Slide 1: Fourth Quarter 2010 Earnings Call
Fourth Quarter 2010 Earnings Call February 24 24, 2011
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements made in the presentation whether written or oral may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, 1933 as amended, amended and Section 21E of Securities Exchange Act of 1934, as amended, and involve
Slide 3: Earnings Call Participants
Earnings Call Participants ▫ Thomas J. Hook - President & Chief Executive Officer ▫ Thomas J. Mazza - Senior Vice President & Chief Financial Officer ▫ Marco F. Benedetti - Corporate Controller & Treasurer 3
Slide 4: Agenda
Agenda ▫ Fourth Quarter and Full Year 2010 Review – Tom Hook - Financial Highlights - 2010 Accomplishments ▫ Fourth Quarter and Full Year 2010 Financial Results - Tom Mazza ▫ Questions & Answers 4
Slide 5: Investor Day invitation
We are p pleased to invite the institutional investment community to our Investor Day Thursday March 24, 2011 Millennium Broadway Hotel 145 West 44th Street New York, NY 10036 Webcast Available at: www.greatbatch.com Registration: 8:30 A.M. Presentations & Q&A: 9:00 A.M. – 1:00 P.M. 5
Slide 6: Fourth Quarter 2010 Financial Highlights
Fourth Quarter 2010 Financial Highlights ▫ Sales – Q4 of $133.1 Million - 6% higher than prior year. - 29% Vascular Access growth & 22% Orthopaedic growth. - Revenue within guidance. ▫ Operating Results - Adjusted j operating p g income increased 8%. - Cost reduction & containment initiatives fundin
Slide 7: 2010 Review
2010 Review ▫ Grow & Diversify Revenue Base - Diversified revenue base offsetting slower than expected CRM growth. - Extended partnerships with Boston Scientific, Medtronic and St. Jude Medical. - Expanded Orthopaedic capabilities. ▫ Drive Operating Performance - Gross Margin improved 60 basis point
Slide 8: 2010 Review
2010 Review ▫ Deliver Innovative Solutions - Net R&D investment 8.4% of sales vs. 6.4% in 2009. - Opens new pathways for growth. - Received first 510(k) clearance under Greatbatch Medical brand. - IntElect Medical investment gain. - Significant progress on system & device projects. - Further details
Slide 9: Fourth Quarter Sales
Fourth Quarter Sales Greatbatch Medical Electrochem Q4’10 vs. 4Q ’09 vs. 3Q ’10 Q4’10 vs. 4Q ’09 vs. 3Q ’10 $118.9M +9% +12% $14.2M -17% -32% Challenging CRM market In-line with expectations 29% Vascular g growth Energy gy customers built inventory y levels in 2Q & 3Q 2010 - Returned to a no
Slide 10: Fourth Quarter 2010 Financial Results
Fourth Quarter 2010 Financial Results 4Q ’10 vs. 4Q ’09 vs. 3Q ’10 Sales $133.1M +6% +4% Gross Profit $ $44.5M +7% +6% as % of Sales 33.4% SG&A $15.3M -15% 15% -11% 11% as % of Sales 11.5% RD&E, Net $11.4M +57% 0% as % of Sales 8.6% Adjusted Operating Income(1) $17.8M +8% +23% as % of Sales 13 3% 13
Slide 11: 2010 Financial Results
2010 Financial Results 2010 vs. 2009 Sales $533.4M +2% Gross Profit $ $173.6M +4% as % of Sales 32.5% SG&A $64.5M -8% 8% as % of Sales 12.1% RD&E, Net $45.0M +34% as % of Sales 8.4% Adjusted Operating Income(1) $64.9M +4% as % of Sales 12 2% 12.2% Adjusted EPS(1) $1.51 -1% (1) Adjusted Adj t d ffor
Slide 12: 2011 Guidance
2011 Guidance 2011 Annual Sales Guidance: $540 million - $560 million CRM & Neuromodulation: Flat Vascular: 10% to 20% Orthopaedic: 2% to 10% Electrochem: 2% to 5% Adjusted OI as % of Sales(1): 12.0% - 13.0% Adjusted Diluted EPS(2): $1.55 - $1.65 (1) Excludes $8 - $11 million of non-recurring, unusu
Slide 13: Appendix
13 Appendix & Greatbatch
Slide 14: GAAP Reconciliation
GAAP Reconciliation 2010 2009 2010 2009 4th Qtr. Qtr 4th Qtr Qtr. Year Year Operating income (loss) as reported: $ 24,512 $ (2,287) $ 68,994 $ 1,048 Adjustments: Electrochem Litigation charge (gain) (9,500) - (9,500) 34,500 Executive death benefits ((SG&A)) - - 885 - Write-down of intangible assets
Slide 15: GAAP Reconciliation
GAAP Reconciliation 2010 2009 2010 2009 4th Qtr. 4th Qtr. Year Year Income (loss) before taxes as reported: $ 20,520 $ (7,356) $ 49,325 $ (18,177) Adjustments: Electrochem Litigation charge (gain) (9,500) - (9,500) 34,500 Executive death benefits (SG&A) - - 885 - Write-down of intangible assets - 15
Slide 16: Contact Information
Contact Information Marco F. Benedetti C Corporate t Controller C t ll & TTreasurer Greatbatch 10000 Wehrle Drive Clarence, NY 14031 Tel 716-759-5856 mbenedetti@greatbatch.com www.greatbatch.com g