Symmetry Medical (SMA) reported fourth quarter fiscal 2010 adjusted earnings per share of 14 cents, missing the Zacks Consensus Estimate of 16 cents while exceeding the year-ago earnings of 5 cents per share. For fiscal 2010, adjusted earnings of 42 cents per share missed the Zacks Consensus Estimate by a penny and were well below the year-ago earnings of 66 cents per share.
Adjusted earnings exclude facility consolidation costs, employee severance payments and debt extinguishment charges. Net income for the fourth quarter catapulted more than seven-fold year over year to $4.3 million (or 12 cents a share) powered by a healthy double-digit expansion in the top line.
Revenues for the quarter zoomed roughly 26% year over year to $96 million, matching the Zacks Consensus Estimate. Growth was boosted by higher demand across the Indiana-based company’s orthopedic implants and medical devices businesses. For the full year, sales inched down 1% to $360.8 million, mostly in line with the Zacks Consensus Estimate.
By product category, surgical instruments revenues surged 32% year over year to $42.3 million. Orthopedic implants sales rose 6% to $26.2 million. Revenues from orthopedic, endoscopy and dental cases clambered 46% to $21.6 million while other revenues surged 23% to $5.9 million.
Gross margin for the quarter climbed to 23.4% from 18.3% a year ago owing to higher sales and increased manufacturing efficiency. Operating margin jumped to 9.4% from 1.5% a year ago as the company spent considerably less on facility closure and severance, assisted by higher gross margin.
Symmetry exited the quarter with cash and cash equivalents of roughly $15.1 million, up 6% year over year. Total long-term debt declined marginally year over year to $88.7 million.
Looking ahead, Symmetry expects revenues in the range of $363 million to $383 million for fiscal 2011. Adjusted earnings for the year are forecast between 57 cents to 65 cents a share. On a reported basis, earnings are expected in the range of 50 cents to 58 cents per share. The current Zacks Consensus Estimates for revenues and earnings per share are $382 million and 60 cents, respectively.
Symmetry is the largest OEM provider of orthopedic implants and instruments to orthopedic devices manufacturers. The company has created a distinct competitive niche in the orthopedic devices market with its “Total Solutions Approach."
Symmetry Medical has adopted a three-pronged strategy to tackle the economic downturn by preserving cash, developing an extensive supply chain and focusing on bottom line improvement. Its major customers include Johnson & Johnson (JNJ), DePuy, Stryker (SYK) and Zimmer Holdings (ZMH). Currently, we have a Neutral recommendation on Symmetry Medical.