Exhibit 99.1
Contacts:
Rachael Scherer
Investor Relations
763/514-4971
Jessica Stoltenberg
Public Relations
763/514-3333
F O R I M M E D I A T E R E L E A S E
MEDTRONIC REPORTS QUARTERLY EARNINGS-PER-SHARE GAIN OF
24% FUELED BY STRONG SALES ACROSS MAJOR PRODUCT LINES
Revenue Growth Highlighted by Gains in Implantable
Defibrillators and Coronary Stents
MINNEAPOLIS, MN, November 20, 2000 - Spurred by strong sales growth in
coronary stents and implantable defibrillators and across the board growth in
all product lines, Medtronic, Inc. (NYSE: MDT), announced today that quarterly
diluted earnings per share for the period ended October 27, 2000, increased 24
percent to $0.26, compared with the $0.21 reported in the same period a year
ago. Net earnings rose 21 percent to $314 million, compared with $261 million
reported in the prior-year quarter.
Quarterly revenues of $1,361 million marked an increase of 17.4 percent
on a constant-currency basis. Unfavorable foreign currency rates reduced
revenues by $34 million, lowering the reported revenue gain to 14.4 percent over
the second quarter of the prior year. Unless otherwise noted, all growth
percentages are quoted on a constant-currency basis.
Officials credited the company's industry-leading performance to
market-share gains in defibrillators and coronary stents, together with
broad-based revenue growth across major product lines. Implantable
defibrillators, coronary vascular, neurological products, spinal surgery
products, heart valves and tissue stabilization devices for beating heart
surgery, all posted revenue increases of more than 20 percent in the quarter.
"We are pleased with the very solid performance this quarter, which was
balanced across multiple businesses and geographies," said William W. George,
chairman and chief executive officer.
Art Collins, president and chief operating officer, noted, "Medtronic's
revenue performance growth rate continues to lead the medical technology
industry. Our top-line growth was nearly triple the average revenue growth of
our industry competitors. Equally important, the company's robust product
pipeline lays the foundation for continuing future growth."
<PAGE>
Cardiac Rhythm Management Businesses
Worldwide quarterly revenue of $670 million for the Cardiac Rhythm
Management businesses increased 13 percent on a constant-currency basis over
sales in last year's comparable quarter.
Worldwide implantable cardioverter-defibrillator (ICD) sales grew 22
percent on a unit growth of 24 percent. Medtronic gained several points of
market share as physicians increasingly opted for the superior therapeutic
capabilities of the Medtronic GEM II systems, which combine sophisticated PR
Logic(TM) detection algorithms, shorter charge times, higher Joule output and
patient-friendly features such as Patient Alert(TM).
Next month, Medtronic plans to launch its GEM II single- and
dual-chamber models in Japan and the new Sprint(TM) Quattro Model 6944
quadripolar defibrillation sensing lead in the United States. Worldwide
introduction of the GEM III family of defibrillators is expected later in the
fiscal year, including therapeutically-advanced single- and dual-chamber models
and the GEM III AT, which will add another therapeutic approach to the treatment
of atrial fibrillation. In addition, Medtronic's defibrillators and all other
Cardiac Rhythm Management products will soon benefit from the easy-to-use Vision
2001 software interface upgrade for Medtronic's 9790 industry-leading device
programmer.
Worldwide pacing sales grew at 9 percent on a constant-currency basis,
reflecting a double-digit increase in unit sales and sustaining market share
well above 50 percent. Results were driven by the expansion of the worldwide
sales force, combined with continuing strong acceptance of the Medtronic
Kappa(R) family of pacemakers and the Vitatron product line, which now includes
the Vitatron Selection(TM) AFm pacing system released in the U.S. market in
September. Rapid market acceptance of the Medtronic AT500(TM) pacing system
spurred European and Canadian sales in the last part of the quarter and
underscored the focus on new indications for pacing therapy. Emerging
device-based therapies for heart failure also contributed to sales as the
Medtronic InSync(TM) ICD device entered the European market.
Medtronic Physio-Control achieved modest growth in the quarter.
Placement of AEDs in public places such as shopping malls and airliners is
gaining momentum as the organization anticipates implementation of the Cardiac
Arrest Survival Act (CASA), the nation's first law expected to increase the
availability of AEDs in federal buildings nationwide.
Vascular Businesses
Medtronic Vascular recorded worldwide sales of $215 million for the
quarter, 35 percent above those of last year's comparable period, as the
organization became the overall leader in international markets for coronary
stents.
Coronary stent revenue of $157 million rose above last quarter's level
and was up 53 percent worldwide and 71 percent in the United States over the
same quarter last year. The Medtronic S670 modular coronary stent continued its
strong acceptance in the medical community, leading Vascular to achieve 30
percent worldwide market share and become the market leader outside the United
<PAGE>
States. Results reflected strong growth in Japanese stent sales, which were up
65 percent, and physician interest in recently released data from the European
Restenosis and Clinical Evaluation in Coronary Arteries Study (RACECAR) showing
the S670 restenosis rate at 9.8 percent, the best performance among stents
measured.
Medtronic Vascular is the only provider of both modular and tubular
stents. Solid market penetration of the Medtronic BeStent(TM) 2 tubular stent,
released in the United States late in the quarter, is expected to continue as
the company awaits the launch outside the United States of the S7, successor to
the popular S670 model, later in the third quarter. Concurrently, the pending
acquisition of PercuSurge, Inc., the first company in the world to market a
distal protection device to reduce complications in the treatment of vascular
disease, will expand Medtronic's Vascular portfolio.
Peripheral Vascular results declined moderately compared to the same
quarter last year because of production pauses related to the expansion and
upgrading of the manufacturing capability for the clinically preferred Medtronic
AneuRx(TM) stent graft for treatment of abdominal aortic aneurysms. The company
expects sales improvements within the next few months as full-scale production
resumes.
Neurological, Spinal and Ear, Nose and Throat (ENT) Businesses
Medtronic's Neurological, Spinal and ENT organization continued its
strong growth history at a rate of over 20 percent, achieving worldwide sales of
$360 million, a 22 percent gain for the quarter.
The new Medtronic Synergy(TM) neurostimulation device for pain
highlighted a 24 percent increase in revenue from the neurological product lines
(neurostimulators, drug delivery systems and diagnostic systems). During the
next quarter, Medtronic expects U.S. commercial release of Activa(R) Parkinson's
Control Therapy. An advisory panel to the U.S. Food and Drug Administration
recommended approval last March.
Spinal surgery products continued their solid revenue growth - 26
percent worldwide and 31 percent in the United States -- on the strength of
lumbar, interbody, and cervical devices.
Cardiac Surgery Businesses
Quarterly Cardiac Surgery business revenues, which grew 6 percent to
$116 million worldwide, reflected several strong market trends. Bioprosthetic
heart valve sales rose 39 percent as surgeons increasingly opted for tissue
valves over mechanical models. Medtronic moved into a solid second position in
this market with the industry's largest product line of tissue offerings under
the Mosaic(R), Freestyle(R), Hancock(R) and Hancock II brand names. With revenue
growth of 59 percent, Medtronic's Octopus(R) Tissue Stabilization Systems were
one of the company's fastest-growing product lines. Sales of the traditional
perfusion systems declined moderately during the quarter as physician preference
continues to shift to minimally invasive approaches.
<PAGE>
First Half Performance
Medtronic's earnings for the first half of fiscal 2001 were $615
million ($0.50 per diluted share), an increase of 20 percent over the same
period a year ago before the non-recurring litigation judgment charge in the
first quarter of this fiscal year and $603 million ($0.49 per diluted share)
after the charge. Revenues were $2,671 million, an increase of 17.4 percent on a
constant currency basis, over sales of $2,324 million in the comparable prior
period, and 15 percent after the negative foreign currency impact of $54
million.
Medtronic will host a teleconference Monday, November 20, at 5 p.m.,
EST (4 p.m., CST) for shareholders, security analysts and the media to discuss
second quarter financial results. The teleconference will be webcast
simultaneously through Medtronic's Website at www.medtronic.com. It will be
available for replay until 12 a.m.
(CST) on November 27, 2000.
Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company, providing lifelong solutions for people with chronic
disease. Its Internet address is www.medtronic.com.
Any statements made regarding 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 10K for the year ended April 30, 2000. Actual results may differ materially
from anticipated results.
[tabulation follows]
<PAGE>
<TABLE>
<CAPTION>
MEDTRONIC, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
(in millions, except per share data)
Three months ended Six months ended Six months ended
---------------------------------
10/27/2000 10/29/1999
----------------------------- -----------------
Before Litigation
Litigation
Judgment Judgment Reported
------------------------------------
10/27/2000 10/29/1999
------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 1,361.4 $ 1,190.3 $ 2,671.3 $ 2,671.3 $ 2,323.5
Costs and expenses:
Cost of products sold 366.8 313.3 697.3 599.7
697.3
Research and development expense 143.1 117.2 279.0 231.2
279.0
Selling, general, and administrative expense 400.8 377.6 810.9 739.9
810.9
Litigation judgment 16.9
- 16.9 -
Interest expense 4.3 3.6 7.6 6.8
7.6
Interest income (18.4) (6.7) (32.8) (32.8) (13.3)
----------- --------- ---------- --------- ------------ -----------
Total costs and expenses 896.6 805.0 1,762.0 16.9
----------- --------- ---------- --------- ------------ -----------
Earnings before income taxes 464.8 385.3 909.3 (16.9) 892.4 759.2
Provision for income taxes 150.7 124.7 294.8 (5.5) 289.3 246.2
----------- --------- ---------- --------- ------------ -----------
Net earnings (loss) $ 314.1 $ 260.6 $ 614.5 $ (11.4) $ 603.1 $ 513.0
=========== ========= ========== ========= ============ ===========
Earnings per share
Basic $ 0.26 $ 0.22 $ 0.51 $ (0.01) $ 0.50 $ 0.43
=========== ========= ========== ========= ============ ===========
Diluted $ 0.26 $ 0.21 $ 0.50 $ (0.01) $ 0.49 $ 0.42
=========== ========= ========== ========= ============ ==========
Weighted average shares outstanding
Basic 1,199.7 1,194.1 1,199.0 1,199.0 1,193.8
Diluted 1,225.6 1,219.5 1,225.3 1,225.3 1,220.2
</TABLE>
