"Our unique set of businesses and a strong focus on execution helped usdeliver another excellent quarter," commented Stephen P. MacMillan, Presidentand Chief Executive Officer. "Domestic sales were particularly strong, withOrthopaedic Implants growing 16% and MedSurg up 20%, while international salesgrowth accelerated to 11% operationally."
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Net sales were $1,453.2 million for the third quarter of 2007,representing an 18.0% increase over net sales of $1,231.1 million for thethird quarter of 2006, and were $4,342.4 million for the first nine months of2007, representing a 15.9% increase over net sales of $3,746.8 million for thefirst nine months of 2006. On a constant currency basis, net sales increased15.7% for the third quarter and 13.9% for the first nine months.
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Net earnings from continuing operations for the third quarter of 2007 were$228.7 million, representing a 22.3% increase over net earnings fromcontinuing operations of $187.0 million for the third quarter of 2006.Diluted net earnings per share from continuing operations for the thirdquarter of 2007 increased 22.2% to $.55 compared to $.45 for the third quarterof 2006.
Net earnings from continuing operations for the first nine months of 2007were reduced by a $12.7 million intangible asset impairment charge (net of$7.1 million income tax benefit) to write off patents associated withintervertebral body fusion cage products recorded in the second quarter. Netearnings from continuing operations for the first nine months of 2006 werereduced by a $52.7 million charge to write off purchased in-process researchand development associated with the first quarter 2006 acquisition ofSightline Technologies, Ltd. (Sightline).
Excluding the impact of the $12.7 million intangible asset impairmentrecorded in the second quarter of 2007 and the $52.7 million charge to writeoff purchased in-process research and development in the first quarter of 2006,adjusted net earnings from continuing operations for the first nine months of2007 of $723.3 million increased 21.1% over adjusted net earnings fromcontinuing operations of $597.4 million for the first nine months of 2006 andadjusted diluted net earnings per share from continuing operations for thefirst nine months of 2007 of $1.74 increased by 20.0% over adjusted dilutednet earnings per share from continuing operations of $1.45 for the first ninemonths of 2006.
Net earnings from continuing operations for the first nine months of 2007were $710.6 million, representing a 30.5% increase over net earnings fromcontinuing operations of $544.7 million for the first nine months of 2006.Diluted net earnings per share from continuing operations for the first ninemonths of 2007 increased 28.8% to $1.70 compared to $1.32 for the first ninemonths of 2006.
During the second quarter of 2007, the Company sold its outpatientphysical therapy business. This sale resulted in a second quarter 2007 gain of$25.7 million (net of income taxes), or $.06 per diluted share. Net earningsfrom discontinued operations for the third quarter of 2006 were $1.4 million.Net earnings from discontinued operations for the first nine months of 2007were $5.0 million compared to net earnings from discontinued operations of$5.1 million for the first nine months of 2006.
Net earnings for the third quarter of 2007 were $228.7 million,representing a 21.4% increase over net earnings of $188.4 million for thethird quarter of 2006. Diluted net earnings per share for the third quarterof 2007 increased 19.6% to $.55 compared to $.46 for the third quarter of 2006.Net earnings for the first nine months of 2007 were $741.3 million,representing a 34.8% increase over net earnings of $549.8 million for thefirst nine months of 2006. Dil
