8-KOther EventsExhibits & Filings

STRYKER CORP 8-K Report, Corporate Update (Jun 4, 2007)

Filed June 4, 2007For Securities:SYK

Summary

Stryker Corporation (SYK) announced on June 4, 2007, the completion of the sale of its outpatient physical therapy business, Physiotherapy Associates, to Water Street Healthcare Partners. This divestiture marks a strategic shift for Stryker, likely allowing the company to focus resources on its core medical technology and services segments. Investors should note that the company is also providing non-GAAP financial measures, such as "constant currency" and "adjusted net earnings," to offer a more comparable view of ongoing operational performance by excluding the impact of foreign currency fluctuations and certain one-time charges. The included financial reconciliations provide clarity on how these adjusted figures are derived, specifically by excluding purchased in-process research and development charges from 2005 and 2006, and the income tax associated with foreign earnings repatriation in 2005. While GAAP figures remain the official reporting standard, these adjusted metrics are used by management for internal analysis and bonus calculations, and Stryker encourages investors to review both GAAP and non-GAAP information for a comprehensive understanding of the company's financial health and future prospects.

Key Highlights

  • 1Stryker Corporation has completed the sale of its outpatient physical therapy business, Physiotherapy Associates.
  • 2The buyer of Physiotherapy Associates is Water Street Healthcare Partners.
  • 3The company is reporting on the divestiture through a press release dated June 4, 2007.
  • 4Stryker is presenting non-GAAP financial measures, including 'constant currency,' 'adjusted net earnings,' and 'adjusted diluted net earnings per share.'
  • 5These non-GAAP measures are used to provide a more consistent and comparable view of operational performance.
  • 6Exclusions from adjusted earnings include purchased in-process R&D charges (2005-2006) and income taxes on foreign earnings repatriation (2005).

Frequently Asked Questions

The main event reported is the completion of the sale of Stryker Corporation's outpatient physical therapy business, Physiotherapy Associates, to Water Street Healthcare Partners.

Stryker provides these non-GAAP measures to offer a more meaningful and comparable view of its results, excluding items like foreign currency impacts, purchased in-process R&D charges, and income taxes from foreign earnings repatriation, which can affect the comparability of operating results and earnings trends.

Adjusted net earnings exclude purchased in-process research and development charges recorded in 2006 and 2005, and the additional income taxes associated with the repatriation of foreign earnings recorded in 2005.

Stryker encourages investors to review both its reported GAAP financial statements and the supplemental non-GAAP measures. The non-GAAP measures provide insights into operational performance on a consistent basis, while GAAP figures represent the official financial reporting. A comprehensive understanding requires considering both.