Symmetry Medical Reports Fourth Quarter and Full Year 2012 Financial Results

Symmetry Medical Reports Fourth Quarter and Full Year 2012 Financial Results

                       Provides 2013 Financial Guidance

Fourth Quarter Highlights:

  oRevenue of $106.6 million, up 26% year-over-year
  oGross margin of 27.1% compared to 16.4% year ago
  oOperating income of $8.7 million; as adjusted operating income of $13.7
    million, up 403% year-over-year
  oNet income of $2.9 million; as adjusted net income of $6.1 million, up
    371% year-over-year
  oGenerated strong cash from operations of $10.7 million
  oContinued debt reduction; leverage ratio at 3.3

WARSAW, Ind., Feb. 21, 2013 (GLOBE NEWSWIRE) -- Symmetry Medical Inc.
(NYSE:SMA), a leading global source of innovative medical device solutions,
including surgical instruments, orthopedic implants, and sterilization cases
and trays, announced fourth quarter and full year 2012 financial results for
the period ended December 29, 2012.

         Fourth Quarter         Vs Prior Quarter       Total Year
(in
millions,
except    2012    2011    Change 4Q'12   3Q'12   Change 2012     2011     Change
per share
data)
Revenue   $      $84.5 26%    $      $      6%     $410.5 $359.0 14%
          106.6                  106.6   100.9
Operating 8.7    (4.1)  FAV    8.7    10.2   -15%   33.0    8.3     300%
income
Net       2.9    (3.2)  FAV    2.9    3.7    -22%   9.1     2.9     216%
income
EPS       $0.08 $      FAV    $0.08 $0.10 -20%   $0.25  $0.08  213%
                  (0.09)
                                                                 
As
Adjusted                                                          
Non-GAAP*
Operating $13.7 $2.7  403%   $13.7 $14.0 -2%    $49.7  $24.3  104%
income*
Net       6.1    1.3    371%   6.1    6.5    -6%    20.7    13.6    53%
income*
EPS*      $0.17 $0.04 340%   $0.17 $0.18 -6%    $0.57  $0.38  51%
                                                                 
* Excludes non-cash charges for stock compensation expense, amortization of
intangible assets and debt issuance costs, impairment of an intangible asset in
2011, as well as charges for management transition costs, acquisition related
costs, facility closure and severance, SEC related legal costs and legal entity
restructuring costs.See "As Adjusted Financial Measures" below.

                                                       
                                                       
(in
millions,   Fourth Quarter         Vs Prior Quarter       Total Year
except per
share data)
Revenue by
Product: by 2012    2011    Change 4Q'12   3Q'12   Change 2012     2011     Change
Segment
OEM
Solutions                                                           
Revenue
Instruments $30.0 $27.3 10%    $30.0 $29.6 1%     $115.2 $115.3 0%
Implants    26.5   22.9   16%    26.5   25.6   3%     102.0   103.3   -1%
Cases       13.9   15.9   -12%   13.9   14.2   -2%    58.5    75.8    -23%
Other       7.7    7.2    8%     7.7    6.7    16%    27.6    25.1    10%
Total OEM
Solutions   $78.1 $73.3 7%     $78.1 $76.1 3%     $303.3 $319.5 -5%
Revenue
Symmetry
Surgical    28.5   11.2   154%   28.5   24.8   15%    107.2   39.5    172%
Revenue
                                                                   
Total       $      $84.5 26%    $      $      6%     $410.5 $359.0 14%
Revenue     106.6                  106.6   100.9

Revenue for the fourth quarter 2012 was $106.6 million, up 26.1% compared to
$84.5 million in the same period last year. The year-over-year revenue
increase was driven by growth in the Company's OEM Solutions and Symmetry
Surgical segments. Symmetry Surgical segment results for the fourth quarter
2012 included the Company's December 2011 acquisition of the surgical
instruments business of Codman & Shurtleff, Inc.

The increase in revenue in the Company's OEM Solutions segment to $78.1
million in the fourth quarter 2012 from $73.3 million in the fourth quarter
2011 was driven by increased implant demand by OEM customers as a result of
stronger procedural growth and reduced impact of unfavorable inventory
reductions made in the fourth quarter 2011. Additionally, instrument revenue
benefitted from continued stable customer capital spending as compared to the
fourth quarter 2011, which included reduced customer capital spending on
instruments. These increases were partially offset by continued weaker case
customer demand and market share loss in the case business. Foreign currency
exchange rates had a neutral impact on the fourth quarter 2012 OEM Solutions
segment revenue as compared to the fourth quarter 2011. On a sequential basis,
fourth quarter 2012 OEM Solutions revenue was up 2.6% compared to the third
quarter 2012, primarily driven by increased demand in the Implant and Other
categories, and indicative of the improved procedural growth reported by the
Company's OEM customers during the fourth quarter 2012.

The increase in revenue from the Company's Symmetry Surgical segment to $28.5
million in the fourth quarter 2012 from $11.2 million in the fourth quarter
2011 was primarily due to the inclusion of $13.1 million of revenues from the
Company's acquisition of the surgical instruments business of Codman &
Shurtleff, Inc., as well as, a one-time purchase of $2.9 million by an OEM
Solutions customer who was served by Symmetry Surgical. Excluding this
acquisition and one-time purchase, Symmetry Surgical segment revenue increased
10.4% year-over-year and 3.0% sequentially.

Gross profit for the fourth quarter 2012 was $28.9 million, up 108.9% compared
to $13.8 million in the same period last year. Gross margin percentage for the
fourth quarter 2012 was 27.1%, compared to 16.4% in the fourth quarter 2011.
The increase in gross margin was driven by a larger percentage of revenue from
the Company's higher margin Symmetry Surgical segment. Gross margin also
benefitted from strength in OEM Solutions gross margin, which was primarily
driven by improvements in scrap, consumables, and efficiencies resulting from
the Company's lean initiatives, as well as, increased leveraging of overhead
costs.

Sales, marketing, general and administrative expenses in the fourth quarter
2012 were $19.0 million, compared to $15.2 million in the same period last
year. The increase in the fourth quarter 2012 was primarily due to higher
ongoing costs in the Symmetry Surgical segment for the Codman business which
was acquired on December 29, 2011; thus, such costs did not impact 2011,
including increased amortization of intangible assets $1.3 million. The fourth
quarter 2012 also included a $0.5 million increase in stock compensation
expense. This was offset by the reduction of $1.2 million in acquisition
related costs and $0.5 million in management transition expenses. In addition,
the fourth quarter 2011 included an impairment charge of $1.5 million related
to the write off the Specialty Surgical Instruments ("SSi") trade-name and
SEC-related legal costs of $0.2 million, both of which did not recur in the
fourth quarter 2012. Facility closure and severance costs were negligible in
the fourth quarter of 2012, compared to costs of $0.2 million in the same
period last year.

Operating income for the fourth quarter 2012 was $8.7 million, compared to an
operating loss of $4.1 million in the same period last year. Operating margin
was 8.2% in the fourth quarter 2012, compared to (4.8%) in the same period
last year. Excluding amortization of intangible assets, stock compensation
expense, management transition costs, acquisition related costs, the
impairment of intangible asset in 2011, SEC-related legal costs, facility
closure and severance costs, and legal entity restructuring costs, operating
income for the fourth quarter 2012 was $13.7 million, up 403.2% compared to
$2.7 million in the same period last year primarily driven by significantly
improved gross margin in the OEM Solutions segment as well as the impact of
the Codman surgical instruments acquisition.

Interest expense for the fourth quarter 2012 was $4.7 million, compared to
interest expense of $1.1 million in the same period last year.This increase
was driven by incremental debt utilized to complete the Codman surgical
instruments acquisition in December 2011.

Income tax expense for the fourth quarter 2012 was $0.7 million, compared to
an income tax benefit of $1.8 million in the same period last year, driven by
the increase in pre-tax income. 

Net income for the fourth quarter 2012 was $2.9 million, or $0.08 per diluted
share, compared to net loss of $3.2 million, or $(0.09) per diluted share, in
the same period last year. Excluding amortization of intangible assets and
debt issuance costs, stock compensation expense, management transition costs,
acquisition related costs, the impairment of intangible asset in 2011,
SEC-related legal costs, facility closure and severance costs, and legal
entity restructuring costs referenced above, net income for the fourth quarter
2012 was $6.1 million, or $0.17 per diluted share, compared to $1.3 million,
or $0.04 per diluted share in the same period last year.

The weighted average number of diluted shares outstanding during the fourth
quarter of 2012 was 36,590,612.

Revenue for the full year 2012 was $410.5 million, up 14.3% compared to $359.0
million reported in the full year 2011. Full year 2012 revenue in the OEM
Solutions segment was $303.3 million, compared to $319.5 million in the same
period last year. This decline in revenue was primarily due to weaker case
customer demand. 2012 revenue was also impacted by $3.7 million due to the
unfavorable impact of foreign currency exchange rates. Full year 2012 revenue
in the Symmetry Surgical segment was $107.2 million, up 171.5% compared to
$39.5 million in the same period last year, including the impact of the Olsen
Medical acquisition and the acquisition of the surgical instruments business
of Codman & Shurtleff, Inc., which contributed $59.8 million of revenue in the
full year 2012.Excluding these acquisitions and the one-time fourth quarter
purchase, the Symmetry Surgical segment grew 12.8% organically.

Gross margin percentage for the full year 2012 was 26.6%, compared to 19.8%
for the full year 2011. Net income for the full year 2012 was $9.1 million, or
$0.25 per diluted share, compared to $2.9 million, or $0.08 per diluted share,
reported in the full year 2011. Excluding amortization of intangible assets
and debt issuance costs, stock compensation expense, management transition
costs, acquisition related costs, the impairment of intangible asset in 2011,
SEC-related legal costs, facility closure and severance costs, and legal
entity restructuring costs referenced above, net income for the full year 2012
was $20.7 million, or $0.57 per diluted share, compared to $13.6 million, or
$0.38 per diluted share, reported in the full year 2011.

Thomas J. Sullivan, President and Chief Executive Officer of Symmetry Medical,
stated, "In 2012 we successfully executed the key initiatives we outlined for
the year. These included improving the gross margin in our OEM Solutions
segment, integrating the Codman surgical instrument business into our Symmetry
Surgical segment, commercializing a record number of new products, and
delivering enhanced cash flow to significantly reduce our debt. 2012 reflected
the initial benefit of these business initiatives, and combined with a
stable-to-slightly-improving orthopedic procedure market, we believe we are
well positioned to continue to enhance shareholder value with ongoing
improvement in results in 2013 and beyond."

Financial Guidance

The following forward-looking estimates regarding 2013 guidance reflect
current market conditions and foreign currency rates. Actual results may
differ materially, and the Company refers you to forward-looking statements
located at the end of the press release.

For the full year 2013, the Company expects revenue to be in the range of $420
million to $440 million. The Company expects full year 2013 GAAP earnings per
diluted share to be in the range of $0.35 to $0.47 and full year 2013 as
adjusted* earnings per diluted share to be in the range of $0.64 to $0.76.
This includes a negative $0.03 impact of the Medical Device Excise Tax in SG&A
expense.The as adjusted* earnings per diluted share guidance excludes the
impact of amortization of intangible assets and debt issuance costs, stock
compensation expense, acquisition related costs, severance costs and other
one-time expenses. These items are expected to negatively impact full year
2013 GAAP earnings per diluted share by approximately $0.29.

Diluted earnings per share – GAAP         $0.35 -- $0.47
                                         
Estimated Amortization                    ($0.16)
Estimated stock compensation expense      ($0.08)
Estimated all other adjustments           ($0.05)
                                         
Diluted earnings per share – as adjusted* $0.64 -- $0.76

Conference Call

Symmetry Medical will host a conference call to discuss fourth quarter and
full year 2012 financial results at 8:00 a.m. ET on February 21, 2013.A live
webcast of the conference call will be available online from the investor
relations page of the Company's corporate website at www.symmetrymedical.com.
The dial-in numbers are (888) 771-4371 for domestic callers and (847) 585-4405
for international. The confirmation number for both is 34152034 (please
reference "Zack Kubow" as host and "Symmetry Medical" as the Company). After
the live webcast, the call will remain available on Symmetry Medical's website
through May 1, 2013. In addition, a telephonic replay of the call will be
available until February 28, 2013. The replay numbers are (888) 843-7419 for
domestic callers and (630) 652-3042 for international callers. Please use
passcode 3415 2034#.

About Symmetry Medical Inc.

Symmetry Medical Inc. is a leading global source of innovative medical device
solutions, including surgical instruments, orthopedic implants, and
sterilization cases and trays. The Company's thousands of Teammates provide
design, development and worldwide production capabilities for these products
to customers in the orthopedic industry, other medical device markets, and
specialized non-healthcare markets. Symmetry's trusted reputation and brands,
broad Intellectual Property portfolio and commitment to innovation enable it
to collaborate with hundreds of global medical device manufacturers as well as
thousands of hospitals to provide solutions for today's needs and tomorrow's
growth.

As Adjusted Non-GAAP Measures

The as adjusted* measures, including adjusted operating income, net income and
EPS, shown in this release exclude the impact of amortization of intangible
assets and debt issuance costs, stock compensation expense, acquisition
related costs, legal entity restructuring costs, SEC-related legal costs,
management transition costs, facility closure and severance costs and the
impairment of intangible assets in 2011.

Reconciliations of these non-GAAP measures to the most directly comparable
GAAP measure are included after the financial information included in this
press release.These measures are not in accordance with, or an alternative
for, GAAP and may be different from non-GAAP measures used by other
companies.Management believes these non-GAAP measures improve management's
and investors' ability to better compare the company's ongoing financial
performance between periods and with other companies.

Forward-Looking Statements

Statements in the press release regarding Symmetry Medical Inc.'s business
which are not historical facts may be "forward-looking statements" that
involve risks and uncertainties, within the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are predictive in nature and are frequently identified by the use of terms
such as "may," "might," "will," "should," "expect," "believe," "anticipate,"
"plan," "estimate," "intend," and similar words indicating possible future
expectations, events or actions. Such predictive statements are not guarantees
of future performance, and actual outcomes and results could differ materially
from our current expectations. We refer you to the "Risk Factors" and "Forward
Looking-Statements" sections in the Company's most recent Annual Report on
Form 10-K filed with the Securities and Exchange Commission as well as the
Company's other filings with the SEC, which are available on the SEC's Web
site at www.sec.gov.

                                                              
Symmetry Medical Inc.                                          
Consolidated Statements of                                     
Operations
                                                              
                          Three Months Ended        Year to Date
                          December 29, December 31, December 29, December 31,
                          2012         2011         2012         2011
                          (In Thousands, Except Per Share Data)
                          
                                                              
Revenue                    $106,556   $84,508    $410,505   $359,046
Cost of revenue            77,641      70,664      301,449     287,897
                                                              
Gross profit               28,915      13,844      109,056     71,149
                                                              
Research and development   1,154       1,008       4,152       4,040
expenses
Sales and marketing        6,512       4,102       26,380      17,455
expenses
General and administrative 12,526      11,079      44,857      37,163
expenses
Impairment of intangible   --          1,529       --          1,529
asset
Facility closure and       26          184         622         2,710
severance
                                                              
                                                              
Operating income           8,697       (4,058)     33,045      8,252
Other (income) expense:                                        
Interest expense           4,715       1,108       19,620      3,862
Derivatives valuation gain (63)        --          (242)       --
Other                      460         (191)       (102)       400
                                                              
Income before income taxes 3,585       (4,975)     13,769      3,990
Income tax expense         662         (1,803)     4,642       1,098
                                                              
Net income                 $2,923     $(3,172)   $9,127     $2,892
                                                              
Net income per share:                                          
Basic                      $0.08      $(0.09)    $0.25      $0.08
                                                              
Diluted                    $0.08      $(0.09)    $0.25      $0.08
                                                              
                                                              
Weighted average common
shares and equivalent                                          
shares outstanding:
Basic                      36,097      35,691      35,987      35,576
Diluted                    36,591      35,691      36,418      36,021

                                                                
                                                                
                                                                
Symmetry Medical Inc.                                            
Consolidated Balance Sheets                                      
In Thousands                                                     
                                                    December 29, December 31,
                                                    2012         2011
                                                                
ASSETS:                                                          
Current Assets:                                                  
Cash and cash equivalents                            $9,815     $18,931
Accounts receivable, net                             62,593      51,835
Inventories                                          64,437      84,678
Refundable income taxes                              4,904       5,090
Deferred income taxes                                7,878       7,535
Derivative valuation asset                           242         --
Other current assets                                 4,145       4,863
                                                                
Total current assets                                 154,014     172,932
Property and equipment, net                          98,046      103,363
Goodwill                                             229,134     229,112
Intangible assets, net of accumulated amortization   116,403     124,276
Other assets                                         7,721       9,182
                                                                
Total Assets                                         $605,318   $638,865
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY:                            
Current Liabilities:                                             
Accounts payable                                     $27,863    $23,343
Accrued wages and benefits                           9,354       7,637
Other accrued expenses                               10,028      5,825
Accrued income taxes                                 --          522
Current portion of derivative valuation liability    513         --
Deferred income taxes                                --          39
Revolving line of credit                             --          6,567
Current portion of capital lease obligations         492         483
Current portion of long-term debt                    11,111      5,904
                                                                
Total current liabilities                            59,361      50,320
Accrued income taxes                                 7,035       6,844
Deferred income taxes                                17,910      18,459
Derivative valuation liability, less current portion 3,883       --
Other liabilities                                    869         619
Capital lease obligations, less current portion      1,417       1,907
Long-term debt, less current portion                 200,113     259,317
                                                                
Total Liabilities                                    290,588     337,466
                                                                
Shareholders' Equity:                                            
Common Stock, $.0001 par value; 75,000 shares
authorized; shares issued December 29,               4           4
2012---36,795; December 31, 2011---36,426
Additional paid-in capital                           287,453     283,071
Retained earnings                                    26,267      17,140
Accumulated other comprehensive income               1,006       1,184
                                                                
Total Shareholders' Equity                           314,730     301,399
                                                                
Total Liabilities and Shareholders' Equity           $605,318   $638,865

                                                                
                                                                
                                                                
Reconciliation of
As Adjusted                                                      
Financial Measures
                   Three Months Ended                     Year to Date
                   December    September   December 31,   December  December
                    29,         29,                        29,       31,
                   2012        2012        2011           2012      2011
                   (In Thousands, Except Per Share Data)
                   (unaudited)
                                                                
Operating income,   $8,697    $10,172   $(4,058)     $33,045 $8,252
as reported
Adjustments:                                                     
Amortization of     2,002      2,017      745           $8,039  $2,883
intangible assets
Stock Compensation  957        1,126      456           $4,032  $995
expense ^(1)
Management
transition costs    58         58         513           232      3,676
^(2)
Acquisition related 1,932      635        3,127         3,210    3,602
costs ^ (3)
Impairment of       --         --         1,529         --       1,529
intangible asset
SEC-related legal   --         --         221           133      684
costs ^ (4)
Facility closure    26         (76)       184           622      2,710
and severance
Legal entity        --         54         --            369      --
restructuring ^(5)
                                                                
Operating income,   $13,672   $13,986   $2,717       $49,682 $24,331
as adjusted
                                                                
Net income, as      $2,923    $3,738    $(3,172)     $9,127  $2,892
reported
Adjustments:                                                     
Amortization of     1,301      1,311      484           5,225    1,874
intangible assets
Amortization of     279        295        64            1,117    229
debt issuance costs
Stock Compensation  622        732        296           2,621    647
expense ^(1)
Management
transition costs    38         38         333           151      2,389
^(2)
Acquisition related 1,256      413        2,033         2,087    2,341
costs ^ (3)
Impairment of       --         --         994           --       994
intangible asset
SEC-related legal   --         --         144           (326)    445
costs ^ (4)
Facility closure    17         (49)       120           404      1,762
and severance
Legal entity        (333)      35         --            332      --
restructuring ^(5)
                                                                
Net income, as      $6,103    $6,513    $1,296       $20,738 $13,573
adjusted
                                                                
                                                                
Earning per diluted $0.08     $0.10     $(0.09)      $0.25   $0.08
share, as reported
Impact of           0.09       0.08       0.13          0.32     0.30
adjustments
                                                                
Earning per diluted $0.17     $0.18     $0.04        $0.57   $0.38
share, as adjusted
                                                                
(1)Stock compensation expense is included in three adjustment categories;
stock compensation expense, acquisition related costs and management
transition costs.
(2)Management transition costs for the fourth quarter 2011 and full year 2011
included stock compensation expense of $226 and $1,862 respectively.
(3)Acquisition related costs include costs associated with professional fees,
non-cash purchase accounting inventory step-up non-cash stock compensation
expense related to a stock grant made to members of Symmetry management
associated with the successful completion of the Codman acquisition. Non-cash
purchase accounting inventory step-up amortization for the fourth quarter 2011
and full year 2012 and 2011 was $345, $365 and $631, respectively. Non-cash
stock compensation expense for the fourth quarter and full year 2011 were
$816.
(4)Fourth quarter 2011 and full years 2012 and 2011 include professional fees
associated with the informal SEC inquiry which concluded in early 2012.Full
year 2012 includes cash received by the Corporation from two executive
officers related to the settlement of the informal SEC inquiry, which was
reported in Other Income in the statement of operations.
(5)Legal entity restructuring during 2012 includes professional fees, foreign
currency impact and a net unfavorable income tax impact.

CONTACT: Symmetry Medical Inc.
         Fred L. Hite
         Senior Vice President
         Chief Financial Officer
         (574) 371-2218
        
         Investors and Media:
         The Ruth Group
         Zack Kubow
         (646) 536-7020
         zkubow@theruthgroup.com
 
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