Alphatec Reports Second Quarter 2018 Financial Results

CARLSBAD, Calif., Aug. 02, 2018 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc.  (“ATEC” or the “Company”) (Nasdaq: ATEC), a provider of innovative spine surgery solutions with a mission to improve patient lives through the relentless pursuit of superior outcomes, today reported financial results for the second quarter ended June 30, 2018.

Second Quarter 2018 Financial Highlights

  • Total net revenue of $22.0 million; U.S. commercial revenue of $20.4 million, up 6% compared to the first quarter of 2018
  • U.S. commercial gross margin of 69.5%
  • Cash and cash equivalents of $44.9 million at June 30, 2018
  • Operating cash burn (excluding debt service and transaction-related costs) of $3.0 million

Second Quarter Organizational, Commercial, and Product Highlights

  • Continued transition of sales organization and increased contribution from dedicated distribution partners and agents to 57% of U.S. commercial revenue
  • Increased revenue attributable to newly converted surgeons, which more than doubled sequentially
  • Obtained FDA 510(k) clearance for IdentiTi porous titanium interbody implants; successfully completed first surgery in conjunction with alpha launch
  • Obtained two significant, favorable rulings in the patent litigation brought by NuVasive, Inc.
  • Made three key additions to ATEC leadership team: David Sponsel, Area Vice President, South Central United States; Emory Rooney, Vice President, Sales Channel Development; and Robert Judd, Vice President, Finance & Controller, who collectively bring decades of  additional spine industry experience to ATEC

“Our second quarter results, and numerous leading indicators, drive our growing confidence in the bright future for ATEC,” said Pat Miles, Chairman and Chief Executive Officer.  “While we continue to anticipate some short-term variability, we expect that our organic product development machine will accelerate growth. The spine market needs surgeon-driven, outcome-focused innovation, and we are absolutely committed to providing it. We are confident that we are building an organization that will create significant, long-term value.”

Comparison of Financial Results for the Second Quarter 2018 to First Quarter 2018

The following table compares key second quarter 2018 results to first quarter 2018 results.

Change
June 30, 2018   March 31, 2018 $   %
(unaudited) (unaudited)
U.S. commercial revenue $   20,409 $   19,201 $   1,208 6 %
U.S. gross profit   14,178   13,432   746 6 %
U.S. gross margin 69.5 % 70.0 %
Operating Expenses
Research and development $   2,009 $   1,786 $   223 12 %
Sales and marketing   10,673   10,060   613 6 %
General and administrative   7,815   6,442   1,373 21 %
Amortization of intangible assets   187   177   10 6 %
Transaction-related expenses   (62 )   1,542   (1,604 ) (104 %)
Gain on settlement   –   (6,168 )   6,168 (100 %)
Restructuring   193   398   (205 ) (52 %)
Total operating expenses $   20,815 $   14,237 $   6,578 46 %
Operating loss $   (6,545 ) $   (667 ) $   (5,878 ) 881 %
Interest and other expense $   (1,784 ) $   (1,645 ) $   (139 ) 8 %
Loss from continuing operations $   (7,064 ) $   (1,854 ) $   (5,210 ) 281 %
Non-GAAP Adjusted EBITDA $   (3,677 ) $   (2,390 ) $   (1,287 ) 54 %

U.S. commercial revenue for the second quarter of 2018 was $20.4 million, compared to $19.2 million in the first quarter of 2018.  Results reflect the continued transition of the Company’s distribution channel to more dedicated, scalable partners. Revenue growth generated by the expansion of the dedicated sales channel, coupled with new surgeon adoption, offset the revenue losses associated with the intentional reduction of non-strategic distributor relationships.

U.S. gross profit and gross margin for the second quarter of 2018 were $14.2 million and 69.5%, respectively, compared to $13.4 million and 70.0%, respectively, for the first quarter of 2018. U.S. gross margin stabilized as the Company continued to reduce product costs and optimize its supply chain.

Total operating expenses for the second quarter of 2018 were $20.8 million, compared to $14.2 million in the first quarter of 2018.  The increase is primarily the result of a $6.2 million contract settlement gain recorded in the first quarter of 2018.  On a non-GAAP basis (excluding restructuring charges, stock-based compensation, transaction-related expenses, and the contract settlement gain), total operating expenses in the second quarter increased to $19.5 million, compared to $17.9 million in the first quarter of 2018.  The increase primarily reflects increased sales expenses, litigation support costs, and investments in product development.

Operating loss for the second quarter of 2018 was $6.5 million, compared to a loss of $0.7 million for the first quarter of 2018. The increase is primarily the result of the $6.2 million contract settlement gain recorded in the first quarter of 2018.

Non-GAAP Adjusted EBITDA for the second quarter of 2018 was $(3.7) million, compared to $(2.4) million in the first quarter of 2018.  For more detailed information, please refer to the table, “Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures,” that follows.

Current and long-term debt includes $30.6 million in term debt and $8.2 million outstanding under the Company’s revolving credit facility at June 30, 2018. This compares to $31.5 million in term debt and $8.4 million outstanding under the Company’s revolving credit facility at March 31, 2018.

Cash and cash equivalents were $44.9 million at June 30, 2018, compared to $47.6 million reported at March 31, 2018.

Comparison of Financial Results for the Three and Six Months Ended June 30, 2018 and 2017

Revenue decreased on a year-over-year basis as a result of the continued transition of the Company’s distribution channel to more dedicated, scalable partners and the discontinuation of non-strategic distributor relationships. The year-over-year increase in operating expenses was attributable to litigation support costs, transaction-related expenses associated with the Company’s acquisition of SafeOp Surgical, Inc., and increased investment in product development initiatives as the Company expands its product pipeline. For additional information, please reference the following financial statement tables and the Company’s Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or before August 3, 2018.

2018 Financial Outlook

ATEC continues to anticipate total revenue in 2018 to approximate $95.0 million, with revenue growth expected to accelerate in the second half of the year.

Favorable Patent Litigation Rulings

ATEC obtained two significant, favorable rulings in the patent litigation brought by NuVasive, Inc.: the first dismissed NuVasive’s design patent counts, covering the implant and sequential dilators used in lateral surgery; the second denied NuVasive’s Motion for Preliminary Injunction, finding that NuVasive had not met its burden of proving either likelihood of success or irreparable harm.  The latter ruling allows ATEC to continue to sell its lateral surgery offering while the lawsuit is pending.

Key Executive Additions

Mr. Sponsel has nearly 20 years’ sales experience, including 13 years in the spine industry.  He spent a decade with Stryker Spine, before leaving to lead Medacta USA’s Spine Division. Mr. Rooney has accumulated over a decade of leadership in spine sales. He joins ATEC from Stryker Spine, where he most recently served as Vice President, Sales, Southeast.  Mr. Judd brings nearly 15 years of accounting and strategic finance experience to ATEC. He joins ATEC following three years with NuVasive, Inc., where he served most recently as Vice President, Finance – Global Process Transformation, after holding finance and accounting leadership positions with Thermo Fisher Scientific, Life Technologies, Allergan, and KPMG.

Non-GAAP Information

To supplement the Company’s financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company reports certain non-GAAP financial measures such as Adjusted EBITDA.  Adjusted EBITDA included in this press release is a non-GAAP financial measure that represents net income (loss), excluding the effects of interest, taxes, depreciation, amortization, stock-based compensation expenses, and other non-recurring income or expense items, such as sale of assets, settlement gains, impairments, restructuring expenses, severance expenses and transaction-related expenses.  The Company believes that non-GAAP Adjusted EBITDA provides investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company.  For completeness, management uses non-GAAP Adjusted EBITDA in conjunction with GAAP earnings and earnings per common share measures.  The Company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Adjusted EBITDA should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.   Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

Investor Conference Call

ATEC will hold a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss second quarter 2018 results. The dial-in numbers are (877) 556-5251 for domestic callers and (720) 545-0036 for international callers. The conference ID number is 1956197. A live webcast of the conference call will also be available online from the investor relations page of the Company’s corporate website at www.atecspine.com.

A replay of the webcast will remain available on the Company’s website, www.atecspine.com, until the Company releases its third quarter 2018 financial results. In addition, a telephonic replay of the call will be available until November 2, 2018. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 1956197.

Inducement Awards Granted

As an inducement to accepting employment with the Company, and in accordance with applicable Nasdaq listing requirements, the Compensation Committee of the Board of Directors approved grants of inducement stock options to purchase, collectively, an aggregate of 115,000 shares of the Company’s common stock (“Options”) and approved the grants of, collectively, 115,000 restricted stock units (RSUs) to the three new employees noted above.  The grants are dated as of May 29, June 18, and July 16, 2018 — the respective dates of employment of each new employee.

The RSUs will vest in equal annual installments on each of the first four anniversaries of the respective dates of employment set forth above.  The Options, which have exercise prices of $3.86, $3.01 and $2.84 per share (based on the closing prices of the Company’s common stock on the respective effective dates of the grants), will vest 25 percent on the first anniversary of the grants and in equal monthly installments of 1/36th of the balance of the Options, provided the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs and Options will fully vest upon a change in control of ATEC.

ATEC is providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).

About Alphatec Holdings, Inc.

Alphatec Holdings, Inc., through its wholly owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company that designs, develops, and markets technology for the treatment of spinal disorders associated with disease and degeneration, congenital deformities, and trauma. The Company’s mission is to improve lives by providing innovative spine surgery solutions through the relentless pursuit of superior outcomes. The Company markets its products in the U.S. via independent sales agents and a direct sales force.

Additional information can be found at www.atecspine.com.

Forward-Looking Statements 
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include the references to the Company’s strategy in significantly repositioning the ATEC brand and turning the Company into a growth organization.  The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to:  the uncertainty of success in developing new products or products currently in the Company’s pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community, including Battalion and Arsenal Deformity; failure to obtain FDA or other regulatory clearance or approval for new products, or unexpected or prolonged delays in the process; continuation of favorable third party reimbursement for procedures performed using the Company’s products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to successfully control its costs or achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other competing products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation in which the Company is a defendant; patent infringement claims; claims related to the Company’s intellectual property and the Company’s ability to meet its financial obligations under its credit agreements and the Orthotec settlement agreement. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement.  A further list and description of these and other factors, risks and uncertainties can be found in the Company’s most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

Investor/Media Contact:

Tina Jacobsen
Investor Relations
tjacobsen@moreeffectiveir.com

Company Contact:

Jeff Black
Executive Vice President and Chief Financial Officer
Alphatec Holdings, Inc.
ir@atecspine.com

 

ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  (in thousands, except per share amounts – unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenues $ 22,042 $ 24,379 $ 43,349 $ 52,357
Cost of revenues 7,772 8,631 15,509 19,830
Gross profit 14,270 15,748 27,840 32,527
Operating expenses:
Research and development 2,009 990 3,795 2,439
Sales and marketing 10,673 10,298 20,733 21,401
General and administrative 7,815 5,351 14,257 11,574
Amortization of intangible assets 187 172 364 344
Transaction-related expenses (62 ) 1,480
Gain on settlement (6,168 )
Gain on sale of assets (856 ) (856 )
Restructuring expenses 193 528 591 1,759
Total operating expenses 20,815 16,483 35,052 36,661
Operating loss (6,545 ) (735 ) (7,212 ) (4,134 )
Other income (expense):
Interest expense, net (1,709 ) (1,881 ) (3,416 ) (3,862 )
Other income, net (75 ) 2 (13 ) 7
Total other expense, net (1,784 ) (1,879 ) (3,429 ) (3,855 )
Loss from continuing operations before taxes (8,329 ) (2,614 ) (10,641 ) (7,989 )
Income tax (benefit) provision (1,265 ) 15 (1,723 ) 64
Loss from continuing operations (7,064 ) (2,629 ) (8,918 ) (8,053 )
Loss from discontinued operations (12 ) (68 ) (74 ) (159 )
Net loss $ (7,076 ) $ (2,697 ) $ (8,992 ) $ (8,212 )
Net loss per share, basic and diluted:
Continuing operations $ (0.21 ) $ (0.24 ) $ (0.32 ) $ (0.80 )
Discontinued operations (0.00 ) (0.01 ) (0.00 ) (0.02 )
Net loss per share, basic and diluted $ (0.21 ) $ (0.24 ) $ (0.33 ) $ (0.82 )
Shares used in calculating basic and diluted net loss per share
34,030 11,047 27,656 10,033
Stock-based compensation included in:
Cost of revenue 11 11 33 14
Research and development 129 (20 ) 13 291
Sales and marketing 193 151 304 224
General and administrative 815 269 1,417 690
$ 1,148 $ 411 $ 1,767 $ 1,219
ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
June 30, December 31,
 2018  2017
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $   44,912 $   22,466
Accounts receivable, net 11,405 14,822
Inventories, net 28,177 27,292
Prepaid expenses and other current assets 1,778 1,767
Current assets of discontinued operations 251 131
Total current assets 86,523 66,478
Property and equipment, net 12,060 12,670
Goodwill 14,250   –
Intangibles, net 26,382 5,248
Other assets 225 208
Noncurrent assets of discontinued operations 55 56
Total assets $   139,495 $   84,660
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable $   3,354 $   3,878
Accrued expenses 24,607 22,246
Current portion of long-term debt 6,682 3,306
Current liabilities of discontinued operations 385 312
Total current liabilities 35,028 29,742
Total long term liabilities   50,644   57,973
Redeemable preferred stock   23,603   23,603
Stockholders’ equity   30,220   (26,658 )
Total liabilities and stockholders’ deficit $   139,495 $   84,660
ALPHATEC HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands – unaudited)
Three
Months
Ended
Three Months Ended Six Months Ended
March 31, June 30, June 30,
2018 2018 2017 2018 2017
Operating expenses 14,237 20,815 16,483 35,052 36,661
Adjustments:
Stock-based compensation (597 ) (1,137 ) (400 ) (1,734 ) (1,205 )
Restructuring (398 ) (193 ) (528 ) (591 ) (1,759 )
Transaction-related expenses (1,542 ) 62 (1,480 )
Gain on settlement 6,168 6,168
Gain on sale of assets 856 856
Non-GAAP operating expenses $ 17,868 $ 19,547 $ 16,411 $ 37,415 $ 34,553
Three
Months
Ended
Three Months Ended Six Months Ended
March 31, June 30, June 30,
2018 2018 2017 2018 2017
Operating loss, as reported $ (667 ) $ (6,545 ) $ (735 ) $ (7,212 ) $ (4,134 )
Add back:
Depreciation 1,592 1,457 1,636 3,049 3,270
Amortization of intangible assets 294 132 234 426 468
Total EBITDA 1,219 (4,956 ) 1,135 (3,737 ) (396 )
Add back significant items:
Stock-based compensation 619 1,148 411 1,767 1,219
Restructuring 398 193 528 591 1,759
Transaction-related expenses 1,542 (62 ) 1,480
Gain on settlement (6,168 ) (6,168 )
Gain on sale of assets (856 ) (856 )
Adjusted EBITDA $ (2,390 ) $ (3,677 ) $ 1,218 $ (6,067 ) $ 1,726
ALPHATEC HOLDINGS, INC.
RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT
(in thousands, except percentages – unaudited) 
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenues by source
U.S. commercial revenue $   20,409 $   21,877 $   39,610 $   45,314
Other 1,633 2,502 3,739 7,043
Total revenues $   22,042 $   24,379 $   43,349 $   52,357
Gross profit by source
U.S. $   14,178 $   15,521 $   27,610 $   31,789
Other   92   227   230   738
Total gross profit $   14,270 $   15,748 $   27,840 $   32,527
Gross profit margin by source
U.S. 69.5 % 70.9 % 69.7 % 70.2 %
Other 5.6 % 9.1 % 6.1 % 10.5 %
Total gross profit margin 64.7 % 64.6 % 64.2 % 62.1 %

Total Knee Replacement Market worth over $10 billion by 2024: Global Market Insights, Inc.

Sellbyville, Delaware, Aug. 02, 2018 (GLOBE NEWSWIRE) —

Global Total Knee Replacement Market is projected to cross USD 10 billion by 2024; according to a new research report by Global Market Insights, Inc. Total knee replacement market will witness a CAGR of 3.7% during the forecast period owing to expanding ageing population pool worldwide coupled with increasing prevalence of degenerative diseases. Geriatric population is more prone to suffer from degenerative diseases such as osteoporosis resulting in demand for total knee replacement procedures. As per International Osteoporosis Foundation estimates, 200 million women worldwide suffer from osteoporosis; therefore, the demand should only increase during the projection years.

Additionally, technological upgradation of implant material with evolution of customized replacement implants is augmenting market growth. The increased benefits of knee replacement surgery in restoration of normal functioning of knee has led to growth of younger population undergoing knee replacement surgeries. Presently, 3D printed surgical implants along with customized inserts, jigs devices are used in surgery to deliver better results escalating the industry growth. With increasing use of 3D technology, the knee replacement market will witness rapid growth over the forecast timeframe.

Request for a sample of this research report @ https://www.gminsights.com/request-sample/detail/2804

Although presence of numerous growth opportunities has influenced the industry growth positively, high costs associated with the surgical procedures has affected the same. However, steady development in reimbursement scenario and government initiatives have lowered the costs of knee replacement surgery proving beneficial for industry growth.

Partial knee replacement system market accounted for largest market share in 2016 and anticipated to grow at 3.4% CAGR over the projection years, owing to its advantages such as replacement of only damaged component of knee along with minimal erosion of healthy tissues.

Browse key industry insights spread across 120 pages with 106 market data tables & 9 figures & charts from the report, “Total Knee Replacement Market” in detail along with the table of contents:

https://www.gminsights.com/industry-analysis/total-knee-replacement-market

Tibial knee component market segment will be the fastest growing segment with expected growth of 4.0% CAGR by 2024. This component provides intraoperative flexibility to the replaced component proving to be beneficial in revision replacement surgery. Also, polyethylene tibial component is known to provide significant long-lasting clinical results with reduced probability of osteolysis; therefore, the demand for the same should rapidly rise in coming years.

 Ambulatory surgical centers market segment is expected to experience a CAGR of over 5% during the forecast period owing to overall low costs associated with surgery in this facility. Timely procedures without long delay in ambulatory centers attract more patients, resulting in rapid expansion of the same. Moreover, personalized care offering by ambulatory healthcare facilities surges the segment growth.

U.S. knee replacement market valued at USD 3,294 in 2017 and will expand significantly with growth of than 3.8% from 2018-2024. The growing geriatric population base suffering from degenerative diseases such as osteoarthritis and availability of superior quality medical devices and components will favor market growth. Also, increase in the disposable income across the nation will positively affect market growth.

Germany knee replacement market will grow at a CAGR of 4.0% during the projection period, owing to increasing healthcare spending, technological advancement and high disposable income. Growing healthcare awareness will increase number of knee replacement surgeries favoring market growth.

 Some of the major industry players operating in knee replacement market include Stryker, Smith & Nephew, Medacta, MicroPort Scientific, B. Barun, ConforMIS, DePuy Synthes, Corin, DJO Global and Zimmer Biomet. These manufacturing companies have focused their efforts on R&D that have helped them to evolve as major industry players.

 Key industry players undertake certain strategic initiatives such as new product launch and collaborations to maintain their market position. For instance, Smith & Nephew launched GENESIS II total knee system that is the most preferred and comprehensive system improving surgical performance. Launching this product has rendered company with competitive advantage and improved the company’s market share.

Make an inquiry for purchasing this report @ https://www.gminsights.com/inquiry-before-buying/2804

Browse Related Reports:

  • Orthopedic Devices Market Size 2017 – 2024

Orthopedic Devices Market outlook was at over USD 39 billion in 2016 and is forecast to witness more than 3% CAGR from 2017 to 2024. The growing geriatric population base is highly susceptible for developing bone related diseases such as osteoporosis and osteoarthritis.
https://www.gminsights.com/industry-analysis/orthopedic-devices-market

  • Orthobiologics Market Size 2018 – 2024

Orthobiologics Market share is projected to experience significant growth from 2018 to 2024. Increasing number of orthopedic procedures owning to the rising geriatric population, accidents and obesity is driving the market growth.
https://www.gminsights.com/industry-analysis/orthobiologics-market

About Global Market Insights

Global Market Insights, Inc., headquartered in Delaware, U.S., is a global market research and consulting service provider; offering syndicated and custom research reports along with growth consulting services. Our business intelligence and industry research reports offer clients with penetrative insights and actionable market data specially designed and presented to aid strategic decision making. These exhaustive reports are designed via a proprietary research methodology and are available for key industries such as chemicals, advanced materials, technology, renewable energy and biotechnology.

Contact Us:
Arun Hegde
Corporate Sales, USA
Global Market Insights, Inc.
Phone: 1-302-846-7766
Toll Free: 1-888-689-0688
Email: sales@gminsights.com
Web: https://www.gminsights.com
Blog: http://healthcaremotives.com/

Conformis announces election of Carrie Bienkowski to its Board of Directors

BILLERICA, Mass., Aug. 02, 2018 (GLOBE NEWSWIRE) — Conformis, Inc. (NASDAQ:CFMS), a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are customized to fit each patient’s unique anatomy, announced today that its Board of Directors elected Carrie Bienkowski to the Board effective July 31, 2018.  Ms. Bienkowski will serve as a class I director until the Conformis 2019 Annual Meeting of Stockholders.

“We welcome the addition of Carrie Bienkowski to our Board of Directors,” said Kenneth P. Fallon, III, Chairman of the Board of Directors of Conformis. “Her knowledge in consumer marketing and digital innovation will be a great asset for Conformis.” “Carrie’s experience is consistent with the opportunity we have to position the Conformis brand among today’s active and engaged patients that are seeking orthopedic treatment,” added Mark Augusti, Conformis’ President and Chief Executive Officer.

Ms. Bienkowski is a dynamic operational and strategic leader with over 20 years of experience working across e-commerce, retail, blue-chip fast-moving consumer goods and management consulting. She has a proven track record of delivering results in diverse industries and international markets and is skilled in executive level strategic business planning, new product development, customer experience strategy and brand management.

Ms. Bienkowski has served as Chief Marketing Officer of Peapod since 2014. Prior to joining Peapod, Ms. Bienkowski served as the Head of Buyer Experience for eBay’s Fashion vertical in the European markets. From 2002-2009, at C&E Advisory in London, Ms. Bienkowski counseled businesses and brands including L’Oreal, Sky Media, HSBC, Boots Pharmacy and Vodafone in sustainability strategies. Earlier in her career, Ms. Bienkowski spent nearly a decade at Procter & Gamble, where she served in various brand management roles.

Ms. Bienkowski received her degree in finance and business economics from the University of Notre Dame.

About Conformis, Inc.

Conformis is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are individually sized and shaped, or customized, to fit each patient’s unique anatomy. Conformis offers a broad line of customized knee implants and customized pre-sterilized, single-use instruments delivered in a single package to the hospital. In clinical studies, Conformis iTotal CR demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants. Conformis owns or exclusively in-licenses issued patents and pending patent applications that cover customized implants and customized patient-specific instrumentation for all major joints.
For more information, visit www.conformis.com. To receive future releases in e-mail alerts, sign up at http://ir.conformis.com/.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this press release about our future expectations, plans and prospects, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You should not place undue reliance on our forward-looking statements. Actual results could differ materially from the projections disclosed in the forward-looking statements we make as a result of a variety of risks and uncertainties, including risks related to our estimates and expectations regarding our results of operations, and the other risks and uncertainties described in the “Risk Factors” sections of our public filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments may 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. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

CONTACT:
Investor contact
Oksana Bradley
ir@conformis.com
(781) 374-5598

RTI Surgical® and Aziyo® Biologics Announce Exclusive Agreement to Distribute ViBone® for Spine and Other Orthopedic Procedures

August 01, 2018

ALACHUA, Fla. & SILVER SPRING, Md.–(BUSINESS WIRE)–RTI Surgical, Inc. (Nasdaq: RTIX), a global surgical implant company, and Aziyo Biologics, Inc., a fully integrated regenerative medicine company, today announced the signing of an agreement under which Aziyo will provide ViBone to RTI Surgical for exclusive distribution in the U.S.

ViBone is a bone repair product designed to perform and handle more closely to autograft in a variety of orthopedic proceduresViBone is processed using a proprietary method optimized to protect and preserve the health of native bone cells to potentially enhance new bone formation.

“ViBone is a next generation bone graft product that meets the diverse needs of surgeons with high potential for improved outcomes for patients,” said Camille Farhat, President and CEO, RTI Surgical. “ViBone will join RTI’s existing biologic portfolio as another important option for surgeons.”

RTI’s company strategy centers on organic and acquisitive growth focused on differentiated products supported by clinical data. RTI’s commercial team will integrate ViBone into its sales and growth strategy in the U.S., effective immediately. Together, RTI and Aziyo will initiate new research on ViBone in the coming months to build on the characterization and other data currently available.

“We are excited to partner with RTI Surgical, a recognized leader in spine and tissue-based implants, to bring this innovative option to more surgeons, and to further investigate the value it provides to patients,” said Ron Lloyd, President and CEO, Aziyo Biologics. “This agreement provides a platform for RTI and Aziyo to mutually grow and expand in the spinal fusion and orthopedic markets in service to more patients.”

About ViBone

ViBone is a next generation viable bone matrix that was designed to perform and handle more like high quality autograft. Aziyo’s proprietary manufacturing process was designed to optimally protect the tissue environment with less disruption. ViBone is based on science that brings bone grafting closer to meeting the surgeon and patient’s needs and provides a better option for bone repair. To learn more about ViBone, visit www.Aziyo.com/ViBone/.

About RTI Surgical, Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, general surgery, spine, orthopedic and trauma procedures and are distributed in nearly 50 countries. RTI has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com.

About Aziyo Biologics, Inc.

Aziyo Biologics is a fully integrated, commercially oriented regenerative medicine company. Since its founding in 2015 the Company has expanded through acquisitions and strategic partnerships, creating a high growth commercial entity. Its proprietary products are used in orthopedic, cardiovascular and other medical specialties. For more information, visit www.Aziyo.com.

Contacts

RTI Media Contact
Molly Poarch, +1-224-287-2661
mpoarch@rtix.com
or
RTI Investor Contact
Nathan Elwell, +1-847-530-0249
nelwell@lincolnchurchilladvisors.com
or
Aziyo Media Contact
Courtney Guyer, +1-510-730-7896
PR@aziyo.com

RTI Surgical Announces Second Quarter 2018 Results

August 02, 2018

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical, Inc. (Nasdaq: RTIX), a global surgical implant company, reported operating results for the second quarter of 2018.

“Our team is sustaining the momentum generated over the past 18 months, as evidenced by our positive operational and financial performance this quarter,” said Camille Farhat, chief executive officer. “As anticipated in our previously issued guidance, our OEM franchise continues to contribute attractive growth, which we believe demonstrates the importance of the changes we implemented in 2017 and the value of our diverse portfolio. Our current operational excellence priorities, focused primarily on the cost of tissue processing, began to positively impact our cost of sales this quarter, providing significant margin and adjusted EBITDA improvements. Our efforts to date are encouraging and we believe that we remain well positioned to deliver on our commitments in 2018 and beyond.”

Farhat added, “As we enter the second half of the year, we continue to make significant strides in our strategic transformation. Following the recent owned agency transition announcement, we have further reduced the complexity of our operations through the reduction of vertical integration and increased focus on our strength in tissue processing. We believe we maintain strong partnerships with the organ procurement community that, in our opinion, ensure that we can continue to expand the number of patients served with our differentiated allograft products. With the implementation of our operational excellence initiatives well underway, we are starting to see the positive outcomes in our financial results, and I am proud of the ongoing efforts of many people across the Company. Also, we are encouraged by the progress demonstrated by the team managing the Zyga acquisition and integration, which exemplify our endeavors to accelerate growth. In light of this progress, I am focused on reinvigorating the R&D pipeline and pursuing attractive deals at logical valuations.”

Second Quarter 2018

RTI’s worldwide revenues for the second quarter of 2018 were $70.7 million, down slightly compared with $72.1 million during the same period for the prior year. Excluding a $3.7 million reduction from the sale of substantially all the assets of the cardiothoracic closure business completed in August 2017, our total revenues increased $2.2 million, or 3.3%. Gross profit for the second quarter of 2018 was $30.0 million, inclusive of a $6.8 million charge for the write-off of excess inventory related to decreased distributions of our map3® implant and the purchase accounting step-up of Zyga inventory. To partially offset the impact of the decreased distribution of map3® implant we signed a distribution agreement with Aziyo Biologics, Inc., to supplement our biologics portfolio with an alternative allograft stem cell product. Excluding the excess inventory charge and purchase accounting impact, our Adjusted Gross Profit for the second quarter of 2018 was $36.8 million or 52.1% of revenues, compared to $37.0 million, or 51.3% of revenues, in the second quarter of 2017.

During the second quarter of 2018, RTI incurred non-recurring pre-tax charges to support the ongoing strategic transformation of the business. The company incurred $4.5 million in asset impairment and abandonment charges related to decreased distribution of our map3® implant During the second quarter of 2017, the company incurred $3.4 million of non-recurring pre-tax charges.

Net loss applicable to common shares was $6.4 million, or $0.10 per fully diluted common share in the second quarter of 2018, compared to a net loss applicable to common shares of $2.6 million, or $0.04 per fully diluted common share in the second quarter of 2017. As outlined in the reconciliation tables that follow, excluding the impact of the various non-recurring charges, Adjusted Net Income applicable to common shares was $2.0 million, or $0.03 per fully diluted common share in the second quarter of 2018.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the second quarter of 2018 was $9.1 million, or 13% of revenues compared with $8.3 million, inclusive of $1.2 million of EBITDA related to the cardiovascular closure business, or 11% of revenues for the second quarter of 2017. The increase in Adjusted EBITDA is primarily driven by the reduction in operating expenses associated with efforts to reduce complexity and increase operational excellence implemented during 2017.

Fiscal 2018 Outlook

Based on our recent financial results and current business outlook, the Company is reiterating financial guidance for 2018, originally issued on January 5, 2018:

  • The Company expects full year revenues in the range of $280 million and $290 million.
  • The Company expects full year Adjusted EBITDA to be in the range of $32 million to $38 million.

The Company noted the following assumptions are included in its guidance:

  • Relatively stable market conditions and regulatory environment;
  • Positive revenue contribution from the acquisition of Zyga Technology – announced January 4, 2018;
  • Ongoing positive impact of efforts to reduce complexity and implement operational excellence; and
  • Continued demand of map3® cellular allogeneic bone graft or alternative allograft stem cell product.

Conference Call

RTI will host a conference call and audio webcast at 9:00 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419 (U.S.) or (760) 666-3754 (International). The webcast can be accessed through the investor section of RTI’s website at www.rtix.com. A replay of the conference call will be available on RTI’s website for one month following the call.

About RTI Surgical, Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, general surgery, spine, orthopedic and trauma procedures and are distributed in more than 40 countries. RTI has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements made in this communication about our positive operational and financial performance, the continued contribution of the OEM franchise to RTI’s growth, the impact of operational priorities on costs and their impact on RTI’s financial performance, RTI’s ability to meet its commitments, the implementation of RTI’s strategic initiatives, the reduction in complexity of RTI’s operations, RTI’s ability to maintain partnerships in the organ procurement community, RTI’s ability to expand the number of patients it is able to serve, the integration of Zyga’s operations, anticipated financial results, growth rates, new product introductions, and future operational improvements. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements are not guarantees of future performance and are based on certain assumptions including RTI’s ability to reduce inventory, manage expenses and accomplish its goals and strategies, the quality of the new product offerings from RTI, general economic conditions, as well as those within RTI’s industry, RTI’s ability to integrate acquisitions into existing operations, and numerous other factors and risks identified in the Company’s Form 10-K for the fiscal year ended December 31, 2017 and other filings with the Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company’s SEC filings may be obtained by contacting the company or the SEC or by visiting RTI’s website at www.rtix.com or the SEC’s website at www.sec.gov.

RTI SURGICAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
Three months ended Six months ended
June 30, June 30,
2018 2017 2018 2017
Revenues $ 70,685 $ 72,120 $ 140,575 $ 142,059
Costs of processing and distribution 40,645 35,157 76,853 69,317
Gross profit 30,040 36,963 63,722 72,742
Expenses:
Marketing, general and administrative 29,266 29,496 57,655 59,167
Research and development 3,270 3,740 6,691 7,428
Severance and restructuring costs 3,400 884 7,803
Asset impairment and abandonments 4,515 4,644
Acquisition and integration expenses 800
Total operating expenses 37,051 36,636 70,674 74,398
Operating (loss) income (7,011 ) 327 (6,952 ) (1,656 )
Total other expense – net (1,151 ) (990 ) (1,926 ) (1,789 )
Loss before income tax provision (8,162 ) (663 ) (8,878 ) (3,445 )
Income tax benefit (provision) 2,702 (1,026 ) 2,453 (116 )
Net loss (5,460 ) (1,689 ) (6,425 ) (3,561 )
Convertible preferred dividend (981 ) (924 ) (1,947 ) (1,834 )
Net loss applicable to common shares $ (6,441 ) $ (2,613 ) $ (8,372 ) $ (5,395 )
Net loss per common share – basic $ (0.10 ) $ (0.04 ) $ (0.13 ) $ (0.09 )
Net loss per common share – diluted $ (0.10 ) $ (0.04 ) $ (0.13 ) $ (0.09 )
Weighted average shares outstanding – basic 63,405,708 58,935,786 63,400,737 58,715,791
Weighted average shares outstanding – diluted 63,405,708 58,935,786 63,400,737 58,715,791
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Commons Shares to Adjusted EBITDA
(Unaudited, in thousands)
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
Net loss applicable to common shares $ (6,441 ) $ (2,613 ) $ (8,372 ) $ (5,395 )
Interest expense, net 771 915 1,595 1,734
(Benefit) provision for income taxes (2,702 ) 1,026 (2,453 ) 116
Depreciation 2,524 2,652 5,147 5,324
Amortization of intangible assets 960 909 1,921 1,805
EBITDA (4,888 ) 2,889 (2,162 ) 3,584
Reconciling items impacting EBITDA
Preferred dividend 981 924 1,947 1,834
Non-cash stock based compensation 1,290 974 2,570 1,808
Foreign exchange gain 71 75 22 55
Other reconciling items *
Inventory write-off 6,559 7,582
Inventory purchase price adjustment 250 456
Severance and restructuring costs 3,400 884 7,470
Loss on extinguishment of debt 309 309
Asset impairment and abandonments 4,515 4,515
Acquisition and integration expenses 800
Adjusted EBITDA $ 9,087 $ 8,262 $ 16,923 $ 14,751
Adjusted EBITDA as a percent of revenues 13 % 11 % 12 % 10 %
* See explanations in Use of Non-GAAP Financial Measures section later in this release.
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Common Shares and Net Loss Per Diluted Share to
Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Share
(Unaudited, in thousands except per share data)
Three Months Ended
June 30, 2018 June 30, 2017
Net Net
(Loss) Income Amount (Loss) Income Amount
Applicable to Per Diluted Applicable to Per Diluted
Common Shares Share Common Shares Share
As reported $ (6,441 ) $ (0.10 ) $ (2,613 ) $ (0.04 )
Severance and restructuring costs 3,400 0.06
Asset impairment and abandonments 4,515 0.07
Inventory purchase price adjustment 250 0.00
Loss on extinguishment of debt 309 0.00

Inventory obsolescence and reserve charge

6,559 0.10
Tax effect on adjustments (3,161 ) (0.05 ) 178 0.00
Adjusted * $ 2,031 $ 0.03 $ 965 $ 0.02
Six Months Ended
June 30, 2018 June 30, 2017
Net Net
(Loss) Income Amount (Loss) Income Amount
Applicable to Per Diluted Applicable to Per Diluted
Common Shares Share Common Shares Share
As reported $ (8,372 ) $ (0.13 ) $ (5,395 ) $ (0.09 )
Severance and restructuring costs 884 0.01 7,803 0.13
Asset impairment and abandonments 4,515 0.07
Inventory purchase price adjustment 456 0.01
Loss on extinguishment of debt 309 0.00

Inventory obsolescence and reserve charge

7,582 0.12
Acquisition and integration expenses 800 0.01
Tax effect on adjustments (3,654 ) (0.06 ) (1,304 ) (0.02 )
Adjusted * $ 2,520 $ 0.04 $ 1,104 $ 0.02
* See explanations in Use of Non-GAAP Financial Measures section later in this release.
Amount Per Diluted Share may not foot due to rounding.

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited condensed consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP financial measures that exclude certain amounts, including EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit. The calculation of the tax effect on the adjustments between GAAP net loss applicable to common shares and non-GAAP net income applicable to common shares is based upon our estimated annual GAAP tax rate, adjusted to account for items excluded from GAAP net loss applicable to common shares in calculating Adjusted Net Income Applicable to Common Shares-Diluted. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measures is included in the tables listed above.

The following is an explanation of the adjustments that management excluded as part of adjusted measures for the three and six months ended June 30, 2018 and 2017 as well as the reason for excluding the individual items:

Severance and restructuring costs – This adjustment represents costs relating to the reduction of our organizational structure. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Asset impairment and abandonments – This adjustment represents an asset impairment and abandonments related to decreased distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Acquisition and integration expenses – This adjustment represents charges relating to acquisition and integration expenses due to the purchase of Zyga. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory obsolescence and reserve charge – This adjustment represents charges relating to inventory obsolescence due to the rationalization of our international distribution infrastructure and an inventory reserve charge related to decreased distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory purchase price adjustment – This adjustment represents the purchase price effects of acquired Zyga inventory that was sold during the six months ended June 30, 2018. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Loss on extinguishment of debt – This adjustment represents costs relating to refinancing our debt. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted, and Adjusted Gross Profit should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making. The Company further believes that providing this information better enables the Company’s investors to understand the Company’s overall core performance and to evaluate the methodology used by management to assess and measure such performance.

RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(Unaudited, in thousands)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenues: (In thousands)
Spine $ 18,934 $ 19,419 $ 38,197 $ 39,757
Sports 14,190 14,453 27,625 29,129
OEM 31,170 27,983 61,290 53,125
International 6,391 6,592 13,463 13,224
Cardiothoracic 3,673 6,824
Total revenues $ 70,685 $ 72,120 $ 140,575 $ 142,059
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
June 30, December 31,
2018 2017
Assets
Cash $ 14,246 $ 22,381
Accounts receivable – net 45,576 35,081
Inventories – net 101,022 111,927
Prepaid and other assets 8,038 16,285
Total current assets 168,882 185,674
Property, plant and equipment – net 76,838 79,564
Goodwill 64,863 46,242
Other assets – net 36,910 34,426
Total assets $ 347,493 $ 345,906
Liabilities and Stockholders’ Equity
Accounts payable $ 14,797 $ 18,252
Accrued expenses and other current liabilities 28,934 30,478
Current portion of long-term obligations 4,268
Total current liabilities 43,731 52,998
Deferred revenue 3,155 3,741
Long-term liabilities 58,571 43,507
Total liabilities 105,457 100,246
Preferred stock 65,961 63,923
Stockholders’ equity:
Common stock and additional paid-in capital 425,544 425,132
Accumulated other comprehensive loss (6,850 ) (6,329 )
Accumulated deficit (242,619 ) (237,066 )
Total stockholders’ equity 176,075 181,737
Total liabilities and stockholders’ equity $ 347,493 $ 345,906
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Three Months Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
Cash flows from operating activities:
Net loss $ (5,460 ) $ (1,689 ) $ (6,425 ) $ (3,561 )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization expense 3,484 3,561 7,068 7,129
Stock-based compensation 1,290 974 2,570 1,808
Amortization of deferred revenue (1,218 ) (1,186 ) (2,435 ) (2,460 )
Other items to reconcile to net cash
(used in) provided by operating activities 12,731 (624 ) 8,600 7,697
Net cash provided by operating activities 10,827 1,036 9,378 10,613
Cash flows from investing activities:
Purchases of property, plant and equipment (1,738 ) (3,877 ) (3,856 ) (7,160 )
Patent and acquired intangible asset costs (398 ) (1,526 ) (728 ) (1,845 )
Acquisition of Zyga Technology (21,000 )
Net cash used in investing activities (2,136 ) (5,403 ) (25,584 ) (9,005 )
Cash flows from financing activities:
Proceeds from long-term obligations 54,425 2,000 74,425 4,000
Payments on long-term obligations (61,625 ) (3,125 ) (66,750 ) (7,375 )
Other financing activities (991 ) 1,467 403 1,433
Net cash (used in) provided by financing activities (8,191 ) 342 8,078 (1,942 )
Effect of exchange rate changes on cash and cash equivalents (66 ) 102 (7 ) 160
Net increase (decrease) in cash and cash equivalents 434 (3,923 ) (8,135 ) (174 )
Cash and cash equivalents, beginning of period 13,812 17,598 22,381 13,849
Cash and cash equivalents, end of period $ 14,246 $ 13,675 $ 14,246 $ 13,675

Contacts

RTI Surgical, Inc.
Media Contact:
Molly Poarch, +1-224-287-2661
mpoarch@rtix.com
or
Investor Contact:
Nathan Elwell, +1-847-530-0249
nelwell@lincolnchurchilladvisors.com

U.S. Ambulatory Surgical Centers Market Analysis & Outlook to 2024, With an Expected CAGR of 2.6% – ResearchAndMarkets.com

August 02, 2018

DUBLIN–(BUSINESS WIRE)–The “U.S. Ambulatory Surgical Centers Market Outlook 2024” report has been added to ResearchAndMarkets.com’s offering.

U.S. ambulatory surgery centers market size is currently valued at USD 25.8 Billion and is projected to surpass USD 31.4 Billion by 2024 at a healthy CAGR of 2.6% over the forecast period.

According to CDC, In 2015, 30.3 million people of all ages or 9.4% of the U.S. population is estimated to have diabetes. Diabetes is the major cause of numerous eye disorders such as diabetic retinopathy. This eye disorder leads to surgeries which is projected to flourish the growth of ambulatory surgery centers market.

U.S. ambulatory surgery centers is segmented on the basis of type, such as hospital-based ambulatory surgery centers and free-standing ambulatory surgery centers. Free-standing ambulatory surgery centers (72.7% share in 2016) occupies the largest market of ambulatory surgery centers in the U.S.

Single specialty centers segment is anticipated to reach at a valuation of USD 18.0 Billion by 2024 from USD 15.5 Billion in 2016, witnessing a CAGR of 2.0% over the forecast period. Moreover, single specialty centers segment is expected to achieve Y-o-Y growth rate of 2.6% in 2024 as compared to previous year.

In treatment segment, laceration treatment segment is expected to reach USD 10.7 Billion by the end of 2024 from USD 8.3 Billion in 2016. Further, this segment is anticipated to flourish at a CAGR of 3.4% over the forecast period. Further, laceration treatment segment is projected to achieve Y-o-Y growth rate of 4.0% in 2024 as compared to previous year. Moreover, laceration treatment segment stood at market share of 32.1% in 2016 and it is expected to contribute a market share of 34.2% by the end of 2024.

Companies Mentioned

  • HCA Holdings
  • Envision Healthcare
  • Tenet Healthcare
  • Surgery Partners
  • Surgical Care Affiliates
  • SurgCenter Development
  • Regent Surgical Health
  • Physicians Endoscopy
  • Ambulatory Surgical Centers of America
  • Covenant Surgical Partners

Key Topics Covered:

1. Executive Summary

2. Research Methodology

3. Risk Analysis

4. Market Dynamics & Its Impact Analysis

5. U.S. Market Segmentation Analysis

6. Porter’s Five Force Model Analysis

7. Competitive Landscape

For more information about this report visit https://www.researchandmarkets.com/research/tlvtf5/u_s_ambulatory?w=4

Contacts

ResearchAndMarkets.com
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
Related Topics: Other Healthcare Facilities

Conformis Announces the first 3D Total Hip Replacement Surgeries performed at JFK Medical Center in Florida

BILLERICA, Mass., Aug. 01, 2018 (GLOBE NEWSWIRE) — Conformis, Inc. (NASDAQ:CFMS), a medical technology company that offers patient conforming joint replacement implants, today announced completion of the first two Conformis Hip System implants. The Conformis Hip System is the first ever 3D designed primary total hip replacement system. The first surgeries were performed by Gregory Martin, M.D., Joint Fellowship Trained Orthopedic Surgeon and founder of Personalized Orthopedics of the Palm Beaches, and took place at a leading HCA Facility, JFK Medical Center in Atlantis, Florida on July 31, 2018.

“Partnering with our expert surgeon design team and leveraging our extensive experience in automated 3D printing and additive manufacturing enabled us to bring a revolutionary new hip replacement system to market. Our 3D implant design process provides surgeons with interactive input and improves operational efficiencies compared to 2D templating. The design process produces specific individualized pre-navigated cutting guides and implants. A groundbreaking acetabular reaming system has also been developed,” said Mark Augusti, chief executive officer and president of Conformis. “With this launch, we expect to lead the way in innovative solutions for the $7B hip replacement market by providing surgeons with game-changing operative solutions to better serve them and their patients both in hospitals and ambulatory surgical settings.”

Similar to the design process for the Conformis Knee technologies, the Conformis Hip System uses proprietary advanced imaging and design software, to design, manufacture and deliver the suite of FDA-cleared patient conforming Knee and Hip replacement implants. After each patient’s CT scan is converted into a 3-dimensional computer model, the unique measurements of each patient’s anatomy are transformed into a comprehensive, individualized, pre-operative surgical plan that is delivered to the surgeon well in advance of the operation. Surgeons are able to collaborate with Conformis during the planning process in order to design the optimal Hip System for each patient based on surgeon preferences.

“The Conformis Hip System is designed to address many of the short comings of primary hip replacement today. For the first time, orthopedic surgeons have a fully-guided system designed to address the wide variations in anatomy presented across our cases,” said Dr. Martin M.D*, a member of the surgeon design team. “The Conformis system builds upon traditional methods for hip replacement surgery with proven materials and components which, today, are offered in only limited standard configurations. Due to the accuracy of the personalized pre-operative surgical plan, the 3D printed patient conforming cutting guides and hip implant components, my hope is that with the new Conformis Hip system, surgeons will be able to improve both patient outcomes and operational efficiencies.”

Each component of the Conformis Hip System is pre-navigated to fit the patient, with certain components designed specifically for that patient. The Conformis Hip System is delivered directly to the hospital or surgery center in a single patient-labeled kit, eliminating the need for excess inventory. Patient conforming, single-use, 3D printed cutting guides are also included, limiting the need for the vast amount of reusable instruments required for a standard off-the-shelf total hip replacement.

The first two Conformis Hip System surgeries were conducted as part of a limited launch. Timing for a complete commercial launch is expected to be announced in 2019.

The global hip joint reconstruction market is projected at over $7B, and about 400,000 total hip replacements are performed in the United States each year.

*Gregory Martin, MD is a consultant to Conformis, Inc.

About Conformis, Inc.

Conformis is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are designed and manufactured to fit and conform to each patient’s unique anatomy. Conformis offers a broad line of patient conforming total and partial knee systems and a hip system that include sterilized single-use instruments delivered in a single package to the hospital. Conformis owns or exclusively in-licenses over 400 issued patents and pending patent applications that cover patient-specific implants and instrumentation for all major joints. In clinical studies, Conformis iTotal CR demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants.

For more information, visit www.conformis.com. To receive future releases in e-mail alerts, sign up at http://ir.conformis.com/.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this press release about our future expectations, plans and prospects, including statements about the anticipated timing of our product launches, and our financial position and results, total revenue, product revenue, gross margin, operations, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You should not place undue reliance on our forward-looking statements. Actual results could differ materially from the expectations disclosed in the forward-looking statements we make as a result of a variety of risks and uncertainties, including risks related to our estimates and expectations regarding our revenue, gross margin, expenses, revenue growth and other results of operations, and the other risks and uncertainties described in the “Risk Factors” sections of our public filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments may 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. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

Media Contact:

Kelly Wakelee

kwakelee@berrypr.com

(212)-253-8241

Investor Contact:

Oksana Bradley

ir@conformis.com

(781) 374-5598

A photo accompanying this announcement is available at: http://www.globenewswire.com/NewsRoom/AttachmentNg/e52cfbc4-fc9b-4c4d-b337-1990354e34a7

The photo is also available via AP PhotoExpress.

Source: Conformis, Inc.

This article appears in: News Headlines

Referenced Stocks: CFMS

 

K2M Group Holdings, Inc. Reports Second Quarter 2018 Financial Results and Updates Fiscal Year 2018 Outlook

LEESBURG, Va., Aug. 01, 2018 (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 Balance, today reported financial results for its second quarter ended June 30, 2018.

Second Quarter 2018 Financial Summary:

  • Total second quarter revenue of $73.6 million, up 12% year-over-year on a reported basis and 11.3% on a constant currency basis.
  • Domestic second quarter revenue of $54.3 million, up 7% year-over-year, comprised of:
    • U.S. Complex Spine revenue of $21.8 million, up $1.5 million, or 7%, year-over-year.
    • U.S. Minimally Invasive Surgery (MIS) revenue of $8.7 million, down $0.1 million, or 1%, year-over-year.
    • U.S. Degenerative revenue of $23.8 million, up $2.2 million, or 10%, year-over-year.
  • International second quarter revenue of $19.3 million, up 29.1% year-over-year on a reported basis and 25.7% on a constant currency basis.
  • Net loss of $10.8 million for the second quarter, compared to a net loss of $9.1 million in the comparable quarter last year.
  • Adjusted EBITDA loss of $2.7 million for the second quarter, compared to Adjusted EBITDA of $0.6 million in the comparable quarter last year.

Second Quarter Product Introductions and Strategic Highlights:

  • On April 27, 2018, the Company executed an exclusive agency and services agreement to replace its then-existing exclusive distribution agreement with its partner in Spain and Portugal, Medcomtech, S.A., whereby K2M and Medcomtech extended their partnership through 2024.  Pursuant to the agreement, K2M acquired Medcomtech’s spine customer contracts and relationships as well as its K2M product inventory and instrumentation in exchange for certain outstanding receivables from Medcomtech.
  • On April 30, 2018, the Company announced that it hosted more than 100 international spine surgeons from 10 countries for its annual Meeting of Minds™ in Chicago, IL, from April 20-21, 2018. Meeting of Minds, which is the largest of K2M’s comprehensive medical education programs, offers interactive discussions and case presentations on the latest issues in spine surgery, including the latest in cervical deformity correction.
  • On May 16, 2018, the Company announced the U.S. commercial launch of its MOJAVE™ PL 3D Expandable Interbody System. Designed with K2M’s Lamellar 3D Titanium Technology™, MOJAVE PL 3D incorporates a porous structure in conjunction with rough surfaces, with the goal of allowing for bony integration throughout its endplates. K2M was the first leading spine company to market a 3D-printed titanium interbody device and offers the most comprehensive portfolio of 3D-printed spinal devices on the market.
  • On May 30, 2018, the Company announced U.S. Food and Drug Administration (FDA) 510(k) clearance for BACS® Patient-Specific devices. With the BACS Surgical Planner, surgeons can create pre-contoured rods, rails, and templates that match the surgeon’s preoperative plan. This is K2M’s fifth module within the BACS platform, and its first clearance for patient-specific devices.
  • On June 7, 2018, the Company surpassed its 100th product milestone with the announcement of FDA 510(k) clearance and commercial launch of its OZARK™ Cervical Plate Systems, which are designed for anterior screw fixation to the cervical spine (C2-T1) in patients with degenerative disease, deformity, tumor, or trauma. This milestone highlights the depth and breadth of K2M’s 3D spinal balance portfolio, its cervical solutions offering, and strengthens the Company’s commitment to improving surgical outcomes for people living with spinal disease.
  • On June 14, 2018, the Company announced the pricing of a private offering of $75.0 million aggregate principal amount of 3.00% Convertible Senior Notes due 2025.

“Our second quarter total revenue growth of approximately 12% year-over-year reflects strong trends in both the U.S. and international markets, and we have increased our fiscal year 2018 revenue guidance expectations accordingly,” said Chairman, President, and Chief Executive Officer, Eric Major. “Summer deformity season is off to a strong start and, similar to Q1, our revenue growth in the U.S. this quarter was fueled in part by our multiple new product launches and the expansion of our distribution network in 2017 and 2018.”

Mr. Major continued: “We delivered 7.5% growth in the United States over the first six months of 2018, driven by solid execution against our strategic goal of increasing market share by introducing new and innovative spinal implant solutions like our first-of-its-kind MOJAVE PL 3D Expandable Interbody System featuring Lamellar 3D Titanium Technology and our YUKON OCT Spinal System that can be used with the PALO ALTO Cervical Static Corpectomy Cage System.  Building on the early commercial traction from recent new product introductions, we announced two important U.S. regulatory clearances this quarter, our BACS Patient-Specific devices and our OZARK Cervical Plate Systems, as we continue to enhance the foundation of growth in the future. To that end, we remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine surgery market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies.”

Second Quarter 2018 Financial Results

Three Months Ended June 30, Increase / Decrease
2018 2017 $ Change % Change % Change
($ in thousands) (as reported) (constant currency)
United States $ 54,325 $ 50,775 $ 3,550 7.0% 7.0%
International 19,255 14,917 4,338 29.1% 25.7%
Total Revenue Revenue: $ 73,580 $ 65,692 $ 7,888 12.0% 11.3%

Total revenue for the second quarter of 2018 increased $7.9 million, or 12.0%, to $73.6 million, compared to $65.7 million for the second quarter of 2017. Total revenue increased 11.3% year-over-year on a constant currency basis. The increase in revenue was primarily driven by higher sales volume from domestic new surgeon users and newer product offerings, and increased set investments by our distribution partners in Australia and Japan.

Revenue in the United States increased $3.6 million, or 7.0% year-over-year, to $54.3 million, and international revenue increased $4.3 million, or 29.1% year-over-year, to $19.3 million. Second quarter 2018 international revenue increased 25.7% year-over-year on a constant currency basis. Foreign currency exchange positively impacted second quarter international revenue by $0.4 million, representing approximately 338 basis points of 2018 international growth year-over-year.

The following table represents domestic revenue by procedure category:

Three Months Ended June 30, Increase / Decrease
2018 2017 $ Change % Change
($ in thousands)
Complex Spine $ 21,829 $ 20,342 $ 1,487 7.3%
Minimally Invasive 8,685 8,785 (100 ) (1.1)%
Degenerative 23,811 21,648 2,163 10.0%
U.S. Revenue $ 54,325 $ 50,775 $ 3,550 7.0%

 

By procedure category, U.S. revenue in the Company’s complex spine, MIS and degenerative categories represented 40.2%, 16.0% and 43.8% of U.S. revenue, respectively, for the three months ended June 30, 2018.

Gross profit for the second quarter of 2018 increased 11.1% to $48.0 million, compared to $43.2 million for the second quarter of 2017.  Gross margin was 65.2% for the second quarter of 2018, compared to 65.7% for the prior year period, primarily due to lower overall average selling prices during the quarter. Gross profit includes amortization expense on investments in surgical instruments of $4.1 million, or 5.5% of sales, for the three months ended June 30, 2018, compared to $3.6 million, or 5.5% of sales, for the comparable period last year.

Operating expenses for the second quarter of 2018 increased $7.1 million, or 13.7%, to $58.4 million, compared to $51.3 million for the second quarter of 2017. The increase in operating expenses was driven primarily by a $5.2 million increase in sales and marketing expenses, a $0.9 million increase in research and development expenses, and a $1.0 million increase in general and administrative expenses, compared to the comparable period last year.

Loss from operations for the second quarter of 2018 increased $2.2 million to $10.4 million, compared to a loss from operations of $8.2 million for the second quarter last year. Loss from operations included intangible amortization of $0.2 million for the three months ended June 30, 2018, compared to $2.4 million for the comparable period last year.

Total other expense, net for the second quarter of 2018 increased $2.1 million to $3.0 million, compared to $0.9 million last year. The increase in other expense, net, was primarily attributable to an unrealized loss of $1.0 million from foreign currency remeasurement on intercompany payable balances, compared to unrealized gain of $0.9 million in the second quarter last year.  Other expense, net for the second quarer of 2018 also included $0.2 million in incremental interest expense related to the Company’s new convertible notes issued on June 18, 2018.

Net loss for the second quarter of 2018 was $10.8 million, or $0.25 per diluted share, compared to a loss of $9.1 million, or $0.21 per diluted share, for the second quarter of 2017.

Six-Months 2018 Financial Results

Six Months Ended June 30, Increase / Decrease
2018 2017 $ Change % Change % Change
($ in thousands) (as reported) (constant currency)
United States $ 104,216 $ 96,982 $ 7,234 7.5% 7.5%
International 37,240 30,595 6,645 21.7% 17.2%
  Total Revenue $ 141,456 $ 127,577 $ 13,879 10.9% 9.9%

For the six months ended June 30, 2018, total revenue increased $13.9 million, or 10.9%, to $141.5 million, compared to $127.6 million for the six months ended June 30, 2017. Total revenue increased 9.9% year-over-year on a constant currency basis. U.S. revenue increased $7.2 million, or 7.5%, to $104.2 million for the first six months of 2018, compared to $97.0 million last year. International revenue increased $6.6 million, or 21.7%, to $37.2 million for the first six months of 2018, compared to $30.6 million last year. International revenue increased 17.2% year-over-year on a constant currency basis.

The following represents domestic revenue by procedure category:

Six Months Ended June 30, Increase / Decrease
($ in thousands) 2018 2017 $ Change % Change
Complex Spine $ 40,341 $ 37,478 $ 2,863 7.6 %
Minimally Invasive 17,061 16,657 404 2.4 %
Degenerative 46,814 42,847 3,967 9.3 %
U.S. Revenue $ 104,216 $ 96,982 $ 7,234 7.5 %

Sales in our complex spine, MIS and degenerative categories represented 38.7%, 16.4% and 44.9% of U.S. revenue, respectively, for the first six months of 2018.

As of June 30, 2018, cash and equivalents were $66.2 million as compared to $24.0 million as of December 31, 2017. Our outstanding long-term indebtedness consisted primarily of the carrying value of the Convertible Senior Notes maturing in 2036 and 2025 of $91.8 million and the capital lease obligation, net of current maturities, of $33.2 million. In addition, the Company also had working capital of $147.5 million and $49.0 million of unused borrowing capacity under its revolving credit facility, subject to covenant compliance and conditions of borrowing.

2018 Outlook

  • The Company is increasing total revenue expectations for fiscal year 2018 and now expects total revenue on a reported basis in the range of $288.0 million to $291.0 million, representing growth of 12% to 13% year-over-year, compared to total revenue of $258.0 million in fiscal year 2017.  Its prior revenue guidance expectations were for total revenue on an as reported basis in a range of $283.0 million to $287.0 million, representing growth of 10% to 11% year-over-year.
    • The Company continues to expect growth in its U.S. business of approximately 10% to 11% year-over-year in 2018.
    • The Company now expects growth in its International business of approximately 17% to 19% year-over-year in 2018, compared to prior guidance expectations for growth of approximately 11% to 12% year-over-year.
    • The Company continues to expect currency to have a positive impact on total revenue in 2018 of approximately $2 million.
  • The Company now expects total net loss of $38.2 million to $34.2 million, compared to net loss of $37.1 million in fiscal year 2017, updated to reflect the latest convertible note offering and other non-cash items.
  • The Company continues to expect an Adjusted EBITDA benefit in the range of $4.0 million to $8.0 million, compared to Adjusted EBITDA loss of $0.7 million in fiscal year 2017.

Conference Call

Management will host a conference call at 5:00 p.m. Eastern Time on August 1, 2018 to discuss the results of the second quarter, and to host a question and answer session. Those who would like to participate may dial 866-393-4306 (734-385-2616 for international callers) and provide access code 4666247 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 http://Investors.K2M.com/.

For those unable to participate, a replay of the call will be available for two weeks at 855-859-2056 (404-537-3406 for international callers); access code 4666247. 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, enables K2M to compete favorably in the global spine surgery market. For more information, visit www.K2M.com and connect with us on FacebookTwitterInstagramLinkedIn 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.  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 in the future; our ability to demonstrate to spine surgeons and hospital customers the merits of our products and to retain their use of our products; pricing pressures and our ability to compete effectively generally; collaboration and consolidation in hospital purchasing; inadequate coverage and reimbursement for our products from third-party payers; lack of long-term clinical data supporting the safety and efficacy of our products; 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 to our products; proliferation of physician-owned distributorships in the industry; decline in the sale of certain key products; loss of key personnel; our ability to enhance our product offerings through research and development; our ability to maintain adequate working relationships with healthcare professionals; our ability to manage expected growth; our ability to successfully acquire or invest in new or complementary businesses, products or technologies; our ability to educate surgeons on the safe and appropriate use of our products; costs associated with high levels of inventory; impairment of our goodwill and intangible assets; disruptions to our corporate headquarters and operations facilities or critical information technology systems or those of our suppliers, distributors or surgeon users; our ability to ship a sufficient number of our products to meet demand; our ability to strengthen our brand; fluctuations in insurance cost and availability; our ability to remediate the material weaknesses in our IT general controls; our ability to comply with extensive governmental regulation within the United States and foreign jurisdictions; our ability to maintain or obtain regulatory approvals and clearances within the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; recalls or serious safety issues with our products; enforcement actions by regulatory agencies for improper marketing or promotion; misuse or off-label use of our products; delays or failures in clinical trials and results of clinical trials; legal restrictions on our procurement, use, processing, manufacturing or distribution of allograft bone tissue; negative publicity concerning methods of tissue recovery and screening of donor tissue; costs and liabilities relating to environmental laws and regulations; our failure or the failure of our agents to comply with fraud and abuse laws; U.S. legislative or Food and Drug Administration regulatory reforms; adverse effects associated with the exit of the United Kingdom from the European Union; adverse effects of medical device tax provisions; potential tax changes in jurisdictions in which we conduct business; our ability to generate significant sales; potential fluctuations in sales volumes and our results of operations over the course of a fiscal year; uncertainty in future capital needs and availability of capital to meet our needs; our level of indebtedness and the availability of borrowings under our credit facility; restrictive covenants and the impact of other provisions in the indenture governing our convertible senior notes and our credit facility; worldwide economic instability; our ability to protect our intellectual property rights; patent litigation and product liability lawsuits; damages relating to trade secrets or non-competition or non-solicitation agreements; risks associated with operating internationally; fluctuations in foreign currency exchange rates; our ability to comply with the Foreign Corrupt Practices Act and similar laws; increased costs and additional regulations and requirements as a result of being a public company; our ability to implement and maintain effective internal control over financial reporting; potential volatility in our stock price; our lack of current plans to pay cash dividends; potential dilution by the future issuances of additional common stock in connection with our incentive plans, acquisitions or otherwise; anti-takeover provisions in our organizational documents and our ability to issue preferred stock without shareholder approval; potential limits on our ability to use our net operating loss carryforwards; 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 www.sec.gov.  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.

Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA
443-213-0500
K2M@westwicke.com

K2M GROUP HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share and Per Share Data)
June 30, December 31,
2018 2017
ASSETS    
Current assets:    
Cash and cash equivalents $ 66,230 $ 23,964
Accounts receivable, net 54,464 50,474
Inventory, net 80,112 71,424
Prepaid expenses and other current assets 6,175 7,842
Total current assets 206,981 153,704
Property, plant and equipment, net 47,194 49,200
Surgical instruments, net 29,281 26,250
Goodwill 121,814 121,814
Intangible assets, net 19,209 18,899
Other assets 4,102 3,260
Total assets $ 428,581 $ 373,127

 

READ THE REST HERE

 

Globus Medical Reports Second Quarter 2018 Results

AUDUBON, Pa., Aug. 01, 2018 (GLOBE NEWSWIRE) — Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal solutions company, today announced its financial results for the second quarter ended June 30, 2018.

  • Worldwide sales were $173.4 million, an increase of 13.8% as reported
  • Second quarter net income was $45.0 million, an increase of 56.9%
  • Diluted earnings per share (EPS) and non-GAAP EPS were $0.44
  • Non-GAAP EPS increased 38.0% compared to second quarter of 2017
  • Non-GAAP adjusted EBITDA was 34.3% of sales

“The second quarter marks the third consecutive quarter of double-digit organic growth for Globus Medical, as our U.S. Spine business continues to take market share, growing by 4.2%; our international revenue increased by 7.2%; and Emerging Technologies contributed $13.8 million,” said Dave Demski, CEO.  “We are very pleased with the strong sales of our ExcelsiusGPS™ robotic system, and more importantly, the level of adoption we are seeing by surgeons in accounts that have purchased the technology.  The synergy of this transformational technology, combined with the most innovative suite of spinal implants in the industry, is expected to provide a powerful platform for our future growth.”

Worldwide sales for the second quarter were $173.4 million, an increase of 13.8% over the second quarter of 2017.  Non-GAAP diluted EPS was $0.44, an increase of 38.0%.  Revenue from Emerging Technologies was primarily due to continued demand for our ExcelsiusGPS™ robotics and navigation system.

Second quarter sales in the U.S., including robotics, increased by 15.1% compared to the second quarter of 2017.  International sales increased by 7.2% over the second quarter of 2017 on an as-reported basis and 4.3% on a constant currency basis.

Second quarter GAAP net income was $45.0 million, an increase of 56.9% over the same period last year.  Diluted EPS for the second quarter was $0.44, as compared to $0.29 for the second quarter 2017.  Non-GAAP diluted EPS for the second quarter was $0.44, compared to $0.32 in the second quarter of 2017.

The company generated net cash provided by operating activities of $33.3 million and non-GAAP free cash flow of $18.5 million in the second quarter, and ended the quarter with cash, cash equivalents and marketable securities of $516.8 million.  The company remains debt free.

2018 Annual Guidance
The company today issued new guidance for full year 2018 sales of $700 million and non-GAAP fully diluted earnings per share of $1.55.  2018 guidance was previously sales of $695 million and non-GAAP fully diluted earnings per share of $1.52.

Executive Appointment
The company also announced the promotion of Dan Scavilla to the position of Executive Vice President, Chief Commercial Officer.  In his new role, Mr. Scavilla will be responsible for all contracting and pricing; supply chain and logistics; and manufacturing operations; as well as continued oversight of all finance-related functions.  Mr. Scavilla will continue in the role of Chief Financial Officer until the company completes its search for a new CFO.

Conference Call Information
Globus Medical will hold a teleconference to discuss its 2018 second quarter results with the investment community at 4:30 p.m. Eastern Time today.  Globus invites all interested parties to join the call by dialing:

1-855-533-7141          United States Participants
1-720-545-0060          International Participants
There is no pass code for the teleconference.

For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at investors.globusmedical.com.

The call will be archived until Wednesday, August 8, 2018.  The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 1012-6350.

About Globus Medical, Inc.
Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.

Non-GAAP Financial Measures

To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures.  For example, non-GAAP adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation, provisions for litigation, technology in-licensing fee, and acquisition related costs, and net gain from the sale of assets, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense.  Our management also uses non-GAAP adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.  Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized.  Acquisition related costs/licensing represents the change in fair value of business acquisition related contingent consideration; costs related to integrating recently acquired businesses including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one time licensing fees.   Net gain from sale of assets represents the gain on sale of assets and the offsetting impact of costs incurred through the sale.

In addition, for the period ended June 30, 2018 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP diluted earnings per share, which represents net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, net gain from the sale of assets and the tax effects of such adjustments.  We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs/licensing, net gain from the sale of assets and the tax effects of such adjustments, which we believe are not reflective of underlying business trends.  Additionally, for the periods ended June 30, 2018 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment.  We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions.  Furthermore, the non-GAAP measure of constant currency sales growth is calculated by translating current year sales at the same average exchange rates in effect during the applicable prior year period.  We believe constant currency sales growth provides insight to the comparative increase or decrease in period sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.

Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth are not calculated in conformity with U.S. GAAP.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.  These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results.  Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth may differ from that of other companies and therefore may not be comparable.  Additionally, we have recast prior periods for non-GAAP net income and non-GAAP diluted earnings per share.

Safe Harbor Statements

All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms.  These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends.  Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted.  These risks and uncertainties include, but are not limited to, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to successfully integrate the international operations acquired from Alphatec, both in general and on our anticipated timeline, our ability to transition Alphatec’s international customers to Globus products, our ability to realize the expected benefits to our results from the Alphatec acquisition, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks.  For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission.  These documents are available at www.sec.gov.  Moreover, we operate in an evolving environment.  New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements.  Forward-looking statements contained in this press release speak only as of the date of this press release.  We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.

GLOBUS MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Six Months Ended
(In thousands, except per share amounts) June 30,
2018
June 30,
2017
June 30,
2018
June 30,
2017
Sales $ 173,384 $ 152,390 $ 347,795 $ 308,199
Cost of goods sold 37,637 37,199 75,607 72,799
Gross profit 135,747 115,191 272,188 235,400
Operating expenses:
Research and development 13,523 10,713 26,210 21,379
Selling, general and administrative 77,125 64,438 152,819 131,497
Provision for litigation 243 243
Amortization of intangibles 2,178 1,809 4,365 3,591
Acquisition related costs 782 617 1,021 1,005
Total operating expenses 93,608 77,820 184,415 157,715
Operating income 42,139 37,371 87,773 77,685
Other income/(expense), net 8,165 2,186 10,609 4,286
Income before income taxes 50,304 39,557 98,382 81,971
Income tax provision 5,327 10,890 13,866 24,590
Net income $ 44,977 $ 28,667 $ 84,516 $ 57,381
Earnings per share:
Basic $ 0.46 $ 0.30 $ 0.87 $ 0.60
Diluted $ 0.44 $ 0.29 $ 0.84 $ 0.59
Weighted average shares outstanding:
Basic 97,830 96,161 97,337 96,079
Diluted 101,510 97,818 101,005 97,483

 

READ THE REST HERE

 

The global orthopedic devices market size is expected to reach USD 43.1 billion by 2024

NEW YORK, August 1, 2018 /PRNewswire/ — Orthopedic Devices Market Size, Share & Trends Analysis Report By Application (Hip, Knee, Spine, Dental, Craniomaxillofacial, Sports Injuries, Extremities, and Trauma), By Product, And Segment Forecasts, 2018 – 2024

Read the full report: https://www.reportlinker.com/p05479699 

The global orthopedic devices market size is expected to reach USD 43.1 billion by 2024, according to a study by Grand View Research, Inc. It is anticipated to expand at a CAGR of 4.4% over the forecast period. Major market drivers include rising demand for orthopedic surgeries owing to rise in road accidents and high prevalence of orthopedic ailments.

Growth in geriatric population prone to orthopedic conditions is primarily pushing demand for orthopedic solutions globally. Effects of aging, such as diminishing bone density and weakening bones due to excessive loss of bone mass, make their presence felt from 35 years of age and become more prominent after 55 years.

High adoption of minimally invasive surgeries and increasing number of sport-related injuries and road accidents are expected to fuel demand for orthopedic devices during the forecast period.Arthroscopy, minimally invasive total joint replacement, and spine surgeries are some of the newly adopted minimally invasive surgeries driving the market.

On the down side, stringent regulatory approval procedures are key factors restraining market growth. In addition, high cost of these devices and surgical procedures threaten the growth of the market.

Further key findings from the study suggest:

• The knee surgery segment captured the largest revenue share in 2016 accredited to rising knee surgeries, ranging from common knee injuries to total knee replacements

• The hip surgery segment captured second largest revenue share in 2016, fueled by availability of a wide range of treatment products

• North America is expected to maintain its dominance throughout the forecast period. Presence of a large number of major players and high adoption of advanced technologies are regional growth drivers

• Asia Pacific is expected to exhibit a lucrative CAGR during the forecast period. Presence of untapped opportunities, coupled with supportive government regulations, is expected to attract global players

• Some of the major market players are NuVasive, Inc.; Medtronic PLC; Zimmer-Biomet Holdings; DePuy Synthes Companies; Stryker Corporation; Aesculap Implant Systems, Inc.; Donjoy, Inc.; and Conmed Corporation.

Read the full report: https://www.reportlinker.com/p05479699 

About Reportlinker 

ReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need – instantly, in one place. 

__________________________ 

Contact Clare: clare@reportlinker.com 

US: (339)-368-6001 

Intl: +1 339-368-6001

SOURCE Reportlinker

Related Links

http://www.reportlinker.com