Symmetry Reports in Line – Analyst Blog

Symmetry Medical Inc. (SMA) recently reported fourth quarter and fiscal 2009 results. For the quarter, earnings per share were 5 cents, in line with the Zacks Consensus Estimate but considerably lower than the year-ago earnings of 12 cents. For fiscal 2009, earnings per share of 66 cents were higher than the year-ago figure of 48 cents.

 

 

Total revenues in the quarter declined 23% year over year to $76.4 million. The decline was due to lower customer demand across all business segments.

 

Instruments, Implants, Cases and Other revenues declined 28%, 16%, 20% and 33% year over year to $32.0 million, $24.8 million, $14.8 million and $4.8 million, respectively, in the quarter.

 

Symmetry Medical reported a contraction in margins in the quarter. Gross margin declined 510 basis points (bps) year over year to 18.3%. Selling, general and administrative expenses (SG&A) as a percentage of sales increased 30 bps year over year to 14.2%.

 

Lower gross margin coupled with higher SG&A expenses, the latter as a percentage of sales, were responsible for a lower operating margin that declined 800 bps year over year to 1.5%.

 

 

Total revenues in fiscal 2009 declined 14% year over year to $365.9 million. The decline was broad-based, across all business segments.

 

Instruments, Implants, Cases and Other revenues declined 6%, 12%, 21% and 38% year over year to $166.7 million, $108.0 million, $68.5 million and $22.7 million, respectively, in 2009.

 

 

Symmetry Medical ended fiscal 2009 with cash and cash equivalents of $14.2 million, an increase of 39.5% year over year. The company had an outstanding long-term debt of $89.6 million at fiscal-end 2009.

 

 

Symmetry Medical has provided revenues and earnings guidance for fiscal 2010. Total annual revenues are expected between $320 and $340 million. Earnings per share should be in the range of 43 to 50 cents.

 

Symmetry Medical is the largest original equipment manufacturer (OEM) provider of orthopedic implants and instruments to orthopedic device manufacturers. The company has created a distinct competitive position in the orthopedic device market with its Total Solutions Approach.

 

Under the Total Solutions Approach, customers are provided with a broad range of products relating to orthopedic implants as well as comprehensive services and production capabilities to bring these implant systems from the drawing board to the market in a timely and cost-efficient manner.

 

Presently, we have a “Neutral” recommendation on Symmetry Medical.