SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 1998
Medtronic, Inc.
(Exact name of Registrant as Specified in its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
1-7707 41-0793183
(Commission File Number) (IRS Employer
Identification No.)
7000 Central Avenue N.E.
Minneapolis, Minnesota 55432-3576
(Address of Principal Executive Offices and Zip Code)
(612) 514-4000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On August 6, 1998 and August 18, 1998, the Registrant issued press
releases relating to first-quarter earnings. The full text of the press releases
is set forth in Exhibits 99.1 and 99.2, respectively, which are attached hereto
and incorporated in this Report as if fully set forth herein.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Press release dated August 6, 1998.
Exhibit 99.2 Press release dated August 18, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDTRONIC, INC.
By /s/ Robert L. Ryan
Date: August 19, 1998 Robert L. Ryan
Senior Vice President and Chief
Financial officer
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EXHIBIT INDEX
Medtronic, Inc.
Form 8-K Current Report
Dated August 19, 1998
Exhibit Number Description
99.1 Press release dated August 6, 1998
99.2 Press release dated August 18, 1998
Contacts:
Chris O'Connell
Investor Relations
612/514-4971
Dick Reid
Public Relations
612/514-3052
F O R I M M E D I A T E R E L E A S E
MEDTRONIC PRE-ANNOUNCES FIRST-QUARTER REVENUES
AND ESTIMATED EARNINGS PER SHARE
MINNEAPOLIS, MN, August 6, 1998 -- Medtronic, Inc. (NYSE: MDT), said
today that revenues and earnings per share for its first quarter will be below
company expectations and analysts' published estimates. Though officials said
the company anticipates accelerating revenue during the year as major new
products are introduced to the U.S. market, constant-currency revenues grew only
4 percent to approximately $653 million in the quarter ended July 31.
Accordingly, diluted earnings per share are expected to be $0.32,
compared with $0.31 for the first quarter last year, and 2 cents below the
"street" consensus.
"Medtronic expects accelerating revenue as new products, now winning
rapid acceptance in international markets, are launched in the United States,"
said William W. George, chairman and chief executive officer. He specifically
cited the advanced Medtronic.Kappa(R) 700 pacemaker system and the new Medtronic
Gem(TM) DR defibrillator system, both now gaining market share internationally.
"It was a tough quarter," George said, "but we believe Medtronic is
positioned for its full fiscal year to substantially surpass the $1.27 per share
(before one-time charges) the company earned last year."
Cardiac Rhythm Management revenues increased 6 percent, showing the
benefit of the new pacemakers and defibrillators in markets outside the United
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States. Bradycardia pacing revenues grew nearly 8 percent on a 10 percent growth
in unit sales, leading to market share gains worldwide. International sales were
especially strong as the Medtronic.Kappa 700 system drove a 10 percent revenue
increase and a 13 percent increase in unit sales. The company expects further
increases in pacemaker sales as that system wins U.S. regulatory clearance later
in the year.
Tachyarrhythmia Management sales increased just 5 percent as the market
continued its shift to dual chamber defibrillators for treatment of dangerously
fast heart rhythms. Rapid acceptance in Europe of the Gem DR defibrillator drove
international revenue and unit sales growth of more than 30 percent while U.S.
revenues and unit sales declined 5 percent and 3 percent respectively.
The company said it expects accelerating growth in defibrillator sales
during the year. Recent international releases of the Medtronic Jewel(R) AF and
Medtronic Gem SR defibrillators are expected to augment the momentum of the Gem
DR system outside the United States and the company anticipates U.S. regulatory
clearance of Gem DR/SR defibrillators in its second quarter.
Medtronic Cardiac Surgery sales increased 6 percent in the quarter, led
by continuing strength in bioprosthetic heart valves. First-quarter Vascular
revenues were reduced by a sharp decline in sales of stents and balloon
catheters used in coronary angioplasty. Neurostimulation and drug delivery sales
each grew by more than 20 percent, but sales of neurological shunts and
diagnostic instruments failed to achieve planned levels. As in Cardiac Rhythm
Management product lines, neurological sales are expected to accelerate during
the remainder of the year.
The company said that regulatory processes are on track for a public
stock offering and completion of the recently announced acquisitions of
Physio-Control International, Inc., and AVECOR Cardiovascular Inc. later this
fall.
Medtronic plans to announce complete first-quarter financial results on
August 18.
Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company specializing in implantable and interventional
therapies. Its Internet address is www.medtronic.com.
<PAGE>
Any statements made regarding the company's anticipated financial results and
regulatory approvals are forward-looking statements which are subject to risks
and uncertainties, such as those described in the company's Annual Report on
Form 10K for the year ended April 30, 1998. Actual results may differ materially
from anticipated results.
Contacts:
Chris O'Connell
Investor Relations
612/514-4971
Dick Reid
Public Relations
612/514-3052
F O R I M M E D I A T E R E L E A S E
MEDTRONIC REPORTS FIRST-QUARTER EARNINGS PER SHARE OF $0.32,
CONSISTENT WITH EARLIER ANNOUNCEMENT
MINNEAPOLIS, MN, August 18, 1998 -- Confirming its earlier estimates,
Medtronic, Inc. (NYSE: MDT), today reported first-quarter diluted earnings per
share of $0.32 on net earnings of $150.4 million. Revenues of $653.2 million
reflected an increase of 4 percent, excluding the negative impact of $15.6
million in foreign currency translation. Net earnings increased 3 percent above
the $146.5 million recorded in the comparable period a year ago.
The company expects growing sales momentum in the last half of fiscal
1999. William W. George, chairman and chief executive officer, said Medtronic
anticipates that new products which are winning rapid acceptance in
international markets will drive the growth as they are launched in the United
States. He cited the advanced Medtronic.Kappa(R) 700 pacemaker system and the
new Medtronic Gem(TM) DR defibrillator system, both now gaining market share
internationally.
George also called attention to the recent launches internationally of
the Medtronic Jewel(R) AF arrhythmia management device for the treatment of
atrial fibrillation and Medtronic InSync(TM) multisite stimulator for treatment
of congestive heart failure. In addition, he said, the recent first human
implants of the Medtronic Chronicle(TM) hemodynamic monitor and the Medtronic
<PAGE>
Kinetra(TM) neurostimulator mark major milestones for the innovative device
therapies Medtronic is developing to serve a wide variety of unmet medical
needs. The latter two devices, for diagnosis and treatment of persons with
congestive heart failure and bilateral essential tremor or Parkinson's disease,
respectively, "are features in a full pipeline that will positively impact
Medtronic results in the future," George added.
Cardiac Rhythm Management revenues increased 6 percent in the quarter,
showing the benefit of the new pacemakers and defibrillators in markets outside
the United States. Bradycardia pacing revenues grew nearly 8 percent on a 10
percent growth in unit sales, leading to market share gains worldwide.
International sales were especially strong as the Medtronic.Kappa 700 system
drove a 10 percent revenue increase and a 13 percent increase in unit sales. The
company expects further increases in pacemaker sales as that system wins U.S.
regulatory clearance later in the year.
Tachyarrhythmia Management sales increased 5 percent as the market
continued its shift to dual chamber defibrillators for treatment of dangerously
fast heart rhythms. Rapid acceptance in Europe of the Gem DR defibrillator drove
international revenue and unit sales growth of more than 30 percent. The company
said it expects accelerating growth in defibrillator sales during the year with
U.S. regulatory clearance of Gem and Gem DR defibrillators in its second
quarter.
Medtronic Cardiac Surgery sales increased 6 percent in the quarter, led
by continuing strength in bioprosthetic heart valves. First-quarter Vascular
revenues reflected a sharp decline in sales of stents and balloon catheters used
in coronary angioplasty.
Quarterly sales of neurostimulation and drug delivery products grew by
22 and 20 percent, respectively, over amounts reached as they grew 21 and 72
percent in the comparable quarter last year. Sales of neurological shunts and
diagnostic instruments failed to achieve expected levels. As in Cardiac Rhythm
Management product lines, neurological sales are expected to accelerate during
the remainder of the year.
The company said that regulatory processes are on track for a public
stock offering in September and the acquisition of Physio-Control International,
Inc., and AVECOR Cardiovascular Inc. later this fall. A recently announced
inquiry from the Federal Trade Commission about the Physio-Control transaction
<PAGE>
is not expected to delay timely completion of that transaction, Medtronic
officials said.
Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company specializing in implantable and interventional
therapies. Its Internet address is www.medtronic.com.
- - -
Any statements made regarding the company's anticipated financial results and
regulatory approvals are forward-looking statements which are subject to risks
and uncertainties, such as those described in the company's Annual Report on
Form 10K for the year ended April 30, 1998. Actual results may differ materially
from anticipated results.
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<CAPTION>
MEDTRONIC, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three months ended
------------------------------
July 31, August 1,
1998 1997
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(in thousands, except per share data)
<S> <C> <C>
Net sales $ 653,235 $ 646,279
Costs and expenses:
Cost of products sold 169,689 160,161
Research and development expense 74,634 70,687
Selling, general, and
administrative expense 187,927 194,903
Interest expense 1,882 1,950
Interest income (6,996) (5,068)
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Total costs and expenses 427,136 422,633
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Earnings before income taxes 226,099 223,646
Provision for income taxes 75,743 77,158
------------- ------------
Net earnings $ 150,356 $ 146,488
============= ============
Weighted average shares outstanding 469,061 468,402
Basic earnings per share $ 0.32 $ 0.31
============= ============
Earnings per share assuming dilution $ 0.32 $ 0.31
============= ============
Weighted average shares outstanding assuming dilution 476,236 476,245
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