage of 23.4% in the same period last year. The year-over-year decrease in gross profit and gross margin was driven by lower customer demand, which had an unfavorable impact on the Company's fixed cost recovery.

Selling, general and administrative expenses declined in the fourth quarter 2009 to $10.9 million, a 21.7% reduction from $13.9 million in the fourth quarter 2008. The year-over-year decrease was driven primarily by aggressive cost controls implemented during 2009.  

Operating income for the fourth quarter 2009 was $1.2 million, compared to $9.5 million for the fourth quarter 2008. Operating margin for the fourth quarter 2009 was 1.5%, compared to operating margin of 9.5% for the fourth quarter 2008.  The fourth quarter 2009 included $2.0 million in one-time expenses related to the Company's facility consolidation and severance payments, all of which were announced in or prior to December 2009.  Excluding these expenses, operating income for the fourth quarter 2009 was $3.2 million and operating margin was 4.1%.

The fourth quarter 2009 included a non-cash gain of $0.4 million for the mark to market of the Company's interest rate derivative, compared to a non-cash charge for the interest rate derivative of $1.5 million in the fourth quarter 2008.  

Income tax benefit for the fourth quarter 2009 was $0.6 million, compared to a tax benefit of $2.5 million for the fourth quarter of 2008.

Net income for the fourth quarter 2009 was $0.6 million, or $0.02 per diluted share, compared to net income of $11.3 million, or $0.32 per diluted share, for the fourth quarter of 2008.  The fourth quarter 2008 included a one-time benefit from various tax items of $6.9 million, or $0.19 per diluted share. Excluding the one-time facility consolidation and severance expenses in the fourth quarter of 2009 and the one-time benefit from various tax items in the fourth quarter of 2008, net income for the fourth quarter 2009 was $1.9 million, or $0.05 per diluted share, compared to net income of $4.4 million, or $0.12 per diluted share, for the fourth quarter of 2008.  

The weighted average number of diluted shares outstanding during the fourth quarter of 2009 was 35,625,195.

Revenue for the full year 2009 was $365.9 million, compared to $423.4 million reported in the full year 2008.  Gross margin percentage for the full year 2009 was 23.8%, compared to 23.7% for the full year 2008.  Net income for the full year 2009 was $21.8 million, or $0.61 per diluted share, compared to $24.0 million, or $0.67 per diluted share, reported in the full year 2008.  Excluding the one-time facility consolidation and severance expenses incurred in the fourth quarter of 2009 and the one-time benefit from various tax items in the fourth quarter of 2008, net income for the full year 2009 was $23.6 million, or $0.66 per diluted share, compared to net income of $17.1 million, or $0.48 per diluted share, reported in the full year 2008.  

Brian Moore, President and Chief Executive Officer of Symmetry Medical, stated, "Our fourth quarter and full year 2009 results are broadly in line with our expectations. The decrease in our bottom-line performance resulted from our decision to maintain certain fixed operating costs while experiencing lower volume. We are confident that our strategy of maintaining capacity during market softness in 2009 and into the current environment will be a competitive advantage in enabling us to meet customer demand as volume improves. We are also pleased to report that our SSI direct sales operations exceeded their goals, resulting in record revenue during the fourth quarter of 2009."

Mr. Moore continued, "We are encouraged by the favorable trends our orthopaedic customers are experiencing and our current backlog, which increased throughout the fourth quarter. We are now seeing tangible signs of improvement shaping our outlook for 2010. As these signs translate into increased customer demand it will enable us to leverage our fixed costs and combined with additional cost savings from our facility consolidation initiatives, will position us to drive increased profitability."

Financial Guidance

The following forward-looking estimates regarding 2010 guidance reflect current market conditions and foreign currency rates. Actual results may differ materially, and the Company refers you to forward-looking statements located at the end of the press release.  

For the full year 2010, the Company expects revenue to be in the range of $320 million to $340 million. The Company expects full year 2010 earnings per diluted share to be in the range of $0.43 to $0.50.  

AAOS

Symmetry Medical will be participating in the American Academy of Orthopedic Surgeons (AAOS) 2010 Annual Meeting in New Orleans, LA, March 9-13, 2010.  Symmetry Medical products and technologies will be located at Booth 2561.

SOURCE Symmetry Medical Inc.