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 23, 1999
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)
<PAGE>
Item 5. Other Events
On August 23, 1999, the Registrant issued a press release relating to
first-quarter earnings. The full text of the press release is set forth in
Exhibit 99.1 which is attached hereto and incorporated in this Report as if
fully set forth herein.
On August 25, 1999, the Registrant issued a press release relating to a
stock split and a cash dividend. The full text of the press release is set forth
in Exhibit 99.2 which is 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 23, 1999.
Exhibit 99.2 Press release dated August 25, 1999.
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 25, 1999 Robert L. Ryan
Senior Vice President and Chief
Financial officer
<PAGE>
EXHIBIT INDEX
Medtronic, Inc.
Form 8-K Current Report
Dated August 25, 1999
Exhibit Number Description
99.1 Press release dated August 23, 1999
99.2 Press release dated August 25, 1999
Exhibit 99.1
Contacts:
Rachael Scherer
Investor Relations
612/514-4971
Jessica Stoltenberg
Public Relations
612/514-3333
F O R I M M E D I A T E R E L E A S E
MEDTRONIC REPORTS
STRONG FIRST QUARTER REVENUES AND EARNINGS DRIVEN BY
TACHYARRHYTHMIA AND NEUROLOGICAL GROWTH
MINNEAPOLIS, MN, August 23, 1999 -- Medtronic, Inc. (NYSE: MDT),
reported today that it achieved revenues of $1,104.9 million for its first
fiscal quarter ended July 30, 1999, an 11.4 percent increase over the $991.7
million recorded in the comparable period a year ago. After excluding the $2.3
million negative impact of foreign currency translation, quarterly revenues
increased 11.6 percent. Net earnings were $248.9 million ($0.42 a share), up 9
percent, compared with $228.5 million ($0.39 a share) in the first quarter of
fiscal 1999 on a restated basis with fiscal 1999 poolings included. Prior to the
mergers, Medtronic had reported earnings of $0.32 per share in fiscal 1999's
first quarter.
"Fiscal year 2000 is off to a very solid start. First quarter results
demonstrate continued strong performance from our Cardiac Rhythm Management,
Cardiac Surgery and Neurological and Spinal franchises," said William W. George,
chairman and chief executive officer. "New products accounted for a significant
portion of revenues. We expect our full pipeline of new products will result in
continued acceleration of Medtronic's revenue growth throughout the fiscal year.
All of our fiscal 1999 mergers and acquisitions are fully integrated into
Medtronic and are contributing to our growth in earnings and revenues."
Cardiac Rhythm Management Product Lines
Cardiac Rhythm Management product line revenues grew 20 percent to $584
million, led by a 60 percent gain in defibrillator sales. U.S. revenue growth in
defibrillators exceeded 75 percent, benefiting from market share gains and the
continued strong market adoption of dual chamber devices. Medtronic's GEM(R)
family of defibrillators continues to drive significant sales and market share
gains with its advanced diagnostic features and proprietary PR LogicTM detection
algorithm. The company expects further sales growth from its recently launched
GEM II DRTM and GEM II VR defibrillators which offer the smallest
rate-responsive implantable cardioverter- defibrillators (ICDs) on the market.
In addition, the Medtronic Jewel(R) AF, the world's first implantable
defibrillator for treating multiple, complex rhythm problems including atrial
fibrillation, received a favorable recommendation from a United States Food and
Drug Administration (FDA) advisory panel during the first quarter and is
expected to impact revenues after U.S. introduction later this fall.
<PAGE>
Worldwide pacemaker revenues increased more than 7 percent,
significantly exceeding the growth rate of the overall market during this
period. First quarter sales were fueled by the company's strategy to offer
products at all price points and new features to serve unique patient needs. The
Medtronic.Kappa TM family (the Kappa 700, 600 and 400) is driving growth and
increased U.S. market share while the Medtronic.SigmaTM and Vitatron(R)
Collection III families of pacemakers are driving solid double digit growth in
Europe. Currently, Vitatron is the most rapidly growing pacemaker brand in
Europe.
Continued growth is expected from the recent U.S. launch of the
Medtronic.SigmaTM family of pacemakers in the mid-market segment. In addition,
the anticipated U.S. commercial releases of the Vitatron Collection II and Vita
pacemaker families--seven models with the first new rate responsive sensor to be
offered on the U.S. market in nearly 10 years--are expected to positively
contribute to future market share gains.
Medtronic Physio-Control reported solid sales progress for the quarter,
led by its LIFEPAK(R) 12 and LIFEPAK 500 external defibrillators designed for
the traditional responder market (hospitals, paramedics and other health care
professionals). The company continues to strengthen and expand its presence in
the automated external defibrillator market as its recently released 3D
biphasicTM LIFEPAK 500 becomes more widely accepted by police and security
personnel and placed in public facilities and other non-traditional
first-responder locations.
Neurological and Spinal Product Lines
Medtronic's Neurological and Spinal revenues surged 33 percent to $251
million as core neurological product lines experienced more than 20 percent
revenue growth, while spinal and neurosurgery products posted greater than 40
percent growth for the quarter. Sales were highlighted by recent product
launches such as the Medtronic SynchroMed(R) EL infusion system, with extended
device longevity and even more precise flow rates, and Sofamor Danek's INTER
FIXTM threaded fusion spinal cage which continues to gain market acceptance.
Vascular Product Lines
Vascular product line revenues rose sequentially to $157 million, but
declined 28 percent, largely due to the exceptional first quarter reported by
Medtronic AVE in fiscal 1999. The Medtronic AVE S670 coronary stent is very well
accepted in Europe, evidenced by the quarter's European coronary vascular
revenue gains of 30 percent. U.S. regulatory clearance of the S670 is expected
later this calendar year. The company also anticipates U.S. regulatory clearance
and release of the Medtronic AneuRxTM Stent Graft System for the treatment of
abdominal aortic aneurysms (AAA) this fall. This product received unanimous
conditional approval for marketing clearance by a FDA advisory panel in June.
Cardiac Surgery Product Lines
Cardiac Surgery revenues rose 18 percent to $113 million, reflecting
the first full quarter of revenue from the AVECOR Cardiovascular, Inc.,
acquisition. Sales were led by continuing strength in the Medtronic Octopus(R)
II tissue stabilization device, which facilitates precise suturing on a beating
heart, and rapid growth in the company's perfusion business, due to the
Affinity(R) blood oxygenator from AVECOR. The Hancock(R) II bioprosthetic heart
valve, which closely resembles the heart's natural valves, is also expected to
receive FDA clearance this fall.
<PAGE>
Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company, specializing in interventional and implantable
therapies that restore health, extend life and alleviate pain.
Its Internet address is http://www.medtronic.com.
Any statements made about the company's anticipated financial results and
regulatory approvals are forward-looking statements subject to risks and
uncertainties such as those described in the company's Annual Report and on Form
10-K for the year ended April 30, 1999. Actual results may differ materially
from anticipated results.
-Tabulation Follows-
MEDTRONIC, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
Three months ended
July 30, July 31,
1999 1998
(in millions, except per share data)
Net sales $ 1,104.9 $ 991.7
Costs and expenses:
Cost of products sold 275.4 248.5
Research and development expense 112.7 99.9
Selling, general, and
administrative expense 351.4 289.7
Non-recurring charges 0.0 8.0
Interest expense 3.1 2.9
Interest income (6.5) (9.3)
Total costs and expenses 736.1 639.7
Earnings before income taxes 368.8 352.0
Provision for income taxes 119.9 123.5
Net earnings $ 248.9 $ 228.5
Weighted average shares outstanding 586.1 569.3
Basic earnings per share $ 0.42 $ 0.40
Earnings per share assuming dilution $ 0.42 $ 0.39
Weighted average shares outstanding
assuming dilution 599.1 583.3
Exhibit 99.2
Contacts:
Rachael Scherer
Investor Relations
612/514-4971
Diana Campau
Public Relations
612/514-4920
F O R I M M E D I A T E R E L E A S E
MEDTRONIC BOARD APPROVES TENTH TWO-FOR-ONE STOCK SPLIT
AND DECLARES CASH DIVIDEND
MINNEAPOLIS, MN, August 25, 1999 -- Medtronic, Inc. (NYSE: MDT),
announced at its annual meeting of shareholders today that the board of
directors had approved a two-for-one split in the company's common shares in the
form of a 100 percent stock dividend. The board also approved a quarterly cash
dividend of $0.04 cents per common share of the company's stock on a post-split
basis.
The board's two-for-one stock split action was contingent on
shareholder approval -- received at the meeting -- of an increase in the
company's authorized shares from 800 million to 1.6 billion. The company has
approximately 586 million common shares outstanding and no preferred shares
outstanding. The stock split will apply to shareholders of record at the close
of business on September 10, 1999, who will receive one additional share for
each share then held. Distribution is expected to be made on September 24, 1999.
Medtronic stock was first publicly traded in June, 1960, at $1.75 a
share. The action announced today is the tenth two-for-one split since that
time.
The quarterly cash dividend is payable on October 29, 1999 to
shareholders of record at the close of business October 8 and reflects the
two-for-one stock split.
Medtronic, Inc., headquartered in Minneapolis, is the world's largest
leading medical technology company, specializing in interventional and
implantable therapies that restore health, extend life and alleviate pain. Its
Internet address is www.medtronic.com.
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