Stryker (NYSE:SYK) reported operating results for the fourth quarter and full year of 2023:

Fourth Quarter Results

  • Reported net sales increased 11.8% to $5.8 billion
  • Organic net sales increased 11.4%
  • Reported operating income margin of 21.6%
  • Adjusted operating income margin(1) increased 60 bps to 27.2%
  • Reported EPS increased 102.7% to $2.98
  • Adjusted EPS(1) increased 15.3% to $3.46
  Fourth Quarter Net Sales Growth Overview
  Reported   Foreign Currency Exchange   Constant Currency   Acquisitions / Divestitures   Organic
MedSurg and Neurotechnology         12.3         %           0.3         %           12.0         %           0.2         %           11.8         %
Orthopaedics and Spine         11.0                     0.3                     10.7                     —                     10.7          
Total         11.8         %           0.3         %           11.5         %           0.1         %           11.4         %

Full Year Results

  • Reported net sales increased 11.1% to $20.5 billion
  • Organic net sales increased 11.5%
  • Reported operating income margin of 19.0%
  • Adjusted operating income margin(1) increased 40 bps to 24.2%
  • Reported EPS increased 33.7% to $8.25
  • Adjusted EPS(1) increased 13.5% to $10.60
  Full Year Net Sales Growth Overview
  Reported   Foreign Currency Exchange   Constant Currency   Acquisitions / Divestitures   Organic
MedSurg and Neurotechnology         11.5         %           (0.6)       %               12.1         %           0.3         %           11.8         %
Orthopaedics and Spine         10.5                                             (0.6)                          11.1                     —                     11.1          
Total         11.1         %           (0.5)        %              11.6         %           0.1         %           11.5         %

"We drove excellent organic sales growth of over 11% in both the fourth quarter and the full year, and delivered strong adjusted earnings," said Kevin Lobo, Chair & CEO. "It was exciting to surpass $20 billion in sales as we continue to drive high growth. I would like to thank our teams for the strong performance in 2023."

Sales Analysis

Consolidated net sales of $5.8 billion and $20.5 billion increased 11.8% in the quarter, 11.5% in constant currency, and increased 11.1% in the full year, 11.6% in constant currency. Organic net sales increased 11.4% and 11.5% in the quarter and full year including 10.7% and 10.9% from increased unit volume and 0.7% and 0.6% from higher prices.

MedSurg and Neurotechnology net sales of $3.4 billion and $11.8 billion increased 12.3% in the quarter, 12.0% in constant currency, and increased 11.5% in the full year, 12.1% in constant currency. Organic net sales increased 11.8% and 11.8% in the quarter and full year including 10.1% and 10.2% from increased unit volume and 1.7% and 1.6% from higher prices.

Orthopaedics and Spine net sales of $2.4 billion and $8.7 billion increased 11.0% in the quarter, 10.7% in constant currency, and increased 10.5% in the full year, 11.1% in constant currency. Organic net sales increased 10.7% and 11.1% in the quarter and full year including 11.5% and 11.9% from increased unit volume partially offset by 0.8% and 0.8% from lower prices.

Earnings Analysis

Reported net earnings of $1.1 billion and $3.2 billion increased 103.0% and 34.2% in the quarter and full year. Reported net earnings per diluted share of $2.98 and $8.25 increased 102.7% and 33.7% in the quarter and full year. Reported gross profit margin and reported operating income margin were 63.7% and 21.6% in the quarter and 63.7% and 19.0% in the full year. Reported net earnings include certain items, such as charges for acquisition and integration-related activities, the amortization of purchased intangible assets, structural optimization and other special charges (including asset write-offs and impairments), costs to comply with certain medical device regulations, recall-related matters, regulatory and legal matters and tax matters. Excluding the aforementioned items, adjusted gross profit margin(1) was 63.9% in both the quarter and full year, and adjusted operating income margin(1) was 27.2% and 24.2% in the quarter and full year. Adjusted net earnings(1) of $1.3 billion and $4.1 billion increased 15.4% and 13.9% in the quarter and full year. Adjusted net earnings per diluted share(1) of $3.46 and $10.60 increased 15.3% and 13.5% in the quarter and full year.

2024 Outlook

Based on our momentum from 2023, strong procedural volumes, healthy demand for capital products and a stabilizing macro-economic environment, we expect 2024 organic net sales growth(2) to be in the range of 7.5% to 9.0% and expect adjusted net earnings per diluted share(2) to be in the range of $11.70 to $12.00. Based on the steady progress of our pricing actions, we would expect the full year impact of price to be roughly flat. If foreign exchange rates hold near current levels, we anticipate sales will be modestly unfavorably impacted for the full year, being more negative in the first half of the year. We expect adjusted net earnings per diluted share(2) will be negatively impacted by foreign exchange rates approximately $0.05 to $0.10. This is included in our guidance.

(1) A reconciliation of the non-GAAP financial measures: adjusted gross profit margin, adjusted operating income and adjusted operating income margin, adjusted net earnings and adjusted net earnings per diluted share, to the most directly comparable GAAP measures: gross profit margin, operating income and operating income margin, net earnings and net earnings per diluted share, and other important information accompanies this press release.(2) We are unable to present a quantitative reconciliation of our expected net sales growth to expected organic net sales growth as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisitions and divestitures and the impact of foreign currency exchange rates. We are unable to present a quantitative reconciliation of our expected net earnings per diluted share to expected adjusted net earnings per diluted share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of structural optimization and other special charges, acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings.

Conference Call on Tuesday, January 30, 2024

As previously announced, we will host a conference call on Tuesday, January 30, 2024 at 4:30 p.m., Eastern Time, to discuss our operating results for the quarter and year ended December 31, 2023 and provide an operational update.

Please register for this conference call at: https://www.veracast.com/webcasts/stryker/events/SYK4Q23.cfm. After registering, a confirmation will be sent via email, including dial-in details and unique conference call access codes required for call entry. Registration is open throughout the live call. To ensure you are connected prior to the beginning of the call, we suggest registering a minimum of 15 minutes before the start of the call.

A simultaneous webcast of the call will be accessible via the Investor Relations page of our website at www.stryker.com. For those not planning to ask a question of management, we recommend listening via the webcast. Please allow 15 minutes to register, download and install any necessary software.

Following the conference call, a replay will be available on our website up to one year from the time of the earnings call.

Caution Concerning Forward-Looking Statements

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our products; geopolitical risks, including from international conflicts and upcoming elections in the United States and other countries, which could, among other things, lead to increased market volatility; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign currency exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect United States Food and Drug Administration approval of new products; inflationary pressures; increased interest rates; supply chain disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to recall-related matters; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; changes in tax laws and regulations; the impact of legislation to reform the healthcare system in the United States or other countries; costs to comply with medical device regulations; changes in financial markets; changes in our credit ratings; changes in the competitive environment; our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes; our ability to realize anticipated cost savings; potential negative impacts resulting from environmental, social and governance (ESG) and sustainability related matters; the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties; and breaches or failures of our or our vendors' information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft. Additional information concerning these and other factors is contained in our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.

Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology, Orthopaedics and Spine that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually. More information is available at www.stryker.com.

For investor inquiries please contact:Jason Beach, Vice President, Investor Relations at 269-385-2600 or jason.beach@stryker.com

For media inquiries please contact:Yin Becker, Vice President, Chief Corporate Affairs Officer at 269-385-2600 or yin.becker@stryker.com

STRYKER CORPORATION
For the Three Months and Full Year December 31
(Unaudited - Millions of Dollars, Except Per Share Amounts)
CONSOLIDATED STATEMENTS OF EARNINGS
               
  Three Months   Full Year
        2023               2022             % Change        2023                  2022             % Change
Net sales $         5,815             $         5,202                     11.8         %   $         20,498             $         18,449                     11.1         %
Cost of sales           2,112                       1,966                     7.4                       7,440                       6,871                     8.3          
Gross profit $         3,703             $         3,236                     14.4         %   $         13,058             $         11,578                     12.8         %
% of sales           63.7         %             62.2         %                        63.7         %             62.8         %    
Research, development and engineering expenses           350                       326                     7.4                       1,388                       1,454                     (4.5)         
Selling, general and administrative expenses           1,941                       1,751                     10.9                       7,129                       6,455                     10.4          
Recall charges, net             6                          (29)            nm             18                         (15)            nm
Amortization of intangible assets           149                       158                     (5.7)                      635                       627                     1.3          
Goodwill impairment           —                       216             nm             —                       216             nm
Total operating expenses $         2,446             $         2,422                     1.0         %   $         9,170             $         8,737                     5.0         %
Operating income $         1,257             $         814                     54.4         %   $         3,888             $         2,841                     36.9         %
% of sales           21.6         %             15.6         %                 19.0         %             15.4         %    
Other income (expense), net           (31)                          (53)                    (41.5)                      (215)                       (158)                    36.1          
Earnings before income taxes $         1,226             $         761                     61.1         %   $         3,673             $         2,683                     36.9         %
Income taxes           83                       198                     (58.1)                      508                       325                     56.3          
Net earnings $         1,143             $         563                     103.0         %   $         3,165             $         2,358                     34.2         %
Net earnings per share of common stock:                      
Basic $         3.01             $         1.48                     103.4         %   $         8.34             $         6.23                     33.9         %
Diluted $         2.98             $         1.47                     102.7         %   $         8.25             $         6.17                     33.7         %
Weighted-average shares outstanding (in millions):                      
Basic   380.0       378.5           379.6       378.2      
Diluted   383.9       382.3           383.7       382.2      
CONDENSED CONSOLIDATED BALANCE SHEETS
          December 31
                   2023                       2022        
Assets      
Cash and cash equivalents $         2,940           $         1,844        
Marketable securities                    82                              84        
Accounts receivable, net           3,765                     3,565        
Inventories           4,843                     3,995        
Prepaid expenses and other current assets           857                     787        
Total current assets $         12,487           $         10,275        
Property, plant and equipment, net           3,215                     2,970        
Goodwill and other intangibles, net           19,836                     19,765        
Noncurrent deferred income tax assets           1,670                     1,410        
Other noncurrent assets           2,673                     2,464        
Total assets $         39,881           $         36,884        
Liabilities and shareholders' equity      
Current liabilities $         7,890           $         6,303        
Long-term debt, excluding current maturities           10,901                     11,857        
Income taxes                567                         641        
Other noncurrent liabilities           1,930                     1,467        
Shareholders' equity           18,593                     16,616        
Total liabilities and shareholders' equity $         39,881           $         36,884        
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         December 31
               2023                          2022          
Operating activities      
Net earnings $         3,165             $         2,358          
Depreciation           393                       371          
Amortization of intangible assets           635                       627          
Changes in operating assets, liabilities, income taxes payable and other, n                        (513)                                  (732)         
Net cash provided by operating activities $         3,680             $         2,624          
Investing activities      
Acquisitions, net of cash acquired $         (390)            $         (2,563)         
Purchases of property, plant and equipment           (575)                      (588)         
Other investing, net           3                       227          
Net cash used in investing activities $         (962)            $         (2,924)         
Financing activities      
Borrowings (payments) of debt, net $         (277)            $         472          
Payments of dividends           (1,139)                      (1,051)         
Other financing, net           (178)                      (170)         
Net cash provided by (used in) financing activities $         (1,594)            $         (749)         
Effect of exchange rate changes on cash and cash equivalents           (28)                      (51)         
Change in cash and cash equivalents $            1,096             $         (1,100)         

nm - not meaningful

STRYKER CORPORATION
For the Three Months and Full Year December 31
(Unaudited - Millions of Dollars)
SALES GROWTH ANALYSIS
  Three Months   Full Year
        Percentage Change         Percentage Change
             2023                  2022           As Reported ConstantCurrency           2023                2022           As Reported ConstantCurrency
Geographic:                      
United States $         4,356         $         3,862                   12.8         %         12.8         %   $         15,257         $         13,638                   11.9         %         11.9         %
International           1,459                   1,340                   8.9                   7.8                       5,241                   4,811                   8.9                   10.9          
Total $         5,815         $         5,202                   11.8         %         11.5         %   $         20,498         $         18,449                   11.1         %         11.6         %
Segment:                      
MedSurg and Neurotechnology $         3,427         $         3,051                   12.3         %         12.0         %   $         11,836         $         10,611                   11.5         %         12.1         %
Orthopaedics and Spine           2,388                   2,151                   11.0                   10.7                       8,662                   7,838                   10.5                   11.1          
Total $         5,815         $         5,202                   11.8         %         11.5         %   $         20,498         $         18,449                   11.1         %         11.6         %
SUPPLEMENTAL SALES GROWTH ANALYSIS
  Three Months
            United States   International
      Percentage Change
             2023                  2022          As Reported Constant Currency   As Reported   As Reported Constant Currency
MedSurg and Neurotechnology:                    
Instruments $         736         $         653                   12.5         %         12.0         %           12.5         %           12.3         %         10.0         %
Endoscopy           892                   779                   14.6                   14.4                     17.9                     1.1                   0.6          
Medical           1,042                   936                   11.4                   11.2                     12.9                     6.0                   4.9          
Neurovascular           320                   299                   6.7                   6.6                     7.6                     6.2                   6.1          
Neuro Cranial           437                   384                   14.1                   13.8                     14.0                     14.4                   12.7          
  $         3,427         $         3,051                   12.3         %         12.0         %           14.0         %           6.9         %         5.9         %
Orthopaedics and Spine:                    
Knees $         630         $         552                   14.2         %         13.9         %           12.9         %           18.0         %         16.9         %
Hips           414                   375                   10.2                   10.3                     12.9                     5.5                   5.8          
Trauma and Extremities           860                   774                   11.0                   10.3                     12.1                     8.3                   5.5          
Spine           318                   297                   7.0                   6.5                     6.0                     9.9                   7.7          
Other           166                   153                   9.3                   10.4                     3.0                     25.5                   29.0          
  $         2,388         $         2,151                   11.0         %         10.7         %           10.9         %           11.3         %         10.1         %
Total $         5,815         $         5,202                   11.8         %         11.5         %           12.8         %           8.9         %         7.8         %
 
  Full Year
            United States   International
      Percentage Change
             2023                   2022           As Reported Constant Currency   As Reported   As Reported Constant Currency
MedSurg and Neurotechnology:                    
Instruments $         2,569         $         2,279                   12.7         %         13.0         %           13.3         %           10.4         %         11.8         %
Endoscopy           3,033                   2,725                   11.3                   11.7                     12.1                     7.6                   9.9          
Medical           3,459                   3,031                   14.1                   14.4                     15.0                     10.8                   12.3          
Neurovascular           1,226                   1,200                   2.1                   4.0                     8.1                     (1.4)                  1.5          
Neuro Cranial           1,549                   1,376                   12.6                   13.0                     11.9                     16.1                   18.4          
  $         11,836         $         10,611                   11.5         %         12.1         %           13.0         %           7.0         %         9.1         %
Orthopaedics and Spine:                    
Knees $         2,273         $         1,997                   13.9         %         14.4         %           12.2         %           18.8         %         20.9         %
Hips           1,544                   1,413                   9.2                   10.4                     10.1                     7.7                   10.7          
Trauma and Extremities           3,147                   2,807                   12.1                   12.2                     12.9                     10.1                   10.5          
Spine           1,189                   1,146                   3.8                   4.0                     5.7                     (1.6)                  (0.9)         
Other           509                   475                   7.1                   8.8                     (2.0)                    33.8                   40.9          
  $         8,662         $         7,838                   10.5         %         11.1         %           10.2         %           11.2         %         13.0         %
Total $         20,498         $         18,449                   11.1         %         11.6         %           11.9         %           8.9         %         10.9         %

Note: Fourth quarter and full year 2023 had the same number of selling days as 2022. Beginning in the first quarter 2023 we consolidated Other MedSurg and Neurotechnology into Endoscopy as Other MedSurg and Neurotechnology (primarily Sustainability Solutions) has been fully integrated into our Endoscopy business. Endoscopy includes sales related to Other of $91 and $84 for the three months 2023 and 2022 and $343 and $302 for the full year 2023 and 2022. We have reflected these changes in all historical periods presented.

SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including: percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, income taxes, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of our business. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures. The weighted-average diluted shares outstanding used in the calculation of adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.

STRYKER CORPORATION
For the Three Months and Full Year December 31
(Unaudited - Millions of Dollars, Except Per Share Amounts)
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2023 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings EffectiveTax Rate Diluted EPS
Reported $          3,703           $          1,941           $         350           $          1,257           $ (31)         $         83         $          1,143                   6.8         % $         2.98          
Reported percent net sales           63.7         %           33.4         %           6.0         %           21.6         %         (0.5)        % nm           19.7         %    
Acquisition and integration-related costs                  
Inventory stepped-up to fair value           —                     —                     —                     —                     —                     —                   —                   —                     —          
Other acquisition and integration-related (a)           —                              (13)                    —                     13                     —                     —                   13                   (0.2)                    0.04          
Amortization of purchased intangible assets           —                     —                     —                     149                     —                     28                   121                   0.6                     0.31          
Structural optimization and other special charges (b)           9                              (54)                                 (1)                     64                     —                     15                   49                   0.5                     0.13          
Goodwill impairment           —                     —                     —                     —                     —                     —                   —                   —                     —          
Medical device regulations (c)           1                     —                                 (21)                     22                     —                     5                   17                   0.1                     0.04          
Recall-related matters (d)           —                     —                     —                     6                     —                     1                   5                   —                     0.02          
Regulatory and legal matters (e)           —                               (73)                    —                     73                     —                     25                   48                   1.2                     0.12          
Tax matters (f)           —                     —                     —                     —                     —                     70                  (70)                  5.6                     (0.18)         
Adjusted $          3,713           $          1,801           $         328           $          1,584           $ (31)         $         227         $          1,326                   14.6         % $         3.46          
Adjusted percent net sales           63.9         %           31.0         %           5.6         %           27.2         %                                 (0.5)      % nm           22.8         %    
Three Months 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings EffectiveTax Rate Diluted EPS
Reported $          3,236           $          1,751           $         326           $         814           $ (53)          $         198           $         563                   26.0         % $         1.47          
Reported percent net sales           62.2         %           33.7         %           6.3         %           15.6         %         (1.0)        % nm           10.8         %    
Acquisition and integration-related costs                  
Inventory stepped-up to fair value           —                     —                     —                     —                     —                     —                     —                   —                     —          
Other acquisition and integration-related (a)           —                             (42)                     —                     42                     —                     (16)                    58                   (2.9)                    0.15          
Amortization of purchased intangible assets           —                     —                     —                     158                     —                     34                     124                   1.5                     0.33          
Structural optimization and other special charges (b)           27                             (93)                     —                     120                     —                     27                     93                   1.6                     0.24          
Goodwill impairment           —                     —                     —                     216                     —                     —                     216                   (3.9)                    0.57          
Medical device regulations (c)           —                     —                                   (42)                    42                     —                     9                     33                   0.4                     0.09          
Recall-related matters (d)           —                     —                     —                     (29)                    —                     (7)                   (22)                  (0.4)                    (0.06)         
Regulatory and legal matters (e)           —                              (23)                     —                     23                     —                     (7)                    30                   (1.5)                    0.08          
Tax matters (f)           —                     —                     —                     —                      (1)                    (55)                   54                   (7.0)                    0.13          
Adjusted $          3,263           $          1,593           $         284           $          1,386           $ (54)          $            183          $         1,149                   13.8         % $         3.00          
Adjusted percent net sales           62.7         %           30.6         %           5.5         %           26.6         %         (1.0)        % nm           22.1         %    
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including charges for termination of sales relationships ($3 in 2023, $5 in 2022), employee retention and workforce reductions ($3 in 2023, $4 in 2022), changes in the fair value of contingent consideration ($6 in 2023, ($3) in 2022), manufacturing integration costs ($0 in 2023, $9 in 2022), adjustments to acquisition-related tax provisions (charge of $2 included in Income Taxes for 2023, $0 for 2022) and other integration-related activities such as deal costs and costs associated with legal entity rationalization ($1 in 2023, $27 in 2022).
(b) Charges represent the costs associated with employee retention and workforce reductions ($6 in 2023, $38 in 2022), the closure/transfer of manufacturing and other facilities, including site closure costs, contract termination costs and redundant employee costs during the work transfers ($14 in 2023, $21 in 2022), product line exits (primarily inventory, long-lived asset and specifically-identified intangible asset write-offs) ($16 in 2023, $73 in 2022), certain long-lived and intangible asset write-offs and impairments ($16 in 2023, ($8) in 2022) and other charges ($12 in 2023, ($4) in 2022).
(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
(d) Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain recall-related matters.
(e) Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(f) Benefits and charges represent the accounting impact of certain significant and discrete tax items, including adjustments related to the transfer of certain intellectual properties between tax jurisdictions (benefit of $49 in 2023 and charge of $44 in 2022).
Full Year 2023 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings EffectiveTax Rate Diluted EPS
Reported $         13,058           $       7,129           $        1,388           $          3,888           $ (215)          $          508           $          3,165                   13.8         % $         8.25        
Reported percent net sales           63.7         %           34.8         %           6.8          %           19.0         %         (1.0)        % nm           15.4         %    
Acquisition and integration-related costs                  
Inventory stepped-up to fair value           —                     —                     —                     —                     —                     —                     —                   —                     —        
Other acquisition and integration-related (a)           —                            (20)                     —                     20                     —                     (25)                    45                   (0.8)                    0.12        
Amortization of purchased intangible assets           —                     —                     —                     635                     —                      132                     503                   1.2                     1.31        
Structural optimization and other special charges (b)           39                          (166)                                  (1)                      206                     —                     47                     159                   0.5                     0.42        
Goodwill impairment           —                     —                     —                     —                     —                     —                     —                   —                     —        
Medical device regulations (c)           2                     —                                    (94)                     96                     —                     22                     74                   0.2                     0.19        
Recall-related matters (d)           —                     —                     —                     18                     —                     4                     14                   —                     0.04        
Regulatory and legal matters (e)           —                            (92)                    —                     92                     —                      29                     63                   0.4                     0.16        
Tax matters (f)           —                     —                     —                     —                         (8)                    (51)                    43                   (1.2)                    0.11        
Adjusted $          13,099           $         6,851           $            1,293           $          4,955           $ (223)          $            666           $          4,066                   14.1         % $         10.60        
Adjusted percent net sales           63.9         %           33.4         %           6.3         %           24.2         %         (1.1)        % nm           19.8         %    
Full Year 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings EffectiveTax Rate Diluted EPS
Reported $        11,578           $          6,455           $          1,454           $          2,841           $ (158)         $         325           $         2,358                   12.1         % $         6.17          
Reported percent net sales           62.8         %           35.0         %           7.9         %           15.4         %         (0.9)        % nm           12.8         %    
Acquisition and integration-related costs                  
Inventory stepped-up to fair value           12                     —                     —                     12                     —                        3                  9                   —                     0.02          
Other acquisition and integration-related (a)           —                           (138)                    —                     138                     —                     34                     104                   0.5                     0.27          
Amortization of purchased intangible assets           —                     —                     —                     627                     —                     132                     495                   1.7                     1.30          
Structural optimization and other special charges (b)           56                           (206)                                 (87)                    349                     —                     66                     283                   0.7                     0.74          
Goodwill impairment           —                     —                     —                     216                     —                     —                     216                   (1.1)                    0.57          
Medical device regulations (c)           3                     —                                 (137)                   140                     —                     25                     115                   0.2                     0.30          
Recall-related matters (d)           —                     —                     —                     (15)                    —                          (3)                  (12)                  —                     (0.03)         
Regulatory and legal matters (e)           —                             (76)                     —                     76                     —                           7                     69                   (0.2)                    0.18          
Tax matters (f)           —                     —                     —                     —                       (75)                          (9)                  (66)                  0.1                     (0.18)         
Adjusted $          11,649           $            6,035           $          1,230           $          4,384           $ (233)          $         580           $          3,571                   14.0         % $          9.34          
Adjusted percent net sales           63.1         %           32.7         %           6.7         %           23.8         %         (1.3)        % nm           19.4         %    
(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including charges for termination of sales relationships ($5 in 2023, $21 in 2022), employee retention and workforce reductions ($6 in 2023, $33 in 2022), changes in the fair value of contingent consideration (($1) in 2023, ($135) in 2022), manufacturing integration costs ($2 in 2023, $32 in 2022), stock compensation payments upon a change in control ($0 in 2023, $132 in 2022), adjustments to acquisition-related tax provisions (charges of $30 included in Income Taxes for 2023, $0 for 2022) and other integration-related activities such as deal costs and costs associated with legal entity rationalization ($8 in 2023, $55 in 2022).
(b) Charges represent the costs associated with employee retention and workforce reductions ($69 in 2023, $74 in 2022), the closure/transfer of manufacturing and other facilities, including site closure costs, contract termination costs and redundant employee costs during the work transfers ($50 in 2023, $83 in 2022), product line exits (primarily inventory, long-lived asset and specifically-identified intangible asset write-offs) ($32 in 2023, $80 in 2022), certain long-lived and intangible asset write-offs and impairments ($28 in 2023, $96 in 2022) and other charges ($27 in 2023, $16 in 2022).
(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
(d) Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain recall-related matters.
(e) Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.
(f) Benefits and charges represent the accounting impact of certain significant and discrete tax items, including adjustments related to the transfer of certain intellectual properties between tax jurisdictions (charges of $89 in 2023 and $182 in 2022), certain tax audit settlements (benefit of $9 included in Other Income (Expense), Net for 2023 and benefit of $24 included in Income Taxes for 2023, benefit of $45 included in Other Income (Expense) and benefit of $162 included in Income Taxes for 2022) and the reversal of deferred income tax on undistributed earnings of foreign subsidiaries ($0 for 2023, benefit of $71 for 2022).
Stryker (NYSE:SYK)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Stryker Charts.
Stryker (NYSE:SYK)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Stryker Charts.