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Original Source: FD (FAIR DISCLOSURE) WIRE
. Terry Shepherd, St. Jude Medical, Inc., Chairman of the Board,
CEO . John Heinmiller, St. Jude Medical, Inc., VP - Finance, CFO
. Dan Starks, St. Jude Medical, Inc., President, COO . Mike Coyle, St. Jude Medical, Inc., President, Cardiac Rhythm Management . David Adinolfi, St. Jude Medical, Inc., President, Daig
STJ reported 4Q03 total sales of $519m, up 27% YonY. Favorable FX increased 4Q sales by $23m. 4Q EPS was $0.51, up 28% YonY. 4Q sales of high voltage CRM devices were up $106m or 25% YonY. 4Q sales of low voltage CRM devices were up 17% to $216m. Full year 2003 net sales were $1.933b, up 27% YonY. Q&A Focus: performance by segment, ICD & CRT market dynamics, pricing, guidance.
A. Key Data From Call 1. 4Q03 total sales = $519m. 2. 4Q EPS $0.51.
3. Full year 2003 net sales = $1.933b.
S1. 4Q03 and 2003 Overview (T.S.) 1. 4Q03 Performance: 1. Highlights:
1. 4Q total sales = $519m, up 27% from $410m in 4Q02. 2. FX increased 4Q sales by $23m. 3. 4Q EPS = $0.51, up 28% YonY.
4. Sales of high voltage CRM devices up $106m or 25% YonY.
5. 4Q sales of low voltage CRM devices up 17% to $216m. 1. Sales outside US = $103m, up 39%, with approx. $11m of the increase due to FX. 2. US sales up 2% YonY. 6. EP catheter component of CRM business = $36m, up 44% YonY. 7. 4Q cardiac surgery sales = $72m, up 18% YonY. 2. Cardiology and vascular access: 1. 4Q Angio-Seal sales = $63m, up 43%. 2. 16th quarter in a row where Angio-Seal sales are up over 30% YonY. 3. Significant Events: 1. Submissions: 1. STJ submitted PMA covering four CRT products to FDA during week of 12/15/03. 2. Included Epic HF ICD, Atlas Plus HF ICD, Aescula 1055 K Left Heart Lead, Quick Side 1056 K Over the Wire Left
Heart Lead. 3. Also includes clinical results from rhythm ICD study;
results will be presented in March. 4. Continue to expect FDA approval before NASB/Heart Rhythm Society meeting in May. 2. ICD study: 1. Initial results presented at AHA in November. 2. Evaluated whether ICDs can improve survival in non-ischemic heart failure patients. 3. Results showed that ICD recipients indeed had a statistically significant reduction in the rate of arrythmic death. 4. Demonstrated a strong trend toward the reduction of overall mortality rates. 3. Approvals in November: 1. Co. received FDA approval on European CE marking of Atlas Plus ICD. 2. FDA approval of House Call Plus Remote Patient Monitoring System.
4. Valves: 1. 20,000th implant of Toronto Stentless Porcine Valve, or TSPV. 2. Results of 10-year study of the valve demonstrate excellent durability, clinical performance and hemodynamics.
3. CE marking approval and first implants of SJM Epic Supra Aortic Heart Valve. 4. Sales of stented tissue valves continued to accelerate in OUS markets in 4Q. 5. STJ looks forward to US launch, beginning with the SJM File Core Valve later this year. 2. Mgt. Changes:
1. In December, Terry Shepard announced decision to step down as
Chairman and CEO in May. 2. Dan Starks will succeed him in both positions.
S2. 4Q03 and 2003 Financial Review (J.H.) 1. 4Q03 and 2003 Financial Review: 1. Overview: 1. 4Q03 sales = $519m, up 27% from $410m in 4Q02. 1. Favorable FX increased 4Q sales by $23m. 2. 2003 net sales = $1.933b, up 22% YonY. 1. Favorable FX increased 2003 net sales by $71m. 3. 4Q EPS = $0.51, up 28% YonY. 4. Full year EPS $1.83, up 21% YonY. 2. FX: 1. Two main currencies influencing STJ are the Euro and the Yen. 2. For 2004 outlook, assume a Euro equal to $1.20-1.25, and that each 107-110 Yen will equal one US Dollar. 3. Sales by Product Category: 1. ICD: 1. 4Q sales = $106m, up 25% YonY and up $6m sequentially. 2. FX increased 4Q sales by $3m YonY. 3. 4Q high voltage revenues benefited from new product introductions and full quarter availability of some products. 4. 2003 sales = $414m, up 37% YonY. 5. FX increased 2003 sales by $12m. 6. Current market share of traditional ICD segment is 16-17%, up more than two percentage points YonY. 2. ICD Guidance: 1. 1Q04 sales = $107-112m. 2. FDA approval of first ICDs with CRT functionality in 2Q04. 3. 2004 total ICD sales = $550-580m. 4. Growth rate for worldwide ICD market over 20% for 2004. 5. STJ growth rate expected to be 1-1.5 times market growth rate.
3. Low Voltage Devices: 1. 4Q sales = $216m, up 17% YonY. 2. 4Q US pacemaker sales = $113m, up 2% YonY. 3. 4Q pacemaker sales outside US = $103m, up $29m or 39% YonY; $11m of increase due to FX. 4. 2003 total pacemaker sales = $826m, up 10% YonY, with FX accounting for $33m of the increase. 4. Low Voltage Devices Guidance: 1. 1Q total pacemaker sales = $217-222m. 2. US regulatory approval of Frontier Low Voltage CRT device during 2Q04. 3. 2004 worldwide pacemaker sales = $890-910m. 4. Revenue growth rate of 8-10%, in worldwide market expected to grow in its historical range of 4-6%. 5. EP Catheter: 1. 4Q sales = $36m, up 44% YonY. 2. 2003 sales = $125m, up 34% YonY. 3. 1Q sales expected to total $33-38m. 4. Full year 2004 sales of $140-150m expected, up 12-20% YonY. 6. Vascular Sealing Devices: 1. 4Q sales = $63m, up 43% YonY, with $2m of increase due to FX. 2. 2003 total Angio-Seal sales = $218m, up 40% YonY; $8m of increase due to FX. 3. 1Q vascular sealing device sales of $63-68m expected. 4. 2004 sales of $255-265m expected, up 17-22% YonY. 7. Other CVA: 1. 4Q sales = $26m. 2. 2003 sales = $78m. 3. 1Q04 total sales = $23-28m. 4. Full year 2004 sales of $85-90m expected. 8. Cardiac …