ConforMIS Reports First Quarter 2017 Financial Results

Posted On May 12, 2017 By OrthoSpineNews In Financial /

BILLERICA, Mass., May 10, 2017 (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 financial results for the first quarter ended March 31, 2017.

Q1 Summary:

Total revenue of $20.5 million, up 1% year-over-year on a reported basis and up 2% on a constant currency basis
Product revenue of $20.4 million, up 2% year-over-year on a reported basis and up 3% on a constant currency basis
– U.S. product revenue increased 9% year-over-year
– Rest of World product revenue decreased 16% year-over-year on a reported basis and decreased 12% year-over-year on a constant currency basis

“We reported better than expected revenue results in the first quarter of 2017,” said Mark Augusti, President and Chief Executive Officer of ConforMIS, Inc. “Revenue exceeded the mid-point of the first quarter 2017 guidance range in excess of $2 million. Our full year guidance remains unchanged as we work through this year of transition.”

First Quarter 2017 Financial Results


	Three months ended March 31,				Increase/decrease
*($, in thousands)*		2017		2016	$ Change			% Change		% Change
								*(as reported)*		*(constant* *currency)*
United States	$	15,964	$	14,708	$	1,256		9	%	9	%
Rest of world		4,415		5,274		(859	)	-16	%	-12	%
Product revenue		20,379		19,982		397		2	%	3	%
Royalty revenue		76		268		(192	)	-72	%	-72	%
Total revenue	$	20,455	$	20,250	$	205		1	%	2	%

Total revenue increased $0.2 million to $20.5 million, or 1% year-over-year on a reported basis and increased 2% on a constant currency basis. Total revenue in the first quarter of 2017 included royalty revenue related to patent license agreements of $0.1 million as compared to $0.3 million in the first quarter of 2016.

Product revenue increased $0.4 million to $20.4 million, or 2% year-over-year on a reported basis and increased 3% on a constant currency basis. U.S. product revenue increased $1.3 million to $16.0 million, or 9% year-over-year, and Rest of World product revenue decreased $0.9 million to $4.4 million, or 16% year-over-year on a reported basis and decreased 12% on a constant currency basis. Product revenue from sales of iTotal CR, iDuo and iUni was $15.3 million for the three months ended March 31, 2017 compared to $17.6 million for the three months ended March 31, 2016, a decrease of $2.3 million, or 13% year-over-year, on a reported basis and 12% on a constant currency basis. Product revenue from sales of iTotal PS was $5.1 million for the three months ended March 31, 2017 compared to $2.4 million for the three months ended March 31, 2016, an increase of $2.7 million, or 113% year-over-year, on a reported and constant currency basis.

Total gross profit decreased $0.2 million to $6.5 million, or 32% of revenue, in the first quarter of 2017, compared to $6.7 million, or 33% of revenue, in the first quarter of 2016. The decrease in gross margin year-over-year was driven primarily by the impact of foreign currency exchange rate changes and the timing of royalty payments received.

Total operating expenses increased $2.0 million to $23.8 million, or 9% year-over-year. The increase in operating expenses was driven primarily by higher general and administrative expense, including a $1.4 million increase in patent litigation expense and a $0.7 million increase in personnel costs compared to last year.

Net loss was $17.2 million, or $0.40 per basic share, in the first quarter of 2017, compared to a net loss of $15.0 million, or $0.37 per basic share, for the same period last year. The change in first quarter net loss was driven primarily by higher general and administrative expense year-over-year.

As of March 31, 2017, the Company’s cash and cash equivalents and investments totaled $68.5 million, compared to $65.5 million as of December 31, 2016. As previously announced, in January 2017 the Company secured up to $50 million in term debt financing from Oxford Finance, of which $15 million was borrowed in January.

2017 Financial Guidance

ConforMIS reaffirms the financial guidance provided on February 15, 2017. For the full year 2017, the Company continues to expect total revenue in a range of $80 to $84 million and total gross margin in a range of 36% to 38%.

Note on Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides certain information regarding the Company’s financial results or projected financial results on a non-GAAP “constant currency basis.” This information estimates the impact of changes in foreign currency rates on the translation of the Company’s current or projected future period financial results as compared to the applicable comparable period. This impact is derived by taking the adjusted current or projected local currency results and translating them into U.S. Dollars based upon the foreign currency exchange rates for the applicable comparable period. It does not include any other effect of changes in foreign currency rates on the Company’s results or business. Non-GAAP information is not a substitute for, and is not superior to, information presented on a GAAP basis.

Conference Call

As previously announced, ConforMIS will conduct a conference call and webcast today at 4:30 PM Eastern Time. Management will discuss financial results and strategic matters. To participate in the conference call, please call 877-809-6331 (or 615-247-0224 for international) and use conference ID number 5263799 or listen to the webcast in the investor relations section of the company’s website at ir.conformis.com. The online archive of the webcast will be available on the company’s website for 30 days.

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 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 approximately 450 issued patents and pending patent applications that cover customized implants and 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

Any statements in this press release about our future expectations, plans and prospects, including statements about our strategy, future operations, future financial position and results, market growth, total revenue and revenue mix by product and geography, gross margin, operating trends, the potential impact and advantages of using customized implants, and potential transition at the Company 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. 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. Actual results or events could differ materially from the plans, intentions and 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 regarding the potential market opportunity for our current and future products, our expectations regarding our revenue, gross margin, expenses, revenue growth, transition 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.

CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)

	Three Months Ended March 31
		2017			2016

Revenue
Product	$	20,379		$	19,982
Royalty		76			268
Total revenue		20,455			20,250
Cost of revenue		13,960			13,586
Gross profit		6,495			6,664

Operating expenses
Sales and marketing		10,816			11,115
Research and development		4,560			4,398
General and administrative		8,458			6,295
Total operating expenses		23,834			21,808
Loss from operations		(17,339	)		(15,144	)

Other income and expenses
Interest income		103			139
Interest expense		(307	)		(25	)
Foreign currency exchange transaction income		390			—
Total other expenses		186			114
Loss before income taxes		(17,153	)		(15,030	)
Income tax provision		7			4

Net loss	$	(17,160	)	$	(15,034	)

Net loss per share – basic and diluted	$	(0.40	)	$	(0.37	)
Weighted average common shares outstanding – basic and diluted		42,874,743			40,993,485

CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)

	March 31, 2017			December 31, 2016
	March 31, 2017			December 31, 2016
Assets	(unaudited)
Current Assets
Cash and cash equivalents	$	36,392		$	37,257
Investments		27,910			28,242
Accounts receivable, net		13,052			14,675
Inventories		11,383			11,720
Prepaid expenses and other current assets		2,910			3,954
Total current assets		91,647			95,848
Property and equipment, net		15,760			15,084
Other Assets
Restricted cash		762			300
Investments		4,192			—
Intangible assets, net		684			746
Goodwill		753			753
Other long-term assets		29			79
Total assets	$	113,827		$	112,810

Liabilities and stockholder’s equity
Current liabilities
Accounts payable	$	5,768		$	5,474
Accrued expenses		8,875			8,492
Deferred revenue		305			305
Total current liabilities		14,948			14,271
Other long-term liabilities		161			164
Deferred revenue		4,243			4,320
Long-term debt,less debt issuance costs		14,718			—
Total liabilities		34,070			18,755
Commitments and contingencies		—			—
Stockholders’ equity
Preferred stock, $0.00001 par value:
Authorized: 5,000,000 shares authorized at March 31, 2017 and December 31, 2016, respectively, no shares outstanding as of March 31,2017 and December 31, 2016.		—			—
Common stock, $0.00001 par value:
Authorized: 200,000,000 shares at March 31, 2017 and December 31, 2016; 43,840,318 and 43,399,547 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively		—			—
Additional paid-in capital		480,022			476,486
Accumulated deficit		(400,401	)		(382,930	)
Accumulated other comprehensive loss		136			(499	)
Total stockholders’ equity		79,757			94,055
Total liabilities and stockholders’ equity	$	113,827		$	112,810

CONTACT:    

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

Alphatec Holdings Reports First Quarter 2017 Financial Results

Posted On May 12, 2017 By OrthoSpineNews In Financial /

CARLSBAD, Calif., May 11, 2017 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced today recent corporate highlights and financial results for first quarter ended March 31, 2017.

First Quarter 2017 Highlights and Recent Accomplishments

Financial Highlights

Total net revenues of $28.0 million; revenue from the Company’s U.S. commercial business of $23.4 million
U.S. commercial gross margin of 68%
Gross proceeds of $18.9 million from private placement
Cash balance of $25.5 million at March 31, 2017

Organizational and Product Highlights

Completed its seven-person senior leadership team with appointments of Chief Financial Officer and Executive Vice President of Strategic Marketing and Product Development.
Initiated transition of sales organization from non-exclusive to dedicated.
Added three new Area Vice Presidents with a history of building strong, dedicated distribution channels in spine.
Reduced headcount from 195 in September 2016 to approximately 140 today, and implemented cost-control measures, including consolidating the Company’s operations into one building.
Completed a limited user release of Arsenal™ Deformity Adolescent Idiopathic Scoliosis (AIS) System, and introduced a limited user release of Battalion™ Lateral System, both which have been well-received by surgeons.

“We are very pleased with our progress in evolving the Alphatec organization over the past few months,” said Terry Rich, CEO of Alphatec. “Our strategy for the Company centers on combining our broad product portfolio with new leadership, dedicated distribution partners, and a high-performance culture in order to significantly re-position the Alphatec brand to customers, investors, employees, and business partners. In the short time that our new team has been together, we have taken many important steps to provide a solid base to return Alphatec to a growth organization.”

Financial Results for the First Quarter Ended March 31, 2017

As a result of the sale of the Company’s international business in September 2016, the financial results and related assets and liabilities of the former international business have been excluded from continuing operations for all periods herein and reported as discontinued operations.

U.S. commercial revenues for the first quarter of 2017 were $23.4 million, down 19.8%, compared to $29.2 million reported for the first quarter of 2016. On a sequential basis, U.S. commercial revenues in the first quarter of 2017 were down $1.1 million, or 4.3%, compared to $24.5 million in the fourth quarter of 2016.

These decreases are largely the result of financial and operational challenges the Company faced in 2016, which led to the sale of the Company’s international business in order to sustain operations. This resulted in a reduction in volume from several distributors and surgeons. Revenue was also impacted by the Company’s decision to exit the stocking distributor and terminate distributor relationships that are not representative of the Company’s long-term business and rebranding strategy.

U.S. gross profit and gross margin for the first quarter of 2017 were $16.0 million and 68.3%, respectively, compared to $23.5 million and 80.6%, respectively, for the first quarter of 2016. Gross margins declined primarily as a result of increased supply costs from reduced sourcing and manufacturing volumes, and an increase in inventory kit write-offs due to distributor turnover.

On a sequential basis, U.S. gross margin of 68.3% in the first quarter of 2017 increased from 62.2% in the fourth quarter of 2016.

Total operating expenses for the first quarter of 2017 were $20.2 million, reflecting a decrease of $7.8 million, an approximate 28% improvement over the first quarter of 2016. On a non-GAAP basis, excluding restructuring charges, total operating expenses in the first quarter of 2017 decreased $8.9 million, or approximately 32%, compared to the first quarter of 2016. These decreases reflect the impact of cost reduction initiatives, including the workforce reductions the Company implemented in October 2016 and February 2017.

On a sequential basis, total operating expenses in the first quarter of 2017 were down $1.5 million, or approximately 7%, compared to $21.7 million in the fourth quarter of 2016. On a non-GAAP basis, excluding restructuring charges, total operating expenses in the first quarter of 2017 decreased $2.2 million, or approximately 11%, compared to the fourth quarter of 2016.

GAAP loss from continuing operations for the first quarter of 2017 was $5.4 million, compared to a loss of $4.2 million for the first quarter of 2016, and a loss of $10.2 million for the fourth quarter of 2016.

Adjusted EBITDA in the first quarter of 2017 was $0.5 million, compared to $71,000 in for the first quarter of 2016 and a loss of $2.2 million for the fourth quarter of 2016. Please refer to the table, “Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures” that follows for more detailed information.

Total Current and Long-term debt, includes $34.2 million in term debt and $10.3 million outstanding under the Company’s revolving credit facility at March 31, 2017. This compares to $34.8 million in term debt and $12.5 million outstanding under the Company’s revolving credit facility at December 31, 2016.

Cash and cash equivalents were $25.5 million at March 31, 2017, compared to $19.6 million reported at December 31, 2016. In March, the Company raised gross proceeds of $18.9 million in a private placement of common stock, Series A Convertible Preferred Stock and warrants exercisable for common stock.

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 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.

About Alphatec Holdings, Inc.

Alphatec Holdings, Inc., through its wholly-owned subsidiary Alphatec Spine, Inc., is a medical device company that designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company’s mission is to improve lives by delivering advancements in spinal fusion technologies. 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.alphatecspine.com.

Forward Looking Statements

This press release may contain “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 re-positioning the Alphatec 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 clearance or approval or international regulatory approvals 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 periodic reports, filed with the Securities and Exchange Commission. Alphatec 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.

ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts – unaudited)

		Three Months Ended
		March 31,
		2017			2016

	Revenues	$	27,978		$	34,206
	Cost of revenues		11,199			9,719
	Gross profit		16,779			24,487
			60.0	%		71.6	%
	Operating expenses:
	Research and development		1,449			3,641
	Sales and marketing		11,103			14,940
	General and administrative		6,223			9,004
	Amortization of intangible assets		172			255
	Restructuring expenses		1,231			89
	Total operating expenses		20,178			27,929
	Operating loss		(3,399	)		(3,442	)
	Interest and other expense, net		(1,976	)		(783	)
	Loss from continuing operations before taxes		(5,375	)		(4,225	)
	Income tax provision		49			23
	Loss from continuing operations		(5,424	)		(4,248	)
	Loss from discontinued operations		(91	)		(2,369	)
	Net loss	$	(5,515	)	$	(6,617	)

	Net loss per share continuing operations	$	(0.60	)	$	(0.50	)
	Net loss per share discontinued operations		(0.01	)		(0.28	)
	Net loss per share – basic and diluted	$	(0.61	)	$	(0.78	)

	Weighted-average shares – basic and diluted		9,005			8,466

ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	March 31,			December 31,
	2017			2016
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	25,485		$	19,593
Accounts receivable, net		14,212			18,512
Inventories, net		30,088			30,093
Prepaid expenses and other current assets		2,451			4,262
Current assets of discontinued operations		170			364
Total current assets		72,406			72,824

Property and equipment, net		15,408			15,076
Intangibles, net		5,477			5,711
Other assets		222			516
Noncurrent assets of discontinued operations		58			61
Total assets	$	93,571		$	94,188

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	4,245		$	8,701
Accrued expenses		26,173			27,589
Current portion of long-term debt		2,616			3,113
Current liabilities of discontinued operations		293			732
Total current liabilities		33,327			40,135

Total long term liabilities		65,774			71,954
Redeemable preferred stock		23,603			23,603
Stockholders’ deficit		(29,133	)		(41,504	)
Total liabilities and stockholders’ deficit	$	93,571		$	94,188

ALPHATEC HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts – unaudited)



		Three Months Ended
		March 31,
		2017			2016

	Operating loss, as reported	$	(3,399	)	$	(3,442	)
	Add back:
	Depreciation		1,634			2,254
	Amortization of intangible assets		234			306
	Total EBITDA		(1,531	)		(882	)

	Add back significant items:
	Stock-based compensation		516			58
	Stock price guarantee		292			806
	Restructuring and other charges		1,231			89

	EBITDA, as adjusted for significant items	$	508		$	71

ALPHATEC HOLDINGS, INC.
RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT
(in thousands, except percentages – unaudited)

		Three Months Ended
		March 31,						% Change
		2017			2016

	Revenues by source
	U.S. commercial revenue	$	23,437		$	29,233		(19.8	%)
	Other		4,541			4,973		(8.7	%)
	Total revenues	$	27,978		$	34,206		(18.2	%)

	Gross profit by source
	U.S.	$	16,015		$	23,548
	Other		764			939
	Total gross profit	$	16,779		$	24,487

	Gross profit margin by source
	U.S.		68.3	%		80.6	%
	Other		16.8	%		18.9	%
	Total gross profit margin		60.0	%		71.6	%

Investor/Media Contact: Nick Laudico or Zack KubowThe Ruth Group (646) 536-7000 alphatec@theruthgroup.com Company Contact: Jeff Black Executive Vice President and Chief Financial Officer Alphatec Holdings, Inc. (760) 431-9286

Source: Alphatec Holdings, Inc.

Preop Opioid Use Linked to Worse Spine Surgery Outcomes

Posted On May 12, 2017 By OrthoSpineNews In Spine /

Nancy A. Melville – May 10, 2017

LOS ANGELES — The preoperative use of opioid analgesics is associated with worse clinical postoperative outcomes at 12-month follow-up of lumbar fusion surgery for degenerative lumbar conditions, new research shows.

“The results suggest the use of opioid medication is a potentially modifiable factor that could be controlled to maximize clinical outcomes,” said first author, Alan T. Villavicencio, MD, from Boulder Neurosurgical Associates, Colorado.

He presented the findings here at the American Association of Neurological Surgeons (AANS) 2017 Annual Meeting.

While a high number of patients with low back pain can be expected to have been prescribed opioid medications for pain, research on the relationship between use of the medications before surgery and lumbar fusion surgery outcomes is lacking.

For the prospective study, Dr Villavicencio and colleagues enrolled 93 patients receiving one- to two-level transforaminal lumbar interbody fusion surgeries for degenerative low back conditions.

Of the patients, who had an average age of 59 years, 60 (64.5%) had preoperatively used prescribed opioids, with an average preoperative dose of 64.4 mg (range, 10 to 270 mg).

Demographic and surgical characteristics did not significantly differ between patients who did and didn’t have preoperative opioid use, with the exception of average symptom duration, which was longer in nonusers (113 months vs 56 months; P = .008).

In the opioid use group, preoperative disability was higher than in nonusers (average Oswestry Disability Index, 40.3 vs 33.7; P = .04) and measures of mental health were lower (Short Form-36 [SF-36] Mental Component Summary [MCS], 42.7 vs 49.2; P = .01).

However, other clinical scores of back and leg pain visual analogue scale and SF-36 Physical Component Summary (PCS) were not statistically different.

READ THE REST HERE

SANUWAVE Appoints LOK North America as Territory Sales Manager for Sourcing and Screening of Potential Distributors for Company’s Products in Canada

Posted On May 12, 2017 By OrthoSpineNews In Biologics, Top Stories /

SUWANEE, GA–(Marketwired – May 11, 2017) – SANUWAVE Health, Inc. (OTCQB: SNWV) is pleased to announce that the company has appointed LOK North America to act as Territory Sales Manager for sourcing and screening of potential distributors for SANUWAVE’s products in Canada.

André Mouton, V.P. International Sales and Relations of SANUWAVE, stated, “This decision to engage LOK North America was made to increase visibility within the Canadian market and to maximize the exposure that SANUWAVE can get for their registered and approved product line in Canada. LOK North America will give us an extended reach and establish rigorous evaluation methods of the regional distribution options in Canada to ensure the development of a strong distribution network. All of these factors will lead to faster market entry and closer ties with identified Key Opinion Leaders (KOL’s),” concluded André Mouton.

Eric Fillion, V.P. Sales and Marketing of LOK North America, stated, “LOK North America is an ideal partner for SANUWAVE by providing both regulatory and commercial support when introducing and expanding the Company’s medical device portfolio in Canada.”

“LOK North America will provide targeted assistance to SANUWAVE with a team of professionals that are dynamic individuals with diversified backgrounds and each having his/her own area of expertise,” continued Mr. Fillion. “Our multidisciplinary approach enables us to offer our services in an integrated and efficient way. Our commercial support expertise, with its in-depth knowledge of the Canadian medical landscape will allow SANUWAVE to have the maximum impact in the shortest time span.”

SANUWAVE is using this occasion to further educate on our lead wound care product dermaPACE®. This Extracorporeal Shockwave Technology (ESWT) device, based upon electrohydraulic principles, is CE Marked and has enjoyed success in certain markets within the European Union treating a wide variety of skin conditions such as pressure ulcers, burns, post-operative wounds, and scar reduction. dermaPACE has been proven, in two US based clinical trials enrolling 336 subjects, to be safe and effective in the treatment of Diabetic Foot Ulcers. Within a few weeks of initial treatment, wounds treated with dermaPACE reduce in area at superior rates compared to control subjects. dermaPACE exhibits superiority in wound area reduction within 12 weeks of initial treatment and exhibits superiority in wound closure within 20 weeks of initial treatment. The use of dermaPACE allows the clinician to more easily, and more cost-effectively, manage wounds. More importantly, the patient’s quality of life improves significantly.

For more information on SANUWAVE’s technology, please read our blog, “Shock This”, on our website at www.sanuwave.com.

About SANUWAVE Health, Inc.

SANUWAVE Health, Inc. (OTCQB: SNWV) (www.sanuwave.com) is a shock wave technology company initially focused on the development and commercialization of patented noninvasive, biological response activating devices for the repair and regeneration of skin, musculoskeletal tissue and vascular structures. SANUWAVE’s portfolio of regenerative medicine products and product candidates activate biologic signaling and angiogenic responses, producing new vascularization and microcirculatory improvement, which helps restore the body’s normal healing processes and regeneration. SANUWAVE applies its patented PACE technology in wound healing, orthopedic/spine, plastic/cosmetic and cardiac conditions. Its lead product candidate for the global wound care market, dermaPACE®, is CE Marked throughout Europe and has device license approval for the treatment of the skin and subcutaneous soft tissue in Canada, Australia and New Zealand. In the U.S., dermaPACE is currently under the FDA’s de novo petition review process for the treatment of diabetic foot ulcers. SANUWAVE researches, designs, manufactures, markets and services its products worldwide, and believes it has demonstrated that its technology is safe and effective in stimulating healing in chronic conditions of the foot (plantar fasciitis) and the elbow (lateral epicondylitis) through its U.S. Class III PMA approved OssaTron® device, as well as stimulating bone and chronic tendonitis regeneration in the musculoskeletal environment through the utilization of its OssaTron, Evotron® and orthoPACE® devices in Europe, Asia and Asia/Pacific. In addition, there are license/partnership opportunities for SANUWAVE’s shock wave technology for non-medical uses, including energy, water, food and industrial markets.

About LOK North America
Based out of Laval, Québec, Canada, LOK North America is a member of the LOK Network, which currently maintains 12 offices worldwide and has the combined expertise of over 150 seasoned professionals around the world. The consortium presents global solutions for start-ups, mid-size and multinational companies to accelerate their market entry and the commercialization of their products worldwide. Lok North America is your partner for both regulatory and commercial support when introducing medical devices in Canada. LOK North America has a wealth of expertise and experience advising clients on a range of issues by providing medical devices manufacturers with solutions ranging from market entry strategy, regulatory for Health Canada and FDA, quality system, clinical requirements, distributor identification and selection, distributor agreement negotiations to sales management

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are risks associated with the regulatory approval and marketing of the Company’s product candidates and products, unproven pre-clinical and clinical development activities, regulatory oversight, the Company’s ability to manage its capital resource issues, competition, and the other factors discussed in detail in the Company’s periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement.

For additional information about the Company, visit www.sanuwave.com.

CONTACT INFORMATION

Millennium Park Capital LLC
Christopher Wynne
312-724-7845
cwynne@mparkcm.com

SANUWAVE Health, Inc.
Andre Mouton
Vice President International Sales and Relations
+1-678-578-0117 (Office)
+1-615-823-9907 (Cell)
+1-678-569-0881(Fax)
Skype: andre.w.mouton
Andre.Mouton@sanuwave.com

1418450360_2176452457001_vs-5123efbbe4b0b97f234e6716-1592194038001-1.jpg

On the heavier side of the news, American Airlines sued by man ‘cramped’ by obese passengers

Posted On May 11, 2017 By OrthoSpineNews In Spine /

By Sky McCarthy – May 5, 2017

An Australian man is suing American Airlines, alleging that he suffered serious injuries after being seated next to two passengers he claims were “grossly obese.”

Michael Anthony Taylor, of Wollongong, New South Wales, was flying from Sydney, Australia to Los Angeles in December 2015—a 14-hour journey.

Taylor was seated in the window seat of economy class and, according to court documents, two overweight passengers were seated in his row. According to the lawsuit, the body of the passenger next to Taylor “spilt over and encroached” upon his seat, forcing him to “contort his body into a series of positions including standing up, crouching, keeling and leaning forward,” reports news.com.au.

Though it’s been well over a year since the trip, Taylor, who suffered from a pre-existing spinal curvature, claims that he suffered even more severe back injuries and neck pain, arguing that the uncomfortable plane ride exacerbated his condition.

Taylor’s lawyer, Thomas Jansen of Shine Lawyers, said his client asked the cabin crew if he could change seats but was reportedly denied re-accommodation requests multiple times.

READ THE REST HERE

Shoulder Basic Science Reconfirms Benefits of Inlay Arthroplasty

Posted On May 11, 2017 By OrthoSpineNews In Recon /

FRANKLIN, Mass., May 10, 2017 /PRNewswire/ — Arthrosurface, Inc., the Global Leader in Inlay Arthroplasty announced new evidence showing dramatic differences between the company’s inlay glenoid technology and the standard of care in total shoulder replacement.

According to a comparative study in the Journal of Shoulder and Elbow Surgery, the inlay glenoid (socket) design was far superior to the onlay alternative with respect to the biomechanical stability. “Increased stress on the implant edge resulted in loosening of all onlays through a rocking horse phenomenon, whereas none of the inlays became loose during testing,” said the lead author Jeffrey Gagliano, MD from the Boulder Bone and Joint in Colorado. Richard Hawkins, MD, from the Steadman Hawkins Clinic of the Carolinas, Greenville, SC and senior author of the study concluded, “given the results of the study, future research and development should be directed toward inlay glenoid prosthetic design, matching native anatomy and size variation.”

The American Academy of Orthopaedic Surgeons estimates about 53,000 people in the United States have shoulder replacement surgery each year. The benefits of replacing both sides of the joint with a total shoulder arthroplasty have been well established, however, glenoid loosening remains the Achilles Heel of the procedure.

“According to the literature, 2-10% of patients treated with a standard total shoulder replacement will require a revision procedure within the first decade following surgery due to onlay glenoid component loosening. Inlay arthroplasty may provide a solution to lower the revision burden on patients and the healthcare system,” said Matthias Schurhoff, VP of Clinical Operations and Scientific Affairs at Arthrosurface.

The company’s OVO™ Primary Stemless Shoulder System with inlay glenoid replacement was launched in the US in 2009 and has experienced excellent surgeon adoption. The inherent advantages are particularly well suited for younger and active patients requiring shoulder joint replacement surgery.

About Arthrosurface

Arthrosurface, Inc. is a global orthopedic medical technology business providing a broad portfolio of essential products and instrumentation used to treat upper and lower extremity conditions caused by trauma, injury and arthritic disease. The product offerings include devices, instruments and orthobiologics designed to preserve and restore joints so patients can regain and maintain an active lifestyle. The Company offers a variety of unique systems that provide less invasive technologies for surgeons in the treatment of a wide variety of joint pathologies. Founded in 2002, Arthrosurface markets and distributes its products in the US and around the world and has succeeded in helping patients return to activity for over 13 years. For more information, please go to our website at www.arthrosurface.com

SOURCE Arthrosurface, Inc.

Intrinsic Therapeutics Announces the Completion of a $49m Financing

Posted On May 11, 2017 By OrthoSpineNews In Financial, Spine /

BOSTON, May 10, 2017 /PRNewswire/ — Intrinsic Therapeutics, Inc. a medical device company that has developed a product to improve outcomes in lumbar discectomy patients, announced today that it recently closed a $49 million round of financing. The financing included a $28 million equity round co-led by New Enterprise Associates (NEA) and Delos Capital, coupled with a $21 million debt facility with CRG. Other investors include Greenspring Associates, Quadrille Capital and a corporate strategic. The Company’s Barricaid Anular Closure Device is designed to prevent repeat herniation in patients undergoing lumbar discectomy surgery to treat sciatic pain caused by a herniated disc. Luke Dϋster with CRG commented, “We are very happy to join with a prestigious group of investors to support Intrinsic as they bring this important technology to the market in the U.S. and around the world. In today’s changing healthcare environment, technologies that conserve resources and reduce costs to the healthcare system will fit squarely within the paradigm of hospital and payer cost-containment.”

In December 2016, the Company successfully filed a Pre-Market Application (PMA) with FDA for approval in the United States. This filing is based on the outcomes of a two-year, multi-center, prospective randomized superiority trial of 554 subjects at the greatest risk of reherniation and reoperation. This is the first superiority trial for such a spinal device.

Jeani Delagardelle, who has joined Intrinsic’s Board representing Delos, commented, “We are extremely excited to be investing in Intrinsic at this later stage of their development. The company has generated conclusive clinical data which supports a large global opportunity including the US market as early as next year.”

Describing the market opportunity, Prof. P. Douglas Klassen, Chief of Neurosurgery at St. Bonifatius Hospital, Lingen, Germany stated, “Approximately 1 million discectomies are performed every year around the globe and 40% of these patients will leave the operating room after discectomy with a large hole remaining in the outer rim of the disc, the anulus. By simply sealing these large defects, patient outcomes can be improved significantly.”

“We are excited to welcome Delos and CRG as partners as we continue the process toward US market access,” said Cary Hagan, Intrinsic’s President and Chief Executive Officer. “The additional capital will allow us to continue our development efforts on reimbursement pathways for this compelling new technology with a sharp focus on demonstrating clear health economic value to surgeons, payers and hospital systems.”

About Intrinsic Therapeutics

Intrinsic Therapeutics is a medical device company focused on delivering a safe treatment to improve efficacy in patients who are at a disproportionately high risk of requiring repeat surgeries due to reherniation following lumbar discectomy surgery. Intrinsic currently markets and sells the Barricaid in Europe, Australia, Mexico, S. America, the Middle East and selected countries in other regions around the world. In the United States, Intrinsic Therapeutics is seeking regulatory approval of the Barricaid Anular Closure device. See http://www.in-thera.com for more information.

Barricaid is a registered trademark of Intrinsic Therapeutics, Inc.

About NEA

New Enterprise Associates, Inc. (NEA) is a global venture capital firm focused on helping entrepreneurs build transformational businesses across multiple stages, sectors and geographies. With nearly $17 billion in cumulative committed capital since inception NEA invests in technology and healthcare companies at all stages in a company’s lifecycle, from seed stage through IPO. The firm’s long track record of successful investing includes more than 200 portfolio company IPOs and more than 320 acquisitions. www.nea.com.

About CRG

CRG is a premier healthcare-focused investment firm with more than $3 billion of assets under management across more than 45 portfolio companies. The firm seeks to commit between $20 to $300 million in each company and invests across the healthcare spectrum, including: medical devices, biopharmaceuticals, tools & diagnostics, services and information technology. CRG provides growth capital in the form of long-term debt and equity to support innovative, commercial-stage healthcare companies that address large, unmet medical needs. The firm partners with public and private companies to provide flexible financing solutions and world-class support to achieve exceptional growth objectives with minimal dilution. CRG maintains offices in Boulder, Houston and New York. For more information, please visit www.crglp.com.

About Delos Capital, LLC

Delos Capital is a healthcare-focused fund that invests in growth platforms in Greater China and innovation in the US in the areas of therapeutics and medical technology. Delos Capital seeks to achieve returns through supporting these companies in their development and also helping to create additional value from collaboration between these companies. Founded in 2014, Delos Capital operates from its main office in Hong Kong.

This press release contains forward-looking statements. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including and without limitation, statements relating to the potential approval by the FDA of the Company’s PMA submissions for the Barricaid Anular Closure device and the success of the Company’s launch preparedness efforts. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Intrinsic does not undertake any obligation to update any forward-looking statements as a result of new information, future events, changed assumptions or otherwise.

Media Contact:
Cary Hagan
clinical@in-thera.com

SOURCE Intrinsic Therapeutics, Inc.

Providence Medical Technology Secures New Financing of $10.5 Million From Bridge Bank

Posted On May 11, 2017 By OrthoSpineNews In Financial /

WALNUT CREEK, Calif., May 10, 2017 /PRNewswire/ — Providence Medical Technology, Inc., an innovator in tissue-sparing cervical spine technology, today announced the closing of a $10.5 million debt agreement with Bridge Bank.

“We are pleased that we have partnered with Bridge Bank to bolster our balance sheet with this debt facility,” said Greg Curhan, Chief Financial Officer of Providence. “This financing, coupled with our recently completed equity financing, puts us in a great position to continue to expand our distribution both across the United States as well as in international markets to deliver innovative spinal technology to help patients enjoy pain-free lives.”

“Bridge Bank is excited to be partnering with Providence Medical Technology,” said Rob Lake, senior vice president and head of Bridge Bank’s life sciences group. “I am impressed with the management team, the company’s eloquent and innovative technology, as well as the commercial progress over the past 24 months. We are delighted to be a resource to help Providence achieve its immediate and long-term goals.”

Providence’s differentiated, tissue-sparing devices and instruments are designed to increase procedural efficiency, improve clinical outcomes, minimize complications, and reduce recovery times for cervical fusions. The technology has seen continued, rapid adoption by spine surgeons, hospitals, and ambulatory surgery centers.

About Providence Medical Technology, Inc.
Providence Medical Technology, Inc. is a privately-held medical device company focused on innovative solutions for cervical spinal conditions. The company has pioneered a proprietary, tissue-sparing approach to posterior cervical fusion. Providence has developed surgical instrumentation and implants that offer unique benefits to the $2 billion worldwide cervical spine market. The Providence family of products includes the DTRAX® Spinal Instrumentation System, CAVUX® intervertebral implants, and the ALLY™ line of bone and facet screws. All products are shipped-sterile and single-use to maximize efficiency and ensure consistent quality and performance. For more information, visit www.providencemt.com.

About Bridge Bank
Bridge Bank is a division of Western Alliance Bank, Member FDIC, the go-to bank for business in its growing markets. Bridge Bank was founded in 2001 in Silicon Valley to offer a better way to bank for small-market and middle-market businesses across many industries, as well as emerging technology companies and the private equity community. Geared to serving both venture-backed and non-venture-backed companies, Bridge Bank offers a broad scope of financial solutions including growth capital, equipment and working capital credit facilities, sustainable energy project finance, venture debt, treasury management, asset-based lending, SBA and commercial real estate loans, ESOP finance and a full line of international products and services. Based in San Jose, Bridge Bank has eight offices in major markets across the country along with Western Alliance Bank’s robust national platform of specialized financial services. Western Alliance Bank is the primary subsidiary of Phoenix-based Western Alliance Bancorporation, one of the country’s top-performing banking companies. For more information, visit www.bridgebank.com.

Related Links: www.providencemt.com | www.bridgebank.com

SOURCE Providence Medical Technology, Inc.

Shareholders Approve the Transfer of the Implanet SA Listing to the Alternext Market in Paris

Posted On May 11, 2017 By OrthoSpineNews In Financial /

May 10, 2017

BORDEAUX, France & BOSTON–(BUSINESS WIRE)–Regulatory News:

IMPLANET (Paris:IMPL) (OTCQX:IMPZY) (Euronext: IMPL, FR0010458729, PEA-PME eligible), a medical technology company specializing in vertebral and knee-surgery implants, announces that, on May 5, 2017, the Company’s Shareholders’ Meeting, in accordance with the provisions of article L.421-14 V of the Monetary and Financial Code, transfer was approved of the listing of Implanet SA shares from the Euronext regulated market in Paris (compartment C) to the Alternext Paris multilateral trading facility.

This transfer allows Implanet to be listed on a more appropriate market for the Group’s size and market cap while offering a better-suited regulatory framework. It should thus simplify the administrative burden on Implanet and significantly reduce the listing costs, whilst enabling it to continue benefiting from financial market appeal.

Subject to the consent of Euronext Paris SA, the Company’s listing on the Alternext market will be carried out via the fast-track admission to trading of the Company’s existing shares, without any new shares being issued.

In terms of protecting minority shareholders (non exhaustive list):

the protection of minority shareholders, should control change hands, will be ensured by Alternext Paris through the public offering mechanism if the 50% threshold is exceeded in terms of capital or voting rights, either directly or indirectly and by one party or jointly;
furthermore, companies listed on Alternext Paris are only duty bound to inform the market, in terms of changes in the shareholding structure, of shareholdings moving above or below 50% and 95% of the company’s capital or voting rights;
however, in accordance with regulatory provisions and for a period of 3 months after its listing is removed from the Euronext regulated market in Paris, Implanet will remain subject to the mandatory public offering system and the continuance of information duties regarding the crossing of thresholds and stated intentions applicable to companies listed on the Euronext regulated market in Paris.

Regarding periodic financial information, less restrictive financial information requirements, including the following (non exhaustive list):

extension of the timeframe for publishing half-year results – comprising a balance sheet, a P&L statement and comments regarding this period – to 4 months after the half-year ends;
a chairman’s report on the internal audit and corporate governance is no longer mandatory;
the company can choose which accounting system (French or IFRS) it uses when drawing up its consolidated accounts. However, as the Company’s accounts are already drawn up in IFRS, and in order to ensure transparency vis-à-vis its investors and shareholders, Implanet will continue to apply IFRS.

Implanet intends to continue publishing its revenue on a quarterly basis and to inform the public of any news or information liable to have an impact on its share price.

Indicative timetable of the transfer

March 27, 2017 The Board votes to submit the planned transfer of Implanet SA’s listing to Alternext to a Shareholders’ Meeting

April 3, 2017 Information published regarding the planned request for admission (1^st press release)

May 5, 2017 Shareholders’ Meeting to notably approve the transfer to Alternext Paris

May 9, 2017 Information published regarding the definitive transfer decision (2^nd press release)

July 10, 2017 Decision from Euronext Paris SA to admit shares for trading on Alternext Paris, shares
at the earliest removed from the Euronext regulated market and first listing on Alternext Paris

About IMPLANET
Founded in 2007, IMPLANET is a medical technology company that manufactures high-quality implants for orthopedic surgery. Its flagship product, the JAZZ latest-generation implant, aims to treat spinal pathologies requiring vertebral fusion surgery. Protected by four families of international patents, JAZZ has obtained 510(k) regulatory clearance from the Food and Drug Administration (FDA) in the United States and the CE mark. IMPLANET employs 48 staff and recorded 2016 sales of €7.8 million. For further information, please visit www.implanet.com. Based near Bordeaux in France, IMPLANET established a US subsidiary in Boston in 2013. IMPLANET is listed on Compartment C of the Euronext™ regulated market in Paris.

Disclaimer
This press release contains forward-looking statements concerning Implanet and its activities. Such forward looking statements are based on assumptions that Implanet considers to be reasonable. However, there can be no assurance that the anticipated events contained in such forward-looking statements will occur. Forward- looking statements are subject to numerous risks and uncertainties including the risks set forth in the registration document of Implanet registered by the French Financial Markets Authority (Autorité des marchés financiers (AMF)) on April 3, 2017 under number D.17-0292 and available on the Company’s website (www.implanet-invest.com), and to the development of economic situation, financial markets, and the markets in which Implanet operates. The forward-looking statements contained in this release are also subject to risks unknown to Implanet or that Implanet does not consider material at this time. The realization of all or part of these risks could lead to actual results, financial conditions, performances or achievements by Implanet that differ significantly from the results, financial conditions, performances or achievements expressed in such forward-looking statements.

This press release and the information it contains do not constitute an offer to sell or to subscribe for, or a solicitation of an order to purchase or subscribe for Implanet shares in any country.

Contacts

IMPLANET
Ludovic Lastennet
CEO
Tel. : +33 (0)5 57 99 55 55
investors@implanet.com
or
NewCap
Investor Relations
Florent Alba, Tel. : +33 (0)1 44 71 94 94
implanet@newcap.eu
or
NewCap
Media Relations
Nicolas Merigeau, Tel. : +33 (0)1 44 71 94 98
implanet@newcap.eu
or
AlphaBronze
US-Investor Relations
Pascal Nigen, Tel.: +1 917 385 21 60
implanet@alphabronze.net

DJO Global Announces Financial Results for First Quarter 2017

Posted On May 11, 2017 By OrthoSpineNews In Financial /

May 10, 2017

SAN DIEGO–(BUSINESS WIRE)–DJO Global, Inc. (“DJO” or the “Company”), a leading global provider of medical technologies designed to get and keep people moving, today announced financial results for its public reporting subsidiary, DJO Finance LLC (“DJOFL”), for the first quarter ended April 1, 2017.

First Quarter Highlights

Net sales grew 3.4% as reported to $288.4 million and grew 4.7% on a sales per day constant currency basis.
Net loss was $40.0 million compared to $38.3 million in the prior year period.
Adjusted EBITDA increased 17.0% as reported to $57.2 million, an improvement of 15.4% in constant currency, or greater than 3 times revenue growth.
Net cash provided by continuing operating activities grew $25.2 million to $38.6 million.

“We are off to a solid start in 2017 with growth across our global business, earnings growing faster than revenue and improvement in our cash flow during the first quarter,” said Brady Shirley, DJO’s President and Chief Executive Officer. “Our business transformation is underway and we have begun initiatives to improve liquidity, organization effectiveness, procurement optimization, manufacturing, sales and operations planning, and customer and product profitability, and we are beginning to see early positive results of our efforts. There is still a lot of work ahead of us, but I am confident that this transformation positions the company for sustainable long-term financial performance and value creation for all of our stakeholders.”

Sales Results

DJOFL achieved net sales for the first quarter of 2017 of $288.4 million, reflecting as reported growth of 3.4%, compared with net sales of $278.9 million for the first quarter of 2016. Additionally, the first quarter of 2017 included 64 shipping days, while the comparable period in 2016 included 65 shipping days. Sales in the first quarter of 2017 grew 4.7% on a sales per day constant currency basis over sales in the first quarter of 2016.

Net sales for the Surgical Implant segment were $49.6 million for the first quarter of 2017, reflecting as reported growth of 15.2% compared to the first quarter of 2016. Surgical sales grew 17.0% on a sales day per day basis. The continued growth in the Surgical Implant segment was primarily driven by strong organic growth across the Company’s shoulder, hip and knee products.

Net sales for DJO’s International segment were $78.2 million in the first quarter of 2017, reflecting as reported growth of 4.2% over net sales in the first quarter of 2016. International sales grew 4.9% on a sales per day constant currency basis, driven by stronger sales in the Company’s direct markets, primarily Australia, France, and Spain.

Net sales for DJO’s Recovery Sciences segment were $38.5 million in the first quarter of 2017, reflecting as reported growth of 5.3% compared to the first quarter of 2016. Recovery Sciences sales grew 6.9% on a sales per day basis, reflecting continued strong growth in the segment’s consumer products and Chattanooga rehabilitation equipment product line.

Net sales for DJO’s Bracing and Vascular segment were $122.1 million in the first quarter of 2017, a reported decline of 1.7%, compared to the first quarter of 2016. Bracing and Vascular sales declined 0.2% on a sales per day basis, reflecting softness in the Company’s Aircast and Procare, deep vein thrombosis, and Dr. Comfort products, offset by growth in the Company’s OfficeCare channel, direct consumer and DonJoy products.

Earnings Results

For the first quarter of 2017, DJOFL reported a net loss attributable to DJOFL of $40.0 million, compared to a net loss of $38.3 million for the first quarter of 2016. As detailed in the attached financial tables, the results for the current and prior year first quarter periods and the current and prior year twelve-month periods were impacted by significant non-cash items, non-recurring items and other adjustments.

Adjusted EBITDA for the first quarter of 2017 was $57.2 million compared with Adjusted EBITDA of $48.9 million in the first quarter of 2016, representing 17.0% growth over the prior year and 15.4% growth on a constant currency basis. Strong productivity during the period drove growth in Adjusted EBITDA at over three times the rate of revenue growth. Including projected future savings from cost savings programs currently underway of $6.2 million as permitted under our credit agreement and the indentures governing our outstanding notes, Adjusted EBITDA for the twelve months ended April 1, 2017 was $249.9 million.

The Company defines Adjusted EBITDA as net (loss) income attributable to DJOFL plus net interest expense, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance under the Company’s secured term loan and revolving credit facilities (“Senior Secured Credit Facilities”) and the indentures governing its 8.125% second lien notes and its 10.75% third lien notes. A reconciliation between net loss attributable to DJOFL and Adjusted EBITDA is included in the attached financial tables.

Net cash provided by continuing operating activities for the first quarter of 2017 was $38.6 million compared to $13.4 million for the first quarter of 2016. The improvement in cash flow was primarily attributable to working capital initiatives executed as part of the Company’s overall business transformation.

Conference Call Information

DJO has scheduled a conference call to discuss this announcement beginning at 4:30 p.m., Eastern Time Wednesday, May 10, 2017. Individuals interested in listening to the conference call may do so by dialing (866) 394-8509 (International callers please use (706) 643-6833), using the reservation code 22322226. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (855) 859-2056 and using the above reservation code. The live conference call and replay will be available via the Internet at www.DJOglobal.com.

About DJO Global

DJO Global is a leading global provider of medical technologies designed to get and keep people moving. The Company’s products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Its products are used by orthopaedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. In addition, many of the Company’s medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment. The Company’s product lines include rigid and soft orthopaedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. The Company’s surgical division offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Global’s products are marketed under a portfolio of brands including Aircast®, Chattanooga, CMF™, Compex®, DonJoy®, ProCare®, DJO® Surgical, Dr. Comfort® and Exos™. For additional information on the Company, please visit www.DJOglobal.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements relate to, among other things, the Company’s expectations for improved liquidity, estimated cost reductions associated with the execution of its business transformation plans and improved efficiencies. The words “believe,” “will,” “should,” “expect,” “target,” “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. These forward-looking statements are based on the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions, many of which are beyond the Company’s ability to control or predict. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. 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 successful execution of the Company’s business transformation plans, including achievement of planned actions to improve liquidity, improvements in operational effectiveness, optimization of the Company’s procurement activities, improvements in manufacturing, distribution, sales and operations planning, and actions to improve the profitability of the mix of our product and customers. Other 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: business strategies relative to our Bracing and Vascular, Recovery Sciences, International and Surgical Implant segments; the continued growth of the markets the Company addresses and any impact on these markets from changes in global economic conditions; the impact of potential reductions in reimbursement levels and coverage by Medicare and other governmental and commercial payors; the Company’s highly leveraged financial position; the Company’s ability to successfully develop, license or acquire, and timely introduce and market new products or product enhancements; risks relating to the Company’s international operations; resources needed and risks involved in complying with government regulations and government investigations; the availability and sufficiency of insurance coverage for pending and future product liability claims; and the effects of healthcare reform, Medicare competitive bidding, managed care and buying groups on the prices of the Company’s products. These and other risk factors related to DJO are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on March 15, 2017. Many of the factors that will determine the outcome of the subject matter of this press release are beyond the Company’s ability to control or predict.


DJO Finance LLC
Unaudited Condensed Consolidated Statements of Operations
(In thousands)

	Three Months Ended
	April 1,			April 1,
	2017			2016
Net sales	$	288,389		$	278,906
Operating expenses:
Cost of sales (exclusive of amortization, see note 1)		119,569			118,083
Selling, general and administrative		134,162			121,929
Research and development		9,139			9,854
Amortization of intangible assets		18,845			19,578
		281,715			269,444
Operating income		6,674			9,462
Other (expense) income:
Interest expense, net		(42,687	)		(42,270	)
Other income, net		288			284
		(42,399	)		(41,986	)
Loss before income taxes		(35,725	)		(32,524	)
Income tax provision		(4,078	)		(5,413	)
Net loss from continuing operations		(39,803	)		(37,937	)
Net income (loss) from discontinued operations		58			(190	)
Net loss		(39,745	)		(38,127	)
Net income attributable to noncontrolling interests		(224	)		(193	)
Net loss attributable to DJO Finance LLC	$	(39,969	)	$	(38,320	)

Note 1 — Cost of sales is exclusive of amortization of intangible assets of $6,981 and $7,407 for the three months ended April 1, 2017 and 2016, respectively.



DJO Finance LLC
Unaudited Condensed Consolidated Balance Sheets
(In thousands)

	April 1,			December 31,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	55,000		$	35,212
Accounts receivable, net		172,844			178,193
Inventories, net		152,329			151,557
Prepaid expenses and other current assets		20,849			23,650
Current assets of discontinued operations		511			511
Total current assets		401,533			389,123
Property and equipment, net		128,632			128,019
Goodwill		856,589			855,626
Intangible assets, net		653,427			672,134
Other assets		5,249			5,536
Total assets	$	2,045,430		$	2,050,438
Liabilities and Deficit
Current liabilities:
Accounts payable	$	76,981		$	63,822
Accrued interest		45,342			16,740
Current portion of debt obligations		10,550			10,550
Other current liabilities		111,015			113,265
Total current liabilities		243,888			204,377
Long-term debt obligations		2,385,619			2,392,238
Deferred tax liabilities, net		204,801			202,740
Other long-term liabilities		14,818			14,932
Total liabilities	$	2,849,126		$	2,814,287
Commitments and contingencies
Deficit:
DJO Finance LLC membership deficit:
Member capital		841,597			844,294
Accumulated deficit		(1,619,611	)		(1,579,642	)
Accumulated other comprehensive loss		(28,014	)		(30,580	)
Total membership deficit		(806,028	)		(765,928	)
Noncontrolling interests		2,332			2,079
Total deficit		(803,696	)		(763,849	)
Total liabilities and deficit	$	2,045,430		$	2,050,438


DJO Finance LLC
Unaudited Segment Information
(In thousands)

	Three Months Ended
	April 1,			April 1,
	2017			2016
Net sales:
Bracing and Vascular	$	122,053		$	124,216
Recovery Sciences		38,503			36,575
Surgical Implant		49,592			43,050
International		78,241			75,065
	$	288,389		$	278,906
Operating income:
Bracing and Vascular	$	21,007		$	20,534
Recovery Sciences		8,907			6,445
Surgical Implant		8,140			7,229
International		13,610			8,989
Expenses not allocated to segments and eliminations		(44,990	)		(33,735	)
	$	6,674		$	9,462

DJO Finance LLC
Adjusted EBITDA

For the Three Months Ended April 1, 2017 and 2016
(unaudited)

Our Senior Secured Credit Facilities, consisting of a $1,039.2 million term loan facility and a $150.0 million asset-based revolving credit facility, under which $76.0 million was outstanding as of April 1, 2017, and the Indentures governing our $1,015.0 million of 8.125% second lien notes and $298.5 million of 10.75% third lien notes (collectively, the “notes”) represent significant components of our capital structure. Under our Senior Secured Credit Facilities, we are required to maintain a specified senior secured first lien leverage ratio, which is determined based on our Adjusted EBITDA. If we fail to comply with the senior secured first lien leverage ratio under our Senior Secured Credit Facilities, we would be in default. Upon the occurrence of an event of default under the Senior Secured Credit Facilities, the lenders could elect to declare all amounts outstanding under the Senior Secured Credit Facilities to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders under the Senior Secured Credit Facilities could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets as collateral under the Senior Secured Credit Facilities and under the notes. Any acceleration under the Senior Secured Credit Facilities would also result in a default under the Indentures governing the notes, which could lead to the note holders electing to declare the principal, premium, if any, and interest on the then outstanding notes immediately due and payable. In addition, under the Indentures governing the notes, our and our subsidiaries’ ability to engage in activities such as incurring additional indebtedness, making investments, refinancing subordinated indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on Adjusted EBITDA. Our ability to meet the covenants specified in the Senior Secured Credit Facilities and the Indentures governing those notes will depend on future events, some of which are beyond our control, and we cannot assure you that we will meet those covenants.

Adjusted EBITDA is defined as net income (loss) attributable to DJOFL plus interest expense, net, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance and other ratios under our Senior Secured Credit Facilities and the Indentures governing the notes. We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, certain financial covenants and other ratios in our Senior Secured Credit Facilities and the Indentures governing the notes. Adjusted EBITDA is a material component of these calculations.

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to DJOFL or other performance measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), or as an alternative to cash flow from operations as a measure of our liquidity. Adjusted EBITDA does not represent net income (loss) attributable to DJOFL or cash flow from operations as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In particular, the definition of Adjusted EBITDA under our Senior Secured Credit Facilities and the Indentures governing the notes allows us to add back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income (loss) attributable to DJOFL. However, these are expenses that may recur, vary greatly and are difficult to predict. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.

The following table provides a reconciliation between net loss attributable to DJO Finance LLC and Adjusted EBITDA:


							Twelve
							Months
	Three Months Ended						Ended
	April 1,			April 1,			April 1,
	2017			2016			2017
Net loss attributable to DJO Finance LLC	$	(39,969	)	$	(38,320	)	$	(287,952	)
(Income) loss from discontinued operations, net		(58	)		190			(1,386	)
Interest expense, net		42,687			42,270			170,498
Income tax provision		4,078			5,413			(8,188	)
Depreciation and amortization		29,774			29,902			117,764
Non-cash charges (a)		571			399			182,571
Non-recurring and integration charges (b)		18,389			7,332			59,732
Other adjustment items (c)		1,769			1,728			10,594
		57,241			48,914			243,633
Permitted pro forma adjustments applicable to the twelve month period only (d)
Future cost savings								6,242
Adjusted EBITDA	$	57,241		$	48,914		$	249,875

(a)

Non-cash charges are comprised of the following:


					Twelve
					Months
	Three Months Ended				Ended
	April 1,		April 1,		April 1,
	2017		2016		2017
Stock compensation expense	$	454	$	205	$	3,437
Loss on disposal of fixed assets and assets held for sale, net		117		107		959
Impairment of goodwill (1)		—		—		160,000
Inventory adjustments (2)		—		—		18,013
Purchase accounting adjustments (3)		—		87		162
Total non-cash charges	$	571	$	399	$	182,571

	(1)		Impairment of goodwill and intangible assets for the twelve months ended April 1, 2017 consisted of a goodwill impairment charge of $99.0 million and $61.0 million related to the CMF and Vascular reporting units, respectively. The impairment charge for our CMF reporting unit resulted from reductions in our projected operating results and estimated future cash flows due to disruption caused by our exit of the Empi business. The impairment charge for our Vascular reporting unit resulted from reductions in our projected operating results and estimated future cash flows due to a loss of revenue caused by disruption as we transitioned our Dr. Comfort therapeutic footwear manufacturing and distribution to a new ERP system and market pressure in the therapeutic shoe market.
	(2)		In the fourth quarter of fiscal 2016, current management implemented a new strategy relating to our procurement, manufacturing and liquidation philosophies in order to significantly reduce inventory levels. Historically, our strategy was to purchase inventory in large quantities to capture purchase discounts and rebates and provide an expansive mix of products for our customers. Our new strategy aims to integrate our supply chain services with customer demand through focused forecasted consumption and sales efforts, therefore limiting the range of SKUs we plan to offer. As a result of these changes, the Company recorded a charge to cost of sales and corresponding reduction in inventory of approximately $18.0 million. The E&O reserve expense in fiscal 2016 included $5.7 million related to the Company’s decision to discontinue certain SKUs mainly within the Bracing and Vascular product lines, $8.3 million related to holding inventory for shorter periods and the planned scrapping of long-dated inventory, $2.0 million related to new Surgical Implant products that changed the expected life cycle of its current product portfolio, and $2.0 million of slow moving consigned inventory within certain OfficeCare clinics for which management has decided not to strategically relocate.
	(3)		Purchase accounting adjustments consisted of amortization of fair market value inventory adjustments for all periods presented.
(b)		Non-recurring and integration charges are comprised of the following:


					Twelve
					Months
	Three Months Ended				Ended
	April 1,		April 1,		April 1,
	2017		2016		2017
Restructuring and reorganization	$	15,796	$	1,993	$	30,641
Acquisition related expenses and integration (1)		302		3,325		7,327
Executive transition		—		—		4,856
Litigation and regulatory costs and settlements, net (2)		2,102		2,014		16,650
IT automation projects		189		—		258
Total non-recurring and integration charges	$	18,389	$	7,332	$	59,732

	(1)		Consists of direct acquisition costs and integration expenses related to acquired businesses and costs related to potential acquisitions.
	(2)		For the twelve months ended April 1, 2017, litigation and regulatory costs consisted of $2.6 million in litigation costs related to ongoing product liability issues and $14.1 million related to other litigation and regulatory costs and settlements.
(c)		Other adjustment items are comprised of the following:


							Twelve
							Months
	Three Months Ended						Ended
	April 1,			April 1,			April 1,
	2017			2016			2017
Blackstone monitoring fees	$	1,750		$	1,750		$	7,000
Non-controlling interests		224			193			654
Other (1)		(205	)		(215	)		2,940
Total other adjustment items	$	1,769		$	1,728		$	10,594

	(1)		Other adjustments consist primarily of net realized and unrealized foreign currency transaction gains and losses.
(d)		Permitted pro forma adjustments include future cost savings related to the exit of our Empi business and the restructuring of our Recovery Sciences Segment.

Contacts

DJO Investor/Media Contact:
DJO Global, Inc.
David Smith
SVP and Treasurer
760.734.3075
ir@djoglobal.com

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