Curt R. Hartman, Interim CEO, VP & Chief Financial Officer
Ramesh Subrahmanian, Group President, International
Kevin A. Lobo, Group President, Orthopaedics
Timothy J. Scannell, Group President, MedSurg & Spine
William R. Enquist, President, Endoscopy
James N. Heath, President, Instruments
William J. Huffnagle, President, Reconstructive
Vivian Masson, President, Osteosynthesis
Mark H. Paul, President, Neurovascular
Bradford L. Saar, President, Medical
Spencer S. Stiles, President, Spine
NO. OF EMPLOYEES: 21,241
GLOBAL HEADQUARTERS: Kalamazoo, Mich.
If that famous 19th century idiom is true—the one proclaiming imitation to be the most sincere form of flattery—then former Stryker Corp. Board Chairman John W. Brown should be tickled pink. Brown, now retired from the Kalamazoo, Mich.-based
orthopedic manufacturer, was quoted by executive management
in the company’s most recent annual report.
“Since Dr. Stryker’s first invention,
we have been a company of inventors,
experimenters and achievers—all
united behind the single goal of im-
proving the delivery of healthcare in
ways that positively affect the work of
caregivers and the lives of patients,”In-
terim CEO, Vice President and Chief Fi-
nancial Officer Curt R. Hartman wrote
in a four-page letter to shareholders at
the start of Stryker’s 2011 annual report.
(Hartman assumed the post after for-
mer Chairman/President/CEO Stephen
P. MacMillan resigned abruptly in Feb-
ruary 2012).“I am excited about our fu-
ture and our prospects for continued
growth. To borrow a quote from John W.
Brown, Chairman Emeritus, which
graced these pages several years ago, ‘I
am still long on Stryker.’”
Hartman has good reason to be
“long” on his company: Revenue grew
by $1 billion, or 13. 5 percent last year (to
$8.3 billion) and adjusted net earnings ballooned 12 percent to
$3.72, finishing near the high end of executives’original guidance.
Further cementing Hartman’s rosy outlook on Stryker most
likely was the 9.1 percent jump in gross profit and the 5. 6 percent
rise in net earnings to $1.34 billion in the year ended Dec. 31, 2011.
Solid growth in both domestic and international sales indubitably
contributed as well—U.S. revenue swelled 9. 9 percent to $5.2 billion while international proceeds totaled $3 billion, a 13. 4 percent
increase in constant currency compared with 2010.
Indeed, Stryker’s financial health was nearly picture-perfect
last year, save for a 3. 7 percent decrease in operating income (a
mere hiccup for all intents and purposes) and a $38 million severance outlay to cover the pensions and health benefits of employees affected by a restructuring that will reduce the company’s
global workforce 5 percent by the end of 2012. Stryker initiated
the restructuring to realign resources and potentially minimize the
impact of the 2.3 percent medical device excise tax that is set to
take effect next year.
Stryker also incurred an additional $38 million in asset impairments and other contractual obligations in 2011, but the company recouped that expense (and the severance charge) by
negotiating a $99 million settlement with the U.S. Internal Revenue Service (IRS) over the firm’s cost-sharing arrangement with
two wholly owned Irish entities.
While notable, the IRS settlement was mere pocket change
compared with the additional revenue generated by each of
Stryker’s three business segments last year. The most impressive
gains came from the Reconstructive unit, which surmounted dramatic changes in the global healthcare environment and lower
surgical procedural volume to achieve a 4. 5 percent rise in sales.
“Our reconstructive implant business was affected as high un-
Financial data provided by Stryker Corp.
ODT • 43