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16 SPINE DEVICE & INNOVATION How Did 5 Orthopedic Device Giants Fare in the Most Recent Fiscal Period? 45 Notes on Stryker, Medtronic & More By Anuja Vaidya T he most recent financial quarter — the first quarter for most companies — was full of activity for medical device companies. e first few months of the year includes product launches, mergers and acquisitions as well as restructuring of businesses. Here are 45 things to know about the most recent financial period for the largest ortho- pedic companies. Stryker — Q1 of fiscal year 2016 1. Stryker reported net sales grew 4.9 percent to $2.5 billion from the first quarter of 2015. 2. Acquisitions, such as its acquisition of Physio-Control and SafeWire, did not sig- nificantly impact net sales in the quarter. 3. e company reported net earnings of $402 million, up 79.5 percent from the first quarter of 2015. 4. Reported net earnings include certain charges for the Rejuvenate and ABG II recall, amortization of intangible assets, legal matters, acquisition- and integration-related activities and restructuring-related activities. 5. Excluding the impact of these charges, gross profit margin in the first quarter 2016 increased from 67.9 percent to 68 percent and operating income margin increased in the quarter from 20.8 percent to 24.2 percent. 6. Net sales of Stryker's orthopedics business increased 3.3 percent from the same period last year to $1.1 billion. 7. e company's neurotechnology and spine businesses saw an increase of 12 percent in net sales from quarter one 2015, reaching $480 million. 8. Net sales of the company's MedSurg reached $958 million. 9. Stryker expects 2016 organic sales growth to be in the range of 5.5 percent to 6.5 percent. 10. Stryker also acquired Stanmore Implants from SIW Holdings in early May. Stanmore focuses on orthopedic oncology implants. Zimmer Biomet — Q1 of fiscal year 2016 1. e company reported net sales of $1.9 billion in first quarter of 2016, an increase of 67.8 percent on a reported basis and an increase of 1.2 percent on an adjusted pro forma, constant currency basis, as compared to the first quarter of 2015. 2. Net earnings for the first quarter were $105.9 million on a reported basis and $404.3 million on an adjusted basis, repre- senting an increase of 51.5 percent, adjusted over the same period last year. 3. Operating cash flow for the first quarter of 2016 was $265.2 million. 4. Zimmer Biomet's knees category saw net sales of $703.3 million. e hips category saw net sales of $467.9 million and the spine and CMF category saw net sales reach $141.2 million. 5. Zimmer Biomet used $415.5 million to repurchase 4.2 million shares. 6. e company paid $44.6 million in divi- dends and declared a first quarter dividend of $0.24 per share in the first quarter of 2016. 7. e company increased its full-year 2016 constant currency revenue and adjusted earnings per share guidance. 8. Zimmer Biomet now expects constant currency revenue for the full year 2016, as compared to adjusted pro forma 2015 revenue, to increase between 2 percent and 3 percent. 9. Previously, the company had expected full-year constant currency revenue to in- crease between 1.5 percent and 2.5 percent. 10. Most recently, Zimmer Biomet ac- quired Cayenne Medical, a company that develops and markets so tissue repair and reconstruction solutions for conditions of the knee, shoulder and extremities. Smith & Nephew — Q1 of fiscal year 2016 1. Revenue was up 4 percent in the first quarter to $1.1 billion, compared to the same period last year. e company had a 2 percent benefit from acquisitions. 2. Established markets revenue grew 6 per- cent; the United States led the way with an 8 percent revenue growth. 3. However, revenue in emerging markets declined 6 percent. Weakness in China offset double-digit growth in most other countries and there was a significant slow-down in tendering and sales in the oil-dependent Gulf states. 4. e knee implant revenue was up 9 percent in the quarter while hip implant revenue jumped 4 percent. Sports medicine and the advanced wound devices business grew 11 percent. 5. e trauma and extremities revenue was down 7 percent, with China and Gulf states decreases offsetting a strong showing in the United States. e advanced wound manage- ment business was flat. 6. U.S. revenue hit $563 million while the emerging markets reported $153 million. e other established markets revenue was reported as $421 million. 7. e company's largest market is the Unit- ed States, where the quarter was successful. Smith & Nephew also reported sustainable improvements in the European market with four consecutive quarters of positive revenue growth last year. 8. e company continues to integrate Blue Belt Technologies' robotics-assisted orthopedic surgery business, which was acquired last year. Capital sales of the Navio system were included in the "other surgical business" segment, which reported 19 percent revenue growth. 9. Over the next year, Smith & Nephew's expec- tations for the group are unchanged from the previous report. "Overall, we continue to expect good underlying revenue growth in 2016 as we benefit from our investments in established businesses, acquisitions and pioneering tech- nologies," said CEO Olivier Bohuon. 10. In February, OrthAlign entered into a multi-country distribution agreement with Smith & Nephew. Under the agreement, Smith & Nephew can distribute OrthAlign's KneeAlign technology as part of its portfolio in 21 countries.