Summary
Stryker Corporation (SYK) filed an 8-K on July 20, 2010, primarily to report its second quarter 2010 operating results via a press release. The filing highlights the company's use of non-GAAP financial measures, specifically "constant currency" for sales and "adjusted diluted net earnings per share" (adjusted EPS). These measures are presented to provide a clearer, more comparable view of operational performance by excluding the impact of foreign currency fluctuations and certain one-time items from 2009, such as restructuring charges, taxes on foreign earnings repatriation, and a patent settlement gain.
Key Highlights
- 1Stryker announced its second quarter 2010 operating results via a press release filed as part of this 8-K.
- 2The company is utilizing non-GAAP financial measures: 'constant currency' for sales and 'adjusted diluted net earnings per share' (adjusted EPS).
- 3Constant currency reporting aims to remove the impact of foreign currency exchange rate changes for a more comparable sales analysis.
- 4Adjusted EPS for the year ended December 31, 2009, was $2.95, compared to GAAP reported diluted EPS of $2.77.
- 5Key adjustments to arrive at 2009 adjusted EPS included excluding restructuring charges ($0.12), a patent litigation gain ($0.11), and income taxes on foreign earnings repatriation ($0.17).
- 6Stryker emphasizes that these non-GAAP measures are supplemental and investors should also review GAAP results.
- 7Management uses these non-GAAP measures for internal performance review, trend analysis, and bonus plan calculations.
Frequently Asked Questions
The main purpose of this 8-K filing is to report Stryker Corporation's second quarter 2010 operating results, which were released to the public via a press release.
Constant currency results allow Stryker to report sales performance by removing the impact of fluctuations in foreign currency exchange rates. This provides a more consistent and comparable view of how underlying sales are trending over time, irrespective of currency movements.
Adjusted diluted net earnings per share (adjusted EPS) is a non-GAAP measure Stryker uses to present earnings performance on a consistent and comparable basis. For the year ended December 31, 2009, the company excluded restructuring charges, a gain from a confidential patent infringement settlement, and income taxes associated with repatriating foreign earnings to arrive at the adjusted EPS of $2.95.
No, Stryker explicitly encourages investors and users of financial statements to review its consolidated financial statements and other publicly filed reports in their entirety and not to rely solely on any single financial measure. The non-GAAP measures are presented as supplemental information.