31 Jul

Stryker reports second quarter 2017 results

By GlobeNewswire,  July 27, 2017

Kalamazoo, Michigan - July 27, 2017 - Stryker Corporation (NYSE:SYK) reported operating results for the second quarter of 2017:

Second Quarter Highlights Net sales grew 6.1% to $3.0 billion (6.9% constant currency)

Orthopaedics 5.5 % or 6.5% constant currency
MedSurg 6.2 % or 6.8% constant currency
Neurotechnology and Spine 6.9 % or 7.9% constant currency

Adjusted net earnings per diluted share(1) increased 10.1% to $1.53

Reported net earnings per diluted share increased 3.0% to $1.03

"Our growth momentum continued in the second quarter as we continue to drive share gains through new products and strong commercial execution," said Kevin A. Lobo, Chairman and Chief Executive Officer. "We are raising our full year guidance for both organic sales growth and EPS, which reflects our expectations for continued strong performance throughout the year."

Sales Analysis

Consolidated net sales of $3.0 billion increased 6.1% in the quarter as reported and 6.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 0.2% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 8.2% from increased unit volume partially offset by 1.5% due to lower prices.

Orthopaedics net sales of $1.1 billion increased 5.5% in the quarter as reported and 6.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Excluding the 0.3% impact of acquisitions, net sales in the quarter increased 6.2% in constant currency, including 8.6% from increased unit volume partially offset by 2.4% due to lower prices.

MedSurg net sales of $1.3 billion increased 6.2% in the quarter as reported and 6.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%. Excluding the 0.1% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 7.1% from increased unit volume partially offset by 0.4% due to lower prices.

Neurotechnology and Spine net sales of $0.5 billion increased 6.9% in the quarter as reported and 7.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Net sales in the quarter increased 10.0% from increased unit volume partially offset by 2.1% due to lower prices.

Earnings Analysis

Reported net earnings of $391 million increased 2.9% in the quarter. Reported net earnings per diluted share of $1.03 increased 3.0% in the quarter. Reported net earnings include certain charges for the amortization of purchased intangible assets, Rejuvenate and ABG II and other recall matters, restructuring-related activities, legal matters and acquisition and integration related activities. The effect of each of these matters on reported net earnings and net earnings per diluted share appears in the reconciliation of actual results to adjusted results below. Excluding the impact of these charges increases gross profit margin in the quarter from 66.1% to 66.3% and increases operating income margin from 16.6% to 25.0%. Excluding the impact of the items described above, adjusted net earnings(2) of $581 million increased 10.7% in the quarter. Adjusted net earnings per diluted share(1) of $1.53 increased 10.1% in the quarter.

2017 Outlook

We now expect 2017 organic net sales growth to be in the range of 6.5% to 7.0% and adjusted net earnings per diluted share(3) to be in the range of $6.45 to $6.55. For the third quarter we expect adjusted net earnings per diluted share(3) to be in the range of $1.50 to $1.55. If foreign currency exchange rates hold near current levels, we expect net sales in the third quarter and full year to be negatively impacted by approximately 0.5% and adjusted net earnings per diluted share to be negatively impacted by approximately $0.02 in the third quarter and $0.10 in the full year.

(1) A reconciliation of reported net earnings per diluted share to adjusted net earnings per diluted share, a non-GAAP financial measure, and other important information appears below. (2) A reconciliation of reported net earnings to adjusted net earnings, a non-GAAP financial measure, and other important information appears below. (3) A reconciliation of expected net earnings per diluted share to expected adjusted net earnings per diluted share for the third quarter and full year and other important information appears below.

Conference Call on Thursday, July 27, 2017

As previously announced, the Company will host a conference call on Thursday, July 27, 2017 at 4:30 p.m., Eastern Time, to discuss the Company's operating results for the quarter ended June 30, 2017 and provide an operational update.

To participate in the conference call dial (844) 826-0610 (domestic) or (973) 453-3249 (international) and be prepared to provide conference ID number 26061645 to the operator.

A simultaneous webcast of the call will be accessible via the Company's website at www.stryker.com. The call will be archived on the Investors page of this site.

A recording of the call will also be available from 8:00 p.m., Eastern Time, on Thursday, July 27, 2017, until 11:59 p.m., Eastern Time, on Thursday, August 3, 2017. To hear this recording, you may dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and enter conference ID number 26061645.

Caution Concerning Forward-Looking Statements

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities laws that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; potential supply disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Stryker is one of the world's leading medical technology companies and, together with our customers, we are driven to make healthcare better. The Company offers a diverse array of innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes. Stryker is active in over 100 countries around the world. Please contact us for more information at www.stryker.com.

For investor inquiries please contact:

Katherine A. Owen, Stryker Corporation, 269-385-2600 or katherine.owen@stryker.com

For media inquiries please contact:

Yin Becker, Stryker Corporation, 269-385-2600 or yin.becker@stryker.com

 
STRYKER CORPORATION For the Three and Six Months June 30 (Unaudited - Millions of Dollars, Except Per Share Amounts) CONDENSED STATEMENTS OF EARNINGS
Three Months Six Months
2017 2016 % Change 2017 2016 % Change
Net sales $ 3,012 $ 2,840 6.1 % $ 5,967 $ 5,335 11.8 %
Cost of sales 1,022 998 2.4 2,015 1,799 12.0
Gross profit $ 1,990 $ 1,842 8.0 % $ 3,952 $ 3,536 11.8 %
% of sales 66.1 % 64.9 % 66.2 % 66.3 %
Research, development and engineering expenses 192 183 4.9 384 342 12.3
Selling, general and administrative expenses 1,130 1,043 8.3 2,232 1,987 12.3
Recall charges 72 28 157.1 98 47 108.5
Amortization of intangible assets 95 88 8.0 183 141 29.8
Total operating expenses $ 1,489 $ 1,342 11.0 % $ 2,897 $ 2,517 15.1 %
Operating income $ 501 $ 500 0.2 % $ 1,055 $ 1,019 3.5 %
% of sales 16.6 % 17.6 % 17.7 % 19.1 %
Other income (expense), net (57 ) (67 ) (14.9 ) (112 ) (105 ) 6.7
Earnings before income taxes $ 444 $ 433 2.5 % $ 943 $ 914 3.2 %
Income taxes 53 53 - 108 132 (18.2 )
Net earnings $ 391 $ 380 2.9 % $ 835 $ 782 6.8 %
Net earnings per share of common stock:
Basic $ 1.04 $ 1.02 2.0 % $ 2.23 $ 2.09 6.7 %
Diluted $ 1.03 $ 1.00 3.0 % $ 2.20 $ 2.07 6.3 %
Weighted-average shares outstanding - in millions:
Basic 373.9 374.2 373.7 373.7
Diluted 379.8 378.5 379.6 378.0
 
CONDENSED BALANCE SHEETS
June December
2017 2016
Assets
Cash and cash equivalents $ 3,649 $ 3,316
Marketable securities 98 68
Accounts receivable, net 1,905 1,967
Inventories 2,279 2,030
Other current assets 547 480
Total current assets $ 8,478 $ 7,861
Property, plant and equipment, net 1,758 1,569
Goodwill and other intangibles, net 9,853 9,864
Other noncurrent assets 1,203 1,141
Total assets $ 21,292 $ 20,435
Liabilities and shareholders' equity
Current liabilities $ 3,014 $ 2,554
Accrued recall expenses 538 594
Other noncurrent liabilities 1,113 1,051
Long-term debt, excluding current maturities 6,592 6,686
Shareholders' equity 10,035 9,550
Total liabilities and shareholders' equity $ 21,292 $ 20,435
 
CONDENSED STATEMENTS OF CASH FLOWS
Six Months
2017 2016
Operating activities
Net earnings $ 835 $ 782
Depreciation 127 106
Amortization of intangible assets 183 141
Changes in operating assets and liabilities and other, net (344 ) (274 )
Net cash provided by operating activities $ 801 $ 755
Investing activities
Acquisitions, net of cash acquired $ (38 ) $ (4,219 )
Change in marketable securities, net (30 ) 536
Purchases of property, plant and equipment (270 ) (229 )
Net cash used in investing activities $ (338 ) $ (3,912 )
Financing activities
Borrowings/repayments of debt, net $ 443 $ 3,611
Dividends paid (318 ) (284 )
Repurchases of common stock (230 ) (13 )
Other financing (72 ) (56 )
Net cash (used in) provided by financing activities $ (177 ) $ 3,258
Effect of exchange rate changes on cash and cash equivalents 47 10
Change in cash and cash equivalents $ 333 $ 111
 
STRYKER CORPORATION For the Three and Six Months Ended June 30 (Unaudited - Millions of Dollars) CONDENSED SALES ANALYSIS
Three Months Six Months
Percentage Change Percentage Change
2017 2016 As Reported Constant Currency 2017 2016 As Reported Constant Currency
Geographic:
United States $ 2,201 $ 2,050 7.4 % 7.4 % $ 4,364 $ 3,871 12.7 % 12.7 %
International 811 790 2.7 5.7 1,603 1,464 9.5 11.9
Total $ 3,012 $ 2,840 6.1 % 6.9 % $ 5,967 $ 5,335 11.8 % 12.5 %
Segment:
Orthopaedics $ 1,141 $ 1,082 5.5 % 6.5 % $ 2,276 $ 2,139 6.4 % 7.2 %
MedSurg 1,336 1,258 6.2 6.8 2,641 2,216 19.2 19.7
Neurotechnology and Spine 535 500 6.9 7.9 1,050 980 7.1 7.8
Total $ 3,012 $ 2,840 6.1 % 6.9 % $ 5,967 $ 5,335 11.8 % 12.5 %
 
SUPPLEMENTAL SALES GROWTH ANALYSIS
Three Months
Percentage Change
United States International
2017 2016 As Reported Constant Currency As Reported As Reported Constant Currency
Orthopaedics:
Knees $ 389 $ 370 5.0 % 5.9 % 7.0 % 0.1 % 3.0 %
Hips 322 323 (0.3 ) 1.0 2.1 (4.3 ) (0.8 )
Trauma and Extremities 351 328 7.0 8.0 11.4 (0.5 ) 2.4
Other 79 61 32.0 32.1 34.8 20.1 20.9
Total Orthopaedics $ 1,141 $ 1,082 5.5 % 6.5 % 8.8 % (1.0 )% 2.1 %
MedSurg:
Instruments $ 392 $ 377 4.1 % 4.7 % 4.2 % 3.6 % 6.2 %
Endoscopy 406 357 13.9 14.3 15.5 8.4 10.2
Medical 474 465 1.6 2.4 2.3 (0.7 ) 2.8
Sustainability 64 59 10.0 10.0 10.0 8.4 13.0
Total MedSurg $ 1,336 $ 1,258 6.2 % 6.8 % 7.0 % 3.4 % 6.2 %
Neurotechnology and Spine:
Neurotechnology $ 352 $ 312 12.8 % 13.9 % 10.3 % 17.3 % 20.4 %
Spine 183 188 (2.9 ) (2.1 ) (1.3 ) (7.7 ) (4.7 )
Total Neurotechnology and Spine $ 535 $ 500 6.9 % 7.9 % 5.5 % 10.0 % 13.1 %
Total $ 3,012 $ 2,840 6.1 % 6.9 % 7.4 % 2.7 % 5.7 %
 
Six Months
Percentage Change
United States International
2017 2016 As Reported Constant Currency As Reported As Reported Constant Currency
Orthopaedics:
Knees $ 780 $ 731 6.8 % 7.3 % 7.2 % 5.5 % 7.4 %
Hips 642 639 0.4 1.5 2.1 (2.2 ) 0.6
Trauma and Extremities 703 655 7.3 8.1 10.7 1.5 4.0
Other 151 114 33.0 33.0 30.5 45.2 44.6
Total Orthopaedics $ 2,276 $ 2,139 6.4 % 7.2 % 8.3 % 2.6 % 4.9 %
MedSurg:
Instruments $ 786 $ 742 5.9 % 6.4 % 6.0 % 5.7 % 8.0 %
Endoscopy 779 685 13.8 14.0 15.0 9.4 10.7
Medical 949 672 41.2 42.3 38.9 49.8 55.2
Sustainability 127 117 8.8 8.8 8.7 27.0 28.2
Total MedSurg $ 2,641 $ 2,216 19.2 % 19.7 % 18.9 % 20.3 % 22.9 %
Neurotechnology and Spine:
Neurotechnology $ 683 $ 613 11.3 % 12.0 % 10.0 % 13.7 % 15.6 %
Spine 367 367 0.1 0.6 0.5 (1.3 ) 1.1
Total Neurotechnology and Spine $ 1,050 $ 980 7.1 % 7.8 % 6.1 % 9.4 % 11.5 %
Total $ 5,967 $ 5,335 11.8 % 12.5 % 12.7 % 9.5 % 11.9 %
NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; cost of sales excluding specified items; adjusted selling, general and administrative expenses; adjusted operating income; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share. We believe that these non-GAAP measures provide meaningful information to assist shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates and acquisitions that affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, operating income, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures:

STRYKER CORPORATION For the Three Months and Six Months June 30 (Unaudited - Millions of Dollars, Except Per Share Amounts) Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2017 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective Tax Rate Diluted EPS
Reported $ 1,990 $ 1,130 $ 95 $ 501 $ 391 11.8 % $ 1.03
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 1 - - 1 - 0.1 -
Other acquisition and integration related - (8 ) - 8 7 - 0.02
Amortization of purchased intangible assets - - (95 ) 95 63 3.7 0.16
Restructuring-related charges (b) 6 (39 ) - 45 41 (0.6 ) 0.11
Rejuvenate and other recall matters (c) - - - 72 54 1.3 0.14
Legal matters (d) - (30 ) - 30 25 - 0.07
Adjusted $ 1,997 $ 1,053 $ - $ 752 $ 581 16.3 % $ 1.53
 
Three Months 2016 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective Tax Rate Diluted EPS
Reported $ 1,842 $ 1,043 $ 88 $ 500 $ 380 12.3 % $ 1.00
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 35 - - 35 22 1.6 0.06
Other acquisition and integration related - (31 ) - 31 21 1.0 0.06
Amortization of purchased intangible assets - - (88 ) 88 59 3.1 0.16
Restructuring-related charges (b) 2 (20 ) - 22 20 (0.4 ) 0.05
Rejuvenate and other recall matters (c) - - - 28 23 - 0.06
Adjusted $ 1,879 $ 992 $ - $ 704 $ 525 17.6 % $ 1.39
 
Six Months 2017 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective Tax Rate Diluted EPS
Reported $ 3,952 $ 2,232 $ 183 $ 1,055 $ 835 11.4 % $ 2.20
Acquisition and integration related charges: (a)
Other acquisition and integration related - (18 ) - 18 14 0.2 0.04
Amortization of purchased intangible assets - - (183 ) 183 124 3.1 0.32
Restructuring-related charges (b) 11 (72 ) - 83 68 0.2 0.18
Rejuvenate and other recall matters (c) - - - 98 75 0.9 0.20
Legal matters (d) - (30 ) - 30 25 - 0.07
Adjusted $ 3,963 $ 2,112 $ - $ 1,467 $ 1,141 15.8 % $ 3.01
 
Six Months 2016 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective Tax Rate Diluted EPS
Reported $ 3,536 $ 1,987 $ 141 $ 1,019 $ 782 14.5 % $ 2.07
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 35 - - 35 22 0.7 0.06
Other acquisition and integration related - (36 ) - 36 25 0.5 0.07
Amortization of purchased intangible assets - - (141 ) 141 98 2.0 0.26
Restructuring-related charges (b) 5 (37 ) - 42 34 0.1 0.09
Rejuvenate and other recall matters (c) - - - 47 39 - 0.10
Legal matters (d) - 12 - (12 ) (7 ) (0.3 ) (0.02 )
Adjusted $ 3,576 $ 1,926 $ - $ 1,308 $ 993 17.5 % $ 2.63
 
(a) Charges represent certain acquisition and integration related costs associated with acquisitions.
(b) Charges represent the cost associated with certain restructuring-related charges associated with workforce reductions and other restructuring-related activities.
(c) Charges represent changes in our best estimate of the minimum end of the range of probable loss to resolve the Rejuvenate recall and other recall matters.
(d) Amount represents gains or losses associated with legal settlements.
 
STRYKER CORPORATION For the Three Months September 30, 2017 and Full Year December 31, 2017 Reconciliation of Expected Net Earnings Per Diluted Share to Expected Adjusted Net Earnings per Diluted Share
Three Months Full Year
Low High Low High
Expected - Reported $ 1.15 $ 1.28 $ 5.05 $ 5.25
Acquisition and integration related charges 0.05 0.02 0.13 0.08
Amortization of purchased intangible assets 0.15 0.15 0.65 0.65
Restructuring-related charges 0.15 0.10 0.35 0.30
Rejuvenate and other recall matters - - 0.20 0.20
Legal matters - - 0.07 0.07
Expected - Adjusted $ 1.50 $ 1.55 $ 6.45 $ 6.55
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Stryker Corporation via Globenewswire

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31 Jul

OrthAlign, Inc. Announces Distribution Partnership with Ortosistemas S.A. and First KneeAlign Cases for TKA in Panama

OrthAlign, Inc., a privately held U.S.-based medical device and technology company providing orthopedic surgeons with advanced precision technologies, announced today a distribution partnership with Ortosistemas S.A. and the first set of KneeAlign® cases successfully completed for total knee arthroplasty (TKA) in the country of Panama.

These cases were completed by Panama City-based orthopaedic surgeon Edmundo Ford, MD of Centro de Especialidades Ortopedicas at Hospital San Fernando and continue to demonstrate the rapid adoption of OrthAlign's handheld precision technologies, by surgeons throughout the world (the technology is now utilized in over 45 countries).

"KneeAlign is easy, simple, and reliable," said Dr. Ford. "I'm happy to know that going forward, my total knees no longer are subject to human error. Our patients will be happy to know that their knees are being treated with a technology that helps to achieve the best alignment possible, in order to maximize implant survival and a superior outcome."

OrthAlign provides highly accurate, computer-assisted, handheld technologies for surgeons to receive real-time, actionable data for precise alignment and positioning of components in total knee, unicondylar knee, and total hip (both posterior and anterior) arthroplasty surgeries. Over 15 peer-reviewed clinical studies have been published to date, validating OrthAlign's accuracy, simplicity of use, and benefits in recovery for the patient.

Maria Luisa Muñoz, Chief Executive Officer of Ortosistemas S.A., a market leading orthopaedic distributor in Panama for over 25 years, stated, "Technology is a very important part of Panama's growing joint arthroplasty market. Surgeons are looking for tools to provide their patients with better outcomes. We are pleased to be OrthAlign's partner in Panama and look forward to not only providing surgeons with this valuable tool, but also further expanding our market share."

“Panama is the gateway for our expansion into Latin America," said James Young Kim, OrthAlign’s Vice President and General Manager of International. "Over the next few years, Latin America is expected to be a major driver in global market growth, however, high costs of surgery are making it difficult for surgeons to even use technologies that will help them be more accurate. OrthAlign's cost-effective, highly accurate technology is the answer for the Latin American market.”

About OrthAlign, Inc.

OrthAlign is a privately held medical device and technology company, developing advanced technologies that deliver healthier and more pain-free lifestyles to joint replacement patients, globally. We provide healthcare professionals with cutting edge, computer-assisted surgical tools that seamlessly and cost-effectively deliver vital data and clinical results to optimize outcomes for our patients. For more information regarding OrthAlign, please visit http://www.orthalign.com.

“ORTHALIGN®, ORTHALIGN PLUS®, KNEEALIGN®, KNEEALIGN® 2, HIPALIGN®, and UNIALIGN™ are registered trademarks of OrthAlign, Inc.”

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31 Jul

Spartan Medical Purchases 7D Surgical Technology to Support Its Commercialization Efforts in The Key Mid-Atlantic Hospital Market

TORONTOJuly 31, 2017 /PRNewswire/ -- 7D Surgical, developer of ground breaking surgical navigation technologies, announced today that Spartan Medical has purchased the 7D Surgical System to support its strategic sales plan in MarylandWashington D.C. and Virginia.  7D Surgical has entered into an exclusive sales representative agreement with Spartan Medical for many of the premier medical facilities within those markets. "Our new partnership with Spartan Medical is another important step in our rapid growth strategy in North America," said Beau Standish, Chief Executive Officer of 7D Surgical.  "Their expertise and unique relationships with federal facilities will be critical in bringing the most advanced machine-vision based navigation technologies to DoD spine surgeons and the U.S. military personnel and veterans they serve." The 7D Surgical System is the first and only Machine-Vision Image Guided Surgery (MvIGS) platform. For the first-time spine surgery patients can be automatically registered using only visible light in just seconds with 7D Surgical's Flash™ Registration technology. Unlike time-consuming conventional image guided surgery (IGS) systems that depend on intraoperative radiation, this new MvIGS platform can achieve an incredibly fast surgical workflow for spine procedures.  Continuing to leverage the capabilities of machine-vision, 7D Surgical's soon to be released Flash™ Fix technology can also update and correct the registration at any time during the procedure in just seconds. "To me, this is similar to the invention of the X-ray," said Vince Proffitt, President of Spartan Medical.  "Those of us that have been in surgeries supporting our implants know the real challenges of accurate and reproducible imaging and navigation.  We know how dependent the surgery may be on the equipment technicians' skills and training, and we also know the incredible risks of daily radiation. The 7D Surgical System eliminates these critical concerns and creates a surgeon controlled, real-time, radiation-free, simple and accurate imaging and navigation system…truly a technological marvel!" Live demonstrations of the 7D Surgical System are available at Spartan Medical Headquarters in Silver Spring, Maryland.  Contact Spartan Medical to schedule a time to experience the system in action at 1-888-240-8091, or email Spartan Medical at 170185@email4pr.com. About 7D Surgical 7D Surgical is a privately-owned Toronto based company that develops advanced optical technologies and machine vision-based registration algorithms to improve surgical workflow and patient care. 7D Surgical's flagship FDA 510(k)-cleared and Health Canada-approved MvIGS system delivers profound improvement to surgical workflows in spine surgery, providing the promise of similar future advancements in other surgical specialties.  www.7Dsurgical.com Flash™ Fix: http://7dsurgical.com/7d-surgical-system/flash-technology/ Contact: Beau Standish, CEO 7D Surgical +1 647 484-0078 www.7Dsurgical.com 170185@email4pr.com About Spartan Medical Spartan Medical Inc. was founded in 2008 by a former Air Force Intelligence Officer to provide an extensive armamentarium of advanced medical devices and technologies focused on the needs of the VA and DoD surgeon.  Spartan Medical is considered a top priority vendor in the VA as a certified Service-Disabled Veteran-Owned Small Business (SDVOSB), and has secured multi-year Blanket Purchase Agreements at 30 major military treatment facilities.  With a core staff possessing over 200 years of combined expertise and experience in the field, and numerous highly trained and skilled consultants across the nation, Spartan Medical assures no single points of failure.  Consistent with its mission to provide the best products and services to our nation's wounded warriors and veterans, Spartan Medical has recently collaborated with 7D Surgical to provide the most innovative, state-of-the-art, image-guided spinal navigation system - with zero radiation -  to meet the incredible need to improve implant placement accuracy in real-time while eliminating radiation in the operating room. Contact: Vince Proffitt, President Spartan Medical Inc. +1 888 240 -8091 www.spartanmedspine.com 170185@email4pr.com Forward-looking Statements This press release contains forward-looking statements regarding, among other things, statements pertaining to expectations, goals, plans, objectives, and future events. 7D Surgical intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, and the Private Securities Reform Act of 1995. In some cases, forward-looking statements can be identified by the following words: "may," "can," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "promise," "continue," "ongoing," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are based on the current estimates and assumptions of our management as of the date of this press release and are subject to risks, uncertainties, changes in circumstances, assumptions, and other factors that may cause actual results to differ materially from those indicated by forward-looking statements, many of which are beyond 7D Surgical's ability to control or predict. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. 7D Surgical does not undertake any obligation to release publicly any updates or revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. "Flash," as well as the "7D" logo, whether standing alone or in connection with the words "7D Surgical" are protected trademarks of 7D Surgical. SOURCE 7D Surgical Inc.

Related Links

http://7dsurgical.com

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28 Jul

SPINEWAY : Reinforcement of the balance-sheet structure with a reserved issue of Notes with Warrants

Spineway, specialist in surgical implants and instruments for treating disorders of the spinal column (spine), announces that it is setting up an issue of Tranche Warrants for Notes with Warrants to finance the acceleration of its development.

Legal framework

In accordance with the delegation of power granted to the Board of Directors and approved by the Ordinary and Extraordinary General Meeting of Spineway (the "Company") shareholders held on June 19, 2017, Spineway's Board of Directors approved - on July 20, 2017 - the plan for an issue of 200 warrants (the "Tranche Warrants"), the exercise of which gives access to the issue of 200 notes redeemable in cash and/or convertible into new and/or existing shares (the "Notes") with warrants to subscribe shares (the "Warrants"), representing  a bond issue in the amount of €2M in favor of the YA II PN, LTD investment fund (the "Investor"), a fund managed by the US management company Yorkville Advisors, and empowered the CEO to decide to launch this transaction, approve its final terms and conditions, and issue the Tranche Warrants.

Pursuant to an issuance agreement entered into today between the Investor and Spineway, the Investor has agreed to subscribe - during a period of 36 months as from the date of issue of the Tranche Warrants - up to 200 Notes with Warrants, representing a total par value of €2M, in several successive tranches (each referred to as a "Tranche"), which investor is not, however, intended to remain as Spineway capital in the long term.

This issuance is subject to the transfer of the Spineway shares to the "Public Offering" compartment of Euronext Growth and obtaining prior approval from the Autorité des Marchés Financiers of the prospectus to be prepared by the Company by December 31, 2017, at the latest. Therefore, if this condition precedent is met, the issuance of the Tranche Warrants and subscription for the first Tranche should take place by the end of 2017.

Purpose of the transaction

The purpose of the issuance of these Notes with Warrants is to provide Spineway with the financial means necessary to carry out its international-development plan and launch new innovative products. It could result in a capital investment of approximately €3.96M: €1.96M corresponding to the subscription of all the Notes and €2M corresponding to the exercise of all the Warrants.

Stéphane Le Roux, CEO of the Spineway Group, commented on this potential €3.96M in additional financial resources: "We are thrilled about this agreement with Yorkville Advisors that will allow us to diversify the financing we have to support our growth. The issuance of a first tranche of €1M by the end of the year will allow us to finance our development in new areas, such as in the USA, and accelerate the launch of our new products."

Characteristics of the Tranche Warrants, Notes and Warrants

The main characteristics of the Tranche Warrants, Notes and Warrants (the detailed terms and conditions of which are available on the Company's website) are as follows:

  • Main characteristics of the Tranche Warrants

The Tranche Warrants require their bearer, at the Company's request(1) (a "Request") or on the Investor's initiative(2), to subscribe Notes with Warrants attached, i.e., one Note per Tranche Warrant exercised, at a price set at 98% of the par value of a Note. The Company can therefore request the exercise of the Tranche Warrants in order to allow the issuance of Notes in several tranches. Each exercise date of each Tranche Warrant is a "Tranche Warrant Exercise Date."

The Tranche Warrants are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company's prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

  • Main characteristics of the Notes

The Notes shall be issued in several Tranches. The aggregate principal amount of the first Tranche will be equal to €1M. The aggregate principal amount of each of the following Tranches shall, in principle, be equal to €0.5M, unless otherwise mutually agreed by the Investor and the Company.

The Notes have a par value of €10,000 each and are subscribed at 98% of par.

The Notes have a maturity of 12 months from their date of issuance. Upon maturity or an event of default(3), the Notes that have not been converted shall be redeemed by the Company at par (plus accrued interest, if any). The Notes do not bear interest (except in the event of default).

At its discretion, the Investor may convert all or any of its Notes into new and/or existing shares (a "Conversion"). Upon a Conversion, the Investor shall determine the number of Notes to be converted and the corresponding aggregate principal amount and interest (if any) so converted (the "Conversion Amount"). The number of shares to be issued to the Investor upon each Conversion will be equal to the Conversion Amount divided by 92% of the Market Price (as defined below) on the Conversion Date.

Upon a Conversion, the Company shall have the right at its sole discretion to remit to the Investor: (1) the corresponding new and/or existing shares (as described above), (2) the value in cash or (3) an amount in cash and new and/or existing shares.

If the Company chooses to remit a cash amount, such amount shall be equal to:

M = (Vn / P) * C

"M": cash amount payable to the Note bearer; "Pv": bond claim that the Note represents (par value of a Note, plus accrued interest, if any); "P": 92% of Market Price; "C": daily volume weighted average price of the Company's share on the Conversion Date.

The market price (the "Market Price") shall be the lowest daily volume weighted average price of the Company's share over the ten (10) consecutive trading days immediately preceding the applicable date (the "Pricing Period"). By way of exception, in the case of a Conversion, or upon exercise of Tranche Warrants on the Investor's initiative, Pricing Period shall mean the trading days during which the Investor has not sold any share of the Company in the market among the ten (10) consecutive trading days immediately preceding the applicable date.

The Notes, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company's prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

  • Main characteristics of the Warrants

Each Note shall be issued with a number of Warrants equal to the par value of a Note divided by the applicable strike price of the Warrants (the "Strike Price"). The Warrants shall immediately be detached from the Notes and each Warrant shall give its bearer the right to subscribe for one (1) new share in the Company, subject to possible adjustments.

The Strike Price of the Warrants attached to the Notes of the first Tranche shall be equal to 115% of the lower of (1) the Market Price on the issuance date of the Tranche Warrants (2) the Market Price on July 13, 2017, i.e., 3.2572 euros.

The Strike Price of the Warrants attached to the Notes of the subsequent Tranches shall be equal 115% of the Market Price on the date of the applicable Request (or Tranche Warrant Exercise Date in the case of an exercise of Tranche Warrants on the Investor's initiative).

The Warrants shall be exercisable in new shares for a period of 5 years from their respective issuance dates.

The Warrants, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company's prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed, unless the Company and the Investor agree otherwise.

For reference, based on the share's closing price on July 27, 2017 (i.e., €3.66), the theoretical value of a Warrant would be between €0.78 and €1.69 depending on the volatility applied (between 30% and 60%). The theoretical value of a Warrant is obtained using the Black & Scholes formula based on the following hypotheses:

  • maturity: 5 years;
  • risk-free interest rate: 0%;
  • dividend payout rate: 0%.

New shares resulting from the Conversion of Notes or the exercise of Warrants

The new shares issued upon conversion of the Notes and/or exercise of the Warrants shall be admitted to trading on Euronext Growth as from their issuance, will carry immediate and current dividend rights and will be fully assimilated to and fungible with the existing ordinary shares.

The Company shall update a summary table on its website showing the Tranche Warrants, Notes, Warrants and number of shares outstanding.

Theoretical impact of the issuance of the Notes with Warrants attached (based on the Company share's closing price on July 27, 2017, i.e., €3.66)

For reference, assuming the Company decides to remit only new shares upon Conversion of the Notes, the impact of the issuance of the Notes with Warrants attached would be as follows:

  • Impact of the issuance on the consolidated net assets per share (based on the shareholders' equity as at December 31, 2016, and the number of shares making up the Company's share capital as at July 27, 2017, i.e., 3,907,846 shares):
Consolidated net assets per share (in €)
Non-diluted basis Diluted basis(1)
1sttranche Total tranches 1sttranche Total tranches
Before issuance €0.47 €0.80
After issuance of a maximum of 296 982 (1st tranche) or of 593 964 (total tranches) new shares resulting from the Conversion of the Notes €0.65 €0.82 €0.95 €1.08
After issuance of a maximum of 564 361  (1st tranche) or of 1 099 438 (total tranches) new shares resulting from the Conversion of the Notes and the exercise of the Warrants €0.84 €1.13 €1.10 €1.35
(1) assuming the exercise of all the dilutive instruments existing to date that could result in the creation of a maximum of 390,786 new shares.
  • Impact of the issuance on the investment of a shareholder currently holding 1% of the Company's share capital (based on the number of shares making up the Company's share capital as at July 27, 2017, i.e., 3,907,846 shares):
Consolidated net assets per share (%)
Non-diluted basis Diluted basis (1)
1sttranche Total tranches 1sttranche Total tranches
Before issuance 1.00% 0.91%
After issuance of a maximum of 296 982 (1st tranche) or of 593 964  (total tranches) new shares resulting from the Conversion of the Notes 0.93% 0.87% 0.85% 0.80%
After issuance of a maximum of 564 361  (1st tranche) or of 1 099 438 (total tranches) new shares resulting from the Conversion of the Notes and the exercise of the Warrants 0.87% 0.78% 0.80% 0.72%
(1) assuming the exercise of all the dilutive instruments existing to date that could result in the creation of a maximum of 390,786 new shares.

The Company specifies that, upon Conversion of the Notes, it shall have the right to remit a cash amount and/or existing shares instead of new shares in order to limit dilution for its shareholders.

(1) The following conditions must be met on the day of the Request and the day the Warrants are exercised:
  • more than then (10) calendar days have passed since the conversion or the redemption in full of the Notes from the previous Tranches;
  • no material adverse change shall have occurred;
  • the closing price of the Company's share is greater than or equal to €1.60;
  • no event of default or event that could constitute an event of default that is not resolved shall have occurred;
  • no impossibility for the holders of Notes to convert the Notes into shares shall have occurred in the previous 90 days;

no suspension of the listing of the Company's shares (other than an intraday suspension by Euronext) shall have occurred in the previous 90 days;

  • the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued.
(2) The following conditions must be met if a Tranche is issued on the Investor's initiative:
  • the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued;
  • the closing price of the Spineway share on the trading day prior to the Tranche Warrant Exercise Date is greater than or equal to €3.50. It is specified that if the closing price is between €3.50 (excluded) and €4.50 (included), the Investor may exercise up to 50 Tranche Warrants on its own initiative. If the closing price exceeds €4.50 (excluded), the Investor may exercise up to 100 Tranche Warrants on its own initiative.
(3) Events of default include, in particular, the suspension of the listing of the Company's shares (other than a suspension of less than five (5) consecutive days at the Company's request) and the Company's failure to remit shares or cash owed to the Investor pursuant to the terms of the Issuance Agreement. This press release is entered into in both English and French languages. In case of discrepancies, French language shall prevail.

SPINEWAY IS ELIGIBLE FOR THE PEA-PME (EQUITY SAVINGS PLAN FOR SMES)

Find out all about Spineway at www.spineway.com

Spineway designs, manufactures and markets innovative implants and surgical instruments for treating severe disorders of the spinal column. Spineway has an international network of over 50 independent distributors and 90% of its turnover comes from exports. Spineway, which is eligible for investment through FCPIs (French unit trusts specializing in innovation), received the OSEO Excellence award as well as the Deloitte Fast 50 award in 2011. Rhône Alpes INPI Patent Innovation Award (2013) - Talent INPI award (2015).  ISIN code: FR0011398874 - Euronext Growth

Contacts:              

SPINEWAY Investor Relations David Siegrist - Finance Director +33 (0)4 72 77 01 52 finance.dsg@spineway.com AELIUM Financial Communication Jérôme Gacoin / Solène Kennis +33 (0)1 75 77 54 68 skennis@aelium.fr
Attachments: http://www.globenewswire.com/NewsRoom/AttachmentNg/d5916663-a95b-438c-b949-b93e46b9e13d

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28 Jul

Orchid Design Hires New Director of Engineering

Shelton, CT, July 28, 2017 --(PR.com)-- Orchid Design (Orchid), a leader in innovative surgical device design, development and regulatory services for the orthopedic and spine industry, is pleased to announce the appointment of a new Director of Engineering for its Shelton, Connecticut design center. Poised for continued growth, Orchid has added Brandon Beckendorf to oversee the development of orthopedic and spine products for Orchid’s customers.
Brandon comes to Orchid with strong product development experience in extremities, craniomaxillofacial, and sports medicine. Most recently, as the Director of Engineering at OsteoMed, he introduced lean product development, DFx, concurrent engineering, and a disciplined approach to project management to increase overall project performance. In his roles at both OsteoMed and Arthrex, Brandon developed a strong understanding of FDA regulations and product development know-how required for the global development of orthopedic implants and instruments. Brandon earned a ME and BS in Biomedical Engineering from Texas A&M University.
“We are pleased to have Brandon join our team to continue to build on our 14 years of helping our customers launch innovative new products to help surgeon and their patients. His demonstrated leadership and product development expertise will expand our capabilities to drive new products to market for our customers,” Steve Maguire, General Manager, Orchid Design.
About Orchid Design Orchid Design, a division of Orchid Orthopedic Solutions, is the orthopedics industry leader in innovative surgical device design, development and regulatory submission services. Utilizing their ISO 13485 certified product development process, Orchid Design partners with device companies to help bring their ideas to life and streamline the pathway to commercial launch. The company has two design centers located in Shelton, CT and Memphis, TN, focused on the orthopedic medical device market. For more information about Orchid, visit the company’s website at www.orchid-ortho.com/about-orchid-design.
About Orchid Orchid is a worldwide leader in design and manufacturing for the orthopedic and medical device markets. Orchid is able to do this by compressing time to market, providing new technologies and being the best total supply-chain value. Orchid provides expertise in design and development, quality and regulatory support, implant manufacture, advanced machining, plastics technology, instrument manufacturing, implant coatings, surface treatments, and packaging services. With 14 world-class facilities located around the globe, Orchid continues to provide others an opportunity to live a better life through the products, services and the way the company conducts business. For more information about Orchid, visit the company’s website at www.orchid-ortho.com.
Contact Information
Orchid Abbie Woolston 517-694-2300 Contact www.orchid-ortho.com

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28 Jul

Exactech Q2 Revenue $67.3 Million On Continuing Strong Extremities Revenue

July 27, 2017

GAINESVILLE, Fla.--(BUSINESS WIRE)--Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products and biologic solutions for extremities, knee and hip, announced today that revenue for the second quarter of 2017 increased 2% to $67.3 million from $66.1 million in the second quarter of 2016, and 3% on a constant currency basis. Domestic revenue increased 2% to $45.7 million, and international revenue increased 1% to $21.6 million in the second quarter of 2017. Diluted earnings per share for the second quarter was $0.33 based on net income of $4.8 million, compared to second quarter 2016 net income of $4.4 million and diluted earnings per share of $0.31. Second Quarter Segment Performance
  • Extremities revenue increased 19% to $29.5 million from $24.8 million, a 19% constant currency increase
  • Knee revenue was flat at $19.6 million, a 1% constant currency increase
  • Hip revenue decreased 8% to $11.5 million from $12.5 million, a 7% constant currency decrease
  • Other revenue decreased 27% to $6.7 million from $9.2 million, a 26% constant currency decrease. The Other segment includes an aggregation of the former Biologics and Spine segment
Six Months Highlights and Segment Performance For the first six months of 2017, revenue was $136.8 million, an increase of 4% over $131.4 million for the comparable period last year. On a constant currency basis, revenue for the first half of 2017 was up 5%. Net income for the first six months of 2017 increased 7% to $9.4 million, or $0.65 per diluted share compared to $8.8 million, or $0.62 per diluted share, for the first six months of 2016. First six month product revenue was as follows:
  • Extremities revenue increased 20% to $59.4 million, a 20% constant currency increase
  • Knee revenue increased 1% to $39.7 million, a 1% constant currency increase
  • Hip revenue decreased 1% to $23.6 million, flat on a constant currency basis
  • Other revenue decreased 24% to $14.1 million, a 23% constant currency decrease
Management Comment Exactech CEO and President David Petty said, “For the first half of 2017, we reported a 4% increase in our revenue; however, excluding the impact of the divested spine products from the prior year we reported 7% growth in revenue during the first half of the year. Our hip revenue was negatively impacted by distribution transitions underway in certain markets outside the U.S. We continue to be pleased with the performance of our Extremities segment, which benefited modestly in the quarter from the pilot launch of the Vantage® ankle and also the Equinoxe® Preserve humeral stem. In terms of our product pipeline, additional pilot launches of the ExactechGPS® shoulder application, Alteon® H.A. hip stem and the Truliant® knee system are also going well. “During the third and fourth quarters we will be building inventory for these systems and hope to move into a limited launch late this year. Our channel development strategy remains important and will be enhanced as we more fully launch the Truliant knee system,” Petty said. Chief Financial Officer Jody Phillips said, “Gross margins decreased to 68.7% from 69.3% for the second quarter a year ago, as average selling price decreases offset the increases in higher margin extremity sales. Total operating expenses for the quarter remained relatively flat at $39.3 million due to the divestiture of the spine segment being offset by an increase in product launch and development expenses. As a result, we produced a net income increase of 10% to $4.8 million and $0.33 diluted EPS for the second quarter which was in the range of our expectations.” Looking forward, Exactech narrowed 2017 revenue guidance to $267-$271 million and diluted EPS target to $1.25-$1.29, including the impact of the first quarter $0.02 diluted earnings per share costs related to the spine business transition. On an adjusted basis, the diluted EPS target is $1.27-$1.31. For the third quarter of 2017, the company anticipates revenues of $60.5-$62.5 million and diluted EPS of $0.23-$0.25. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance. The financial statements are below. Conference Call The company will hold a conference call with CEO David Petty and key members of the management team, Friday, July 28th at 10:00 a.m. Eastern Time. The call will cover Exactech’s second quarter 2017 results. Mr. Petty will open the conference call and a question-and-answer session will follow. To participate in the call, dial 888-417-2254 any time after 9:50 a.m. Eastern Time on July 28. International and local callers should dial 719-325-4790. A live webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm or http://public.viavid.com/index.php?id=125497. About Exactech Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech’s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States, in addition to more than 30 markets in Europe, Latin America, Asia and the Pacific. Additional information about Exactech, Inc. can be found at http://www.exac.com. Copies of Exactech’s press releases, SEC filings, current price quotes and other valuable information for investors may be found at http://www.exac.com and http://www.hawkassociates.com. An investment profile on Exactech may be found at http://www.hawkassociates.com/profile/exac.cfm. To receive future releases in e-mail alerts, sign up at http://www.hawkassociates.com/about/alert. This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent the company’s expectations or beliefs concerning future events of the company’s financial performance. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include the effect of competitive pricing, the company’s dependence on the ability of third party manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company’s products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.

EXACTECH, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited) (audited)
June 30, December 31,
2017 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,917 $ 13,052
Trade receivables, net of allowances of $1,707 and $1,473 57,733 53,051
Prepaid expenses and other assets, net 3,606 3,075
Income taxes receivable 1,848 2,140
Inventories, current 67,358 65,264
Assets held for sale 2,695 6,477
Total current assets 142,157 143,059
PROPERTY AND EQUIPMENT:
Land 4,530 4,474
Machinery and equipment 43,033 42,034
Surgical instruments 144,018 132,134
Furniture and fixtures 4,713 4,700
Facilities 21,690 21,726
Projects in process 6,818 2,473
Total property and equipment 224,802 207,541
Accumulated depreciation (108,160 ) (100,234 )
Net property and equipment 116,642 107,307
OTHER ASSETS:
Deferred financing, deposits and other 4,326 968
Equity investment 1,952 2,047
Deferred tax asset 887
Non-current inventory 11,823 15,723
Product licenses and designs, net 8,933 9,102
Patents and trademarks, net 717 821
Customer relationships, net 467 476
Goodwill 14,758 13,819
Total other assets 42,976 43,843
TOTAL ASSETS $ 301,775 $ 294,209
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 16,602 $ 17,566
Income taxes payable 1,772 780
Accrued expenses 13,017 11,832
Liabilities held for sale 325
Other current liabilities 2,884 2,927
Total current liabilities 34,600 33,105
LONG-TERM LIABILITIES:
Deferred tax liabilities 3,243 1,773
Long-term debt, net of current portion 14,000 20,000
Other long-term liabilities 3,152 5,089
Total long-term liabilities 20,395 26,862
Total liabilities 54,995 59,967
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock 145 144
Additional paid-in capital 90,228 87,319
Treasury Stock (3,042 ) (3,042 )
Accumulated other comprehensive loss, net of tax (8,398 ) (8,611 )
Retained earnings 167,847 158,432
Total shareholders’ equity 246,780 234,242
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 301,775 $ 294,209

EXACTECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
Three Month Periods Six Month Periods
Ended June 30, Ended June 30,
2017 2016 2017 2016
NET SALES $ 67,327 $ 66,124 $ 136,809 $ 131,422
COST OF GOODS SOLD 21,054 20,268 41,695 40,636
Gross profit 46,273 45,856 95,114 90,786
OPERATING EXPENSES:
Sales and marketing 23,569 23,835 48,622 47,154
General and administrative 5,621 5,640 12,157 11,554
Research and development 5,380 5,329 11,604 10,399
Depreciation and amortization 4,732 4,410 9,391 8,734
Total operating expenses 39,302 39,214 81,774 77,841
INCOME FROM OPERATIONS 6,971 6,642 13,340 12,945
OTHER INCOME (EXPENSE):
Interest income 52 2 55 6
Other income (loss) 185 32 328 72
Interest expense (238 ) (268 ) (464 ) (530 )
Foreign currency exchange gain 168 98 730 592
Total other income (expenses) 167 (136 ) 649 140
INCOME BEFORE INCOME TAXES 7,138 6,506 13,989 13,085
PROVISION FOR INCOME TAXES 2,255 2,120 4,479 4,297
INCOME BEFORE EQUITY IN LOSS OF INVESTEE 4,883 4,386 9,510 8,788
EQUITY IN LOSS OF INVESTEE, NET OF TAX (52 ) (95 )
NET INCOME $ 4,831 $ 4,386 $ 9,415 $ 8,788
BASIC EARNINGS PER SHARE $ 0.34 $ 0.31 $ 0.66 $ 0.62
DILUTED EARNINGS PER SHARE $ 0.33 $ 0.31 $ 0.65 $ 0.62
SHARES - BASIC 14,321 14,112 14,297 14,084
SHARES - DILUTED 14,574 14,298 14,513 14,243
Non-GAAP Disclosure and Reconciliation We present certain non-GAAP results as a supplement to our financial results based on GAAP, as we believe it is useful to exclude certain items in order to focus on what we regard to be a more reliable indicator of the underlying operating performance of our business. Because we operate internationally, we present the percentage change in sales by reporting segment on a constant currency basis, which is a non-GAAP financial measure. We calculate this change on a constant currency basis by translating current period sales at the comparable average historical exchange rates for the same period in the prior year. We believe that presenting the percentage change in sales on a constant currency basis assists in the understanding of actual sales fluctuations by excluding the impact of foreign currency fluctuations. Additionally, we report on a non-GAAP basis adjusted sales, gross margin, operating expenses, income, and diluted earnings per share excluding charges related to the spine assets we sold January 2017. We believe the exclusion of spine sales and costs provides the reader with more comparable financials to better analyze the reported periods. The following items have been adjusted:
  • Sales, cost of goods sold, and operating expenses from our spine products
  • Transition charges related to the sale of our spine assets
  • Personnel and severance costs related to the transition
Six Months June 30, 2017 Six Months June 30, 2016 Change %
Reported US Spine Adjusted Reported US Spine Adjusted Reported Adjusted
Domestic sales $ 93,355 $ 282 $ 93,073 $ 89,185 $ 3,758 85,427
International sales 43,454 43,454 42,237 42,237
Total sales 136,809 282 136,527 131,422 3,758 127,664 4.1% 6.9%
Gross profit 95,114 187 94,927 90,786 1,700 89,086 4.8 6.6
Operating expense 81,774 715 81,059 77,841 1,886 75,955 5.1 6.7
Other income 649 649 140 140 363.6 363.6
Income before income tax and equity in loss of investee 13,989 (528 ) 14,517 13,085 (186 ) 13,271 6.9 9.4
Income tax 4,479 (140 ) 4,619 4,297 (67 ) 4,364 4.2 5.9
Equity in loss of investee (95 ) (95

)

Net income (loss) $ 9,415 $ (388 ) $ 9,803 $ 8,788 $ (119 ) $ 8,907 7.1 10.1
Diluted EPS $ 0.65 $ (0.03 ) $ 0.68 $ 0.62 $ (0.01 ) $ 0.63
We also provide adjusted forward looking guidance on diluted earnings per share for the full year for 2017. We believe this adjusted guidance will assist in comparative measures. The following reconciles the guidance ranges to expected guidance on a GAAP basis:
Twelve Months Ended
December 31, 2017
Expected diluted EPS range on GAAP basis $1.25 - $1.29
Adjustment: Spine asset divestiture 0.02
Adjusted total diluted EPS range $1.27-$1.31

Contacts

Exactech, Inc. Investor contacts Jody Phillips, 352-377-1140 Executive Vice President of Finance & Chief Financial Officer or Hawk Associates Julie Marshall or Frank Hawkins, 305-451-1888 EXAC@hawkassociates.com or Exactech, Inc. Media contact Priscilla Bennett, 352-377-1140 Vice President, Corporate & Marketing Communication

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27 Jul

NuVasive Reports Second Quarter 2017 Financial Results

SAN DIEGOJuly 27, 2017 /PRNewswire/ -- NuVasive, Inc. (Nasdaq: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended June 30, 2017.
Second Quarter 2017 Highlights
  • Revenue increased 10.3% to $260.6 million, or 10.7% on a constant currency basis;
  • GAAP operating profit margin of 11.4%; Non-GAAP operating profit margin up 40 basis points from prior year to 16.3%;
  • GAAP diluted earnings per share of $0.22; Non-GAAP diluted earnings per share up 15.0% from prior year to $0.46; and
  • Company reiterates revenue, non-GAAP operating margin and non-GAAP diluted earnings per share guidance for 2017.
"NuVasive delivered better than expected operating profitability and earnings per share results in the second quarter 2017, along with continued strength across our International business, growing at more than 20% for the third quarter in a row," said Gregory T. Lucier, chairman and chief executive officer of NuVasive. "In addition, several of our industry-disrupting technologies completed alpha and beta testing this quarter and will commercially launch over the next few months, giving surgeons and patients access to some of the most innovative technologies to address spine and trauma conditions, as well as radiation reduction in the operating room." A full reconciliation of GAAP to non-GAAP measures can be found in the tables of this news release. Second Quarter 2017 Results NuVasive reported second quarter 2017 total revenue of $260.6 million, a 10.3% increase compared to $236.2 million for the second quarter 2016. On a constant currency basis, second quarter 2017 total revenue increased 10.7% compared to the same period last year. For the second quarter 2017, both GAAP and non-GAAP gross profit was $194.2 million, while both GAAP and non-GAAP gross margin was 74.5%. These results compared to GAAP and non-GAAP gross profit of $176.5 million and $183.8 million, respectively, and GAAP and non-GAAP gross margin of 74.7% and 77.8% respectively, for the second quarter 2016. Total GAAP and non-GAAP operating expenses were $164.4 million and $151.7 million, respectively, for the second quarter 2017. These results compared to GAAP and non-GAAP operating expenses of $116.4 million and $146.4 million, respectively, for the second quarter 2016. NuVasive reported a GAAP net income of $12.7 million, or $0.22 per share, for the second quarter 2017 compared to $30.2 million, or $0.57 per share, for the second quarter 2016. On a non-GAAP basis, the Company reported net income of $24.1 million, or $0.46 per share for the second quarter 2017 compared to $20.6 million, or $0.40 per share, for the second quarter 2016. Cash, cash equivalents and short and long-term marketable securities were approximately $130.9 million at June 30, 2017. Annual Guidance for 2017 The Company reiterated full year 2017 financial guidance in line with prior expectations, with the exception of the impact of updated foreign exchange rates.

2017 Guidance 1

(in Million's; except %'s and EPS)

 GAAP 

 Non-GAAP 

Revenue

$  1,065

$          1,065

  % Growth - Reported

10.7%

10.7%

% Growth - Constant Currency 2

11.1%

Operating margin

12.4%

17.1%

Earnings per share

$    1.13

$            2.00

EBITDA

23.6%

26.7%

Tax Rate

~33%

~35%

    1

Current guidance reflects guidance provided July 27, 2017.

    2

Constant currency is a measure that adjusts US GAAP revenue for the impact of currency over the same period in the prior year.

 
  • Revenue of $1.065 billion, which now includes approximately $4 million in year-over-year currency headwinds, and reflects 10.7% growth on a reported basis and 11.1% growth on a constant currency basis compared to revenue of $962.1 million for 2016;
  • Non-GAAP diluted earnings per share of $2.00, an increase of 20% compared to non-GAAP diluted earnings per share of $1.66 for 2016;
  • Non-GAAP operating profit margin of 17.1%, an increase of 100 basis points compared to 16.1% for 2016; and
  • Adjusted EBITDA margin of 26.7%, an increase of 150 basis points compared to 25.2% for 2016.
Supplementary Financial Information For additional financial detail, please visit the Investor Relations section at www.nuvasive.com to access Supplementary Financial Information.

Reconciliation of Full Year EPS Guidance

2017 Guidance

2016 Actuals

Prior 1, 2

Current 1, 3

GAAP net income per share

$  0.69

$  1.13

$         1.13

Impact of change to diluted share count

0.02

0.07

0.09

GAAP net income per share, adjusted to diluted Non-GAAP share count

$  0.71

$  1.20

$         1.22

Litigation liability gain

(0.83)

-

-

Business transition costs 4

0.35

0.04

0.05

Non-cash interest expense on convertible notes

0.38

0.33

0.33

Non-cash purchase accounting adjustments on acquisitions 5

0.28

-

-

Loss on repurchase of convertible notes

0.37

-

-

Amortization of intangible assets 6

0.78

0.89

0.88

Tax effect of adjustments 7

(0.38)

(0.46)

(0.48)

Non-GAAP earnings per share

$  1.66

$  2.00

$         2.00

GAAP Weighted shares outstanding - basic

50,077

50,967

50,864

GAAP Weighted shares outstanding - diluted

54,102

56,269

56,617

Non-GAAP Weighted shares outstanding - diluted

51,981

53,069

52,738

  1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

 2

Effective tax expense rate of ~34% applied to GAAP earnings and ~35% applied to Non-GAAP earnings.

 3

Effective tax expense rate of ~33% applied to GAAP earnings and ~35% applied to Non-GAAP earnings.

 4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

5

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 6

Excludes the amortization associated with non-controlling interest.

7

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis. 

Reconciliation of Non-GAAP Operating Margin %

2017 Guidance

(in thousands, except %)

2016 Actuals

Prior 1

Current 1

Non-GAAP Gross Margin %[A]

76.6%

76.1%

75.6%

Non-cash purchase accounting adjustments on acquisitions 2

(1.5%)

0.0%

0.0%

GAAP Gross Margin [B]

75.0%

76.1%

75.6%

GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C]

55.5%

54.0%

53.5%

Non-GAAP Research & Development Expense [D]

5.0%

5.0%

5.0%

In-process research & development

0.0%

0.0%

0.0%

GAAP Research & Development Expense [E]

5.0%

5.0%

5.0%

Litigation liability [F]

(4.5%)

0.0%

0.0%

Amortization of intangible assets [G] 3

4.4%

4.6%

4.5%

Business transition costs [H] 4

1.9%

0.2%

0.2%

Non-GAAP Operating Margin % [A - C - D]

16.1%

17.1%

17.1%

GAAP Operating Margin % [B - C - E - F - G - H]

12.8%

12.3%

12.4%

               1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

          2

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

             3

Excludes the amortization associated with non-controlling interest.

          4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

Reconciliation of EBITDA %

 2017 Guidance 

(in thousands, except %)

2016 Actuals

Prior 1

Current 1

Net Income / (Loss)

3.9%

6.0%

6.0%

Interest (income) / expense, net 2

6.1%

3.5%

3.6%

Provision for income taxes

3.0%

3.0%

2.9%

Depreciation and amortization 3

10.5%

11.1%

11.0%

EBITDA

23.5%

23.6%

23.6%

Non-cash stock based compensation

2.8%

3.0%

3.0%

Business transition costs 4

1.9%

0.2%

0.2%

Non-cash purchase accounting adjustments on acquisitions 5

1.5%

0.0%

0.0%

In-process research & development

0.0%

0.0%

0.0%

Litigation liability gain

(4.5%)

0.0%

0.0%

Adjusted EBITDA

25.2%

26.7%

26.7%

1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

2

Interest (income) / expense, net for the quarter and year ended December 31, 2016 includes loss on extinguishment of debt for $1.6 million and $19.1 million, respectively.

3

Excludes the amortization associated with non-controlling interest.

4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

5

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Reconciliation of Non-GAAP Information Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating profit margin, which exclude amortization of intangible assets, purchase accounting related charges, leasehold related charges, integration related expenses associated with acquired businesses, one-time restructuring and acquisition related items, CEO transition related costs, certain litigation charges, non-cash interest expense and/or losses on convertible notes, and the impact from taxes related to these items, including those taxes that would have occurred in lieu of these items. Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations.  The measure constant currency is the use of an exchange rate that eliminates fluctuations when calculating financial performance numbers. The Company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital.  Additionally, the Company uses an adjusted EBITDA measure which represents earnings before interest, taxes, depreciation and amortization and excludes the impact of stock-based compensation, purchase accounting related changes, leasehold related charges, integration related expenses associated with acquired businesses, CEO transition related costs, certain litigation liabilities, acquisition related items and other significant one-time items. Management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non-GAAP financial measures to enable it to further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional information to enable them to assess, in the same way management assesses, the Company's current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

Reconciliation of Second Quarter 2017 Results

GAAP Net Income per Share to Non-GAAP Earnings per Share

(in thousands, except per share data)

Adjustments

Diluted Earnings Per Share

GAAP net income

$    12,661

$                     0.22

Business transition costs 1

1,369

Non-cash interest expense on convertible notes

4,665

Amortization of intangible assets 2

11,028

Tax effect of adjustments 3

(5,661)

Adjustments to GAAP net income

11,401

Non-GAAP earnings

$    24,062

$                     0.46

GAAP weighted shares outstanding - diluted

58,330

Non-GAAP weighted shares outstanding - diluted 4

52,743

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

2

Excludes the amortization associated with non-controlling interest.

3

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis.

4

Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Year To Date 2017 Results

GAAP Net Income per Share to Non-GAAP Earnings per Share

(in thousands, except per share data)

Adjustments

Diluted Earnings Per Share

GAAP net income

$    25,429

$                     0.44

   Business transition costs 1

1,424

   Non-cash interest expense on convertible notes

9,264

   Amortization of intangible assets 2

22,766

   Tax effect of adjustments 3

(14,784)

Adjustments to GAAP net income

18,670

Non-GAAP earnings

$    44,099

$                     0.84

GAAP weighted shares outstanding - diluted

58,059

Non-GAAP weighted shares outstanding - diluted 4

52,713

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

2

Excludes the amortization associated with non-controlling interest.

3

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis.

4

Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Second Quarter and Six Months 2017 Results

GAAP net income to Adjusted EBITDA

Three months ended

Six months ended

(in thousands, except per share data)

June 30, 2017

June 30, 2017

GAAP net income

$                            12,661

$                                   25,429

Interest expense/(income), net

9,944

19,606

Provision for income taxes

7,079

8,569

Depreciation and amortization 1

28,856

58,014

EBITDA

$                            58,540

$                                 111,618

Business transition costs2

1,369

1,424

Non-cash stock based compensation

8,394

15,411

Adjusted EBITDA

$                            68,303

$                                 128,453

As a percentage of revenue

26.2%

25.2%

1

Excludes the amortization associated with non-controlling interest.

2

Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

Investor Conference Call NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the second quarter 2017. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company's website at www.nuvasive.com. After the live webcast, the call will remain available on NuVasive's website through August 28, 2017. In addition, a telephone replay of the call will be available until August 3, 2017. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6617 for international callers. Please use pin number: 13665648. About NuVasive NuVasive, Inc. (NASDAQ: NUVA) is transforming spine surgery and beyond with minimally invasive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company's portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With $962 million in revenues (2016), NuVasive has an approximate 2,300 person workforce in more than 40 countries serving surgeons, hospitals and patients. For more information, please visit www.nuvasive.com. Forward-Looking Statements NuVasive cautions you that statements included in this news release or made on the investor conference call referenced herein that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive's results to differ materially from historical results or those expressed or implied by such forward-looking statements. In addition, this news release contains selected financial results from the second quarter 2017, as well as projections for 2017 financial guidance and longer-term financial performance goals. The numbers for the second quarter 2017 are prior to the completion of review procedures by the Company's external auditors and are subject to adjustment. In addition, the Company's projections for 2017 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which are subject to the risk of being inaccurate because of the preliminary nature of the forecasts, the risk of further adjustment, or unanticipated difficulty in selling products or generating expected profitability. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive's revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; and those other risks and uncertainties more fully described in the Company's news releases and periodic filings with the Securities and Exchange Commission. NuVasive's public filings with the Securities and Exchange Commission are available at www.sec.gov. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.

NuVasive, Inc. 

Consolidated Statements of Operations 

(in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

(unaudited)

2017

2016

2017

2016

Revenue

$ 260,573

$ 236,210

$ 510,437

$ 451,314

Cost of goods sold (excluding below amortization of intangible assets)

66,421

59,745

128,034

113,971

Gross profit

194,152

176,465

382,403

337,343

Operating expenses:

Sales, marketing and administrative

139,109

134,487

279,611

259,325

Research and development

12,572

11,871

24,986

22,500

Amortization of intangible assets

11,349

10,603

23,410

18,474

Litigation liability (gain)

(43,310)

(43,310)

Business transition costs

1,369

2,756

1,424

8,063

Total operating expenses

164,399

116,407

329,431

265,052

Interest and other expense, net:

Interest income

139

406

276

734

Interest expense

(10,083)

(10,537)

(19,882)

(19,009)

Loss on repurchases of convertible notes

(17,444)

Other expense, net

(501)

(246)

(243)

(196)

Total interest and other expense, net

(10,445)

(10,377)

(19,849)

(35,915)

Income before income taxes

19,308

49,681

33,123

36,376

Income tax expense

(7,079)

(19,891)

(8,569)

(10,411)

Consolidated net income

$   12,229

$   29,790

$   24,554

$   25,965

Add back net loss attributable to non-controlling interest

$      (432)

$      (423)

$      (875)

$      (880)

Net income attributable to NuVasive, Inc.

$   12,661

$   30,213

$   25,429

$   26,845

Net income per share attributable to NuVasive, Inc.:

Basic

$       0.25

$       0.60

$       0.50

$       0.54

Diluted

$       0.22

$       0.57

$       0.44

$       0.51

Weighted average shares outstanding:

Basic

51,082

50,027

50,825

49,822

Diluted

58,330

53,159

58,059

52,354

NuVasive, Inc. 

Consolidated Balance Sheets 

(in thousands, except par values and share amounts) 

June 30, 2017

December 31, 2016

ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$       130,932

$                153,643

Restricted cash and investments

2,402

Accounts receivable, net of allowances of $9,399 and $8,912, respectively

190,169

171,595

Inventory, net

236,839

208,249

Prepaid income taxes

19,576

31,926

Prepaid expenses and other current assets

12,310

10,030

Total current assets

592,228

575,443

Property and equipment, net

214,601

181,524

Intangible assets, net

268,466

291,143

Goodwill

486,439

485,685

Deferred tax assets

5,961

5,810

Restricted cash and investments

4,945

7,405

Other assets

33,744

23,794

Total assets

$    1,606,384

$             1,570,804

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$         82,933

$                  77,585

Contingent consideration liabilities

19,271

49,742

Accrued payroll and related expenses

49,323

51,000

Income tax liabilities

11,995

2,469

Short-term borrowings

20,000

Senior convertible notes

63,302

61,701

Total current liabilities

246,824

242,497

Long-term senior convertible notes

573,532

564,412

Deferred and income tax liabilities, non-current

16,110

18,607

Other long-term liabilities

46,312

44,764

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding

Common stock, $0.001 par value; 120,000,000 shares authorized at June 30, 2017 and December 31, 2016, 58,081,702 and 55,184,660 issued and outstanding at June 30, 2017 and December 31, 2016, respectively

58

55

Additional paid-in capital

1,033,546

1,010,238

Accumulated other comprehensive loss

(8,131)

(10,631)

Accumulated deficit

(53,077)

(66,859)

Treasury stock at cost; 4,974,534 shares and 4,758,828 shares at June 30, 2017 and December 31, 2016, respectively

(253,503)

(237,867)

Total NuVasive, Inc. stockholders' equity

718,893

694,936

Non-controlling interest

4,713

5,588

Total equity

723,606

700,524

Total liabilities and equity

$    1,606,384

$             1,570,804

NuVasive, Inc. 

Consolidated Statements of Cash Flows 

(in thousands) 

Six Months Ended June 30,

(unaudited)

2017

2016

Operating activities:

Consolidated net income

$   24,554

$   25,965

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

58,688

46,329

Loss on repurchases of convertible notes

17,444

Amortization of non-cash interest

10,882

10,943

Stock-based compensation

15,411

12,357

Reserves on current assets

(95)

6,751

Other non-cash adjustments

7,380

8,387

Deferred income taxes

(2,570)

14,691

Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable

(17,586)

(8,615)

Inventory

(29,012)

(12,019)

Prepaid expenses and other current assets

(2,485)

728

Contingent consideration liabilities

(11,200)

Accounts payable and accrued liabilities

4,987

14,384

Litigation liability

(43,310)

Accrued payroll and related expenses

(2,004)

(4,356)

Income taxes

10,172

10,534

Net cash provided by operating activities

67,122

100,213

Investing activities:

Acquisition of Ellipse Technologies, net of cash acquired

(380,080)

Other acquisitions and investments

(14,417)

(8,079)

Purchases of intangible assets

(1,695)

(5,918)

Purchases of property and equipment

(68,690)

(52,566)

Purchases of marketable securities

(128,956)

Proceeds from sales of marketable securities

339,320

Net cash used in investing activities

(84,802)

(236,279)

Financing activities:

Proceeds from the issuance of common stock

5,369

6,150

Purchase of treasury stock

(10,844)

(22,549)

Payment of contingent consideration

(18,800)

Proceeds from issuance of convertible debt, net of issuance costs

634,140

Proceeds from sale of warrants

44,850

Purchase of convertible note hedge

(111,150)

Repurchases of convertible notes

(343,835)

Proceeds from revolving line of credit

20,000

50,000

Repayments on revolving line of credit

(50,000)

Other financing activities

(2,205)

(1,545)

Net cash (used in)provided by financing activities

(6,480)

206,061

Effect of exchange rate changes on cash

1,449

748

(Decrease) increase in cash and cash equivalents

(22,711)

70,743

Cash and cash equivalents at beginning of period

153,643

192,339

Cash and cash equivalents at end of period

$ 130,932

$ 263,082

  SOURCE NuVasive, Inc.

Related Links

http://www.nuvasive.com

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27 Jul

NuVasive Announces New Organizational Structure To Drive Growth And Profitability Goals

SAN DIEGOJuly 27, 2017 /PRNewswire/ -- NuVasive, Inc. (NASDAQ: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, today announced a new organizational structure to drive the Company's growth and profitability goals, supporting its strategy to help deliver safer, more predictable spine surgery.
"As the innovation pioneer and largest, pure-play spine technology company, NuVasive continues to deliver significant value to its customers and shareholders," said Gregory T. Lucier, NuVasive's chairman and chief executive officer. "With incredible opportunities ahead, we are taking steps to refine the company's operating structure to tightly align strategy, product development and marketing and integrate our global commercial channels, while scaling global operations to best address the growing needs of our partners and patients." Today the Company announced that Jason Hannon, president and chief operating officer, is stepping down from his position to pursue other interests. He will remain with NuVasive through the end of the year in an advisory capacity. During Mr. Hannon's successful 12-year career at NuVasive, he has made countless important contributions to the Company. In connection with Mr. Hannon's departure, the Company has accelerated its timeline to implement organizational changes that will position NuVasive to execute against the Company's strategic goals. Effective August 1, the Company will:
  • Align strategy, technology and marketing to build a world-class product development and commercialization capability;
  • Integrate its U.S. Commercial and International sales functions into a scalable global commercial organization; and
  • Transform global operations to drive operational efficiencies through the combination of manufacturing, supply chain, information technology (IT), regulatory affairs and quality assurance (RA/QA).
Matt Link, president, U.S. Commercial is being promoted to a key leadership role as executive vice president, Strategy, Technology and Corporate Development, a newly created position to further drive the Company's innovation agenda. Mr. Link is a long-tenured NuVasive executive with more than 15 years of industry experience, including extensive knowledge of the U.S. spine marketplace, as well as surgeon and hospital dynamics. In this role, he will lead product and systems development, global marketing, surgeon education, clinical research and corporate development. Mr. Link's experience in surgeon requirements and commercial operations will be key as NuVasive continues to bring leading innovation to market. Skip Kiil, executive vice president, International is named executive vice president, Global Commercial. Mr. Kiil joined NuVasive in June and has more than 15 years of experience as a global medical technologies and life sciences business leader. He was previously with Alcon, a division of Novartis Corporation, where he most recently served as surgical head, EuropeMiddle EastAfrica and Russia. He is a proven leader in managing and growing complex, global commercial enterprises internationally and domestically within the healthcare and spine technology industries. His strategic and operational expertise in market entry and development are critical as NuVasive seeks to double its International market share in the coming years and further expand the Company's position in the U.S. marketplace. Steve Rozow, vice president, Global Operations, assumes an elevated role as executive vice president, Global Process Transformation, including IT and RA/QA, in addition to his current Global Operations responsibilities. Since joining NuVasive in 2015, Mr. Rozow has led improvements in supply chain and fulfillment, as well as the successful development of the Company's new manufacturing facility in West Carrollton, Ohio. Mr. Rozow is an experienced medical device leader including more than 20 years with Zimmer, where he served in various manufacturing and operational leadership roles. His position is critical as the Company focuses on scaling global operations and driving operational improvement initiatives. Unrelated to the organizational updates announced today, the Company has accepted the resignation of its chief financial officer, Quentin Blackford, effective August 25, 2017. Mr. Blackford is pursuing another opportunity outside the spine industry and has agreed to remain with the company during this transition period. Mr. Blackford's resignation is not the result of any dispute or disagreement with NuVasive, including any matters relating to the Company's accounting practices or financial reporting. Vickie Capps, in her role as an independent member of NuVasive's board of directors and a member of the audit committee, will provide guidance and support to the Company's financial organization during the transition period. Ms. Capps is a well-respected financial executive, having served as CFO of DJO Global, as well as CFO of several public and private companies. Ms. Capps will also assist the Company in its search for a successor to Mr. Blackford. "Since becoming CEO over two years ago, I have been working with our board to build a world-class leadership team to support our revenue growth and profitability goals. Together, we are executing against our 5-year strategic plan and building a deep bench of talent, positioning us well to execute against our short- and long-term initiatives. I remain more confident than ever in our Company's position to take on the next $1 billion in growth," said Lucier. About NuVasive NuVasive, Inc. (NASDAQ: NUVA) is transforming spine surgery and beyond with minimally invasive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company's portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With $962 million in revenues (2016), NuVasive has an approximate 2,300 person workforce in more than 40 countries serving surgeons, hospitals and patients. For more information, please visit www.nuvasive.com. Forward-Looking Statements NuVasive cautions you that statements included in this news release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive's results to differ materially from historical results or those expressed or implied by such forward-looking statements. The potential risks and uncertainties which contribute to the uncertain nature of these statements include, among others, risks associated with acceptance of the Company's surgical products and procedures by spine surgeons, development and acceptance of new products or product enhancements, clinical and statistical verification of the benefits achieved via the use of NuVasive's products (including the iGA® platform), the Company's ability to effectually manage inventory as it continues to release new products, its ability to recruit and retain management and key personnel, and the other risks and uncertainties described in NuVasive's news releases and periodic filings with the Securities and Exchange Commission. NuVasive's public filings with the Securities and Exchange Commission are available at www.sec.gov. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made. SOURCE NuVasive, Inc.

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27 Jul

Global Orthobiologics Market Forecast 2017-2025

LONDONJuly 26, 2017 /PRNewswire/ -- KEY FINDINGS The orthobiologics global market is anticipated to grow from $ 6596 million in 2016 to $ 12019 million by 2025. The market is expected to grow at a CACR of 6.97% between 2017-2027. The base year considered for the market study is 2016. The forecast period is 2017-2025. Evolvement in orthobiologics has led to the development of tissue regeneration products and bone grafts that minimize hospital visits, stays and bone healing process.

MARKET INSIGHTS The global orthobiologics market is segmented on the basis of product type, application, end-user, and geography. The global orthobiologics market by product type is segmented into the demineralized bone matrix (DBM), allograft, bone morphogenetic protein, viscosupplementation, synthetic bone graft substitutes, stem cell therapy and others. The application segment is further bifurcated into spinal fusion, trauma repair, and reconstructive surgery and others. The end-user is segmented into hospitals and clinics. The orthobiologics market by geography is classified into North AmericaEuropeAsia-Pacific and rest of the world. The rise in the demand for spinal fusion surgeries, development in Strategic Partnerships, and growth in Orthobiologics Material are the major drivers for the global Orthopedics market. Healthcare reforms (such as Stark self-referral law and fraud & abuse law) are estimated to have affected the Orthobiologics surgeons. Bone Regeneration Technology, Larger Spend on Healthcare is the major opportunities in the Orthobiologics Market. REGIONAL INSIGHTS The Orthobiologics market in North America is expected to hold the colossal share by 2024. The increase in research and a rising demand for the products, increasing research investments, aging population growth and an increased number of road accidents are major drivers of the region. Asia-Pacific is estimated with the highest CAGR of 7.09% due to the increased demand for biological implants over mechanical implants, coupled with the growing awareness levels about the benefits of Orthobiologics. Europe has generated revenue of $1705 million in 2016 and is expected to generate revenue of $3077 million by 2024. The rise in the aging population, increased incidences of osteoarthritis and osteoporosis, technological advancements in the European countries are driving the market to grow at a faster pace. COMPETITIVE INSIGHTS Major players for the Orthobiologics market are Bioventus, DePuy Inc. (Acquired by Johnson and Johnson), Exatech Inc., Globus Medical Inc., Integra Life sciences Holding Corporation, Johnson& Johnson, Medtronic Inc., Nuvasive Inc., RTI Surgical, Sanofi, Stryker Corporation, Zimmer Biomet Inc., and Mölnlycke Health Care AB. DePuy Inc. Download the full report: https://www.reportbuyer.com/product/4825329/ About Reportbuyer Reportbuyer is a leading industry intelligence solution that provides all market research reports from top publishers http://www.reportbuyer.com For more information: Sarah Smith Research Advisor at Reportbuyer.com Email: query@reportbuyer.com Tel: +44 208 816 85 48 Website: www.reportbuyer.com
SOURCE ReportBuyer

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27 Jul

Camber Spine Technologies Announces Exceeding the 150th Implantation of ENZA™ Zero-Profile ALIF

WAYNE, Pa.July 27, 2017 /PRNewswire/ -- Camber Spine Technologies, today announced that they have exceeded 150 implantations of the ENZA™ Zero-Profile ALIF device that was launched last July.
"We have been doing anterior spine reconstructions for over 20 years and have used a lot of different ALIF devices," said Orthopedic Surgeon, Dr. Steven B. Wolf, M.D. of OIP in Camp Hill, PA. "I have extensive experience using the Globus Independence®, Zimmer-LDR ROI-A® and other ALIF devices from Renovis and Titan Spine.  The ENZA™ has been an indispensable alternative to all those implants. I can insert ENZA™ and deploy fixation with one instrument and I have the reassurance that I can easily remove it if needed. With the insertion of ENZA™ the patient's spine feels immediate stabilization, especially if they need to be flipped for posterior instrumentation. Our access surgeon loves this implant, because it makes his job much easier. ENZA's™ single instrument deployment, without extra retraction of the vessels, eliminates the need for passing multiple locking instrumentation required by other devices." ENZA™ was designed to increase patient safety by minimizing retraction necessary for implantation of the device, utilizing its integrated fixation. It is often described as "designed for the access surgeon" because of its completely inline instrumentation--which relieves the burden that other systems induce by requiring larger retraction to accommodate angled instrumentation. "We are very excited to achieve this important milestone in the initial launch of the ENZA™ ALIF," said Daniel Pontecorvo, Camber Spine's CEO. The overwhelming interest and success of ENZA™ reaffirms our plan to make this the first of an entire platform of products utilizing our patented ENZA™ Duo Presa™ (Two Grips) Anchor Technology. Surgeons assert that it is a simpler, safer and more stable alternative to all other locking ALIF devices." This achievement comes at an inflexion point for Camber Spine, as they continue to expand sales into new territories of the U.S with new hires. The Camber Spine Technologies ENZA™ MIS Zero-Profile Anterior Interbody Fusion is indicated for use with autogenous bone graft in patients with degenerative disc disease (DDD) at one or two contiguous levels from L2 to S1. These implants may be implanted via a laparoscopic or an open anterior approach. The Camber Spine Technologies' ENZA™ MIS Zero-Profile ALIF is intended to be used with additional FDA-cleared supplementary fixation systems. About Camber Spine Camber Spine Technologies, LLP, is a fast-growing musculoskeletal implant company founded in 2010 bringing innovative, best-in-class products to the market, providing surgeons and their patients with better treatment options. The company is committed to delivering surgeon inspired new technologies to the spine market. Camber is an ISO 13485 certified medical device company. Camber Spine Technologies, located in Wayne, Pennsylvania, markets a line of proprietary musculoskeletal products nationwide through its exclusive distributor, S1 Spine. For further information please visit www.cambermedtech.com . For inquiries about ENZA® or distribution opportunities please call 484.427.7060. All of Camber Spine Technologies' products are proudly MADE IN THE USA. SOURCE Camber Spine Technologies

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