VOL. 111 | NO. 81 | Tuesday, May 6, 1997
lj 10/5 cates
Sofamor Danek breaks
ground on new addition
By LAURIE JOHNSON
The Daily News
Sofamor Danek Group Inc. officially broke ground Monday on an addition that will significantly increase the amount of office and distribution space at the companys facility in the Nonconnah corridor.
The company, which primarily develops, manufactures and markets products associated with spinal surgery and the treatment of spinal disorders, soon will begin construction of a 105,000-square-foot building beside its existing 60,000-square-foot facility at 1800 Pyramid Place.
Sofamor Daneks new addition marks the second phase of the rapidly growing Memphis-based companys master building plan.
"Our growth rate right now is close to 30 percent, which is phenomenal for our industry," said Ron Riley, vice president of operations for Sofamor Danek.
"Our manpower growth has exceeded what our current building can handle, and we are certainly in need of a new higher-tech distribution facility."
Riley attributed the companys rapid growth rate to demand for the companys existing product lines, as well as the acquisition of three surgical products companies.
They include Mednext, which manufactures surgical drills; Timesh, which produces cranial face plates; and SNT Inc., which creates surgical navigation systems.
Riley said over the next three years, Sofamor Danek will add 211 employees to its Memphis facility, which currently has a staff of about 300.
The first two floors of the new facility will be devoted to distribution and lab training space, and the second two floors will contain office space, as well as extra space to accommodate future growth.
"The top two floors of this building will contain 60,000 square feet, an amount equal to all three floors of our existing building," Riley said.
For construction of the new facility, Sofamor Danek financed $12 million through Atlantic Financial Group Ltd., according to a trust deed filed Thursday in the Shelby County Registers Office.
Linkous Construction has been selected as general contractor for the Phase II building, which is expected to be complete in April.
Riley said Sofamor Danek has purchased an additional five acres adjacent to the new facility for a Phase III building project, which will be undertaken when company growth warrants it.
This will consist of a three- to four-story building designed to add even more office or distribution space.
"Phase III could be a full building of either office or distribution," Riley said. "We can be flexible where this is concerned. What we do with the new building will be determined by our growth, our needs and the number of companies we buy during the next few years."
Sofamor Danek, traded publicly on the New York Stock Exchange under the symbol SDG, posted record revenues and earning for the first quarter of 1997.
The company recorded revenues of $69.8 million for the first quarter of 1997, compared with revenues of $54.2 million in the same quarter of 1996.
U.S. revenues increased 35 percent to $48.3 million, and non-U.S. revenues increased 16.4 percent to $21.5 million, compared with first quarter results of 1996.
Sofamor Danek reported a record quarterly net income of $12.8 million, or 48 cents per share, during the first quarter of 1997, compared with a net income of $10.2 million, or 39 cents per share, in the same quarter of 1996.
Operating income increased 42.8 percent to $20 million, and the operating profit margin rose to 28.6 percent of sales.