Growing at Home and Abroad 4129

COVER STORY

Despite an overall slowdown in the orthopedics market over the past couple of years, spinal device manufacturer Kyphon Inc. has continued to report exceptional revenue gains quarter after quarter.

In its second quarter this year, Kyphon reported sales of $101.1 million, marking the first time that the firm's quarterly sales tipped the $100 million mark. The figure represented a 35% increase over sales in the year-ago period.

In addition to significant overall sales growth, the company has continued to boost its international presence. Kyphon's international sales in the second quarter were $19.4 million, a 71% increase over the year-ago period. U.S. sales of $81.7 million marked a 28% gain.

On an annual basis, Kyphon's sales growth continues to outpace that of the overall spine segment. The company reported 2005 sales of $306.1 million—a 43% increase over 2004. The company's 2004 sales of $213.4 million represented an increase of 63% over 2003. For the full-year 2006, Kyphon's sales are expected to increase about 30% versus 2005 to at least $398 million.

In 2005, international sales were $48.5 million, nearly double the company's 2004 international sales of $25.9 million. Likewise, Kyphon's international sales in 2004 marked growth of more than 100% over 2003 figures. In 2006, sales from the company's international operations are expected to constitute 17–19% of total worldwide sales—as much as $75 million.

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