) announced a strategic initiative to realign its business to
achieve 5% organic growth. The company aims to combine its two
separate reportable segments viz. Greatbatch Medical and
Electrochem Solutions into a single sales & marketing and
GREATBATCH INC (GB): Free Stock Analysis
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ST JUDE MEDICAL (STJ): Free Stock Analysis
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The company has appointed 4 new senior executives following the
realignment decision. It expects to incur restructuring charges
in the range of $4.2 to $5.0 million, including employee
severance and termination benefits.
Following its completion, the realignment plan is expected to
generate annual savings of $7.0 to $7.7 million. Moreover,
evaluating the short-term benefit from the realignment plan,
Greatbatch has raised its adjusted earnings per share guidance
range to $2.00- $2.05 from the previous range of $1.90-$2.00 per
With the success of its integration and consolidation efforts,
Greatbatch is now shifting its focus to become a producer of
complete medical devices for Original Equipment Manufacturer
(OEM) customers from being a supplier of batteries, capacitors,
and components used in implantable medical devices (IMDs).
Moreover, Greatbatch boasts a vast intellectual property (IP)
portfolio of more than 1,000 patents. The IP along with better
sales and marketing initiatives will allow the company to gain
market share in the multi-billion dollar worth cardiac and
neuromodulation, portable medical, vascular and orthopedics
We believe that the realignment plan will help management to
emphasize on investing in its core business as well as develop
innovative products by combining the resources of the integrated
unit. We are also encouraged by Greatbatch's effort to transform
into a medical devices company. Almost 80% of its revenues are
derived from medical devices companies. Its top customers include
leading players such as
St. Jude Medical
Greatbatch, Inc. currently retains a Zacks Rank #3 (Hold). A soft
CRM market and pricing pressure remain headwinds for the company.
While we remain on the sidelines for Greatbatch, semi-discretes
Vishay Intertechnology Inc.
) with a Zacks Rank #2 (Buy) warrants a look.