**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-Q**

**(Mark One)**

**x**                              QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe quarterly period ended March 31, 2007**

**OR**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe transition period from             to           .**

**CommissionFile Number  001-32374**

**SYMMETRY MEDICAL INC.**

(Exact name of registrantas specified in its charter)

| **Delaware**                     |   | **35-1996126**       |
|----------------------------------|--------|----------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer     |
| incorporation or  organization)  |   | Identification  No.) |

 

| **220 W. Market Street, Warsaw, Indiana** |   | **46580**  |
|-------------------------------------------|--------|------------|
| (Address of  principal executive offices) |   | (Zip code) |

 

Registrants telephonenumber, including area code**  (574) 268-2252**

Indicate by check mark whether the registrant(1) has filed all reports required to be filed by section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.   Yes  x   No  o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act. (Check One)

| Large accelerated filer  o |   | Accelerated  filer  x |   | Non-accelerated filer  o |
|--------------------------------------|--------|---------------------------------|--------|------------------------------------|

 

Indicate by check mark whether the registrant is ashell company (as defined in Exchange Act Rule 12b-2).   Yes  o   No  x

Thenumber of shares outstanding of the registrant’s common stock as of April 10,2007 was 35,293,651.

 

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**TABLE OF CONTENTS**
| **PART I FINANCIAL INFORMATION**      |
|--------------------------------------------|
|                                       |   |
| Item 1     - | Financial Statements: |
|                                       |   |
|                                       | Condensed Consolidated Balance Sheets: As of  March 31, 2007 and December 30, 2006 |
|                                       |   |
|                                       | Condensed Consolidated Statements of  Operations: Three Months Ended March 31, 2007 and April 1, 2006 |
|                                       |   |
|                                       | Condensed Consolidated Statements of Cash Flows: Three  Months Ended March 31, 2007 and April 1, 2006 |
|                                       |   |
|                                       | Notes to Condensed Consolidated Financial Statements |
|                                       |   |
| Item 2                                | Management’s Discussion and Analysis of Results of  Operations and Financial Condition |
|                                       |   |
| Item 3                                | Quantitative and Qualitative Disclosures about Market  Risks |
|                                       |   |
| Item 4                                | Controls and Procedures |
|                                       |   |
| **PART II  OTHER INFORMATION**        |
|                                       |   |
| Item 1                                | Legal Proceedings |
|                                       |   |
| Item 1A                               | Risk Factors |
|                                       |   |
| Item 2                                | Unregistered Sale of Equity Securities and Use of  Proceeds |
|                                       |   |
| Item 5                                | Other Information |
|                                       |   |
| Item 6                                | Exhibits |
|                                       |   |
| Signatures                                 |   |

 

2

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**Symmetry MedicalInc.Condensed Consolidated Balance Sheets**
| ** **                                                                                                                   | ** ** | **March 31,**                                                 | ** ** | **December 30,** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                                                   | ** ** | **2007**                                                           | ** ** | **2006**              | ** ** |
| ** **                                                                                                                   | ** ** | **(In Thousands, Except Per Share Data)** | ** ** |
| ** **                                                                                                                   | ** ** | **(unaudited)**                                                    | ** ** | ** **            | ** ** |
| **Assets:**                                                                                                                  |       |                                                               |       |                  |       |
| Current Assets:                                                                                                              |       |                                                               |       |                  |       |
| Cash and cash  equivalents                                                                                                   |       | $                                                                  | 6,094      |                  | $          | 11,721 |   |
| Accounts receivables,  net                                                                                                   |       | 55,267                                                             |       | 47,506                |       |
| Inventories                                                                                                                  |       | 49,253                                                             |       | 47,392                |       |
| Refundable income taxes                                                                                                      |       | 112                                                                |       | 111                   |       |
| Deferred income taxes                                                                                                        |       | 3,534                                                              |       | 2,826                 |       |
| Other current assets                                                                                                         |       | 3,820                                                              |       | 3,965                 |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total current assets                                                                                                         |       | 118,080                                                            |       | 113,521               |       |
| Property and equipment,  net                                                                                                 |       | 109,413                                                            |       | 106,147               |       |
| Goodwill                                                                                                                     |       | 157,885                                                            |       | 156,241               |       |
| Intangible assets, net  of accumulated amortization                                                                          |       | 36,830                                                             |       | 33,257                |       |
| Other assets                                                                                                                 |       | 922                                                                |       | 981                   |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total Assets                                                                                                                 |       | $                                                                  | 423,130    |                  | $          | 410,147 |   |
|                                                                                                                         |       |                                                               |       |                  |       |
| **Liabilities and Shareholders'  Equity:**                                                                                   |       |                                                               |       |                  |       |
| Current Liabilities:                                                                                                         |       |                                                               |       |                  |       |
| Accounts payable                                                                                                             |       | $                                                                  | 19,170     |                  | $          | 14,860 |   |
| Accrued wages and  benefits                                                                                                  |       | 10,168                                                             |       | 7,816                 |       |
| Other accrued expenses                                                                                                       |       | 4,723                                                              |       | 4,104                 |       |
| Income tax payable                                                                                                           |       | 1,281                                                              |       | 850                   |       |
| Deferred income taxes                                                                                                        |       | 337                                                                |       | 249                   |       |
| Derivative valuation  liability                                                                                              |       | 546                                                                |       | 1,184                 |       |
| Revolving line of credit                                                                                                     |       | 2,215                                                              |       | —                |       |
| Current portion of  capital lease obligations                                                                                |       | 2,956                                                              |       | 3,500                 |       |
| Current portion of  long-term debt                                                                                           |       | 7,837                                                              |       | 5,550                 |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total current  liabilities                                                                                                   |       | 49,233                                                             |       | 38,113                |       |
| Deferred income taxes                                                                                                        |       | 11,662                                                             |       | 11,832                |       |
| Derivative valuation  liability                                                                                              |       | 893                                                                |       | 549                   |       |
| Capital lease  obligations, less current portion                                                                             |       | 5,400                                                              |       | 5,142                 |       |
| Long-term debt, less  current portion                                                                                        |       | 59,110                                                             |       | 63,650                |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total Liabilities                                                                                                            |       | 126,298                                                            |       | 119,286               |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Commitments and  contingencies (Note 8)                                                                                      |       | —                                                             |       | —                |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Shareholders' Equity:                                                                                                        |       |                                                               |       |                  |       |
| Common Stock, $.0001  par value; 72,410 shares authorized; shares issued March 31, 2007--35,294;  December 30, 2006--35,107) |       | 4                                                                  |       | 4                     |       |
| Additional paid-in  capital                                                                                                  |       | 272,977                                                            |       | 271,388               |       |
| Retained earnings                                                                                                            |       | 10,481                                                             |       | 6,771                 |       |
| Accumulated other  comprehensive income                                                                                      |       | 13,370                                                             |       | 12,698                |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total Shareholders'  Equity                                                                                                  |       | 296,832                                                            |       | 290,861               |       |
|                                                                                                                         |       |                                                               |       |                  |       |
| Total Liabilities and Shareholders' Equity                                                                                   |       | $                                                                  | 423,130    |                  | $          | 410,147 |   |

 

See accompanying notes to condensed consolidatedfinancial statements*.*

3

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**Symmetry MedicalInc.Condensed Consolidated Statements of Operations**
| ** **                                                         | ** ** | **Three Months Ended**                                   | ** ** |
|--------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                                         | ** ** | **March 31,**                                                 | ** ** | **April 1,** | ** ** |
| ** **                                                         | ** ** | **2007**                                                           | ** ** | **2006** | ** ** |
| ** **                                                         | ** ** | **(In Thousands, Except Per Share Data)** | ** ** |
| ** **                                                         | ** ** | **(unaudited)**                                                    | ** ** | **(unaudited)** | ** ** |
| Revenue                                                            |       | $                                                                  | 67,519     |   | $ | 69,613 |   |
| Cost of Revenue                                                    |       | 52,558                                                             |       | 49,272 |   |
|                                                               |       |                                                               |       |   |   |
| Gross Profit                                                       |       | 14,961                                                             |       | 20,341 |   |
| Selling, general, and  administrative expenses                     |       | 7,873                                                              |       | 7,040 |   |
|                                                               |       |                                                               |       |   |   |
| Operating Income                                                   |       | 7,088                                                              |       | 13,301 |   |
| Other (income) expense:                                            |       |                                                               |       |   |   |
| Interest expense                                                   |       | 1,587                                                              |       | 661 |   |
| Derivatives valuation  (gain)/loss                                 |       | (295                                                               | )          | (1 | ) |
| Other                                                              |       | 546                                                                |       | (219 | ) |
|                                                               |       |                                                               |       |   |   |
| Income before income  taxes                                        |       | 5,250                                                              |       | 12,860 |   |
| Income tax expense                                                 |       | 1,540                                                              |       | 4,483 |   |
|                                                               |       |                                                               |       |   |   |
| Net income                                                         |       | $                                                                  | 3,710      |   | $ | 8,377 |   |
|                                                               |       |                                                               |       |   |   |
| Net income per share:                                              |       |                                                               |       |   |   |
| Basic                                                              |       | $                                                                  | 0.11       |   | $ | 0.24 |   |
|                                                               |       |                                                               |       |   |   |
| Diluted                                                            |       | $                                                                  | 0.11       |   | $ | 0.24 |   |
|                                                               |       |                                                               |       |   |   |
| Weighted average common  shares and equivalent shares outstanding: |       |                                                               |       |   |   |
| Basic                                                              |       | 34,973                                                             |       | 34,717 |   |
| Diluted                                                            |       | 35,194                                                             |       | 35,137 |   |

 

See accompanying notes to condensed consolidatedfinancial statements*.*

4

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**Symmetry MedicalInc.Condensed Consolidated Statements of Cash Flows**
| ** **                                                                                   | ** ** | **Three Months Ended** | ** ** |
|----------------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                                   | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **                                                                                   | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| ** **                                                                                   | ** ** | **(In Thousands)**          | ** ** |
| ** **                                                                                   | ** ** | **(unaudited)**                  | ** ** | **(unaudited)** | ** ** |
| **Operating activities**                                                                     |       |                             |       |   |   |
| Net Income                                                                                   |       | $                                | 3,710      |   | $ | 8,377 |   |
| Adjustments to reconcile  net income to net cash provided by (used in) operating activities: |       |                             |       |   |   |
| Depreciation                                                                                 |       | 4,179                            |       | 3,704 |   |
| Amortization                                                                                 |       | 494                              |       | 151 |   |
| Foreign currency  transaction (gain) loss                                                    |       | (11                              | )          | (284 | ) |
| Net loss on sale of  assets                                                                  |       | 2                                |       | 13 |   |
| Deferred income tax  provision                                                               |       | (890                             | )          | (233 | ) |
| Excess tax benefit from  stock-based compensation                                            |       | (796                             | )          | (1,062 | ) |
| Stock-based  compensation                                                                    |       | 244                              |       | 108 |   |
| Derivative valuation  change                                                                 |       | (295                             | )          | (1 | ) |
| Change in operating  assets and liabilities:                                                 |       |                             |       |   |   |
| Accounts receivable                                                                          |       | (5,462                           | )          | (4,406 | ) |
| Other assets                                                                                 |       | 190                              |       | 108 |   |
| Inventories                                                                                  |       | (175                             | )          | (620 | ) |
| Accounts payable                                                                             |       | 3,591                            |       | (4,109 | ) |
| Accrued expenses and  other                                                                  |       | 2,976                            |       | 981 |   |
|                                                                                         |       |                             |       |   |   |
| Net cash provided by  operating activities                                                   |       | 7,757                            |       | 2,727 |   |
|                                                                                         |       |                             |       |   |   |
| **Investing activities**                                                                     |       |                             |       |   |   |
| Purchases of property  and equipment                                                         |       | (3,473                           | )          | (5,085 | ) |
| Proceeds from the sale  of fixed assets                                                      |       | 28                               |       | — |   |
| Acquisition, net of  cash received                                                           |       | (10,317                          | )          | — |   |
|                                                                                         |       |                             |       |   |   |
| Net cash used in  investing activities                                                       |       | (13,762                          | )          | (5,085 | ) |
|                                                                                         |       |                             |       |   |   |
| **Financing activities**                                                                     |       |                             |       |   |   |
| Proceeds from bank  revolver                                                                 |       | 16,473                           |       | 4,641 |   |
| Payments on bank  revolver                                                                   |       | (16,502                          | )          | (3,028 | ) |
| Payments on long-term  debt and capital lease obligations                                    |       | (903                             | )          | (2,384 | ) |
| Proceeds from the  issuance of common stock, net of expenses                                 |       | 549                              |       | 404 |   |
| Excess tax benefit from  stock-based compensation                                            |       | 796                              |       | 1,062 |   |
|                                                                                         |       |                             |       |   |   |
| Net cash provided by  financing activities                                                   |       | 413                              |       | 695 |   |
| Effect of exchange rate  changes on cash                                                     |       | (35                              | )          | 108 |   |
|                                                                                         |       |                             |       |   |   |
| Net increase (decrease)  in cash and cash equivalents                                        |       | (5,627                           | )          | (1,555 | ) |
| Cash and cash  equivalents at beginning of period                                            |       | 11,721                           |       | 12,471 |   |
|                                                                                         |       |                             |       |   |   |
| Cash and cash  equivalents at end of period                                                  |       | $                                | 6,094      |   | $ | 10,916 |   |
|                                                                                         |       |                             |       |   |   |
| Supplemental  disclosures:                                                                   |       |                             |       |   |   |
| Cash paid for interest                                                                       |       | $                                | 1,606      |   | $ | 512 |   |
|                                                                                         |       |                             |       |   |   |
| Cash paid for income taxes                                                                   |       | $                                | 1,449      |   | $ | 2,034 |   |

 

See accompanying notes to condensed consolidatedfinancial statements.

5

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**Symmetry MedicalInc.Notes to Condensed Consolidated Financial Statements(In Thousands, Except Per Share Data)**

**1. Basis ofPresentation**

The condensedconsolidated financial statements include the accounts of SymmetryMedical, Inc. and its wholly-owned subsidiaries (collectively referred toas the Corporation), Symmetry Medical USA Inc., Jet Engineering, Inc.,Ultrexx, Inc., Riley Medical Inc., Symmetry Medical Switzerland SA,Symmetry Medical Everest LLC, Everest Metal International Limited, SymmetryMedical Cheltenham Limited, Symmetry Medical PolyVac, SAS, Thornton PrecisionComponents Limited, Symmetry Medical Malaysia SDN and Clamonta Limited.  The Corporation is a global supplier ofintegrated products and services consisting primarily of surgical implants,instruments and cases to orthopedic and other medical device companies.

The condensedconsolidated financial statements of the Corporation have been prepared withoutaudit, pursuant to the rules and regulations of the Securities andExchange Commission. Certain information and footnote disclosures normallyincluded in financial statements prepared in accordance with generally acceptedaccounting principles have been condensed or omitted pursuant to suchrules and regulations. In the opinion of management, the accompanyingcondensed consolidated financial statements contain all material adjustments(consisting only of normal recurring adjustments) necessary to present fairlythe consolidated financial position of the Corporation, its results of operationsand cash flows. The Corporation’s results are subject to seasonal fluctuations.Interim results are not necessarily indicative of results for a full year. Thecondensed consolidated financial statements included herein should be read inconjunction with the consolidated financial statements and the notes theretoincluded in the Corporation’s Annual Report on Form 10-K for fiscal year2006.

Certain prior yearamounts have been reclassified to conform to the current-year presentation.These reclassifications had no impact on our results of operations or financialposition.

The Corporation’syear end is the 52 or 53 week period ending the Saturday closest toDecember 31. Fiscal year 2007 and 2006 are 52 week years. As such, interimquarters are 13 weeks long ending the Saturday closest toMarch 31, June 30, or September 30. References in theseconsolidated financial statements to the three months ended refer to thesefinancial periods, respectively.

Riley Medical Inc.and Symmetry Medical Switzerland SA were acquired on May 2, 2006 and arecollectively referred to as “Riley Medical.” Symmetry Medical Everest LLC and Everest Metal International Limitedwere acquired on August 31, 2006 and are collectively referred to as “EverestMetal.”  The Corporation’s Annual Reporton Form 10-K for fiscal year 2006 contains additional information on theseacquisitions.

On January 9,2007, the Corporation’s subsidiary Thornton Precision Components Limited(Thornton) acquired all of the stock of Whedon Limited, a privately ownedcompany based in Warwickshire, UK and the holding company of Clamonta Limited(collectively “Clamonta Ltd”), for $10,317 in cash, subject to certain postclosing adjustments.  Clamonta Ltdmanufactures aerospace products for the global aerospace industry.

**2. Inventories**

Inventoriesconsist of the following:

|                            | ** ** | **March 31,** | ** ** | **December 30,** | ** ** |
|----------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                 | ** ** | **2007**           | ** ** | **2006**              | ** ** |
| Raw material and  supplies |       | $                  | 8,234      |                  | $          | 10,661 |   |
| Work-in-process            |       | 30,256             |       | 25,076                |       |
| Finished goods             |       | 10,763             |       | 11,655                |       |
|                       |       |               |       |                  |       |
|                       |       | $                  | 49,253     |                  | $          | 47,392 |   |

 

**3. Property andEquipment**

Propertyand equipment, including depreciable lives, consists of the following:

6

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| ** **                                   | ** ** | **March 31,** | ** ** | **December 30,** | ** ** |
|----------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                   | ** ** | **2007**           | ** ** | **2006**              | ** ** |
| Land                                         |       | $                  | 2,321      |                  | $          | 1,531 |   |
| Buildings and  improvements (20 to 40 years) |       | 30,823             |       | 29,957                |       |
| Machinery and  equipment (5 to 15 years)     |       | 126,588            |       | 121,457               |       |
| Office equipment  (3 to 5 years)             |       | 6,911              |       | 6,832                 |       |
| Construction-in-progress                     |       | 5,253              |       | 4,800                 |       |
|                                         |       |               |       |                  |       |
|                                         |       | 171,896            |       | 164,577               |       |
| Less accumulated  depreciation               |       | (62,483            | )          | (58,430               | )          |
|                                         |       |               |       |                  |       |
|                                         |       | $                  | 109,413    |                  | $          | 106,147 |   |

 

**4. IntangibleAssets**

Intangible assets acquiredin connection with our acquisitions of Mettis (UK) Limited, Riley Medical,Everest Metal and Clamonta Ltd.

As ofMarch 31, 2007, the balances of intangible assets, other than goodwill, were asfollows:
| ** **                                               | ** ** | **Weighted-average** | ** ** | **Gross**      | ** ** | ** **       | ** ** | **Net**        | ** ** |
|----------------------------------------------------------|------------|----------------------|------------|----------------|------------|------------------|------------|----------------|------------|
| ** **                                               | ** ** | **Amortization**     | ** ** | **Intangible** | ** ** | **Accumulated**  | ** ** | **Intangible** | ** ** |
| ** **                                               | ** ** | **Period**           | ** ** | **Assets**     | ** ** | **Amortization** | ** ** | **Assets**     | ** ** |
| Acquired  technology and patents                         |       | 12 years             |       | $              | 1,575      |             | $          | (413           | )          | $ | 1,162 |   |
| Acquired  customers                                      |       | 19 years             |       | 31,525         |       | (2,875           | )          | 28,650         |       |
| Non-compete  agreements                                  |       | 5 years              |       | 402            |       | (47              | )          | 355            |       |
| Intangible assets subject to amortization                |       |                 |       | 33,502         |       | (3,335           | )          | 30,167         |       |
|                                                     |       |                 |       |           |       |             |       |           |       |
| Proprietary  processes                                   |       | Indefinite           |       |           |       |             |       | 3,892          |       |
| Trademarks                                               |       | Indefinite           |       |           |       |             |       | 2,771          |       |
| Indefinite-lived intangible assets, other than  goodwill |       |                 |       |           |       |             |       | 6,663          |       |
|                                                     |       |                 |       |           |       |             |       |           |       |
| Total                                                    |       |                 |       |           |       |             |       | $              | 36,830     |   |
|                                                          |            |                      |            |                |            |                  |            |                |            |  |  |  |

 

**5. New AccountingPronouncements**

*Accounting for Uncertainty in Income Taxes*

The Corporationadopted the provisions of FASB Interpretation No. 48 (“FIN 48”), Accounting forUncertainty in Income Taxes, on December 31, 2006.  The implementation of FIN 48 had no impact onthe Corporation’s financial position or results of operations.  As of the beginning of fiscal year 2007, the Corporationhad unrecognized tax benefits of $339.  There has been no significant change in theunrecognized tax benefits during the first quarter ending March 31, 2007

The Corporationrecognizes interest and penalties related to unrecognized tax benefits through incometax expense.  The Corporation has notaccrued any interest or penalties as of March 31, 2007.  

The Corporation issubject to periodic audits by domestic and foreign tax authorities.  Currently, the Corporation is undergoingroutine periodic audits in both domestic and foreign tax jurisdictions.  It is reasonably possible that the amounts ofunrecognized tax benefits could change in the next 12 months as a result of theaudits.  It is impossible to estimate thesignificance of such a potential change at this time.  For the majority of tax jurisdictions, theCorporation is no longer subject to U.S. federal, state and local, or non-U.S.income tax examinations by tax authorities for fiscal years before 2003.

*The Fair Value Option for Financial Assets and Financial Liabilities*

In February 2007,the FASB issued Statement of Financial Accounting Standard (SFAS) No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. This Statementpermits entities to choose to measure many financial instruments and certainother instruments at fair value. This Statement is effective for fiscal yearsbeginning after November 15, 2007. The adoption of this Statement is notexpected to have a material impact on the Corporation’s financial position,results of operations or cash flows.

**6. SegmentReporting**

The Corporationprimarily designs, develops and manufactures implants and related surgicalinstruments and cases for orthopedic device companies and companies in othermedical device markets such as dental, osteobiologic and endoscopy. TheCorporation also has a special services business serving primarily aerospacecustomers, which does not meet the quantitative disclosure requirements of SFAS131. The Corporation manages its business in multiple operating segments.Because of the similar economic characteristics of the operations, includingthe nature of the products, comparable level of FDA regulations, same orsimilar customers, those operations have been aggregated following theprovisions of SFAS 131 for segment reporting purposes.

7

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The Corporation isa multi-national corporation with operations in the United States, the UnitedKingdom, Ireland, Switzerland, France and Malaysia. As a result, the Corporation’sfinancial results can be impacted by currency exchange rates in the foreignmarkets in which the Corporation sells its products. While exposure tovariability in foreign currency exists, the Corporation does not believe it issignificant to its operations and any variability is somewhat offset throughthe location of its manufacturing facilities. Revenue is attributed togeographic locations based on the location to which we ship our products.

*Revenue from External Customers:*

|                          | ** ** | **Three Months Ended** | ** ** |
|--------------------------|------------|----------------------------------|------------|
| ** **               | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **               | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| United States            |       | $                                | 39,359     |   | $ | 46,347 |   |
| United Kingdom           |       | 13,743                           |       | 7,728 |   |
| Ireland                  |       | 6,569                            |       | 9,525 |   |
| Other foreign  countries |       | 7,848                            |       | 6,013 |   |
|                     |       |                             |       |   |   |
| Total net revenues       |       | $                                | 67,519     |   | $ | 69,613 |   |

 

*Concentrationof Credit Risk:*

A substantialportion of the Corporation’s revenue is derived from a limited number ofcustomers. The Corporation’s revenue includes revenue from customers of theCorporation which individually account for 10% or more of revenue as follows:

Quarter endedMarch 31, 2007—Four customers representing approximately 17%, 12%, 11% and 11%of revenue, respectively.

Quarter endedApril 1, 2006—Two customers representing approximately 30% and 17% of revenue,respectively.

Followingis a summary of the composition by product category of the Corporation’srevenue to external customers. Revenue of the specialty services business isincluded in the “other” category.

|                    | ** ** | **Three Months Ended** | ** ** |
|--------------------|------------|----------------------------------|------------|
| ** **         | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **         | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| Implants           |       | $                                | 24,486     |   | $ | 26,591 |   |
| Instruments        |       | 15,243                           |       | 21,578 |   |
| Cases              |       | 17,586                           |       | 14,671 |   |
| Other              |       | 10,204                           |       | 6,773 |   |
|               |       |                             |       |   |   |
| Total net revenues |       | $                                | 67,519     |   | $ | 69,613 |   |

 

**7. Net Income PerShare**

Thefollowing table sets forth the computation of earnings per share.

8

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| ** **                                                          | ** ** | **Three Months Ended** | ** ** |
|---------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                          | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **                                                          | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| Net income                                                          |       | $                                | 3,710      |   | $ | 8,377 |   |
|                                                                |       |                             |       |   |   |
| Weighted-average  common shares outstanding basic                   |       | 34,973                           |       | 34,717 |   |
| Effect of stock  options, restricted stock and stock warrants       |       | 221                              |       | 420 |   |
|                                                                |       |                             |       |   |   |
| Weighted-average  common shares outstanding and assumed conversions |       | 35,194                           |       | 35,137 |   |
|                                                                |       |                             |       |   |   |
| Net income per  share:                                              |       |                             |       |   |   |
| Basic                                                               |       | $                                | 0.11       |   | $ | 0.24 |   |
|                                                                |       |                             |       |   |   |
| Diluted                                                             |       | $                                | 0.11       |   | $ | 0.24 |   |

 

During the threemonth period ended March 31, 2007, the Corporation issued 178 shares of commonstock through the exercise of stock options.

**8. Commitments andContingencies**

The Corporation isinvolved, from time to time, in various contractual, product liability, patent(or intellectual property) and other claims and disputes incidental to itsbusiness. Currently, there is no environmental or other litigation pending or,to the knowledge of the Corporation, threatened, that the Corporation expectsto have a material adverse affect on its financial condition, results ofoperations or liquidity. While litigation is subject to uncertainties and theoutcome of litigated matters is not predictable with assurance, the Corporationcurrently believes that the disposition of all pending or, to the knowledge ofthe Corporation threatened, claims and disputes, individually or in theaggregate, should not have a material adverse effect on the Corporation’sconsolidated financial condition, results of operations or liquidity.

**9. ComprehensiveIncome**

Comprehensiveincome is comprised of net income and gains and losses resulting from currencytranslations of foreign entities. Comprehensive income consists of thefollowing:

|                                           | ** ** | **Three Months Ended** | ** ** |
|-------------------------------------------|------------|----------------------------------|------------|
| ** **                                | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **                                | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| Net Income                                |       | $                                | 3,710      |   | $ | 8,377 |   |
| Foreign currency  translation adjustments |       | 672                              |       | 942 |   |
|                                      |       |                             |       |   |   |
| Comprehensive income                      |       | $                                | 4,382      |   | $ | 9,319 |   |

 

**10. Acquisitions**

On January 9,2007, the Corporation’s subsidiary Thornton Precision Components Limited(Thornton) acquired all of the stock of Whedon Limited, a privately ownedcompany based in Warwickshire, UK and the holding company of Clamonta Limited(collectively “Clamonta Ltd”), for $10,317 in cash, subject to certain postclosing adjustments.  The acquisition ofClamonta Ltd expands the Corporation’s Total Solutions ® business model intothe global aerospace industry and further strengthens our relationship with akey aerospace customer.  Results ofClamonta Ltd are included from the date of acquisition.

The aggregatepurchase price is preliminary, subject to adjustment and expected to befinalized in the third fiscal quarter. As of March 31, 2007, the aggregatepurchase price of $10,317 was allocated to the opening balance sheet asfollows:

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| Current assets                                   |   | $      | 3,596  |   |
|--------------------------------------------------|--------|--------|--------|--------|
| PP&E                                         |   | 3,695  |   |
| Acquired  customers (amortized over 15 years)    |   | 2,430  |   |
| Non-compete  agreements (amortized over 5 years) |   | 110    |   |
| Trademarks  (indefinite-lived)                   |   | 1,450  |   |
| Goodwill                                         |   | 1,397  |   |
| Current  liabilities                             |   | (1,811 | )      |
| Capital Leases                                   |   | (550   | )      |
| Purchase price, net                              |   | $      | 10,317 |   |

 

Pro forma resultsfor Clamonta Ltd have not been presented as the impacts of Clamonta Ltd to thefirst quarter are not material.

On August 31,2006, the Corporation completed the acquisition of Everest Metal forapproximately $9,214 in net cash, subject to adjustment and an earn-outprovision.  The earn-out provisionrequires payments of up to approximately $1,081 after the end of 2007 ifcertain revenue targets are met.

**11. SubsequentEvent**

Symmetry MedicalUSA Inc., a wholly owned subsidiary of Symmetry Medical Inc. (“Symmetry Medical”),entered into a definitive stock purchase agreement on April 2, 2007 andsubsequently closed on April 3, 2007 on the purchase of all the issued andoutstanding stock of TNCO, Inc. (“TNCO”), a privately owned company based inWhitman, Massachusetts. The cash purchase price was $7,000, subject to certainpost closing adjustments. TNCO designs and supplies precision instruments forarthoscopic, laparoscopic, sinus, and other minimally invasive procedures.

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**ITEM 2.** MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONSAND FINANCIAL CONDITION

**Overview**

We are a leadingindependent provider of implants and related instruments and cases toorthopedic device manufacturers and other medical markets. We also design,develop and produce these products for companies in other segments of themedical device market, including dental, osteobiologic and endoscopy sectors,and provide limited specialized products and services to non-healthcaremarkets, primarily the aerospace industry.

We offer ourcustomers Total Solution® forcomplete implant systems—implants, instruments and cases. While our revenue todate has been derived primarily from the sale of implants, instruments andcases separately, or instruments and cases together, our ability to provideTotal Solutions® for complete implant systems has already proven to beattractive to our customers, and we expect this capability will provide us withgrowth opportunities. In addition, we expect that our Total Solutions®capability will increase the relative percentage of value added products thatwe supply to our customers.

Our Annual Reporton Form 10-K for the fiscal year ended December 30, 2006, providesadditional information about our business, operations and financial condition.

During the firstquarter 2007, our revenue growth of 15.5% over the fourth quarter of 2006 wasdriven by a slow ramp-up in our core orthopedics business and continuedmomentum from the integration of our acquisitions.  Revenue decreased 3.0% in the first quarter2007 compared to 2006 as revenue from our top five orthopedic customers wasdown 24% and represented 58% of total revenues. Quarterly revenue from all other customers increased 47% compared to thesame period last year.  Our long-termstrategy is to diversify our customer base and expand into other medical devicemarkets outside of our core hip and knee business.  While we continue to make progress on theseinitiatives, it did not fully offset the reduced demand from our top fivecustomers.

A significant partof our business strategy has been growth through acquisitions which haveenhanced our product offerings and our business model.  We acquired Riley Medical Inc. and SymmetryMedical Switzerland SA (collectively “Riley Medical”) on May 2, 2006 for $45.8million.  Riley Medical is a leadingdesigner and manufacturer of specialty cases and trays for the global medicalmarket.  We also acquired SymmetryMedical Everest LLC and Everest Metal International Limited (collectively“Everest Metal”) on August 31, 2006 for $9.2 million.  Everest Metal specializes in implantfinishing.  On January 9, 2007, ourwholly-owned subsidiary Thornton Precision Components Limited (Thornton)acquired all of the stock of Whedon Limited, a privately owned company based inWarwickshire, UK and the holding company of Clamonta Limited (collectively“Clamonta Ltd”), for $10.3 million in cash, subject to certain post closingadjustments.  Clamonta Ltd machineshigh-precision specialty parts for the global aerospace industry.

Subsequent to thequarter end, our wholly-owned subsidiary, Symmetry Medical USA Inc. enteredinto a definitive stock purchase agreement on April 2, 2007 and subsequentlyclosed on April 3, 2007 on the purchase of all the issued and outstanding stockof TNCO, Inc. (“TNCO”), a privately owned company based in Whitman,Massachusetts. The cash purchase price was $7.0 million, subject to certainpost closing adjustments. TNCO designs and supplies precision instruments forarthoscopic, laparoscopic, sinus, and other minimally invasive procedures.

While acquisitionsare an important part of our growth strategy and we have a strong pipelineacross several diverse medical device segments, we continue to invest in our corebusiness with the ramp-up of our Malaysian facility, the introduction of newSymmetry products and innovation with new materials and technologies, such ascarbon fiber, to our product offerings. On April 30, 2007, we announced the introduction of a new proprietaryprinting technology for our cases, DigiPrint, that will allow us to employ anon-toxic, durable graphics printed below the surface of the metal making itimpervious to scratching, peeling and fading.

Our focus remainson being well positioned for a resurgence of growth in our core orthopedicbusiness, while capitalizing on our market leadership to extend our TotalSolutions® approach into other markets.  In particular, we continue toexpand our engineering resources that produce and provide closer and criticalcustomer relationships on the development of new products.  This localpresence in the global marketplace allows us to be closer to our customer base,provide quicker response times and increase our value added services.

**FirstQuarter Results of Operations**

*Revenue.*  Revenue for the period ended March 31, 2007 decreased $2.1 million, or 3.0%, to$67.5 million from $69.6 million for the comparable 2006 period.  Revenuefor each of our principal product categories in these periods was as follows:

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| Product Category | ** ** | **Three Months Ended** | ** ** |
|-----------------------|------------|----------------------------------|------------|
| ** **            | ** ** | **March 31,**               | ** ** | **April 1,** | ** ** |
| ** **            | ** ** | **2007**                         | ** ** | **2006** | ** ** |
| ** **            | ** ** | **(in millions)**           | ** ** |
| Implants              |       | $                                | 24.5       |   | $ | 26.6 |   |
| Instruments           |       | 15.2                             |       | 21.5 |   |
| Cases                 |       | 17.6                             |       | 14.7 |   |
| Other                 |       | 10.2                             |       | 6.8 |   |
|                  |       |                             |       |   |   |
| Total                 |       | $                                | 67.5       |   | $ | 69.6 |   |

 

The $2.1 million reduction in revenue resulted from lower implant andinstrument revenue of $2.1 million and $6.3 million, respectively.  Implant revenues included $2.0 million fromour Everest metal acquisition.  Thesereductions were partially offset by increased case revenue of $2.9 million,including $6.2 million of revenue from the Riley Medical acquisition.  Overall, implant, instrument and case revenuefrom our top five customers was down 24% as we faced a challenging quarterlycomparison due to the completion of several projects for our largest customersin the first quarter of 2006.  Otherincreased $3.4 million driven by the continued strength in the aerospaceindustry and included $2.9 million from the Clamonta Ltd acquisition in thefirst quarter of 2007.

*GrossProfit.*  Grossprofit for the three month period ended March 31, 2007 decreased $5.4 million,or 26.4%, to $15.0 million from $20.3 million for the comparable 2006period.  The decrease in gross profit wasdriven by the 3.0% decrease in revenue coupled with lower gross profit as apercentage of revenue which declined to 22.2% for the three month period endedMarch 31, 2007 compared to 29.2% for the comparable 2006 period.  The decline in gross margin as a percentageof revenue was primarily driven by fewer large volume projects from our topfive customers which resulted in increased overhead costs as a percentage ofrevenue as well as less favorable product mix. We view our global infrastructure as a competitive strength, and we havemade a deliberate decision to keep our infrastructure in place, enabling us torespond quickly to our customers’ needs and produce high volume orders on shortnotice.

*Selling,General and Administrative Expenses.*  Selling, general and administrative expenses for the threemonth period ended March 31, 2007 increased $0.8 million, or 11.8%, to $7.9million from $7.0 million for the comparable 2006 period.  Additional costs related to Riley Medical,Everest metal and Clamonta Ltd accounted for $1.1 million of the increase whichincluded $0.3 million of additional intangible asset amortization.  As a percentage of revenue, selling, generaland administrative expenses increased to 11.7% of revenue for the three monthperiod ended March 31, 2007 from 10.1% of revenue for the comparable 2006period primarily due to the reduction in revenue.

*OtherExpense.*   Interest expense for the three monthperiod ended March 31, 2007 increased $0.9 million, or 140.1%, to $1.6 millionfrom $0.6 million for the comparable 2006 period. This increase reflects theadditional $40.0 million senior term debt related to the acquisition of RileyMedical.  This increase was partially offset by the reduction inoutstanding capital lease obligations and existing senior term debt through normalamortization.  No additional borrowings were needed to complete theEverest Metal acquisition; however, approximately $5 million in revolvingsenior term debt was initially drawn to facilitate the Clamonta Ltdacquisition.

The derivativesvaluation (gains) losses consist of interest rate swap valuations used tomitigate the effect of changing interest rates on net income and foreigncurrency forward contracts used to mitigate the effect of changes in theforeign exchange rates on net income. The increase in the gain of $0.3 millionfor the three month period ended March 31, 2007 versus the comparable 2006period is due to market fluctuations in these contracts, which are notdesignated as hedges under SFAS 133. During the first quarter of 2007, wesettled one of our foreign exchange rate contracts at a loss of $0.6million.  Realized losses are included inthe Other expense category.  No contractswere settled in the first quarter of 2006.

*Provisionfor Income Taxes.*   Our effective tax rate was29.3% for the three month period ended March 31, 2007 as compared to 34.9% forthe comparable 2006 period. Provision for income taxes decreased by $2.9million, or 65.6%, to $1.5 million for the three month period ended March 31,2007 from $4.5 million for the comparable 2006 period. This decrease in ratewas primarily due to a higher percentage of income coming from lower taxjurisdictions outside of the United States and increased research anddevelopment tax credits and Indiana development tax credits in the currentperiod.  We did not record a Federal research and development tax creditin the first quarter of 2006 since the United States government had not yetreinstated Section 41 of the U.S. tax code.

**Liquidityand Capital Resources**

Our principalsources of cash in the three month period ended March 31, 2007 were cashgenerated from operations, borrowings under our senior credit revolving loanfacility and U.K. revolving credit facility and proceeds from the exercise ofcommon stock options.  Principal uses ofcash in the three month period ended March 31, 2007 included capitalexpenditures, the acquisition of Clamonta Ltd and debt service. We expect thatour principal uses of cash in the future will be to finance working capital, topay for capital expenditures, to service debt and to fund mergers andacquisitions.

We completed theacquisition of Clamonta Ltd on January 9, 2007 for $10.3 million, subject toadjustment, through the use of the existing cash balances and our$40.0 million senior debt facility.  On April 3, 2007, we completed the acquisition of

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TNCO for approximately$7.0 million, subject to adjustment, through the use of existing cash balancesand our $40.0 million senior debt facility.

*OperatingActivities  *Wegenerated cash from operations of $7.8 million in the three month period endedMarch 31, 2007 compared to $2.7 million for the three month period ended April1, 2006 an increase of $5.1 million.  Theincrease in cash from operations is primarily a result of cash provided byworking capital, offset by a decrease in net income of $4.7 million.

Cash provided by working capital fluctuations was $1.1 million in thethree month period ended March 31, 2007 as compared to a use of $8.0 million inthe comparable 2006 period.  The primaryuses of cash for working capital came from an increase in accounts receivableof $5.5 million.  Primary sources of cashdue to changes in working capital were increases in accounts payable andaccrued expenses of $6.6 million.  Increasesin accounts receivable, accounts payable and accrued expenses are a result ofincreasing production activity in the first quarter of 2007 compared todecreasing production activity in the first quarter of 2006.

*InvestingActivities*  Capitalexpenditures of $3.5 million were lower by $1.6 million, or 31.7%, in the threemonth period ended March 31, 2007 compared to the three month period ended April1, 2006.  The acquisition of Clamonta Ltdused $10.3 million of cash in the 2007 period with no comparable acquisitionactivity in the 2006 period.

*FinancingActivities  * Financing activities generated $0.4million of cash due primarily to the exercise of stock options offset bypayments on long-term debt and capital leases.

***Capital Expenditures***

Capitalexpenditures totaled $3.5 million for the three months ended March 31, 2007,compared to $5.1 million for the three month period ended April 1, 2006.Expenditures were primarily used to complete our Sheffield, U.K. facility forincreased forge and machining capacity for the aerospace products, and maintainproduction capacity in all of our production facilities.

***Debt and Credit Facilities***

As of March 31,2007, we had an aggregate of $77.5 million of outstanding indebtedness, whichconsisted of $64.2 million of term loan borrowings outstanding under our seniorcredit facility, $2.7 million of borrowings outstanding under our revolvingcredit facility, $2.2 million of borrowings under our U.K. short-term creditfacility and $8.4 million of capital lease obligations. We had no outstandingletters of credit as of March 31, 2007.

Our senior creditagreement contains various financial covenants, including covenants requiring amaximum total debt to EBITDA ratio, minimum EBITDA to interest ratio and aminimum EBITDA to fixed charges ratio. We were in compliance with our financialand restrictive covenants under the senior credit facility as of March 31,2007.

We believe thatcash flow from operating activities and borrowings under our senior creditfacility will be sufficient to fund currently anticipated working capital,planned capital spending, debt service requirements for the foreseeable future,including at least the next twelve months. We also review technology,manufacturing and other strategic acquisition opportunities regularly, whichmay require additional debt or equity financing.

**ContractualObligations and Commercial Commitments**

There have been nomaterial changes from the information provided in our Annual Report onForm 10-K for fiscal year ended December 30, 2006.

**Off-BalanceSheet Arrangements**

Our off-balancesheet arrangements and contractual obligations include our operating leases andletters of credit. There have been no material changes from the informationprovided in our Annual Report on Form 10-K for fiscal year endedDecember 30, 2006.

**Environmental**

There have been nomaterial changes from the information provided in our Annual Report on Form 10-Kfor fiscal year ended December 30, 2006.

**CriticalAccounting Policies and Estimates**

The preparation ofour financial statements requires management to make estimates, judgments andassumptions that affect the reported amounts of assets, liabilities, revenuesand expenses during the periods presented. Our Annual Report on Form 10-Kfor fiscal year ended December 30, 2006 includes a summary of the criticalaccounting policies we believe are the most important to aid in understandingits financial results. There have been no material changes to these criticalaccounting policies that impacted our reported amounts of assets, liabilities,revenues or expenses during the three months ended March 31, 2007.

**NewAccounting Pronouncements**

*Accounting for Uncertainty in Income Taxes*

The Corporationadopted the provisions of FASB Interpretation No. 48 (“FIN 48”), Accounting forUncertainty in Income

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Taxes, on December 31,2006.  The implementation of FIN 48 didnot have an impact on the Corporation’s financial position or results ofoperations.  As of the beginning offiscal year 2007, the Corporation had unrecognized tax benefits of $339.  There has been no significant change in theunrecognized tax benefits during the first quarter ending March 31, 2007.

The Corporationrecognizes interest and penalties related to unrecognized tax benefits through incometax expense.  The Corporation has notaccrued any interest or penalties as of March 31, 2007.  

The Corporation issubject to periodic audits by domestic and foreign tax authorities.  Currently, the Corporation is undergoingroutine periodic audits in both domestic and foreign tax jurisdictions.  It is reasonably possible that the amounts ofunrecognized tax benefits could change in the next 12 months as a result of theaudits.  It is not possible to estimatethe significance of such a potential change at this time.  For the majority of tax jurisdictions, theCorporation is no longer subject to U.S. federal, state and local, or non-U.S.income tax examinations by tax authorities for fiscal years before 2003.

*The Fair Value Option for Financial Assets and Financial Liabilities*

In February 2007,the FASB issued Statement of Financial Accounting Standard (SFAS) No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. This Statementpermits entities to choose to measure many financial instruments and certainother instruments at fair value. This Statement is effective for fiscal yearsbeginning after November 15, 2007. The adoption of this Statement is notexpected to have a material impact on the Corporation’s financial position,results of operations or cash flows.

**CautionaryNotice Regarding Forward-Looking Statements**

Certain statementscontained in this Quarterly Report on Form 10-Q and other written and oralstatements made from time to time by the Corporation do not relate strictly tohistorical or current facts. As such they are considered “forward-lookingstatements” that provide current expectations or forecasts of future events.Forward-looking statements typically are identified by the use of terms such as“may,” “will,” “should,” “expect,” “anticipate,” “believe,” “could,” “estimate,”“intend” and similar words, although some forward-looking statements areexpressed differently. Factors that could cause the Corporation’s actualresults to differ materially from the expectations expressed in ourforward-looking statements include, but are not limited to, the following:changes in general economic conditions in the United States and Europe; ourability to retain existing customers, particularly our key customers, andattract new customers; the timing of significant orders and shipments,including the effects of changes in inventory management practices by ourcustomers; the competitive nature of the orthopedic device market; the pursuitof strategic acquisitions or encountering unforeseen difficulties inintegrating acquisitions; the degree to which we are leveraged and oursignificant debt service obligations; the impact of work stoppages andother labor matters; general economic or business conditions affecting theorthopedic device market being less favorable than expected; our ability toanticipate changes in technology and regulatory standards and to successfullydevelop and introduce new and enhanced products on a timely basis; theunpredictability of intellectual property protection and maintenance and otherintellectual property issues; any future changes in management or loss of keypersonnel; unforeseen problems associated with international revenue andoperations, including gains and losses from foreign currency exchange; productliability lawsuits brought against us or our customers; implementation of orchanges in laws, regulations or policies that could negatively affect theorthopedic device market; and other uncertainties and factors discussed in the “RiskFactors” section of the Corporation’s Annual Report on Form 10-K filed onMarch 13, 2007, elsewhere in this Quarterly Report on Form 10-Q and in theCorporation’s other filings with the Securities and Exchange Commission.

Forward-lookingstatements relate only to events as of the date on which the statements aremade. Except as required by law, the Corporation’s undertakes no obligation toupdate any forward-looking statement to reflect events or circumstances afterthe date on which the statement is made or to reflect the occurrence ofunanticipated events, even if new information becomes available in the future.

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**ITEM 3.** QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

For financialmarket risks related to changes in interest rates, foreign currency exchangerates, commodity prices and the effects of inflation, reference is made toItem 7a “Quantitative and Qualitative Disclosures About Market Risk”contained in Part II of our Annual Report on Form 10-K for the fiscal yearended December 30, 2006. Our exposure to these risks has not changed materiallysince December 30, 2006.

**ITEM 4.** CONTROLS AND PROCEDURES

(a)   Evaluation of disclosure controls andprocedures.

Our ChiefExecutive Officer and Chief Financial Officer, after evaluating theeffectiveness of our “disclosure controls and procedures” (as defined inRule 13a-15(e) of the Securities Exchange Act of 1934), haveconcluded that, as of the end of the fiscal quarter covered by this report onForm 10-Q, our disclosure controls and procedures were adequate anddesigned to ensure that material information relating to the Corporation andits consolidated subsidiaries would be made known to them by others withinthose entities.

(b)  Changes in internal control over financialreporting.

During thequarter, there have been no changes in our “internal control over financialreporting” (as defined in Rule 13a-15(f) of the Securities Exchange Act of1934) that occurred during the fiscal quarter covered by this report onForm 10-Q that has materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting, except thatwe are still in the process of integrating the Riley Medical, Everest Metal andClamonta Ltd. operations and will be incorporating these operations as part ofour internal controls. For purposes of this evaluation, the impact of theseacquisitions on our internal controls over financial reporting has been excluded.See Note 10 to the condensed consolidated financial statements included in Item1 for a discussion of the Clamonta Ltd acquisition.

**PART II OTHER INFORMATION**

**ITEM 1** LEGAL PROCEEDINGS

None.

**ITEM 1A** RISK FACTORS

In addition to theother information set forth in this report, you should carefully consider thefactors discussed in Part I, Item 1A “Risk Factors” contained in ourAnnual Report on Form 10-K for the fiscal year ended December 30,2006, which could materially affect our business, financial condition or futureresults. The Risk Factors included in the Company’s Annual Report onForm 10-K for the fiscal year ended December 30, 2006 have notmaterially changed.

**ITEM 2** UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

**ITEM 5** OTHER INFORMATION

(b)           Therehave been no material changes to the procedures by which security holders mayrecommend nominees to our Board of Directors since our Schedule 14A filed March21, 2006.

**ITEM 6** EXHIBITS
| 10.28  |   | Stock Purchase Agreement, dated April 2, 2007,  between Symmetry Medical USA Inc. and Roger M. Burke (incorporated by  reference to Exhibit 10.1 from our Form 8-K, filed April 5, 2007).                       |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                            |
| 10.29  |   | Separation Letter, dated April 12, 2007, between  Andrew J. Miclot and Symmetry Medical Inc.                                                                                                                    |
|   |   |                                                                                                                                                                                                            |
| 31.1   |   | Certification of Chief Executive Officer required by  Item 307 of Regulation S-K as promulgated by the Securities and Exchange  Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of  2002. |
|   |   |                                                                                                                                                                                                            |
| 31.2   |   | Certification of Chief Financial Officer required by  Item 307 of Regulation S-K as promulgated by the Securities and Exchange  Commission and pursuant to Section 302 of the Sarbanes-Oxley Act of  2002. |
|   |   |                                                                                                                                                                                                            |
| 32.1   |   | Certification of Chief Executive Officer and Chief  Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                      |

 

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**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
|          | SYMMETRY MEDICAL INC. |
|----------|-----------------------|
|     |                  |   |
|     | By                    |  /s/ BRIAN  MOORE |
|     |                  | Brian Moore, |
|     | * *              | *President and Chief Executive Officer* |
|     | * *              | *(Principal Executive Officer)* |
| * * | * *              | * * |
|     | By                    |  /s/ FRED HITE |
|     |                  | Fred Hite, |
|     | * *              | *Senior Vice President and Chief Financial Officer* |
|     | * *              | *(Principal Financial and Accounting Officer)* |
|     |                  |   |

 

May 9, 2007

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