Medtronic 2010 Annual Report Download - page 33

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29
Medtronic, Inc.
The increase in net sales for fiscal year 2010 was driven by strong
performance worldwide in nerve monitoring products with the
launch of the NIM 3.0 Nerve Monitoring System, power disposables
and the continued success of the Fusion EM IGS System and the
MR7 next generation pneumatic system, which is an advanced
electromagnetic-based image-guided surgery system to facilitate
sinus surgeries. Additionally, net sales for fiscal year 2010 increased
as a result of service revenue worldwide, the continued adoption
of the O-Arm Imaging System outside the U.S. and the
StealthStation S7 worldwide with the launch of the Synergy
Cranial 2.1 software. The O-Arm Imaging System is a multi-
dimensional surgical imaging platform that is optimized
for use in spine and orthopedic surgery. The StealthStation S7
System, launched in the first quarter of fiscal year 2009, offers
personalized navigation support for surgeons and surgical staff in
the operating room.
Surgical Technologies net sales for fiscal year 2009 were $857
million, an increase of 10 percent when compared to the prior
fiscal year. Foreign currency translation had an unfavorable
impact on net sales of approximately $11 million when compared
to the prior fiscal year. The increase in net sales was driven by the
continued success of the Fusion EM IGS System. Additionally, net
sales for fiscal year 2009 increased as a result of service revenue
in the U.S. and strong worldwide sales of the O-Arm Imaging
System and the StealthStation S7 System.
Looking ahead, we expect our Surgical Technologies operating
segment should be impacted by the following:
• Continued acceptance in the U.S. of our Fusion EM IGS System.
• Continued acceptance of the StealthStation S7 System. In
addition, we look forward to the continued acceptance of the
Synergy Cranial 2.1 software for cranial procedures on the
StealthStation S7 System hardware platform, which was
launched in the second quarter of fiscal year 2010.
• Continued adoption of power systems for sinus procedures
inside and outside the U.S., as well as continued global
adoption of nerve monitoring for ENT and thyroid procedures.
• Continued acceptance of new products, including the NIM
3.0, a next generation nerve monitoring system, which we
launched in the first quarter of fiscal year 2010, the MR7
Pneumatic Drill, which was launched in the second quarter of
fiscal year 2010 and the Peak next generation RF Ablation
technology, which was launched in the fourth quarter of
fiscal year 2010.
• Continued and future worldwide acceptance of the O-Arm
Imaging System. The O-Arm Imaging System was launched in
Japan during the first quarter of fiscal year 2010.
• Potential improvement in consumer and hospital spending.
As the economy shows signs of improvement and the
financial health of hospitals improve this could lead to an
increase in spending on revenue generating capital.
Physio-Control Physio-Control products consist of external
defibrillators, including manual defibrillator/monitors used by
hospitals and emergency response personnel and automated
external defibrillators (AED) used in commercial and public
settings for the treatment of sudden cardiac arrest. Physio-Control
fiscal year 2010 net sales were $425 million, an increase of 24
percent over the prior fiscal year. Foreign currency translation had
a favorable impact on net sales of approximately $7 million when
compared to the prior fiscal year. Net sales were driven by the
LIFEPAK 15 monitor/defibrillator and by the resumption of
unrestricted global shipments early in the fourth quarter of fiscal
year 2010 following the lifting of FDA restrictions.
Physio-Control fiscal year 2009 net sales were $343 million, an
increase of 4 percent over the prior fiscal year. Foreign currency
translation had an unfavorable impact on net sales of
approximately $7 million when compared to the prior fiscal year.
Net sales were negatively impacted by the restrictions placed on
shipments of certain defibrillators during the period while
improvements were being made to the quality system.
Looking ahead, we expect our Physio-Control operating
segment should be impacted by the following:
• Resumption of shipments of devices into the AED market.
• Continued acceptance of our external defibrillator products,
primarily driven by the LIFEPAK 15 monitor/defibrillator.
• Our previously announced intention to pursue a spin-off of
Physio-Control into an independent, publicly traded company.
Our plans have been delayed as a result of our suspension of
shipments of certain Physio-Control products from January
2007 to February 2010 to address quality system issues. As a
result, our current focus is to meet customer back orders and
future product needs. Therefore, we do not anticipate
spinning-off Physio-Control in fiscal year 2011.
• Our ability to increase or maintain market share through the
successful introduction of future products.