Stryker Corp. (NYSE: SYK ) CEO Stephen MacMillan took time out to tout his company’s resilience at an analyst meeting in New York Wednesday.
MacMillan said the Kalamazoo, Mich.-based orthopedic and medical equipment giant has proven its mettle in tough times, something he said would allow it to continue to perform, despite struggles in the orthopedic industry.
“For many years in med tech, the rising tide lifted us all along with it,” he said. “What we hope you see is a company, and a team, that continues to deliver,” he said. “And we are poised to win in any environment.”
The CEO reaffirmed Stryker’s guidance for 2011, despite mounting pressures from tough economic conditions that have been a drain on the entire orthopedic industry. In January, Stryker officials predicted 11 to 13 percent sales growth and adjusted per-share earnings of $3.65 to $3.73.
MacMIllan said his confidence was rooted in the fact that the company isn’t dependent on just one market for success. In fact, no single franchise in the Stryker family makes up more than 18 percent of the company’s total revenues, MacMillan said.
“With any sector I’ve ever watched in med tech, what is hot for one period of time goes cold,” he said, explaining why the company has hedged its bets. “What you see over time is that some pieces offset others.”
MacMillan pointed to the rise in Stryker’s MedSurg equipment business in 2010, which offset the unexpected slowdown in the company’s reconstruction segment, which includes orthopedic reconstructive equipment.
He also took some time to discuss the company’s activity on the acquisition trail over the past 24-months. MacMillan noted that Stryker spent more than $2 billion on acquisitions from 2008 to 2010, up considerably from the $400 million it spent during the previous three year period.
However, he bristled at the notion that these moves were anything other than smart business decisions.
“Our acquisitions have all ben grown out of existing relationships we have with our customers. It is no diversification for diversification sake, but diversification because we see opportunities for growth,” he said. “It’s not like we went out and hired some consultant who said ‘you ought go on a diversification kick.'”
In 2011, the company has already committed nearly $2 billion to acquisitions alone. In January it closed aclosed a $1.5 billion acquisition of Boston Scientific Corp.’s (NYSE:BSX) neurovascular business and this week SYK announced a $316 million buyout of Orthovita, Inc. (NSDQ: VITA).