May 6 2010
Symmetry Medical Inc. (NYSE: SMA), a leading independent provider of products to the global orthopaedic device industry and other medical markets, announced first quarter 2010 financial results for the three-month period ended April 3, 2010.
Revenue for the first quarter 2010 was $84.5 million, up 10.6% on a sequential basis from the $76.4 million reported in the fourth quarter 2009, reflecting increased customer demand across all product lines. Revenue for the first quarter 2009 was $101.4 million.
Gross profit for the first quarter 2010 was $17.0 million, up 21.4% on a sequential basis from the $14.0 million reported in the fourth quarter 2009 and compared to $24.6 million in the first quarter 2009. Gross margin percentage for the first quarter 2010 was 20.2% compared to 18.3 % for the fourth quarter 2009 and 24.2% in the same period last year.
Selling, general and administrative expenses in the first quarter 2010 were $12.6 million, up from $10.9 million in the fourth quarter 2009 driven by investments in R&D, sales and marketing expenses as well as an increase in employee commissions and incentive accruals. Expenses were down 4.8% compared to $13.2 million in the first quarter 2009. The year-over-year decrease was driven primarily by cost controls implemented during the second half of 2009.
On a pre-tax basis, facility closure and severance costs were $0.5 million in the first quarter of 2010, compared to $0.1 million in the first quarter of 2009 and $2.0 million in the fourth quarter of 2009.
Operating income for the first quarter 2010 was $3.9 million, up from fourth quarter 2009 operating income of $1.2 million and compared to $11.2 million for the first quarter 2009. Operating margin for the first quarter 2010 was 4.6%, compared to 1.5% in the fourth quarter 2009 and 11.0% for the first quarter 2009. Excluding expenses related to facility consolidation and employee severance payments referenced above, operating income for the first quarter 2010 was $4.4 million compared to $3.1 million in the fourth quarter of 2009.
The first quarter 2010 included a non-cash gain of $0.3 million for the mark to market of the Company's interest rate derivative, compared to a non-cash gain for the interest rate derivative of $0.4 million in the first quarter 2009.
Income tax expense for the first quarter 2010 was $0.8 million, compared to a tax expense of $3.2 million for the first quarter of 2009.
Net income for the first quarter 2010 was $1.6 million, or $0.05 per diluted share, up from $0.6 million, or $0.02 per diluted share, for the fourth quarter of 2009 and compared to $6.9 million, or $0.19 per diluted share, for the first quarter of 2009. Excluding the facility consolidation and employee severance payments referenced above, net income for the first quarter 2010 was $2.0 million, or $0.06 per diluted share compared to $0.05 per diluted share in the fourth quarter of 2009.
The weighted average number of diluted shares outstanding during the first quarter of 2010 was 35,729,115.
Brian Moore, President and Chief Executive Officer of Symmetry Medical, stated, "We are encouraged with the improving environment in the orthopedic industry and the results of our cost control initiatives, both of which contributed positively to our first quarter 2010 results. Our strong 11% sequential revenue growth was driven by the ongoing stabilization of our business that began during the fourth quarter 2009. We are continuing to see positive signs of recovery with order intake greater than reported sales for the second consecutive quarter. Our strategic focus remains on positioning ourselves for the reacceleration of orthopedic industry growth and increasing our market share."
Mr. Moore continued, "As a reflection of the improved environment and order intake, we are increasing full-year 2010 revenue guidance. We believe we will continue to gain volume leverage and increase efficiencies to improve bottom line performance."
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 is increasing revenue guidance to a range of $330 million to $340 million, up from the previously announced range of $320 million to $340 million. The increase is based on current order flow and anticipated customer demand for the remainder of 2010.
The Company is raising its full year 2010 earnings per diluted share guidance in the range of $0.45 to $0.50, up from the previously announced range of $0.43 to $0.50.
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