Q3 2003 Synthes Stratec Sales Results Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Welcome to the Synthes-Stratec third-quarter sales results 2003 conference call. After the presentation there will be an opportunity to ask questions. At this time I'd like to turn the call over to Mr. Peter Fehlmann, Head of Investor Relations. Please go ahead, sir.

PETER FEHLMANN, INVESTOR RELATIONS, SYNTHES-STRATEC: Thank you and good evening, good afternoon to you ladies and gentlemen. Thank you for joining today's conference call and our sales results for the third-quarter 2003. With me today on the call are Michael Huggins, President of the North American Operations; Bob Donohue, our Chief Financial Officer of Synthes-Stratec Group; Ciro Romer, President of the European and Latin American operations. The press release has been made available to approximately an hour ago and it can also be downloaded by our Website, www.sympathetic.com. We will start this conference call with a comment on the financial results by our CFO, then followed by general update on the North American markets by Michael Huggins, and an update on the European and Latin American markets by Ciro Romer. And after that, as you heard, we are happy to take questions.

Apart from the published sales results we assume that you might be interested in any news of the market acquisition. Here I would like to refer to our comprehensive shareholder information brochure which was published together with a press release at the end of last month, and it can also be downloaded from our website. We really don't want to make this call a Mathys update call as we don't have much more information to share with you, we went to focus on Q3 results. I will just give you the details have. On the Mathys, the next step is extraordinarily general assembly which will take place next week exactly on the 23rd of October. At this occasion, we are going to ask shareholders that they approve the issuance of 510,725 shares that we can cover the equity portion of the purchase price of the Mathys shares. And then we are still awaiting some regulatory approval and hopefully we will be able to close the transaction this year. However, the authorities, they do have the right to prolong their approval into the first quarter of 2004. So this is all the news that we can give you at the moment for Mathys. Now I am pleased to hand over to Bob Donohue for the financials of Q3, 2003. Please go ahead, sir.

ROBERT DONOHUE, CFO, SYNTHES-STRATEC: Thank you Peter. Synthes-Stratec consolidated sales were $316.3 million US for the third-quarter and $108 million US for nine months year-to-date period. The third-quarter sales growth versus prior year is 21.3 percent, 18.6 percent in local currencies from continuing operations. Year-to-date sales growth versus the prior year is 20.6 percent, 18.7 percent in local currency continuing operations. With respect to our business units, in the general trauma area, the company continued to strengthen its number one position. The lock and compression plate or LCP, TFN or the Trochanteric Fixation nail and also the Norian SRS were the major contributors to the 2003 growth.

The spine division experienced significant growth for the fifth consecutive quarter. There were many major new products that contributed to that including the duo opening U.S.S. system. In the craniomaxillofacial area, the performance for the first nine months of 2003 continues to be above market growth. The major contributors to the growth in the craniomaxillofacial area include the low profile Neuro Fixation System as well as Norian CRS Fast-Set Putty.

In the acquisition and divestiture area, the acquisition of Spine Solutions closed on April 4, 2003. Spine Solutions received FDA notification on July 23rd that it may begin the ProDisc cervical IDE replacement clinical trial study. The company is pleased to confirm that the Prodisc cervical IDE steady actually began in August of 2003. With respect to Mathys Medical, on August 13th, Synthes-Stratec, Inc. announced that it had agreed to combine the two companies to create a global osteosynthesis medical device company. In 2002, the osteosynthesis business contributed 383 million Swiss francs in revenues to Mathys. The company designs, manufactures and markets instruments and implants for trauma, spine, craniomaxillofacial and orthopedic surgeons. Mathys prosthetics business will not be part of the combination.

In June, of 2003, there was an agreement to sell the Medivision division of Synthes-Stratec or computer-assisted surgery to Praxim. That …