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Guidant Posts All-Time Record Sales of $668.4 Million in Second Quarter; Record Net Income and Earnings Per Share of $0.40 Grow 22 Percent

Business Wire, July 18, 2000

Business Editors, Health/Medical Writers

INDIANAPOLIS--(BW HealthWire)--July 18, 2000

Led by strong coronary stent and implantable defibrillator revenues and growth from emerging therapies such as endovascular AAA repair and heart failure, Guidant Corporation (NYSE:GDT)(PCX:GDT), today reported all-time record sales of $668.4 million for the second quarter, an increase of 9 percent over the same period of 1999. Excluding unfavorable exchange rate impact and 1999 revenues from the general surgery business divested last summer, revenue growth for Guidant in the quarter would have totaled 13 percent. Record second quarter net income of $124.3 million and earnings per share of $0.40 each grew 22 percent over the second quarter of 1999, excluding special charges in the prior period.(a)

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Three Months Ended June 30, 2000

Revenue Performance Strong for Implantable Defibrillators,

Coronary Stents, and Pacemakers

Emerging Therapies Contribute 40% of Growth

Revenue growth for Guidant in the second quarter was driven by a strong showing in implantable defibrillator and pacemaker revenues. Additionally, 40 percent of growth versus the second quarter of 1999 was generated by Guidant's emerging technologies to treat abdominal aortic aneurysms (AAA), heart failure, and peripheral vascular disease. "The success of the VENTAK(R) PRIZM(TM) dual chamber implantable pacemaker/defibrillator, Guidant's physiologically shaped dual chamber defibrillator with six-year longevity, continued throughout the second quarter and drove acceleration in the expanding market for ventricular arrhythmia therapy," commented Ronald W. Dollens, Guidant President and Chief Executive Officer. U.S. implantable defibrillator revenues of $149.9 million, grew 30% versus the second quarter of 1999. Worldwide defibrillator revenues increased 27% to $180.9 million.

Regarding coronary stent performance Dollens commented, "In spite of several competitive launches in the U.S. during the second quarter, Guidant continued to maintain market leadership through excellent field execution and by providing leading edge technology to our customers." On-going success of the MULTI-LINK TRISTAR(TM) Coronary Stent System in the U.S. and the recent launch of the MULTI-LINK TETRA(TM) Coronary Stent System in Europe, led to U.S. and worldwide coronary stent sales of $165.8 million and $223.9 million, respectively. Recently launched in May in European markets, the TETRA incorporates VTS(TM) (Variable Thickness Strut) technology to achieve optimal flexibility and visibility while offering outstanding stent scaffolding. In addition, TETRA incorporates all the features that made the TRISTAR the world's leading coronary stent. Compared to the second quarter of 1999, worldwide coronary stent units increased by 6 percent while revenues declined by 4 percent. Average selling prices for Guidant coronary stent products in the U.S. declined by 8 percent versus the prior year, which is in line with recent trends.

"Benefiting from the 1999 expansion of distribution capacity and of newly launched pacemaker products, Guidant experienced significant pacemaker revenue growth in the second quarter," stated Dollens. U.S. pacing product revenue growth of 9 percent versus the prior year was led by the continuing acceptance of the DISCOVERY(TM) II and PULSAR(TM) MAX pacemakers. Worldwide and U.S. pacemaker revenue was $137.8 and $86.8 million, respectively. Worldwide pacing sales increased by 8 percent.

"Another bright spot in the quarter's performance was in worldwide angioplasty products, which grew 9 percent to $88.3 million," observed Dollens. Growth was driven by worldwide dilatation catheter revenues which increased 17%, led by a nearly three-fold increase in Japan versus the prior year.

Sales of cardiac and vascular surgery products totaled $27.8 million worldwide, and were up 34 percent from the first quarter of 2000. "The success of our ANCURE(R) ENDOGRAFT(R) System for endovascular abdominal aortic aneurysm (AAA) repair, the ULTIMA(TM) and VORTEX(TM) Stabilization Systems for `beating heart' cardiac bypass procedures, and the VASOVIEW UNIPORT(TM) PLUS Vessel Harvesting System demonstrates the strong clinical acceptance of minimally invasive surgical approaches. This underscores the significant immediate contribution to growth they provide," said Dollens. He continued, "For example, two-years of clinical data in over 500 patients implanted with the ANCURE bifurcated graft show excellent clinical success with no ruptures. The enthusiasm about this procedure and the ANCURE system has been remarkable." Versus the prior year, sales of cardiac and vascular surgery products grew 18%. The comparison includes Guidant's general surgery product line, which was sold in July of 1999.

Guidant Delivers All-Time Record Net Income of $124.3 million

Gross profit for Guidant in the second quarter of $506.1 million represented 75.7 percent of sales versus 75.6 percent in the same period last year.

Business Services Industry

Guidant Posts All-Time Record Sales of $668.4 Million in Second Quarter; Record Net Income and Earnings Per Share of $0.40 Grow 22 Percent

Business Wire, July 18, 2000

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