Pacira Pharmaceuticals Announces Proposed Offering of $300 Million Aggregate Principal Amount of Convertible Senior Notes

PARSIPPANY, N.J., March 06, 2017 (GLOBE NEWSWIRE) — Pacira Pharmaceuticals, Inc. (Nasdaq:PCRX) today announced that it intends to offer, subject to market and other conditions, $300 million aggregate principal amount of convertible senior notes due 2022 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).  Pacira also intends to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $45 million aggregate principal amount of notes.

The terms of the notes, including the interest rate, initial conversion rate and other terms, will be determined by negotiations between Pacira and the initial purchasers of the notes.

Pacira intends to use a portion of the net proceeds to enter into privately negotiated agreements with certain holders of its 3.25% convertible senior notes due 2019 (the “2019 Notes”) to exchange their 2019 Notes for a combination of cash and shares of Pacira common stock. The remaining net proceeds will be used for general corporate purposes, including working capital, research and development expenditures and the license or acquisition of complementary products and/or technologies.

This offering is being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the notes and the shares of Pacira common stock, if any, issuable upon conversion of the notes have not been and will not be registered under the Securities Act or any state securities laws, and, unless so registered, the notes and such shares may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall it constitute an offer, or the solicitation of any sale, of any securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

About Pacira

Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) is a specialty pharmaceutical company focused on the clinical and commercial development of new products that meet the needs of acute care practitioners and their patients. The company’s flagship product, EXPAREL® (bupivacaine liposome injectable suspension), indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia, was commercially launched in the United States in April 2012. EXPAREL and two other products have successfully utilized DepoFoam®, a unique and proprietary product delivery technology that encapsulates drugs without altering their molecular structure, and releases them over a desired period of time.

Forward-Looking Statements

Certain of the statements made in this press release, such as those, among others, relating to our expectations regarding the completion of the proposed offering, and other statements containing the words “believes,” “anticipates,” “plans,” “estimates,” “expects,” “intends,” “may” and similar expressions, constitute forward-looking statements.  Actual results or developments may differ materially from those projected or implied in these forward-looking statements.  Factors that may cause such a difference include, without limitation, risks and uncertainties related to whether or not we will be able to raise capital through the proposed offering, the final terms of the proposed offering, market and other conditions, the satisfaction of customary closing conditions related to the proposed offering and the impact of general economic, industry or political conditions in the United States or internationally.  There can be no assurance that we will be able to complete the proposed offering on the anticipated terms, or at all. Additional risks and uncertainties relating to the proposed offering, Pacira and our business are discussed in the “Risk Factors” section of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and in other filings that we periodically make with the SEC.  In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements, and, as such, we anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, except as may be required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor Contact:
Susan Mesco
(973) 451-4030

K2M Group Holdings, Inc. Reports Fourth Quarter and Full Year 2016 Financial Results

LEESBURG, Va., March 06, 2017 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (the “Company” or “K2M”), a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body BalanceTM, today reported financial results for the fourth quarter and fiscal year ended December 31, 2016.

Fourth Quarter 2016 Financial Summary:

  • Total Q4 revenue of $61.8 million, up 14.0% year-over-year. Total Q4 revenue increased 14.9% year-over-year on a constant currency basis.
  • Domestic Q4 revenue of $47.7 million, up 21.5% year-over-year, comprised of:
    – U.S. Complex Spine growth of 18.0% year-over-year
    – U.S. Minimally Invasive Surgery (MIS) growth of 37.3% year-over-year
    – U.S. Degenerative growth of 19.3% year-over-year
  • International Q4 revenue of $14.1 million, down approximately 5.8% year-over-year, or 2.8% on a constant currency basis.
  • Net loss of $12.5 million for the three months ended December 31, 2016, compared to a net loss of $8.5 million in the comparable period last year.
  • Adjusted EBITDA loss of $0.8 million for the three months ended December 31, 2016, compared to Adjusted EBITDA of $1.3 million in the comparable period last year.

Fourth Quarter 2016 Highlights:

  • On October 6, 2016, the Company announced it had received 510(k) clearance from the FDA to expand its CASCADIA™ Lateral Interbody System featuring Lamellar 3D Titanium Technology™, the Company’s innovative technology that uses 3D printing with the goal of allowing for bony integration throughout the implant. The CASCADIA Lateral Interbody System line extension clearance strengthens K2M’s MIS portfolio and the Company’s leadership in the 3D printing of spinal devices, as evidenced by its having the most comprehensive 3D-printed spinal portfolio available on the market among leading spine companies.
  • On October 26, 2016, the Company announced the U.S. launch of its award-winning CASCADIA Interbody Systems, featuring Lamellar 3D Titanium Technology, during the 31st North American Spine Society (NASS) Annual Meeting. K2M presented clinical background on its 3D-printed spinal devices and showcased the Company’s comprehensive CASCADIA product portfolio, which was recognized by Orthopedics This Week with a 2016 Spine Technology Award as one of the best new spine technologies of 2016.

Highlights Subsequent to Quarter-End:

  • On February 15, 2017, the Company introduced Balance ACSTM (or BACSTM), a comprehensive platform that applies three-dimensional solutions across the entire clinical care continuum to help drive quality outcomes for patients undergoing spinal surgery. BACS provides solutions focused on achieving balance of the spine by addressing each anatomical vertebral segment with a 360-degree approach of the axial, coronal and sagittal planes, emphasizing Total Body Balance as a critical component to surgical success.

“We reported constant currency revenue growth of 14.9% year-over-year in the fourth quarter, driven by U.S. constant currency revenue growth of 21.5% year-over-year,” said President and Chief Executive Officer, Eric Major. “We delivered approximately 17% growth in the U.S. in calendar year 2016 and we believe this strong performance reflects the Company’s success in executing our strategic plan to introduce differentiated spine technologies and expand our global distribution network. Our U.S. growth reflects the clearest indication yet of the increasing adoption of our innovative products by the spine surgeon community. Outside the U.S., we successfully navigated challenging market disruptions with our distributors in Australia and Japan earlier in 2016, and look forward to building on our improving results during 2017 without the expectation of these headwinds.  We continue to anticipate our ability to grow our U.S. revenue in the mid-teens in 2017 with improved profitability.”

Fourth Quarter 2016 Financial Results

Three Months
Ended December 31,
  Increase / Decrease
($,thousands) 2016 2015   $ Change % Change % Change
(as reported)  (constant currency)
United States $47,669 $39,236 $8,433 21.5% 21.5%
International $14,122 $14,984 $(862) (5.8%) (2.8%)
Total Revenue: $61,791 $54,220   $7,571 14.0% 14.9%

Total revenue for fourth quarter 2016 increased $7.6 million, or 14.0%, to $61.8 million, compared to $54.2 million in the fourth quarter of 2015. Total revenue increased 14.9% year-over-year on a constant currency basis. The increase in revenue was primarily driven by greater sales volume from primarily domestic new surgeon users and newer product offerings, offset by decreases in both international direct and distributor revenue compared to last year.

Revenue in the United States increased $8.4 million, or 21.5% year-over-year, to $47.7 million, and international revenue decreased $0.9 million, or 5.8% year-over-year, to $14.1 million. Fourth quarter 2016 international revenue decreased 2.8% year-over-year on a constant currency basis. Foreign currency exchange impacted fourth quarter international revenue by approximately $0.5 million, representing approximately 302 basis points of international growth year-over-year.

The following table represents domestic revenue by procedure category.

Three Months
Ended December 31,
  Increase / Decrease
($,thousands) 2016 2015   $ Change % Change
Complex Spine $17,934 $15,194 $2,740 18.0%
Minimally Invasive 8,058 5,867 2,191 37.3%
Degenerative 21,677 18,175 3,502 19.3%
U.S Revenue: $47,669 $39,236   $8,433 21.5%

By procedure category, U.S. revenue in the Company’s complex spine, MIS and degenerative categories represented 37.6%, 16.9% and 45.5% of U.S. revenue, respectively, for the three months ended December 31, 2016.

Gross profit for fourth quarter of 2016 increased 6.7% to $38.4 million, compared to $35.9 million for fourth quarter 2015.  Gross margin was 62.1% for the fourth quarter of 2016, compared to 66.3% last year.  After adjusting for a medical device tax recovery of $0.7 million in 2015, Gross margin was 62.1% for the fourth quarter of 2016 as compared to 65.0% in the comparable period last year.  Gross profit includes amortization expense on investments in surgical instruments of $3.6 million, or 5.8% of sales, for the three months ended December 31, 2016, compared to $3.2 million, or 5.9% of sales, for the comparable period last year.

Operating expenses for fourth quarter 2016 increased $4.2 million, or 9.7%, to $47.7 million, compared to $43.5 million for fourth quarter 2015. The increase in operating expenses was driven primarily by a $2.5 million increase in general and administrative expenses, a $1.2 million increase in sales and marketing expenses and, to a lesser extent, a $0.5 million increase in research and development expenses compared to the comparable period last year.

Loss from operations for the fourth quarter of 2016 was $9.4 million, compared to a loss from operations of $7.6 million for the comparable period last year. Loss from operations included intangible amortization of $2.6 million for each of the fourth quarters of 2016 and 2015.

Total other expenses for the fourth quarter of 2016 increased $2.3 million to $3.1 million, compared to $0.8 million last year. The increase in other expense, net, was primarily attributable to interest expense incurred on the capital lease obligation related to our headquarters and operations facilities as well as the Convertible Senior Notes issued in August 2016, and an increase of $1.1 million in unrealized losses from foreign currency re-measurement on intercompany payable balances.  Foreign currency losses impacted operating results compared to last year due to changes in the average exchange rates of the U.S. Dollar, Pound Sterling and Euro applied to intercompany balances in both periods.

Net loss for the fourth quarter of 2016 was $12.5 million, or $(0.30) per diluted share, compared to a loss of $8.5 million, or $(0.21) per diluted share, for the fourth quarter of 2015.

Twelve-Months 2016 Financial Results

Twelve Months
Ended December 31,
  Increase / Decrease
($,thousands)  2016  2015   $ Change % Change % Change
(as reported)  (constant currency)
United States $181,078 $155,291 $25,787 16.6% 16.6%
International $55,556 $60,716 (5,160) (8.5%) (6.6%)
Total Revenue: $236,634 $216,007   $20,627 9.5%  10.2%

For the twelve months ended December 31, 2016, total revenue increased $20.6 million, or 9.5%, to $236.6 million, compared to $216.0 million for the twelve months ended December 31, 2015. Total revenue increased 10.2% year-over-year on a constant currency basis. U.S. revenue increased $25.8 million, or 16.6%, to $181.1 million in fiscal year 2016, compared to $155.3 million last year. International revenue decreased $5.1 million, or 8.5%, to $55.6 million in fiscal year 2016, compared to $60.7 million last year. International revenue decreased 6.6% year-over-year on a constant currency basis.

Twelve Months
Ended December 31,
  Increase / Decrease
($,thousands) 2016 2015   $ Change % Change
Complex Spine $71,915 $63,398 $8,517 13.4%
Minimally Invasive 28,711 23,633 5,078 21.5%
Degenerative 80,452 68,260 12,192 17.9%
U.S Revenue: $181,078 $155,291   $25,787 16.6%

Sales in our complex spine, MIS and degenerative categories represented 39.7%, 15.9% and 44.4% of U.S. revenue, respectively, for the twelve months ended December 31, 2016.

As of December 31, 2016, we had cash and cash equivalents of $45.5 million as compared to $34.6 million as of December 31, 2015. We had working capital of $115.9 million as of December 31, 2016 as compared to $107.4 million as of December 31, 2015. At December 31, 2016, outstanding long-term indebtedness included the carrying value of the Convertible Senior Notes of $36.9 million and the capital lease obligation of $34.9 million. In addition, we had no borrowings outstanding under our credit facility.

2017 Outlook

The Company is introducing its fiscal year 2017 guidance expectations. The Company expects:

  • Total revenue on an as reported basis in the range of $263.0 million to $270.0 million, representing growth of 11% to 14% year-over-year, compared to total revenue of $236.6 million in fiscal year 2016.  The Company expects mid-teens growth in its U.S. business in 2017.
  • Total net loss of approximately $34.0 million to $31.0 million, compared to a total net loss of $41.7 million in fiscal year 2016.
  • Adjusted EBITDA in a range of $6.0 million to $10.0 million, compared to Adjusted EBITDA of $0.6 million in fiscal year 2016.

Conference Call

Management will host a conference call at 5:00 p.m. Eastern Time on March 6th to discuss the results of the quarter, and to host a question and answer session. Those who would like to participate may dial 888-208-1814 (719-457-2552 for international callers) and provide access code 4389380 approximately 10 minutes prior to the start of the call. A live webcast of the call will also be provided on the investor relations section of the Company’s website at

For those unable to participate, a replay of the call will be available for two weeks at 888-203-1112 (719-457-0820 for international callers); access code 4389380. The webcast will be archived on the investor relations section of the Company’s website.

About K2M Group Holdings, Inc.

K2M Group Holdings, Inc. is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. Since its inception, K2M has designed, developed and commercialized innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most complicated spinal pathologies. K2M has leveraged these core competencies into Balance ACS, a platform of products, services, and research to help surgeons achieve three-dimensional spinal balance across the axial, coronal and sagittal planes, with the goal of supporting the full continuum of care to facilitate quality patient outcomes. The Balance ACS platform, in combination with the Company’s technologies, techniques and leadership in the 3D-printing of spinal devices, enable K2M to compete favorably in the global spinal surgery market. For more information, visit and connect with us on Facebook, Twitter, Instagram, LinkedIn, and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements that reflect current views with respect to, among other things, operations and financial performance.  Forward-looking statements include all statements that are not historical facts such as our statements about our expected financial results and guidance and our expectations for future business prospects, including with respect to our international distribution partners in Australia and Japan.  In some cases, you can identify these forward-looking statements by the use of words such as outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.  Such forward-looking statements are subject to various risks and uncertainties including, among other things: our ability to achieve or sustain profitability; our ability to successfully demonstrate the merits of our technologies; pricing pressure from our competitors, hospitals and changes in third-party coverage and reimbursement; competition and our ability to develop and commercialize new products; aggregation of hospital purchasing from collaboration and consolidation; hospitals and other healthcare providers may be unable to obtain adequate coverage and reimbursement for procedures performed using our products; the safety and efficacy of our products is not yet supported by long-term clinical data; our dependence on a limited number of third-party suppliers; our ability to maintain and expand our network of direct sales employees, independent sales agencies and international distributors and their level of sales or distribution activity with respect our products; the proliferation of physician-owned distributorships; concentration of sales from a limited number of spinal systems or products that incorporate these technologies; loss of the services of key members of our senior management, consultants or personnel; ability to enhance our product offerings through our research and development efforts; failure to properly manage our anticipated growth; acquisitions of or investments in new or complementary businesses, products or technologies; ability to train surgeons on the safe and appropriate use of our products; requirements to maintain high levels of inventory; impairment of our goodwill or intangible assets; disruptions in our information technology systems; any disruption or delays in operations at our facilities, including our new headquarter facility; or an ability to ship a sufficient number of our products to meet demand; ability to strengthen our brand; fluctuations in insurance cost and availability; extensive governmental regulation; in the United States and foreign jurisdictions; failure to obtain or maintain regulatory approvals and clearances; requirements for new 510(k) clearances, premarket approvals or new or amended CE Certificates of Conformity; medical device reporting regulations in the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; a recall of our products; withdrawal or restrictions on our products or the discovery of serious safety issues with our products; possible enforcement action if we engage in improper marketing or promotion of our products; the misuse or off-label use of our products; delays or failures in any future clinical trials;  the results of clinical trials; procurement and use of allograft bone tissue; environmental laws and regulations; compliance by us or our sales representatives with FDA regulations or fraud and abuse laws; U.S. legislative or regulatory healthcare reforms; medical device tax provisions in the healthcare reform laws; our need to generate significant sales to become profitable; potential fluctuations in sales volumes and our results of operations may fluctuate over the course of the year; uncertainty in our future capital needs; failure to comply with restrictions in our revolving credit facility; continuing worldwide economic instability; our inability to protect our intellectual property rights; our reliance on patent rights that we either license from others or have obtained through assignments; our patent litigation; the outcome of potential claims that we, our employees, our independent sales agencies or our distributors have wrongfully used or disclosed alleged trade secrets or are in breach of non-competition or non-solicitation agreements with our competitors; potential product liability lawsuits; operating risks relating to our international operations; foreign currency fluctuations; our ability to comply with the Foreign Corrupt Practices Act and similar laws associated with our activities outside the United States; possible conflicts of interest with our large shareholders; increased costs and additional regulations and requirements as a result of becoming a public company; our ability to implement and maintain effective internal control over financial reporting in the future; the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make; and other risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and our filings with the SEC.

We operate in a very competitive and challenging environment.  New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release.  We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made.  We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.  We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Unless specifically stated otherwise, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

(In Thousands, Except Share and Per Share Data)
December 31,
2016 2015
Current assets:
Cash and cash equivalents $ 45,511 $ 34,646
Accounts receivable, net 46,430 38,773
Inventory, net 61,897 62,002
Prepaid expenses and other current assets 6,147 19,820
Total current assets 159,985 155,241
Property, plant and equipment, net 50,714 38,318
Goodwill 121,814 121,814
Intangible assets, net 22,758 33,123
Other assets, net 28,254 26,016
Total assets $ 383,525 $ 374,512
Current liabilities:
Current maturities under capital lease obligation $ 973 $ 284
Accounts payable 15,367 22,483
Accrued expenses 15,673 13,559
Accrued payroll liabilities 12,068 11,507
Total current liabilities 44,081 47,833
Convertible senior notes 36,894
Capital lease obligation, net of current maturities 34,933 34,140
Deferred income taxes, net 5,017 5,042
Other liabilities 1,032 835
Total liabilities 121,957 87,850
Stockholders’ equity:
Common stock, $0.001 par value, 750,000,000 shares authorized; 42,282,741 and 41,337,692 shares issued and 42,274,130 and 41,337,692 shares outstanding, respectively 42 41
Additional paid-in capital 474,512 454,153
Accumulated deficit (211,081 ) (169,421 )
Accumulated other comprehensive (loss) income (1,771 ) 1,889
Treasury stock, at cost, 8,611 and 0 shares, respectively (134 )
Total stockholders’ equity 261,568 286,662
Total liabilities and stockholders’ equity $ 383,525 $ 374,512
(In Thousands, Except Share and Per Share Data)
Three Months Ended
December 31,
Year Ended
December 31,
Revenue $ 61,791 $ 54,220 $ 236,634 $ 216,007
Cost of revenue 23,431 18,284 82,178 71,791
Gross profit 38,360 35,936 154,456 144,216
Operating expenses:
Research and development 5,558 5,060 21,547 19,868
Sales and marketing 27,244 26,047 111,376 105,635
General and administrative 14,921 12,408 56,264 54,983
Total operating expenses 47,723 43,515 189,187 180,486
Loss from operations (9,363 ) (7,579 ) (34,731 ) (36,270 )
Other expense, net:
Foreign currency transaction loss (1,331 ) (261 ) (2,430 ) (1,813 )
Interest expense (1,720 ) (587 ) (4,425 ) (941 )
Total other expense, net (3,051 ) (848 ) (6,855 ) (2,754 )
Loss before income taxes (12,414 ) (8,427 ) (41,586 ) (39,024 )
Income tax expense 53 67 74 192
Net loss $ (12,467 ) $ (8,494 ) $ (41,660 ) $ (39,216 )
Net loss per share attributable to common stockholders:
Basic and diluted $ (0.30 ) $ (0.21 ) $ (1.00 ) $ (0.97 )
Weighted average shares outstanding:
Basic and diluted 41,995,284 41,263,912 41,729,013 40,237,848


(In Thousands)
Year Ended
December 31,
Operating Activities 2016 2015
Net loss $ (41,660 ) $ (39,216 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 29,212 24,940
Provision for inventory reserve 5,572 1,680
Provision for allowance for doubtful accounts 68 319
Stock-based compensation 6,956 11,188
Accretion of discounts and amortization of issuance costs of convertible senior notes 1,604
Deferred income taxes (33 )
Changes in operating assets and liabilities:
Accounts receivable (9,381 ) (5,082 )
Inventory (3,439 ) (8,766 )
Prepaid expenses and other assets (10,256 ) (9,738 )
Accounts payable, accrued expenses, and accrued payroll liabilities 8,059 6,365
Net cash used in operating activities (13,298 ) (18,310 )
Investing activities
Purchase of surgical instruments (12,275 ) (10,905 )
Purchase of property, plant and equipment (17,439 ) (2,787 )
Changes in cash restricted for leasehold improvements 6,608
Purchase of intangible assets (1,307 ) (588 )
Net cash used in investing activities (24,413 ) (14,280 )
Financing activities
Borrowings on bank line of credit 19,500 25,000
Payments on bank line of credit (19,500 ) (25,000 )
Proceeds from issuance of convertible senior notes, net issuance of costs 47,108
Proceeds from issuances of common stock, net of issuance costs 54,209
Principal payments under capital lease (219 )
Issuances and exercise of stock-based compensation benefit plans, net of income tax 2,244 2,017
Net cash provided by financing activities 49,133 56,226
Effect of exchange rate changes on cash and cash equivalents (557 ) (401 )
Net increase in cash and cash equivalents 10,865 23,235
Cash and cash equivalents at beginning of period 34,646 11,411
Cash and cash equivalents at end of period $ 45,511 $ 34,646
Significant non-cash investing activities
Buildings under capital lease $ $ 26,469
Leasehold improvements, including property under capital lease $ 171 $ 6,884
Significant non-cash financing activities
Capital lease obligation $ 1,708 $ 33,938
Accretion of convertible senior notes 807
Common stock offering costs 52
Cash paid for:
Income taxes $ 159 $ 126
Interest $ 382 $ 428


Reconciliation of GAAP to Non-GAAP Measures
(In Thousands)

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP financial measures of revenue in constant currency, Adjusted Gross Profit, and Adjusted EBITDA.

The Company presents these non-GAAP measures because it believes these measures are useful indicators of the Company’s operating performance.  Management uses these non-GAAP measures principally as a measure of the Company’s operating performance and believes that these measures are useful to investors because they are frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry.  The Company also believes that these measures are useful to its management and investors as a measure of comparative operating performance from period to period.

Constant currency information compares results between periods as if exchange rates had remained constant period-to-period.  We calculate constant currency by converting the prior-year results using current-year foreign currency exchange rates.

Adjusted Gross Profit represents Gross Profit less amortization expense of surgical instruments and medical device excise tax expense (recovery).  The Company presented Adjusted Gross Profit because it believes it is a useful measure of the Company’s gross profit and operating performance because the measure is not burdened by the timing impact of instrument purchases and related amortization as well as the medical device tax.

Adjusted EBITDA represents net loss plus interest expense, income tax (benefit) expense, depreciation and amortization, stock-based compensation expense, foreign currency transaction loss and a deduction for cash payments made for rent on the capital lease of the Company’s new headquarters and operations facilities, which commenced in October 2016.

The Company presents Adjusted EBITDA because it believes it is a useful indicator of the Company’s operating performance.  Management uses Adjusted EBITDA principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating budget and financial projections.

Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP and it should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.  In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future.  Adjusted EBITDA contains certain other limitations, including the failure to reflect the Company’s cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized.  In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation.  The Company’s presentation of Adjusted EBITDA should not be construed to imply that the Company’s future results will be unaffected by any such adjustments.  Management compensates for these limitations by primarily relying on its GAAP results in addition to using Adjusted EBITDA supplementally.  The Company’s definition of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.

The following table presents reconciliations of gross profit to adjusted gross profit and net loss to Adjusted EBITDA for the periods presented.

$ in thousands Three Months Ended December 31,  Year Ended December 31,
2016 2015 2016 2015
Reconciliation from Gross Profit to Adjusted Gross Profit
Gross Profit $ 38,360 $ 35,936 $ 154,456 $ 144,216
Surgical instrument amortization 3,575 3,188 13,725 12,334
Medical device excise tax 12 (694 ) (854 ) 514
Adjusted Gross Profit (a Non-GAAP Measure) $ 41,947 $ 38,430 $ 167,327 $ 157,064
$ in thousands Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
Reconciliation from Net Loss to Adjusted EBITDA
Net loss $ (12,467 ) $ (8,494 ) $ (41,660 ) $ (39,216 )
Interest expense 1,720 587 4,425 941
Income tax expense 53 67 74 192
Depreciation and amortization 7,760 6,544 29,212 24,940
Stock-based compensation expense 1,575 2,325 6,956 11,188
Foreign currency transaction loss 1,331 261 2,430 1,813
Cash-based rent payments (801 ) (801 )
Adjusted EBITDA (a Non-GAAP Measure) $ (829 ) $ 1,290 $ 636 $ (142 )

The following table presents a reconciliation of net loss to Adjusted EBITDA for our 2017 guidance ($ in thousands):

Year Ended
December 31,
Net loss $ (32,450 )
Interest expense 6,700
Income tax expense 100
Depreciation and amortization 27,500
Stock-based compensation expense 6,150
Foreign currency transaction loss
Adjusted EBITDA $ 8,000

The reconciliation assumes the mid-point of the Adjusted EBITDA range and the midpoint of each component of the reconciliation, corresponding to guidance of $6.0 million to $10.0 million for 2017.

Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA

Global Vertebral Compression Fractures Devices Market Expected to Reach $1,109 Million by 2022

Press release from: Allied Market Research – March 06,2017

Vertebral Compression Fracture Devices Market Report, published by Allied Market Research, forecasts that the global market was valued at $748 million in 2015, and is expected to reach $1,109 million by 2022, supported by a CAGR of 5.7% during the forecast period 2014 – 2022.

Access Full Summary at:…
Vertebral compression fracture (VCF) generally occurs when the block-like part of a single bone of the spine (vertebra) is compressed due to trauma. The surgical approach for VCF treatment involves injecting cementing material in the fractured vertebra to provide immediate relief from pain and stability to the patient.

The vertebral compression fractures devices market is driven by factors such as advent of minimally invasive spine surgery techniques and rise in incidence of osteoporosis and arthritis. In addition, rise in geriatric population, short recovery period, low risk of infection, and shorter hospital stay are anticipated to boost the demand for VCF devices, globally. However, risk of post-surgical complications and stringent regulatory approval process hamper the market growth.

Balloon kyphoplasty devices segment is projected to maintain its leading trend in the global market, owing to the benefits offered by these procedures such as reduction of back pain and restoration of vertebral body height. Furthermore, vertebroplasty segment is anticipated to grow rapidly during the forecast period.

The global VCF devices market is segmented on the type of surgery into open spine surgery and minimally invasive spine surgery. The open spine surgery segment contributed the highest revenue in the global market in 2015. However, the MISS market is estimated to grow at the highest CAGR during the study period.






Summit Orthopedics’ Vadnais Heights Surgery Center Receives The Joint Commission’s Advanced Certification

WOODBURY, Minn., March 6, 2017 /PRNewswire/ — Summit Orthopedics is to pleased to announce that its Vadnais Heights Surgery Center has earned The Joint Commission’s Gold Seal of Approval® for Advanced Certification for Total Hip and Total Knee Replacement. The facility is one of just two ambulatory surgery centers nationwide to receive the certification.

“We are incredibly honored that our Vadnais Heights Surgery Center has been recognized for its work in the area of advanced total hip and total knee replacements,” said Adam Berry, Summit CEO. “And I, personally, am very proud of our physicians and staff who work tirelessly to ensure the best possible outcomes for our patients who undergo these advanced treatments.”

The advanced certification was developed in response to the growing number of patients undergoing a total hip or total knee replacement surgery in the U.S. Also, there has been an increased focus on clinical evidence-based patient care as it relates to pain management, quality of life issues, functional limitation in mobility, and the return to normal daily activities.

According to the American Academy of Orthopaedic Surgeons, between 1993 and 2009, the number of total knee replacement surgeries more than tripled and the number of total hip replacements doubled. The increase in the number of surgeries is attributed in great part to the rise in obesity rates as well as an active baby boomer generation. Berry noted that since opening in 2014, Summit’s Vadnais Heights facility has performed more than 1,800 total hip and total knee replacements. With the opening of Summit’s Eagan Surgery Center in March, he anticipates that Summit will perform nearly 800 such surgeries between the two surgery centers in 2017.

“There’s certainly a high demand for these advanced surgeries, but we’re finding that there’s also a demand for exceptional care, accelerated recovery times, and reduced costs,” he said. “Patients want the best care available at the best price. Through our Vadnais Heights Surgery Center—and very shortly our new Eagan Surgery Center, Summit provides this service. And now The Joint Commission, the leading healthcare accreditation organization in the country, has recognized Summit’s value.”

Summit’s value, according to Berry, is reflected in key data points critical to patients, insurers and The Joint Commission. For example, since opening in 2014, the average satisfaction level for patients undergoing total hip or knee replacements at Summit’s Vadnais Heights facility was 96.2 out of 100; the average infection rate was between just .1 – .5 percent; and the average time between surgery and ambulation was between 3 hours and 10 minutes and three hours and 23 minutes, with patients traveling an average of 95 to 98 feet.

Summit Orthopedics’ Vadnais Heights facility is a one-stop, state-of-the-art center offering patients comprehensive orthopedic treatment that includes physician consultations, advanced imaging, therapy, bracing, orthotics, and a seven-day-a-week walk-in clinic. The facility also offers surgical care and overnight recovery in specialized care suites adjacent to the surgical facility for those undergoing advanced spine procedures and total joint replacements. In a concept still new to Minnesota and launched at Summit’s Vadnais Heights facility, the care suites, which will open in Eagan in March, offer personalized services, such as catered meals from local restaurants and one-on-one education and physical therapy, as well as hotel-level amenities, including Wi-Fi, lounge seating, and concierge services. In addition, the suites boast Secure Tracks, a post-surgery accelerated walking system exclusive to Summit Orthopedics that gets patients up and walking within hours of surgery.

Summit’s new Eagan facility, which opens this week, mirrors the Vadnais facility in treatment offerings and amenities. The Eagan Surgery Center will pursue this same certification from The Joint Commission.

About The Joint Commission
Founded in 1951, The Joint Commission seeks to continuously improve health care for the public, in collaboration with other stakeholders, by evaluating health care organizations and inspiring them to excel in providing safe and effective care of the highest quality and value. The Joint Commission accredits and certifies more than 21,000 health care organizations and programs in the United States. An independent, nonprofit organization, The Joint Commission is the nation’s oldest and largest standards-setting and accrediting body in health care. Learn more about The Joint Commission at

About Summit Orthopedics
Summit Orthopedics is privately owned and managed, with 50 highly trained orthopedic specialists teamed with 125 supporting providers such as physician assistants, therapists, and certified athletic trainers. For more than 30 years, Summit has provided a range of conservative and progressive care options for musculoskeletal conditions for patients across the Twin Cities, throughout Greater Minnesota and beyond. This includes prevention, surgical and non-surgical treatment, and rehabilitation. Summit employs about 850 people at 33 locations throughout Minnesota.


Patty Gibbs

Patty Gibbs & Company



SOURCE Summit Orthopedics

Safe Orthopaedics expands into Germany and appoints Jochen Esser as Head of Sales Germany

Eragny-sur-Oise, France, March 6, 2017, 6pm (CET) – SAFE ORTHOPAEDICS (FR0012452746 – SAFOR), a company offering an innovative range of sterile implants combined with their single-use instruments for spinal surgery, is today announcing that it is expanding into Germany and has appointed Jochen Esser as Head of Sales Germany.

Jochen has over 25 years’ sales development and sales force leadership experience in the spinal surgery sector, both in Germany and in international markets. Before joining Safe Orthopaedics, Jochen held various sales positions with Zimmer, and DePuy Synthes, the Johnson & Johnson group subsidiary specialized in medical devices, where he was awarded for his sales performance on several occasions. In 2010, he joined K2M, a leader in minimally invasive techniques for back surgery, as head of the Germany, Austria and Switzerland region where he built a team of seven sales representatives and more than tripled the sales base. Since 2015, Jochen has been head of sales Germany at Joimax, a specialist in endoscopic solutions for minimally invasive back surgeries. In this role, he also built up the company’s sales in Austria and Switzerland.

“We are delighted to welcome Jochen to Safe Orthopaedics. His knowledge of the German market and many years of experience in the spinal surgery sector will be invaluable to our development in Germany where we intend to replicate the success we have had in France with direct sales of our products”, said Pierre Dumouchel, Chief Executive Officer of Safe Orthopaedics. “2017 is shaping up to be a strategically important year for the Group, with the progressive strengthening of our sales force in regions experiencing the most rapid growth. Following on from the appointment of Dr. Franke, a highly renowned German surgeon, to our Scientific Advisory Board, the addition of Jochen as our Head of Sales represents another step forward establishing us in this very important market.”

The German market, Europe’s largest, is also growing most rapidly. Sales of spinal implants totaled €443 million in 2015, and a CAGR in sales of 4.7% has been forecast for the period to 2024. By comparison, sales in the French market totaled €64.7 million in the same year. Germany is also a very large market for traumatology, a segment estimated to be worth €50 million. It has around 600 centers specialized in trauma surgery, compared with around a hundred in France.

Jochen Esser, Safe Orthopaedics’ Head of Sales Germany, added: “I’m very excited to be joining Safe Orthopaedics’ team and to be contributing to its development, following on from its solid performance in 2016. With its steadily growing international footprint and its unrelenting commitment to innovation, Safe Orthopaedics is a breakthrough force in back surgery. Its single-use technology is particularly well-suited for minimally-invasive techniques and for trauma surgeries. With this in mind, I will initially focus on traumatology to establish our sales base in Germany in this key segment before building a larger sales team and catering to the degenerative condition segment.”


About Safe Orthopaedics

Founded in 2010, Safe Orthopaedics is a French medical technology company that aims to make spinal surgeries safer by using sterile implants and associated single-use instruments. Through this approach, these products eliminate all risk of contamination, reduce infection risks and facilitate a minimally‑invasive approach for trauma and degenerative pathologies—benefiting patients. Protected by 17 patent families, the SteriSpineTM kits are CE-marked and FDA approved. The company is based at Eragny-sur-Oise (Val d’Oise department), and has 30 employees.

For more information, visit:



Safe Orthopaedics

Thierry Lambert

Tel. : +33 (0)1 34 21 50 00


Julien Perez/Valentine Brouchot
Investor Relations

Nicolas Merigeau
Press Relations

Tel. : +33 (0)1 44 71 94 94

Medical device makers stand to gain if Neil Gorsuch approved for Supreme Court


Emergo Survey: Regulatory Issues Remain Biggest Challenge for Most Medical Device Companies

February 27, 2017 by


  • Regulatory issues continue to be the biggest business challenge for medical device companies of all sizes.
  • Managers at smaller firms report greater concern for funding and capital issues, while largest firms are more challenged by pricing and competition pressures.
  • Medium- and large-sized firms cite product development as a significant challenge, as well.
  • Changing regulatory environments continue to present the biggest business challenge for a majority of medical device company senior managers, according to an annual Emergo industry survey.

    Asked to identify the biggest business challenge they face as part of Emergo’s 2017 Global Medical Device Industry Outlook, nearly 70% of more than 500 senior managers of medical device companies surveyed cited changing regulatory environments as their top issue. But depending on respondents’ size, other challenges such as product development, profitability and funding were also identified.

  • Medical device regulatory challenges: still number one

    Regulatory issues perennially top the list of business challenges in Emergo’s industry surveys, and this year was no different. But while 66% of senior managers identified regulatory changes generally as their biggest challenge, managers of larger firms were more likely to cite regulatory changes as their top concern.



U.S. Knee Implant Market to Register Substantial Expansion by 2024

03-02-2017 – Press release from: TMR, Research Reports

The U.S. market for knee implants a matured market and projected to witness steady growth over the forthcoming years. The technological advancements in knee implants, such as the usage of 3D printing, biocompatible materials, robotic-assisted surgeries, and navigation technology are likely to drive this market in coming years. Apart from this, the increasing health care expenditure and the rising population of geriatric individuals are also anticipated to contribute to the growth of this market significantly.

Browse Market Research Report @…

The U.S. knee implant market stood at US$4.3 bn in 2015 and is expected to protrude at a CAGR of 5.30% between 2016 and 2024 and reach US$7.0 bn by 2024.

Hospitals to Remain Key End Users of Knee Implants
Hospitals, ambulatory surgical centers, and specialized orthopedic clinics are the main end users of knee implants in the U.S. The demand for knee implants is much higher from hospitals than other end users. The hospitals segment held a share of more than 43% of the overall demand for knee implants in the country in 2015. With the presence of hospitals in a very large number, this segment is likely to remain the topmost end user of knee implants in the U.S.

Ambulatory surgery centers are also expected to emerge as a lucrative end-use segment for knee implant manufacturers in the U.S. over the next few years. As these centers offer modern health care facilities and emphasize on providing same-day surgical care, including diagnostics and preventive procedures, which has begun to reflect positively on the demand for knee implants from these centers. Apart from this, the shifting preference of patients from hospitals to ambulatory service centers, owing to the after care services, cost-effective care, and minimally invasive surgeries provided by the latter, is also projected to influence the demand for knee implants from these centers in the near future.



Amend Surgical Announces 510(K) Clearance for NanoFUSE® BA

March 02, 2017

ALACHUA, Fla.–(BUSINESS WIRE)–Amend Surgical, Inc., a medical device company focused on enhancing the regenerative capacity of bone replacement products, announced today that they have received 510(K) clearance to market NanoFUSE® BA as a bone graft extender for spine and orthopedic applications.

NanoFUSE BA is a novel composite containing 45S5 Bioactive Glass and a patent protected carrier that provides optimal surgical handling performance and graft stability. Bioactive glass facilitates operative site graft containment through rapid bone bonding and the subsequent activation of cellular osteogenesis (bone formation). It creates a highly favorable environment for bone fusion as it remodels into the recipient’s skeletal system and is an important tool for the orthopedic surgeon. With this most recent clearance Amend Surgical now has two U.S. Food and Drug Administration (FDA) cleared product lines.

“NanoFUSE BA offers our surgeons and their patients a synthetic alternative to NanoFUSE Bioactive Matrix,” stated Robby Lane, president and chief executive officer of Amend Surgical. “We are continuing to expand our market presence with the only demineralized bone bioactive glass combination product on the market and are excited about the opportunities offered by the launch of NanoFUSE BA. This product provides surgeons the superior handling characteristics they expect with the long and successful clinical history of bioactive glass.”

About Amend Surgical

Amend Surgical is a specialty medical device company focused on enhancing the bone healing and regenerative capacity of bone grafts, including allograft, xenograft tissues and synthetic materials. The company’s pipeline includes novel, clinically evaluated, osteoinductive bone extracts, and will expand in the future to disruptive products based on discovery and development of novel therapeutic additives with tissue-specific regenerative characteristics.


Amend Surgical, Inc.
Robby Lane, 386-518-5546
President and CEO

MiMedx Audit Committee Announces Completion Of Its Investigation

MARIETTA, Ga., March 1, 2017 /PRNewswire/ — MiMedx Group, Inc. (NASDAQ: MDXG), the leading regenerative medicine company utilizing human placental tissue allografts and patent-protected processes to develop and market advanced products and therapies for the Wound Care, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic, and Dental sectors of healthcare, announced today that the Audit Committee of its Board of Directors has completed its investigation and found no merit regarding allegations of wrongdoing that were made by two former employees against the Company.

As previously disclosed, the Company terminated two employees in December 2016 when it was discovered that the employees were selling products for other companies, some of which were competitive with the Company’s products, in violation of their contractual and common law duties to MiMedx. Following their terminations, MiMedx filed suit against these employees, and the employees in turn filed a wrongful termination suit against MiMedx asserting various allegations. Subsequently, the former employees dismissed their lawsuit and then brought wrongful terminations claims in different venues where the Company has filed suits against them.

The Audit Committee worked closely with independent counsel to conduct an extensive investigation into the claims alleged by these former employees. The Audit Committee has completed its investigation and confirmed there is no credible evidence of any wrongdoing on behalf of members of MiMedx management. The lawsuits with these former employees are ongoing and management continues to believe that the employees’ legal claims and accompanying allegations are without merit.

The Audit Committee’s findings have been submitted to and approved by the Company’s Board of Directors. The Audit Committee’s investigation determined that the Company has appropriately recognized revenue and found no credible evidence to indicate that any changes to the Company’s previously issued financial statements are necessary in light of the former employees’ allegations.

About MiMedx

MiMedx® is an integrated developer, processor and marketer of patent protected and proprietary regenerative biomaterial products and bioimplants processed from human amniotic membrane and other human birth tissues, such as amniotic fluid, umbilical cord and placental collagen, and human skin and bone. “Innovations in Regenerative Biomaterials” is the framework behind our mission to give physicians products and tissues to help the body heal itself. We process the human amniotic membrane utilizing our proprietary PURION® Process, to produce a safe and effective implant. MiMedx proprietary processing methodology employs aseptic processing techniques in addition to terminal sterilization. MiMedx is the leading supplier of amniotic tissue, having supplied over 700,000 allografts to date for application in the Wound Care, Burn, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic and Dental sectors of healthcare.

Safe Harbor Statement

This press release includes statements that look forward in time or that express management’s beliefs, expectations or hopes. Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the Company’s beliefs regarding the validity of the employees’ claims. These statements are based on current information and belief, and are not guarantees of future performance. Among the risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements include the normal risks of litigation, and the risk factors detailed from time to time in the Company’s periodic Securities and Exchange Commission filings, including, without limitation, its 10-K filing for the fiscal year ended December 31, 2016, and its most recent Form 10Q filing. By making these forward-looking statements, the Company does not undertake to update them in any manner except as may be required by the Company’s disclosure obligations in filings it makes with the Securities and Exchange Commission under the federal securities laws.

SOURCE MiMedx Group, Inc.

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