Zimmer Biomet Reports Second Quarter 2017 Financial Results

WARSAW, Ind.July 27, 2017 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended June 30, 2017.  The Company reported second quarter net sales of $1.954 billion, an increase of 1.1% over the prior year period, and an increase of 2.1% on a constant currency basis.  Excluding approximately 240 basis points of contribution from the LDR Holding Corporation acquisition, second quarter 2017 revenues decreased 1.3% from the second quarter of 2016, or 0.3% on a constant currency basis.

Diluted earnings per share for the quarter were $0.90.  Adjusted diluted earnings per share for the quarter were $2.08, an increase of 3.0% over the prior year period.

“During the second quarter, we increased production output from our Warsaw North Campus manufacturing facility, and continued to drive efforts to achieve best-in-class quality systems.  Our sales growth fell short of our expectations, due in part to production delays of certain key brands and slower-than-expected sales recapture from previously affected customers in the United States.  These factors have informed our updated outlook for the full year,” said Daniel P. Florin, Interim Chief Executive Officer, Senior Vice President and Chief Financial Officer of Zimmer Biomet.  “Looking forward, we remain focused on fully restoring product supply to enhance our commercial execution, while continuing to closely engage with our customers and take advantage of the opportunities in front of us.”

“We have great confidence in Dan as he transitions into the role of Interim CEO. He has already begun to leverage his deep knowledge of Zimmer Biomet and decades of medical device industry experience to lead the Company during this period,” said Larry C. Glasscock, Chairman of the Board of Zimmer Biomet.  “We have initiated a thorough search to identify the best candidate to serve as Zimmer Biomet’s next CEO.  We are seeking a strong leader, whose strategic and operational track record aligns with Zimmer Biomet’s commitment to growth and enhancing stockholder value.”

Net earnings for the second quarter were $184.2 million, and $424.6 million on an adjusted basis, an increase of 4.3% over the prior year period.  Operating cash flow for the second quarter was $440.5 million.

In the quarter, the Company paid $48.4 million in dividends and declared a second quarter dividend of $0.24 per share.  The Company has made approximately $650 million of net debt repayments through the first half of 2017.

Guidance
The Company is updating its full-year 2017 constant currency revenue and adjusted earnings per share guidance.  For the full year, the Company now expects revenue in the range of $7.80 billion to $7.87 billion, representing constant currency revenue growth of 1.8% to 2.7% compared to the prior year, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Previously, the Company had expected full-year, constant currency revenue growth between 3.2% and 4.2%, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Additionally, the Company now expects its full-year 2017 diluted earnings per share to be in a range of $4.15 to $4.35, and in a range of $8.20 to $8.30 on an adjusted basis.  Previously, the Company had expected full-year 2017 diluted earnings per share to be in a range of $4.68 to $4.88, and in a range of $8.50 to $8.60 on an adjusted basis.

For the third quarter of 2017, the Company expects revenue in the range of $1.815 billion to $1.845 billion, representing constant currency revenue growth of negative 0.5% to positive 1.0% compared to the prior year period, inclusive of approximately 30 basis points of contribution from the LDR transaction.  Additionally, the Company expects its diluted earnings per share for the third quarter to be in a range of $0.60 to $0.70, and in a range of $1.72 to $1.77 on an adjusted basis.

Conference Call
The Company will conduct its second quarter 2017 investor conference call today, July 27, 2017, at 8:00 a.m. Eastern Time.  The live audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at http://investor.zimmerbiomet.com.  It will be archived for replay following the conference call.

Individuals in the U.S. and Canada who wish to dial into the conference call may do so by dialing (888) 312-9837 and entering conference ID 7278985.  For a complete listing of international toll-free and local numbers, please visit http://investor.zimmerbiomet.com.  A digital recording will be available 24 hours after the completion of the conference call, from July 28, 2017 to August 26, 2017.  To access the recording, U.S. callers should dial (888) 203-1112 and international callers should dial +1 (719) 457-0820, and enter the Access Code ID 7278985.

Sales Tables
The following sales tables provide results by geography and product category, as well as the percentage change compared to the prior year quarter and six months, on both a reported and a constant currency basis.

NET SALES – THREE MONTHS ENDED JUNE 30, 2017

(in millions, unaudited)

Constant

Net

Currency

Sales

% Change

% Change

Geographic Results

      Americas

$

1,209

2.3

%

2.5

%

      EMEA

438

(4.9)

(1.8)

      Asia Pacific

307

5.3

6.8

            Total 

$

1,954

1.1

%

2.1

%

Product Categories

     Knees

        Americas

$

406

(2.7)

%

(2.6)

%

        EMEA

159

(5.3)

(1.7)

        Asia Pacific

115

3.4

4.2

            Total

680

(2.4)

(1.3)

Hips

       Americas

245

(1.4)

(1.2)

       EMEA

131

(5.7)

(3.0)

       Asia Pacific

94

4.4

6.6

            Total

470

(1.5)

(0.2)

S.E.T (1)

423

2.6

3.6

Dental

110

(6.4)

(5.7)

Spine & CMF

194

33.0

33.5

Other

77

(8.0)

(7.0)

     Total

$

1,954

1.1

%

2.1

%

(1)  Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

NET SALES – SIX MONTHS ENDED JUNE 30, 2017

(in millions, unaudited)

Constant

Net

Currency

Sales

% Change

% Change

Geographic Results

     Americas

$

2,444

3.6

%

3.6

%

     EMEA

891

(2.8)

0.6

     Asia Pacific

597

6.1

6.4

          Total 

$

3,932

2.4

%

3.3

%

Product Categories

     Knees

       Americas

$

835

(1.4)

%

(1.4)

%

       EMEA

328

(4.4)

(0.4)

       Asia Pacific

219

4.1

3.7

             Total

1,382

(1.3)

(0.4)

Hips

   Americas

492

(0.6)

(0.6)

   EMEA

267

(3.1)

(0.2)

   Asia Pacific

187

6.9

7.8

            Total

946

1.1

S.E.T (1)

848

4.3

5.0

Dental

218

(3.7)

(2.9)

Spine & CMF

380

32.5

32.8

Other

158

(4.9)

(4.1)

     Total

$

3,932

2.4

%

3.3

%

(1) Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

About the Company
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare. We design, manufacture and market orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; office based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products.

We collaborate with healthcare professionals around the globe to advance the pace of innovation. Our products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. Together with healthcare professionals, we help millions of people live better lives.

We have operations in more than 25 countries around the world and sell products in more than 100 countries. For more information, visit www.zimmerbiomet.com or follow Zimmer Biomet on Twitter at www.twitter.com/zimmerbiomet.

Website Information
We routinely post important information for investors on our website, www.zimmerbiomet.com, in the “Investor Relations” section.  We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.  Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.  The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

Note on Non-GAAP Financial Measures
This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).  These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

Sales change information for the three- and six-month periods ended June 30, 2017 is presented on a GAAP (reported) basis and on a constant currency basis, as well as on a basis that excludes the contribution from the Company’s acquisition of LDR Holding Corporation in July 2016.  Constant currency rates exclude the effects of foreign currency exchange rates.  They are calculated by translating current and prior-period sales at the same predetermined exchange rate.  The translated results are then used to determine year-over-year percentage increases or decreases.  Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release.

Net earnings, diluted earnings per share and projected diluted earnings per share are presented on a GAAP (reported) basis and on an adjusted basis.  Adjusted diluted earnings per share excludes the effects of inventory step-up; certain inventory and manufacturing-related charges connected to discontinuing certain product lines, quality enhancement and remediation efforts; special items; intangible asset amortization; any related effects on our income tax provision associated with these items; and other certain tax adjustments.  Special items include expenses resulting directly from our business combinations and/or global restructuring, quality and operational excellence initiatives, including employee termination benefits, certain contract terminations, consulting and professional fees, dedicated project personnel, asset impairment or loss on disposal charges and other items.  Other certain tax adjustments include a tax restructuring that lowered the tax rate on deferred tax liabilities recorded on intangible assets recognized in acquisition-related accounting, net favorable resolutions of various tax matters, and charges from internal restructuring transactions that provide the Company access to cash in a tax efficient manner.

Management uses these non-GAAP financial measures internally to evaluate the performance of the business and believes they are useful measures that provide meaningful supplemental information to investors to consider when evaluating the performance of the Company.  Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported operating results, to perform trend analysis, to better identify operating trends that may otherwise be masked or distorted by these types of items and to provide additional transparency of certain items.  In addition, certain of these non-GAAP financial measures are used as performance metrics in the Company’s incentive compensation programs.

Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding sales and earnings guidance and any statements about our expectations, plans, strategies or prospects.  We generally use the words “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees,” “seeks,” “should,” “could,” “intends” and similar expressions to identify forward-looking statements.  Such statements are based upon the current beliefs and expectations of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially.  These risks, uncertainties and changes in circumstances include, but are not limited to: our chief executive officer transition, including disruptions and uncertainties related thereto, our ability to appoint a permanent successor with the desired level of experience and expertise in a timely manner, the potential impact on our business and future strategic direction resulting from our transition to a new chief executive officer, and our ability to retain other key members of senior management; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, vendors and lenders and on our operating results and businesses generally; compliance with the Deferred Prosecution Agreement entered into in January 2017; the success of our quality and operational excellence initiatives; challenges relating to changes in and compliance with governmental laws and regulations, including regulations of the U.S. Food and Drug Administration (FDA) and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the ability to remediate matters identified in any inspectional observations or warning letters issued by the FDA, while continuing to satisfy the demand for our products; the outcome of government investigations; price and product competition; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts of healthcare purchasing organizations; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; control of costs and expenses; the ability to obtain and maintain adequate intellectual property protection; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures or examinations by tax authorities; product liability and intellectual property litigation losses; the ability to retain the independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; changes in general industry and market conditions, including domestic and international growth rates and general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the impact of the ongoing economic uncertainty affecting countries in the Euro zone on the ability to collect accounts receivable in affected countries.  For a further list and description of such risks and uncertainties, see our reports filed with the U.S. Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2016 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.  Copies of these filings, as well as subsequent filings, are available online at www.sec.govwww.zimmerbiomet.com or on request from us.  Forward-looking statements speak only as of the date they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Readers of this release are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate.  This cautionary statement is applicable to all forward-looking statements contained in this release.

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF EARNINGS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, except per share amounts, unaudited) 

2017

2016

 Net Sales 

$     1,954.4

$     1,934.0

 Cost of products sold, excluding intangible asset amortization 

527.7

640.1

 Intangible asset amortization 

147.7

133.8

 Research and development 

90.1

88.6

 Selling, general and administrative 

748.0

732.0

 Special items 

158.6

137.9

      Operating expenses 

1,672.1

1,732.4

 Operating Profit 

282.3

201.6

 Other expense, net 

(3.9)

(3.8)

 Interest income  

0.3

0.8

 Interest expense 

(82.3)

(88.1)

 Earnings before income taxes 

196.4

110.5

 Provision for income taxes 

12.3

142.2

 Net Earnings (Loss) 

184.1

(31.7)

 Less: Net Loss attributable to noncontrolling interest 

(0.1)

(0.4)

 Net Earnings (Loss) of Zimmer Biomet Holdings, Inc. 

$       184.2

$        (31.3)

 Earnings (Loss) Per Common Share 

     Basic 

$          0.91

$        (0.16)

     Diluted 

$          0.90

$        (0.16)

 Weighted Average Common Shares Outstanding 

     Basic 

201.8

199.4

     Diluted 

203.7

199.4

 Cash Dividends Declared Per Common Share 

$          0.24

$          0.24

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF EARNINGS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, except per share amounts, unaudited) 

2017

2016

 Net Sales 

$     3,931.7

$     3,838.0

 Cost of products sold, excluding intangible asset amortization 

1,040.6

1,280.7

 Intangible asset amortization 

299.7

260.4

 Research and development 

181.2

174.3

 Selling, general and administrative 

1,508.8

1,448.9

 Special items 

268.7

226.6

      Operating expenses 

3,299.0

3,390.9

 Operating Profit 

632.7

447.1

 Other expense, net 

(6.7)

(7.6)

 Interest income  

0.8

2.1

 Interest expense 

(165.2)

(176.3)

 Earnings before income taxes 

461.6

265.3

 (Benefit) provision for income taxes 

(21.8)

188.3

 Net Earnings 

483.4

77.0

 Less: Net Loss attributable to noncontrolling interest 

(0.2)

(0.5)

 Net Earnings of Zimmer Biomet Holdings, Inc. 

$        483.6

$          77.5

 Earnings Per Common Share 

     Basic 

$          2.40

$          0.39

     Diluted 

$          2.38

$          0.38

 Weighted Average Common Shares Outstanding 

     Basic 

201.4

199.8

     Diluted 

203.4

202.1

 Cash Dividends Declared Per Common Share 

$          0.48

$          0.48

 ZIMMER BIOMET HOLDINGS, INC. 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (in millions, unaudited) 

June 30,

December 31,

2017

2016

 Assets 

 Current Assets: 

   Cash and cash equivalents 

$               450.0

$               634.1

   Receivables, net 

1,464.0

1,604.4

   Inventories 

2,023.9

1,959.4

   Other current assets 

527.2

465.7

       Total current assets 

4,465.1

4,663.6

 Property, plant and equipment, net 

2,057.4

2,037.9

 Goodwill 

10,859.5

10,643.9

 Intangible assets, net 

8,544.0

8,785.4

 Other assets 

568.2

553.6

 Total Assets 

$          26,494.2

$          26,684.4

 Liabilities and Stockholders’ Equity 

 Current liabilities 

$            1,708.1

$            1,805.9

 Current portion of long-term debt 

1,329.3

575.6

 Other long-term liabilities 

3,822.9

3,967.2

 Long-term debt 

9,354.4

10,665.8

 Stockholders’ equity 

10,279.5

9,669.9

 Total Liabilities and Stockholders’ Equity 

$          26,494.2

$          26,684.4

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

2017

2016

 Cash flows provided by (used in) operating activities 

Net earnings 

$       483.4

$         77.0

Depreciation and amortization 

531.7

499.2

Share-based compensation 

27.7

30.7

Intangible asset impairment 

26.8

28.0

Inventory step-up 

30.9

286.4

Changes in operating assets and liabilities, net of acquired assets and liabilities

     Income taxes 

(210.4)

13.6

     Receivables 

187.8

(120.8)

     Inventories 

(68.8)

60.2

     Accounts payable and accrued expenses 

(162.7)

(141.9)

     Other assets and liabilities 

(130.5)

(80.0)

 Net cash provided by operating activities 

715.9

652.4

 Cash flows provided by (used in) investing activities 

 Additions to instruments 

(172.6)

(157.3)

 Additions to other property, plant and equipment 

(73.8)

(73.7)

 Purchases of investments 

(1.2)

 Sales of investments 

273.3

 Business combination investments, net of acquired cash 

(4.0)

(184.1)

 Other investing activities 

(11.7)

(27.4)

 Net cash used in investing activities 

(262.1)

(170.4)

 Cash flows provided by (used in) financing activities 

 Proceeds from multicurrency revolving facility 

400.0

 Payments on multicurrency revolving facility 

(400.0)

 Redemption of senior notes 

(500.0)

 Payments on term loan 

(150.0)

(500.0)

 Net payments on other debt 

(0.7)

(18.8)

 Dividends paid to stockholders 

(96.5)

(92.4)

 Proceeds from employee stock compensation plans 

105.5

78.6

 Business combination contingent consideration payments 

(8.1)

 Restricted stock witholdings 

(7.1)

(5.2)

 Repurchase of common stock 

(415.5)

 Net cash used in financing activities 

(656.9)

(953.3)

 Effect of exchange rates on cash and cash equivalents 

19.0

(11.7)

 Decrease in cash and cash equivalents 

(184.1)

(483.0)

 Cash and cash equivalents, beginning of period 

634.1

1,459.3

 Cash and cash equivalents, end of period 

$       450.0

$      976.3

 ZIMMER BIOMET HOLDINGS, INC. 

 NET SALES BY GEOGRAPHY 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

% Inc / (Dec)

2017

2016

% Inc / (Dec)

Americas 

$    1,208.8

$    1,181.0

2.3 %

$    2,443.6

$    2,358.2

3.6 %

EMEA 

438.2

460.9

(4.9)

891.4

917.2

(2.8)

Asia Pacific 

307.4

292.1

5.3

596.7

562.6

6.1

Total 

$    1,954.4

$    1,934.0

1.1

$    3,931.7

$    3,838.0

2.4

 ZIMMER BIOMET HOLDINGS, INC. 

 NET SALES BY PRODUCT CATEGORY 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

% Inc / (Dec)

2017

2016

% Inc / (Dec)

 Knees 

$        680.4

$        697.0

(2.4) %

$     1,382.2

$     1,400.2

(1.3) %

 Hips 

469.8

477.2

(1.5)

945.5

945.1

 S.E.T 

422.8

412.2

2.6

847.9

813.2

4.3

 Dental 

110.4

118.0

(6.4)

218.2

226.6

(3.7)

 Spine & CMF 

194.0

145.8

33.0

380.3

287.0

32.5

 Other 

77.0

83.8

(8.0)

157.6

165.9

(4.9)

 Total 

$     1,954.4

$     1,934.0

1.1

$     3,931.7

$     3,838.0

2.4

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE AND

% CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

For the Three Months Ended

June 30, 2017

Foreign

Constant

Exchange

Currency

 % Change 

Impact

% Change

Geographic Results

Americas

2.3

%

(0.2)

%

2.5

%

EMEA

(4.9)

(3.1)

(1.8)

Asia Pacific

5.3

(1.5)

6.8

Total 

1.1

%

(1.0)

%

2.1

%

Product Categories

Knees

   Americas

(2.7)

%

(0.1)

%

(2.6)

%

   EMEA

(5.3)

(3.6)

(1.7)

   Asia Pacific

3.4

(0.8)

4.2

       Total

(2.4)

(1.1)

(1.3)

Hips

   Americas

(1.4)

(0.2)

(1.2)

   EMEA

(5.7)

(2.7)

(3.0)

   Asia Pacific

4.4

(2.2)

6.6

       Total

(1.5)

(1.3)

(0.2)

S.E.T

2.6

(1.0)

3.6

Dental

(6.4)

(0.7)

(5.7)

Spine & CMF

33.0

(0.5)

33.5

Other

(8.0)

(1.0)

(7.0)

Net Sales % Change

1.1

%

(1.0)

%

2.1

%

Impact of LDR Holding Corporation

(2.4)

(2.4)

% Change excluding LDR Holding Corporation

(1.3)

%

(1.0)

%

(0.3)

%

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE AND

% CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

For the Six Months Ended

June 30, 2017

Foreign

Constant

Exchange

Currency

 % Change 

Impact

% Change

Geographic Results

Americas

3.6

%

%

3.6

%

EMEA

(2.8)

(3.4)

0.6

Asia Pacific

6.1

(0.3)

6.4

Total 

2.4

%

(0.9)

%

3.3

%

Product Categories

Knees

   Americas

(1.4)

%

%

(1.4)

%

   EMEA

(4.4)

(4.0)

(0.4)

   Asia Pacific

4.1

0.4

3.7

       Total

(1.3)

(0.9)

(0.4)

Hips

   Americas

(0.6)

(0.6)

   EMEA

(3.1)

(2.9)

(0.2)

   Asia Pacific

6.9

(0.9)

7.8

       Total

(1.1)

1.1

S.E.T

4.3

(0.7)

5.0

Dental

(3.7)

(0.8)

(2.9)

Spine & CMF

32.5

(0.3)

32.8

Other

(4.9)

(0.8)

(4.1)

       Total

2.4

%

(0.9)

%

3.3

%

Impact of LDR Holding Corporation

(2.3)

(2.3)

% Change excluding LDR Holding Corporation

0.1

%

(0.9)

%

1.0

%

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Three Months 

 Ended June 30, 

2017

2016

Net Earnings of Zimmer Biomet Holdings, Inc.

$       184.2

$        (31.3)

Inventory step-up and other inventory 

   and manufacturing-related charges

24.9

156.6

Intangible asset amortization

147.7

133.8

Special items

   Biomet merger-related

88.2

120.6

   Other special items

70.4

17.3

Merger-related and other (income) expense in other expense, net

(0.6)

1.5

Taxes on above items (1)

(102.2)

(96.3)

Biomet merger-related measurement period tax adjustments (2) 

73.2

Other certain tax adjustments(3)

12.0

31.7

Adjusted Net Earnings

$       424.6

$       407.1

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to charges from internal restructuring transactions that provide the 

    Company access to cash in a tax efficient manner partially offset by net favorable resolutions of various tax matters.  

    The 2016 adjustment relates to internal restructuring transactions that provide the Company access to cash in 

    a tax efficient manner.

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Six Months 

 Ended June 30, 

2017

2016

Net Earnings of Zimmer Biomet Holdings, Inc.

$       483.6

$         77.5

Inventory step-up and other inventory 

   and manufacturing-related charges

48.1

334.9

Intangible asset amortization

299.7

260.4

Special items

   Biomet merger-related

125.2

199.7

   Other special items

143.5

26.9

Merger-related and other expense in other expense, net

0.9

1.5

Taxes on above items (1)

(185.2)

(185.3)

Biomet merger-related measurement period tax adjustments (2) 

52.7

Other certain tax adjustments(3)

(57.8)

46.0

Adjusted Net Earnings

$       858.0

$       814.3

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to a tax restructuring that lowered the tax rate on deferred tax liabilities 

     recorded on intangible assets recognized in acquisition-related accounting, net favorable resolutions of various tax 

     matters, and charges from internal restructuring transactions that provide the Company access to cash in a tax efficient 

     manner.  The 2016 adjustment relates to internal restructuring transactions that provide the Company access to 

     cash in a tax efficient manner.

 ZIMMER BIOMET HOLDINGS, INC. 

      RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (unaudited) 

 Three Months 

 Ended June 30, 

2017

2016

Diluted EPS

$                   0.90

$                     (0.16)

Inventory step-up and other inventory 

   and manufacturing-related charges

0.12

0.77

Intangible asset amortization

0.73

0.66

Special items

   Biomet merger-related

0.43

0.60

   Other special items

0.35

0.09

Merger-related expense in other expense, net

0.01

Taxes on above items (1)

(0.51)

(0.48)

Biomet merger-related measurement period tax adjustments (2) 

0.36

Other certain tax adjustments(3)

0.06

0.16

Effect of dilutive shares assuming net earnings (4)

0.01

Adjusted Diluted EPS

$                   2.08

$                       2.02

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to charges from internal restructuring transactions that provide the 

    Company access to cash in a tax efficient manner partially offset by net favorable resolutions of various tax matters.  

    The 2016 adjustment relates to internal restructuring transactions that provide the Company access to cash in 

    a tax efficient manner.

(4) Diluted share count used in Adjusted Diluted EPS:

Three Months Ended
June 30, 2016

         Diluted shares 

199.4

         Dilutive shares assuming net earnings 

2.5

      Adjusted diluted shares 

201.9

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (unaudited) 

 Six Months 

 Ended June 30, 

2017

2016

Diluted EPS

$                   2.38

$                       0.38

Inventory step-up and other inventory 

   and manufacturing-related charges

0.24

1.66

Intangible asset amortization

1.47

1.29

Special items

   Biomet merger-related

0.62

0.98

   Other special items

0.71

0.13

Merger-related and other expense in other (expense) income, net

0.01

Taxes on above items (1)

(0.91)

(0.91)

Biomet merger-related measurement period tax adjustments (2) 

0.26

Other certain tax adjustments(3)

(0.29)

0.23

Adjusted Diluted EPS

$                   4.22

$                       4.03

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to a tax restructuring that lowered the tax rate on deferred tax liabilities 

     recorded on intangible assets recognized in acquisition-related accounting, net favorable resolutions of various tax 

     matters, and charges from internal restructuring transactions that provide the Company access to cash in a tax efficient 

     manner.  The 2016 adjustment relates to internal restructuring transactions that provide the Company access to 

     cash in a tax efficient manner.

  ZIMMER BIOMET HOLDINGS, INC. 

  SUMMARY OF EXPENSES INCLUDED IN SPECIAL ITEMS 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Three Months 

 Six Months 

 Ended June 30, 

 Ended June 30, 

2017

2016

2017

2016

 Biomet merger-related 

 Consulting and professional fees 

$     22.1

$     43.3

$     40.8

$     79.4

 Employee termination benefits 

9.6

3.1

6.6

7.2

 Dedicated project personnel 

14.2

21.2

22.9

42.9

 Relocated facilities 

1.5

6.3

4.3

8.0

 Contract terminations 

15.2

25.3

 Information technology integration 

1.3

3.1

3.6

4.5

 Intangible asset impairment 

26.8

28.0

26.8

28.0

 Other 

12.7

0.4

20.2

4.4

 Total Biomet merger-related 

88.2

120.6

125.2

199.7

 Other 

 Consulting and professional fees 

51.7

8.8

102.1

15.7

 Employee termination benefits 

1.4

2.6

 Dedicated project personnel 

8.7

1.5

21.5

3.3

 Relocated facilities 

0.1

2.5

0.2

 Certain litigation matters 

7.0

 Contract terminations 

1.0

1.0

 Information technology integration 

0.3

0.2

0.8

0.3

 Certain R&D agreements 

2.5

2.5

 Loss/impairment on assets 

1.1

1.1

 Contingent consideration adjustments 

0.4

(3.2)

 Other 

5.3

4.7

7.7

5.3

 Total Other 

70.4

17.3

143.5

26.9

 Special items 

$   158.6

$   137.9

$   268.7

$   226.6

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF 2017 PROJECTED REVENUE % CHANGE TO

2017 PROJECTED CONSTANT CURRENCY % CHANGE AND

CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

 Projected Three Months Ended September 30, 2017: 

 High

 Low

 Revenue % change 

0.5

%

(1.0)

%

 Foreign exchange impact 

0.5

0.5

    Constant currency % change 

1.0

%

(0.5)

%

 Impact of LDR Holding Corporation 

(0.3)

(0.3)

    Constant currency % change excluding LDR Holding Corporation 

0.7

%

(0.8)

%

 Projected Year Ended December 31, 2017: 

 High

 Low

 Revenue % change 

2.4

%

1.5

%

 Foreign exchange impact 

0.3

0.3

    Constant currency % change 

2.7

%

1.8

%

 Impact of LDR Holding Corporation 

(1.2)

(1.2)

    Constant currency % change excluding LDR Holding Corporation 

1.5

%

0.6

%

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF 2017 PROJECTED DILUTED EPS 

 AND PROJECTED ADJUSTED DILUTED EPS 

 (unaudited) 

Projected Three Months Ended September 30, 2017:

High

Low

Diluted EPS

$                      0.70

$            0.60

Inventory step-up and other inventory and manufacturing related

   charges, intangible asset amortization, special items and other expense 

1.51

1.58

Taxes on above items(1) and other certain tax adjustments

(0.44)

(0.46)

Adjusted Diluted EPS

$                      1.77

$            1.72

Projected Year Ended December 31, 2017:

High

Low

Diluted EPS

$                      4.35

$            4.15

Inventory step-up and other inventory and manufacturing related

   charges, intangible asset amortization, special items and other expense 

6.08

6.23

Taxes on above items(1) and other certain tax adjustments

(2.13)

(2.18)

Adjusted Diluted EPS

$                      8.30

$            8.20

(1) The tax effect for the U.S. jurisdiction is estimated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is estimated based upon the statutory 

     rates where the items are projected to be incurred.

 

SOURCE Zimmer Biomet Holdings, Inc.

4WEB Medical Announces First U.S. Surgeries with 3D Printed Lateral Spine Truss System

NEW YORKJuly 27, 2017 /PRNewswire/ — 4WEB Medical, the industry leader in 3D printed implant technology, announced today the first surgeries utilizing the company’s Lateral Spine Truss System were recently performed in several notable hospitals in the United States. The company’s lateral interbody fusion device was designed to solve known surgical problems associated with legacy annular implant designs and represents a significant advancement in lateral access surgery.

“4WEB’s spine truss implants have proven to be very effective in providing excellent surgical outcomes for my patients,” said Frank Cammisa, MD, Hospital for Special Surgery, New York, NY. “In contrast to older ring-shaped implants with hollow cores, 4WEB’s truss implant web structure spans the entire endplate providing strong initial fixation and minimizing subsidence.”

The Lateral Spine Truss System is designed with a unique bi-convex dome that distributes load across a larger surface area and has three times more textured surface topography when compared to other competitive spine implants. The key differentiator for the product, though, is its proprietary truss design and the performance it lends to driving successful spine fusion results.

“A recent study comparing 4WEB’s lateral truss implant to a ring implant design demonstrated that the truss design had superior resistance to subsidence,” said John Peloza, MD, Center for Spine Care, Dallas, Texas.  “In fact, the 40mm length truss implant displayed 61% greater resistance to subsidence than the 60mm length ring implant1. These results are indicative of the optimized load distribution inherent to 4WEB’s truss implant technology that maximizes endplate contact while providing an open architecture for bone formation and fusion.”

4WEB Medical is an implant device company founded in 2008 in Dallas, Texas. Thirty years of research in topological dimension theory led to the discovery of a novel geometry, the 4WEB, that can be used as a building block to create high-strength, lightweight web structures. The company leveraged this breakthrough along with cutting-edge 3D printing technology to develop 4WEB Medical’s proprietary truss implant platform. The 4WEB Medical product portfolio includes the Cervical Spine Truss System, the ALIF Spine Truss System, the Posterior Spine Truss System, the Lateral Spine Truss System, and the Osteotomy Truss System. 4WEB is actively developing truss implant designs for knee, hip, trauma and patient specific orthopedic procedures.

For more information about 4WEB Medical, 4WEB’s Truss Implant Technology, and the Spine Truss Systems, please visit www.4WEBMedical.com.

  1. Kiapour, A.  Evaluation and Comparison of Subsidence Properties of 4WEB Lateral Device versus an Annular Lateral Device.

SOURCE 4WEB Medical

Related Links

http://www.4webmedical.com

Anika Announces Appointment of Joseph Darling as President

July 27, 2017

BEDFORD, Mass.–(BUSINESS WIRE)–Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic medicines company specializing in therapeutics based on its proprietary hyaluronic acid (“HA”) technology, today announced the appointment of Joseph Darling, an orthopedic and medical device veteran with broad commercial experience, to the role of President. For the past 15 years, the Company’s Chief Executive Officer (CEO), Dr. Charles H. Sherwood served as President and plans to transition the role to Mr. Darling, while continuing his tenure as CEO. Mr. Darling brings more than 20 years of executive management and leadership experience from publicly-traded, commercial-stage companies including Baxter Healthcare, Smith & Nephew, ConMed, and Wyeth-Ayerst.

“Anika is at the cusp of a transformation. We are ushering in the next decade of growth through the build-out of a direct commercialization capability, a steady march of global expansion, and a pipeline that includes multiple potential blockbuster products,” said Charles H. Sherwood, Ph.D., Chief Executive Officer of Anika Therapeutics. “With his established track record overseeing global sales and marketing efforts at leading medical device companies, Mr. Darling is uniquely suited to help drive continued growth and spearhead Anika’s direct commercialization initiative. The company’s leadership team and our Board are excited for Mr. Darling to bring his deep expertise to the table during this exciting period.”

Most recently, Mr. Darling held executive leadership positions with two small privately held orthopedic companies. Prior to these roles, Mr. Darling held senior level executive positions at ConMed Corporation, a global, publicly-held, diversified medical device company, as Global President of its wholly-owned subsidiary, Linvatec Corporation, and as Executive Vice President of Global Corporate Commercial Operations. At ConMed, Mr. Darling led five global business units with $760 million in annual revenues and refocused organizational efforts in sales, marketing, and R&D.

“Dr. Sherwood and his leadership team have built Anika into an innovative, high growth, profitable, and global orthopedic company with a diversified portfolio that includes differentiated, market-leading therapeutic products and an emerging orthopedic medicine pipeline with tremendous potential,” said Mr. Darling. “I’m excited to join Anika during, what I believe to be, a pivotal moment in its 25-year history. My extensive commercial operations background in the orthopedic sector will prove to be integral to executing the company’s long-term growth strategy.”

Before ConMed, Mr. Darling was Senior Vice President and General Manager for the sports medicine business at Smith & Nephew and played an important role in defining a global strategy that propelled the company to a leadership position in the sports medicine field. Mr. Darling launched his career at Abbott Laboratories and Wyeth-Ayerst Pharmaceuticals, where he held management positions in sales and marketing before joining Baxter Healthcare as a Vice President of marketing and health systems. Mr. Darling holds a Bachelor of Arts in Political Science from Syracuse University. Click HERE to view Mr. Darling’s full bio.

About Anika Therapeutics, Inc.

Anika Therapeutics, Inc. (NASDAQ: ANIK) is a global, integrated orthopedic medicines company based in Bedford, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative cartilage repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika’s orthopedic medicine portfolio includes ORTHOVISC®MONOVISC®, and CINGAL®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST®, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the first and second sentences of the second paragraph of this press release, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to the Company’s direct commercial capability, global expansion efforts, and the strength of the Company’s product pipeline. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties, and other factors. The Company’s actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company’s ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company’s ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company’s research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company’s clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company’s ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company’s ability to provide an adequate and timely supply of its products to its customers; and (x) the Company’s ability to achieve its growth targets. Additional factors and risks are described in the Company’s periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC’s website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.

Contacts

For Investor Inquiries:
Anika Therapeutics, Inc.
Sylvia Cheung, 781-457-9000
Chief Financial Officer
or
For Media Inquiries:
Pure Communications
Sonal Vasudev, 917-523-1418
sonal@purecommunicationsinc.com

Samumed Successfully Completed 52-Week Phase 2 Study for Treatment of Osteoarthritis of the Knee

July 27, 2017

SAN DIEGO–(BUSINESS WIRE)–Samumed, a leader in cartilage regeneration research, today announced the successful completion of a 52-week Phase II clinical trial of its potential treatment for osteoarthritis (“OA”) of the knee. SM04690 is a novel, small molecule inhibitor of the Wnt pathway, administered as an intra-articular injection. SM04690 appeared safe and well-tolerated at all dose levels studied. There were 29 serious adverse events reported, none of which were deemed related to SM04690, as assessed by the investigators. A detailed analysis of 52-week results of this Phase II study, including safety, pain and function scores, and disease modification, will be presented at future medical conferences.

“The completion of our Phase II clinical trial of SM04690 for the potential treatment of OA of the knee marks an important milestone for physicians, patients, and our development program,” said Dr. Yusuf Yazici, Samumed’s Chief Medical Officer. “While the current standard of care is focused on relieving signs and symptoms of the disease, SM04690 has the potential to be the first disease-modifying treatment approved for OA of the knee.”

Samumed presented 26-week interim data last month at the annual European League Against Rheumatism (EULAR) Congress in Madrid, Spain. SM04690, studied as a once annual injection, showed promising efficacy and safety at the six-month timepoint. The product appeared to potentially regrow cartilage, as demonstrated by increased medial joint space width on x-ray of the treated knee, and also appeared to improve both pain and function scores in patients compared to placebo. The presentations can be viewed at: http://bit.ly/2tZVN2lhttp://bit.ly/2sBTimi

SM04690 is in development as a potential disease modifying drug for knee OA (DMOAD) designed to increase chondrocyte production to generate new articular cartilage, reduce protease production to slow down cartilage degradation, and reduce inflammation in the joint. This Phase II trial was a randomized, double-blind, placebo-controlled study, to determine the safety and efficacy of SM04690. The study enrolled across 36 clinical sites in the US a total of 455 patients with moderate-to-severe OA of the knee. Subjects received a single injection of SM04690, with pain and function scores assessed by WOMAC and disease modification assessed by medial joint space width by x-ray. Study details can be reviewed at: http://bit.ly/2eOINuv

About Osteoarthritis (OA)

Arthritis is the most common cause of disability among adults, and OA is the most common type of arthritis, accounting for much of this burden. The overall number of US adults affected by OA in any joint has increased during recent decades, to 27 million in 2005, primarily due to an aging population and an ever-increasing prevalence of obesity. OA is characterized by pain, disability and joint deformity due to articular cartilage degradation and bone remodeling.

About Samumed, LLC

Based in San Diego, CA, Samumed (www.samumed.com) is a pharmaceutical platform company focused on advancing regenerative medicine and oncology applications through research and innovation. Samumed has discovered new targets and biological processes in the Wnt pathway, allowing the team to develop small molecule drugs that potentially address numerous degenerative conditions as well as many forms of cancer.

Contacts

For Samumed
Chrissy Randall, 202-393-7337
crandall@brunswickgroup.com

Back Pain Centers of America Announces Titan Spine as the Winner in the Awards of Excellence, “Technology Innovation” Category

Back Pain Centers of America (BPC), which connects people searching for solutions to their neck and back pain with a reputable physician in their area, announces that Titan Spine’s nanoLOCK® Surface Technology is the winner of the 2017 Awards of Excellence for the Technology Innovation Award. This award is one of three categories of awards being presented in our 2017 series. The technology innovation award recognizes the top innovations advancing the field of orthopedic medicine.

The nanoLOCK® surface technology is a proprietary combination of textures at the macro, micro, and nano scales (MMN™) that has been shown to upregulate a significantly greater amount of bone growth factors necessary for fusion as compared to polyetheretherketone (PEEK), smooth titanium, and the company’s current titanium roughened surface. It is the next generation of the company’s current surface technology that has been implanted in patients since 2006.

“We are delighted to receive this award from Back Pain Centers of America,” said Andrew Shepherd, vice-president of marketing for Titan Spine. “Our nanoLOCK surface technology was developed with the goal of helping patients heal faster following back fusion surgery by interfacing with the patient’s cells at the nano level. We are pleased for the recognition it has generated.”

“We created this award category to recognize innovation and advances in medicine and technology,” said Brent Wheeler, president of Back Pain Centers of America. “We applaud Titan Spine for their innovation in taking spinal fusion procedures to the next level.”

More information about Titan Spine’s nanoLOCK® Surface Technology can be found at this link.

About Back Pain Centers of America
Back Pain Centers of America (BPC) has helped people find safe, reliable relief for chronic pain since 2009. The call centers match patients searching for relief for neck and back pain to reputable, board-certified healthcare practices in their geographic area. BPC has the largest network of minimally-invasive spine centers in America. This service is free to patients. For more information, please visit http://www.backpaincenters.com. Also follow BPC on LinkedIn, Facebook, or Twitter.

Amplitude Surgical – FY 2016-17: H2 Sales of over €50m; Annual Sales of €93m, up +16%

July 26, 2017

VALENCE, France–(BUSINESS WIRE)–Regulatory News:

Amplitude Surgical (Paris:AMPLI) (ISIN: FR0012789667, Ticker: AMPLI, PEA-PME eligible), a leading French player on the global surgical technology market for lower-limb orthopedics, today announces its sales for its 2016-17 financial year.

Olivier Jallabert, Chairman and CEO of Amplitude Surgical, says: “With new record half and full-year sales, 2016-17 perfectly illustrates Amplitude Surgical’s excellent dynamism since its creation in 1997, with 20 years of continuous strong organic growth. The result of the Group’s numerous assets, and notably its innovation and execution ability supported by efficient and motivated teams in every country in which we operate, the 16% increase in sales recorded over the financial year is perfectly in line with our implementation strategy, and bolsters our target of doubling sales in five years.

Q4 2016-17 sales

30/06/2017 30/06/2016 Δ actual

Δ constant
currency

€ thousands – IFRS
France 13,883 12,940 7.3% 7.3%
International 10,285 9,108 12.9% 10.2%
of which: Subsidiaries 7,400 6,085 21.6% 17.5%
of which: Distributors 2,885 3,023 -4.6% -4.6%
Total 24,168 22,048 9.6% 8.5%

FY 2016-17 sales

30/06/2017 30/06/2016 Δ actual

Δ constant
currency

€ thousands – IFRS
France 58,145 52,318 11.1% 11.1%
International 35,192 28,416 23.8% 18.8%
of which: Subsidiaries 25,380 20,477 23.9% 16.6%
of which: Distributors 9,812 7,939 23.6% 23.6%
Total 93,337 80,734 15.6% 13.8%

Amplitude Surgical’s buoyant growth momentum continued over its 2016-17 financial year to June 30, 2017, with sales totaling €93.3 million, up +15.6% in actual terms and +13.8% at constant currency. Over the fourth quarter (from April to June), sales totaled €24.2 million, an increase of +9.6%, or +8.5% at constant currency.

On the French market, Amplitude Surgical continued to record solid growth, with annual sales of €58.1 million, up +11.1%, and fourth quarter sales of €13.9 million, up +7.3%. Thanks to the recruitment of numerous surgeons, the Group has again recorded significant market share gains.

The +23.8% growth in international sales to €35.2 million over the year can be attributed to both the buoyant growth achieved by the Group’s subsidiaries and the strong level of sales recorded through its distributors, and it also benefited from a positive currency effect. Indeed, at constant currency sales growth was 10.2% and 18.8% in the fourth quarter and in 2016-17 as a whole, respectively.

Over the year, the activity recorded by the Group’s subsidiaries, accounting for 72% of international sales, notably benefited from the solidity of the German and Benelux markets, while billings exceeded $3 million in the United States and sales from the Group’s new subsidiaries in South Africa and Japan totaled almost €1.3 million.

During the third year of marketing of Novastep products, innovative solutions for extremities (foot and ankle) surgery, sales totaled €6.1 million, up by over 60%, and now account for almost 7% of total Group sales. On the French market, which accounts for 40% of activity, sales grew by almost 45%, while on the extensive American market they virtually doubled to exceed $3 million.

Recent highlights

  • Strengthening of the sales teams in France

Amplitude Surgical has just completed the recruitment of a sizeable sales team in the Auvergne-Rhône-Alpes region. This 8-person team headed by Ralph Tempion has excellent knowledge of this region’s network of surgeons and hospitals.

  • Strengthening of the American sales teams

Amplitude Surgical is currently recruiting its American sales team with a view to shortly launching the commercialization of its hip and knee implants on the world’s largest market, estimated at around $10 billion.

With a cash position in excess of €40 million at the end of its 2016-17 financial year, Amplitude Surgical has the necessary means to finance its growth.

Next financial press release: 2016-17 annual results, Wednesday October 18, 2017, after market.

About Amplitude Surgical
Founded in 1997 in Valence, France, Amplitude Surgical is a leading French player on the global surgical technology market for lower-limb orthopedics. Amplitude Surgical develops and markets high-end products for orthopedic surgery covering the main disorders affecting the hip, knee and extremities, and notably foot and ankle surgery. Amplitude Surgical develops, in close collaboration with surgeons, numerous high value-added innovations in order to best meet the needs of patients, surgeons and healthcare facilities. A leading player in France, Amplitude Surgical is developing abroad through its subsidiaries and a network of exclusive distributors and agents. Amplitude Surgical operates on the lower-limb market through the intermediary of its Novastep subsidiaries in France and the United States. Amplitude Surgical distributes its products in more than 30 countries. At June 30, 2017, Amplitude Surgical had a workforce of over 300 employees and recorded sales of over 93 million euros.

Contacts

Amplitude Surgical
Philippe Garcia
CFO
+33 (0)4 75 41 87 41
finances@amplitude-surgical.com
or
NewCap
Investor Relations
Marc Willaume, +33 (0)1 44 71 00 13
amplitude@newcap.eu
or
NewCap
Media Relations
Nicolas Merigeau, +33 (0)1 44 71 98 55
amplitude@newcap.eu

CTL Medical Secures FDA Clearance for Titanium Cage Device

DALLAS, TX – 07/25/2017 (PRESS RELEASE JET) — CTL Medical Corporation, a Dallas-based medical device manufacturing and service company, has secured FDA clearance to market its new MATISSE™ Titanium ACIF Cage implant with TiCro™ surface, used in the practice of spine fusion surgery.

The MATISSE™ Titanium ACIF Cage with CTL Medical’s proprietary TiCro™ surface technology offers 200 percent greater endplate contact surface area, as well as bone conforming geometry for increased mechanical locking at the cage and bone interface. The implant includes a tapered leading edge for easy insertion and a large graft area to further promote bony fusion. The device is available in a variety of sizes and configurations to accommodate variations in vertebral levels and patient anatomy.

“Countless engineering hours and R&D resources went in to developing CTL Medical’s patent pending TiCro™ surface technology, which was designed to expand our current portfolio, advance fusion technologies, and offer spine surgeons numerous surgical advantages,” stated Danny Chon, president & CEO of CTL Medical Corporation. “The Matisse™ system includes streamlined instrumentation and a variety of footprints, heights and lordotic profiles to accommodate variations in patient anatomy.”

MATISSE™ Titanium ACIF Cage with TiCro™ is indicated for use in skeletally mature patients with degenerative disc disease (DDD) of the cervical spine with accompanying radicular symptoms at one-disc level. DDD is defined as discogenic pain with degeneration of the disc confirmed by patient history and radiographic studies. MATISSE Anterior Cervical Interbody Fusion Cage system is used to facilitate intervertebral body fusion in the cervical spine at the C3 to C7 disc levels using autograft bone. MATISSE™ Titanium ACIF Cage with TiCro™ is to be used with supplemental fixation, such as CTL Medical’s VAN GOGH™ Anterior cervical plating system, which has been cleared for use in the cervical spine.

The use of cage devices in spinal surgery began with clinical trials in 1989, and since then, multiple implant improvements have debuted – leading to easier procedures, benefitting both spine surgeons and overall patient success and recovery times.

For more information on CTL Medical Corporation, visit www.ctlmed.com.

About CTL Medical Corporation
CTL Medical Corporation is a fully integrated, industry-leading, global medical device design, development and manufacturing company. CTL has assembled a world-class executive team, bringing together some of the industry’s most exceptional talent, positioning it to be a leader in medical device design and manufacturing. For more information, visit www.ctlmed.com.

Jeff Cheatham
TrizCom PR
O: 972-247-1369
C: 972-961-6171
jeffc@trizcom.com

Media Contacts:

Company Name: TrizCom PR
Full Name: Jeff Cheatham
Phone: (972) 247-1369
Email Address: SEND EMAIL
Website: www.trizcom.com

MCRA Releases New White Paper Analyzing the Industry Impact of the Federal Budget Request on FDA

WASHINGTONJuly 26, 2017 /PRNewswire-USNewswire/ — Musculoskeletal Clinical Regulatory Advisers, LLC (MCRA), a leading advisory firm and Clinical Research Organization to the medical device industry, today announced that it has authored a new white paper, “The Potential FDA Impact of the 2018 Presidential Budget Request”. Following the release of the 2018 budget request, MCRA looked to analyze the potential impact of funding the Food and Drug Administration (FDA) Medical Device Review Program exclusively through user fees.

As the medical device market grows due to continued innovation and changing demographics, it is imperative for industry to be able to successfully commercialize their technologies and procedures within a reasonable and definable time frame. Since its latest iteration in 2012, the Medical Device User Fee Program has helped speed up decision times. With the new proposed budget request, uncertainty is a challenge companies will have to overcome. MCRA looks to define and clarify some of that uncertainty with this white paper.

The white paper is the result of the collaboration between Vice Presidents Glenn Stiegman and Tim Hunter, Senior Director Keith Tode, and Associate Jack Kiraly. Mr. Kiraly, a recent addition to the MCRA team, had this to say: “We are concerned by the proposed budget, however, even if passed, there will still be opportunities for industry to navigate regulatory pathways to approval.” MCRA has the experience of former FDA professionals, as well as an integrated team of regulatory, clinical, quality, reimbursement, and healthcare compliance specialists.

For more information on MCRA, please visit www.mcra.com. To read the white paper click here.

About MCRA

Founded in 2004, Musculoskeletal Clinical Regulatory Advisers, LLC (MCRA) is a leading adviser and clinical research organization to the neuro-musculoskeletal and orthopedic industry. MCRA’s value lies in its industry experience and integration of five business value creators: regulatory, reimbursement, clinical research, healthcare compliance and quality assurance. MCRA’s integrated approach of these key value creating initiatives provides unparalleled expertise for its clients. MCRA has offices in Washington, DC, Manchester, CT and New York, NY, and serves nearly 500 clients globally.

Contact

David W. Lown
General Manager
212.583.0250 ext. 2111
dlown@mcra.com

SOURCE Musculoskeletal Clinical Regulatory Advisers, LLC

Anika Reports Strong Second Quarter 2017 Financial Results

July 26, 2017

BEDFORD, Mass.–(BUSINESS WIRE)–Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic medicines company specializing in therapeutics based on its proprietary hyaluronic acid (“HA”) technology, today reported financial results for the second quarter ended June 30, 2017, along with business progress in the period.

“Anika delivered strong double-digit revenue and earnings growth in the second quarter of 2017, driven primarily by very robust demand for MONOVISC worldwide,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. “MONOVISC U.S. end-user revenue increased 56% year-over-year in the second quarter, and exceeded our expectations for the quarter. We also made significant progress executing our global expansion strategy, as evidenced by international Orthobiologics revenue growth of 50% year-over-year for the quarter. Additionally, CINGAL continued to gain momentum in Canada and Europe, and we made considerable progress enrolling patients in our supplemental Phase III trial of CINGAL during the quarter.”

Second Quarter Financial Results

  • Total revenue for the second quarter of 2017 increased 26% year-over-year to $33.5 million, compared to $26.6 million for the second quarter of 2016. Total revenue for the second quarter of 2017 included $5.0 million in milestone revenue earned as a result of MONOVISC achieving $100 million in U.S. end-user sales within a consecutive 12-month period ending in June 2017.
  • Product revenue for the second quarter of 2017 increased 7% year-over-year to $28.3 million, compared to $26.6 million for the second quarter of 2016. Worldwide Orthobiologics revenue grew 5% year-over-year in the second quarter of 2017. The main driver of this product revenue growth was an increase in global MONOVISC revenue of 22% year-over-year in the second quarter of 2017, which was partially offset by a decline in ORTHOVISC revenue in the same period.
  • International Orthobiologics revenue increased 50% year-over-year for the second quarter of 2017, due primarily to the global expansion of MONOVISC, as well as growth of CINGAL in Canada and Europe. Domestically, ORTHOVISC and MONOVISC continue to maintain a combined market leading position.
  • Total operating expenses for the second quarter of 2017 were $15.7 million, compared to $13.1 million for the second quarter of 2016. The increase in total operating expenses was due primarily to higher research and development spending required to advance the Company’s product pipeline, expanded operational efforts, and increased professional service fees.
  • Net income for the second quarter of 2017 increased 32% to $11.4 million, or $0.76 per diluted share, compared to $8.6 million, or $0.57 per diluted share, for the second quarter of 2016. The increase in net income was due primarily to an increase in total revenue.

Recent Business Highlights

The Company made key commercial, operational, pipeline, and financial advancements, including:

  • Completing all site qualification activities and enrolling approximately 30 patients for the Company’s supplemental Phase III trial evaluating the efficacy and safety of CINGAL, its novel HA-corticosteroid combination viscosupplement for the treatment of symptoms associated with osteoarthritis (OA) of the knee. The Company expects to complete patient enrollment by the end of 2017.
  • Publishing results from the Company’s original Phase III trial of CINGAL in the peer-reviewed journal Cartilage. The data demonstrated that CINGAL provided improved immediate and short term pain relief after injection as compared to HA alone, and enhanced relief from OA-related pain, stiffness and function through 26 weeks as compared to saline.
  • Receiving regulatory approval for MONOVISC in India for the treatment of pain associated with osteoarthritis of all human synovial joints. The Company plans to expand into India, Australia, and New Zealand over the next six to nine months.
  • Advancing its product pipeline with continued progress on enrolling patients in the FastTRACK Phase III HYALOFAST Study for cartilage repair, as well as the Phase III MONOVISC study for the treatment of osteoarthritis pain in the hip.
  • Progressing the consolidation of the Company’s global manufacturing operations at Anika’s Bedford, Massachusetts corporate headquarters. The Company also opened its new European headquarters and surgical training center in Padova, Italy.

Conference Call Information

Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights tomorrow, Thursday, July 27th at 9:00 am ET. The conference call can be accessed by dialing 1-855-468-0611 (toll-free domestic) or 1-484-756-4332 (international). A live audio webcast will be available in the “Investor Relations” section of Anika’s website, www.anikatherapeutics.com. An accompanying slide presentation may also be accessed via the Anika website. A replay of the webcast will be available on Anika’s website approximately two hours after the completion of the event.

About Anika Therapeutics, Inc.

Anika Therapeutics, Inc. (NASDAQ: ANIK) is a global, integrated orthopedic medicines company based in Bedford, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative cartilage repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika’s orthopedic medicine portfolio includes ORTHOVISC®MONOVISC®, and CINGAL®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST®, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the last sentence of the first bullet point and the last sentence of third bullet point in the section captioned “Recent Business Highlights” of this press release, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to patient enrollment expectations with regard to the Company’s supplemental Cingal Phase III clinical trial and the Company’s international expansion expectations in the near future. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties, and other factors. The Company’s actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company’s ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company’s ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company’s research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company’s clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company’s ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company’s ability to provide an adequate and timely supply of its products to its customers; and (x) the Company’s ability to achieve its growth targets. Additional factors and risks are described in the Company’s periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC’s website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2017 2016 2017 2016
Product revenue $ 28,340 $ 26,575 $ 51,721 $ 48,853
Licensing, milestone and contract revenue 5,122 6 5,127 11
Total revenue 33,462 26,581 56,848 48,864
Operating expenses:
Cost of product revenue 6,315 6,065 12,398 11,490
Research and development 4,449 2,792 8,679 4,951
Selling, general and administrative 4,972 4,255 10,039 8,245
Total operating expenses 15,736 13,112 31,116 24,686
Income from operations 17,726 13,469 25,732 24,178
Interest income, net 16 49 74 121
Income before income taxes 17,742 13,518 25,806 24,299
Provision for income taxes 6,373 4,903 8,944 8,789
Net income $ 11,369 $ 8,615 $ 16,862 $ 15,510
Basic net income per share:
Net income $ 0.78 $ 0.59 $ 1.16 $ 1.05
Basic weighted average common shares outstanding 14,588 14,679 14,582 14,778
Diluted net income per share:
Net income $ 0.76 $ 0.57 $ 1.12 $ 1.02
Diluted weighted average common shares outstanding 15,044 15,111 15,046 15,210
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
June 30, December 31,
ASSETS 2017 2016
Current assets:
Cash and cash equivalents $ 117,874 $ 104,261
Investments 25,000 20,500
Accounts receivable, net of reserves of $210 and $194 at June 30, 2017 and December 31, 2016, respectively 30,450 27,598
Inventories, net 17,584 15,983
Prepaid expenses and other current assets 1,973 2,098
Total current assets 192,881 170,440
Property and equipment, net 52,272 52,296
Long-term deposits and other 1,389 69
Intangible assets, net 10,626 10,227
Goodwill 7,836 7,214
Total assets $ 265,004 $ 240,246
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 5,465 $ 2,303
Accrued expenses and other current liabilities 7,976 6,496
Total current liabilities 13,441 8,799
Other long-term liabilities 422 2,126
Deferred tax liability 7,003 6,548
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; 1,250 shares authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
Common stock, $.01 par value; 60,000 authorized, 14,658 and 14,627 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively 146 146
Additional paid-in-capital 65,171 61,735
Accumulated other comprehensive loss (5,736 ) (7,317 )
Retained earnings 184,557 168,209
Total stockholders’ equity 244,138 222,773
Total liabilities and stockholders’ equity $ 265,004 $ 240,246
Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
Revenue by Product Line and Product Gross Margin
(in thousands, except percentages)
(unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Product Line: 2017 % 2016 % 2017 % 2016 %
Orthobiologics $ 24,468 86 % $ 23,304 88 % $ 44,695 86 % $ 42,891 88 %
Surgical 1,335 5 % 1,433 5 % 2,631 5 % 2,751 6 %
Dermal 453 2 % 582 2 % 878 2 % 963 2 %
Other 2,084 7 % 1,256 5 % 3,517 7 % 2,248 4 %
Product Revenue $ 28,340 100 % $ 26,575 100 % $ 51,721 100 % $ 48,853 100 %
Product Gross Profit $ 22,025 $ 20,510 $ 39,323 $ 37,363
Product Gross Margin 78 % 77 % 76 % 76 %
Product Revenue by Geographic Region
(in thousands, except percentages)
(unaudited)
For the Three Months Ended June 30,

For the Six Months Ended June 30,

2017 % 2016 % 2017 % 2016 %
Geographic Region:
United States $ 22,331 79 % $ 21,895 82 % $ 41,261 80 % $ 39,906 82 %
Europe 4,060 14 % 2,977 11 % 6,889 13 % 5,542 11 %
Other 1,949 7 % 1,703 7 % 3,571 7 % 3,405 7 %
Product Revenue $ 28,340 100 % $ 26,575 100 % $ 51,721 100 % $ 48,853 100 %

Contacts

Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., President and CEO
Sylvia Cheung, CFO
Tel: 781-457-9000

Arlington Capital Partners Announces Acquisitions of Thortex and Millennium Surgical by Avalign Technologies

July 25, 2017

WASHINGTON–(BUSINESS WIRE)–Avalign Technologies (“Avalign”), a portfolio company of Arlington Capital Partners (“Arlington Capital”), has completed the acquisitions of Thortex and Millennium Surgical (“Millennium”).

Thortex is a leading provider of proprietary porous coatings and metal injection molding as well precision manufacturing solutions to the medical device market. Thortex is one of the only companies in the world able to provide porous coating solutions for titanium and cobalt-chrome orthopedic implants. In addition, Thortex provides a full suite of manufacturing and engineering technologies including metal injection molding, CNC machining, finishing and assembly to medical device OEMs.

Millennium is a provider of specialty surgical instruments focused on delivering difficult-to-find instruments utilizing innovative, e-cataloging, web-based marketing tools, and technical sales support. Millennium offers more than 17,000 branded SKUs across a variety of clinical areas including neurosurgery, ophthalmics and orthopedics to a diverse array of hospital and ambulatory surgical center customers.

Matt Altman, a Managing Partner at Arlington Capital said, “The incorporation of Thortex and Millennium into the Avalign platform adds new and proprietary capabilities which enhance Avalign’s strategic position in the marketplace. The increased scale and breadth of services and technologies provided by these acquisitions will accrue to the benefit of Avalign’s customers and bolster Avalign’s already impressive growth.”

“Thortex and Millennium nicely complement and expand the manufacturing technologies and services that Avalign offers and provide us with the ability to continue gaining share with our customers,” said Forrest Whittaker, CEO of Avalign Technologies. “We are excited to welcome the Thortex and Millennium teams to the Avalign family, and thankful for Arlington’s support in consummating these highly strategic acquisitions.”

Malcolm Little, a Principal at Arlington Capital, added: “The proprietary technologies developed by both Thortex and Millennium represent truly unique offerings in the market. We are pleased to complete these acquisitions and continue to pursue additional opportunities to strategically scale our business.”

About Avalign Technologies

Avalign Technologies, Inc. (“Avalign”) is a leading provider of proprietary coatings and full-service precision manufacturer of implants, specialty instrumentation, cutting instruments, and delivery systems to the orthopedic medical device and specialty surgical markets. Avalign offers its OEM partners a broad portfolio of manufacturing technologies and coating solutions as well as extensive engineering design, development, and project management capabilities from concept to launch. Avalign has an established reputation for consistent and sophisticated quality systems, flexible capacity capabilities, innovative proprietary manufacturing technologies, unmatched product offering, and superior customer service.

About Arlington Capital Partners

Arlington Capital Partners is a Washington, D.C.-area private equity firm that has managed $2.2 billion of committed capital via four investment funds, including Arlington’s fourth and most recent $700 million fund. Arlington is focused on middle market investment opportunities in growth industries including: healthcare, aerospace/defense, government services and technology and business services and software. The firm’s professionals and network have a unique combination of operating and private equity experience that enables Arlington to be a value-added investor. Arlington invests in companies in partnership with high quality management teams that are motivated to establish and/or advance their company’s position as leading competitors in their field. www.arlingtoncap.com

Contacts

Arlington Capital Partners
Matt Altman or Malcolm Little
5425 Wisconsin Avenue, Suite 200
Chevy Chase, MD 20815
202-337-7500
202-337-7525 (fax)