WARSAW, Ind., March 12, 2018 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced that its Board of Directors has approved the payment of a quarterly cash dividend to stockholders for the first quarter of 2018.

The cash dividend of $0.24 per share will be paid on or about April 30, 2018 to stockholders of record as of the close of business on March 29, 2018. Future declarations of dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.

About the Company

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

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

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

ZBH-Fin

SOURCE Zimmer Biomet Holdings, Inc.

Related Links

http://www.zimmer.com

“2017 was a strategic building year for us,” said Hans Stover, President and Chief Executive Officer, ulrich medical USA. “I am very proud of our performance. We experienced record organic growth in the U.S. spine market in 2017 amidst many of our competitors who reported a flat or declining spine business.”

The company also reported a 22% growth in annual case volume for 2017, and a record 131% growth in case volume for the prior 5-year period.

“We are very appreciative of our growing U.S. market acceptance and we are extremely grateful to our customers for their continued confidence in our company and our implant technologies,” said Erika Laskey, Chief Commercial Officer, ulrich medical USA.

For more information, please visit www.ulrichmedicalusa.com.

About ulrich medical USA, Inc.
ulrich medical USA is a subsidiary of ulrich medical®, an innovative medical technology company headquartered in Ulm, Germany.

Company Contact: e.laskey@ulrichmedicalusa.com

SOURCE ulrich medical USA, Inc.

Related Links

http://www.ulrichmedicalusa.com

WARSAW, Ind., March 07, 2018 (GLOBE NEWSWIRE) — OrthoPediatrics Corp.(NASDAQ:KIDS), a company exclusively focused on advancing the field of pediatric orthopedics, announced today its financial results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter / Full Year 2017 and Recent Highlights

• Total revenue of $11.7 million for fourth quarter 2017 and $45.6 million for full year 2017, up from $9.4 million or 24.0% and $37.3 million or 22.3% year-over-year, respectively, and in-line with preliminary results provided on January 5, 2018
• Improved profitability with gross margin of 75.6% for fourth quarter 2017 and 75.5% for full year 2017, compared to 68.0% for the fourth quarter 2016 and 70.7% for full year 2016
• Reported adjusted EBITDA of $(0.1) million for full year 2017, up 94.1% from $(1.0) million for full year 2016. See below for additional information and a reconciliation of non-GAAP financial information.
• Launched a record of five new systems over the past 12 months, expanding product portfolio offering to 24 surgical systems
• Provided financial guidance of 22.0% revenue growth for 2018

Mark Throdahl, Chief Executive Officer of OrthoPediatrics, commented, “2017 was a transformational year in which the Company increased sales growth and profitability, completed a public offering, and changed the lives of approximately 20,000 children. While all three of our product lines contributed to the 22% annual revenue growth, we were particularly pleased with the growth of our U.S. Scoliosis segment, which significantly outpaced that of the industry. Our strong U.S. Scoliosis growth rate confirms our specialized pediatric selling organization as an efficient model, and we intend to replicate our U.S. sales agency structure with certain international distributors. We approach 2018 with five recent product introductions and 24 surgical systems with more than 3,000 individual products, which is the most extensive pediatric surgical offering in the orthopedic industry. Furthermore, we have a robust product pipeline with five additional systems targeted for launch in 2018. We are confident that our operational competencies and strategic strengths, coupled with the proceeds from our IPO, position the Company for substantial future growth.”

Fourth Quarter and Full Year 2017 Financial Results
Total revenue for the fourth quarter of 2017 was $11.7 million, a 24.0% increase compared to $9.4 million for the same period last year. U.S. revenue for the fourth quarter of 2017 was $8.8 million, a 21.3% increase compared to $7.3 million for the same period last year, representing 75.5% of total revenue. International revenue for the fourth quarter of 2017 was $2.9 million, a 33.1% increase compared to $2.1 million for the same period last year, representing 24.5% of total revenue.

Total revenue for 2017 was $45.6 million, a 22.3% increase compared to $37.3 million for 2016. U.S. revenue for 2017 was $34.9 million, a 21.0% increase compared to $28.8 million for 2016, representing 76.5% of total revenue. International revenue for 2017 was $10.7 million, a 26.6% increase compared to $8.5 million for 2016, representing 23.5% of total revenue.

Trauma and deformity revenue for the fourth quarter of 2017 was $8.5 million, a 27.1% increase compared to $6.7 million for the same period last year. Scoliosis revenue for the fourth quarter of 2017 was $2.9 million, a 21.8% increase compared to $2.4 million for the same period last year. Sports medicine/other revenue for the fourth quarter of 2017 was $286 thousand, a 17.8% decrease compared to $348 thousand for the same period last year.

Trauma and deformity revenue for 2017 was $32.8 million, a 22.2% increase compared to $26.8 million for 2016. Scoliosis revenue for 2017 was $11.6 million, a 23.9% increase compared to $9.3 million for 2016. Sports medicine/other revenue for 2017 was $1.2 million, an 11.7% increase compared to $1.1 million for 2016.

Gross profit for the fourth quarter of 2017 was $8.8 million, a 38.0% increase compared to $6.4 million for the same period last year, and $34.5 million for 2017, a 30.7% increase compared to $26.4 million for 2016. Gross profit margin for the fourth quarter of 2017 was 75.6%, compared to 68.0% for the same period last year, and was 75.5% for 2017, compared to 70.7% for 2016.

Total operating expenses for the fourth quarter of 2017 were $13.0 million, a 35.1% increase compared to $9.7 million for the same period last year, and $40.9 million for 2017, a 25.9% increase compared to $32.5 million for 2016. Operating expenses for both fourth quarter and full year 2017 included increased research and development expenses of 50.8% and 54.0% year-over-year, respectively, as well as one-time expenses related to our October 2017 IPO. Operating loss for the fourth quarter of 2017 was $(4.2) million, a 29.3% increase in loss realized compared to $(3.3) million for the same period last year. Operating loss for 2017 was $(6.5) million, a 5.6% increase in loss realized compared to $(6.1) million for 2016.

Interest expense for the fourth quarter of 2017 was $0.6 million, a 50.7% increase compared to $0.4 million for the same period last year, and was $2.5 million for 2017, a 68.7% increase compared to $1.5 million for 2016. The increase was due to the use of incremental debt.

Net loss for the fourth quarter of 2017 was $(4.8) million, compared to $(3.6) million for the same period last year. This reflects, in part, accelerated vesting of restricted stock upon our IPO and new public company expenses. Net loss per share attributable to common stockholders for the fourth quarter of 2017 was $(4.35) per basic and diluted share, compared to $(3.03) per basic and diluted share for the same period last year. Adjusted EBITDA for the fourth quarter of 2017 was $(0.6) million as compared to $(0.5) million for the fourth quarter of 2016. See below for additional information and a reconciliation of non-GAAP financial information.

Net loss for 2017 was $(8.9) million, compared to $(6.6) million for 2016. Net loss per share attributable to common stockholders for 2017 was $(6.12), compared to $(7.14) per basic and diluted share for 2016. Adjusted EBITDA for the full year 2017 increased approximately $0.9 million, or 94.2%, to $(0.1) million, compared to $(1.0) million for the full year 2016.

The weighted average number of diluted shares outstanding as of December 31, 2017 was 4,817,079 shares.

Purchases of property and equipment during the fourth quarter of 2017 were $1.3 million, a 27.3% decrease compared to $1.7 million for the same period last year, and $5.2 million for 2017, a 19.8% increase compared to $4.3 million for 2016. The primary driver of this increase was the deployment of consigned sets, which include product specific instruments as well as cases and trays.

As of December 31, 2017, cash and cash equivalents were $42.6 million, compared to $1.6 million as of December 31, 2016.

Capitalization Update
On October 12, 2017, the Company completed a public offering selling 4,600,000 shares at a price of $13.00 per share, including 600,000 shares sold to the underwriters upon exercise of the option to purchase additional shares. The public offering generated net proceeds of approximately $46.9 million, after deducting the underwriting discount, related offering expenses, and the payment of Series B Preferred Stock dividends.

In December 2017, we amended our debt agreement with Squadron Capital, our largest shareholder, to modify and extend the terms of our term notes and revolving credit facility. We consolidated a majority of the term note amounts into a $20.0 million term loan and re-established a $15.0 million revolver. As of December 31, 2017, the Company had approximately $25.5 million in total outstanding indebtedness, including $3.9 million outstanding under the revolving credit facility.

2018 Financial Guidance
The Company estimates 2018 revenue growth of 22.0%. We expect the annual investment in consigned sets to increase to $10.0 million in 2018 from an average of $3.5 million historically.

Conference Call
OrthoPediatrics will host a conference call on Thursday, March 8, 2018 at 8:00 a.m. ET to discuss its financial results. The dial-in numbers are (855) 289-4603 for domestic callers and (614) 999-9389 for international callers. The conference ID number is 7586297. A live webcast of the conference call will be available online at OrthoPediatrics’ investor relations website, ir.orthopediatrics.com.

A replay of the webcast will remain available online at OrthoPediatrics’ investor relations website, ir.orthopediatrics.com, until OrthoPediatrics releases its first quarter 2018 financial results. In addition, a telephonic replay of the conference call will be available until March 15, 2018. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. The replay conference ID number is 7586297.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of U.S. federal securities laws. You can identify forward-looking statements by the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “goals,” “potential,” “objective,” “would” and other similar expressions. Forward-looking statements involve risks and uncertainties, many of which are beyond OrthoPediatrics’ control. Important factors could cause actual results to differ materially from those in the forward-looking statements, including, among others, the risks, uncertainties and factors set forth under “Risk Factors” in OrthoPediatrics’ Registration Statement on Form S-1/A filed with the SEC on October 10, 2017 and its most recent Quarterly Report on Form 10-Q. Forward-looking statements speak only as of the date they are made. OrthoPediatrics assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable securities laws.

Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).  Adjusted EBITDA in this release represents net loss, plus interest expense (income), net plus other expense (income), depreciation and amortization, stock-based compensation expense, accelerated vesting of restricted stock upon our IPO, public company costs and initial public offering costs. Adjusted EBITDA is presented because the Company believes it is a useful indicator of its operating performance. Management uses the measure as a measure of the Company’s operating performance and for planning purposes, including financial projections. The Company believes this measure is useful to investors as supplemental information because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry.  The Company believes Adjusted EBITDA is useful to its management and investors as a measure of comparative operating performance from period to period.  Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, the measure is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as debt service requirements, capital expenditures and other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and other potential cash requirements. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using Adjusted EBITDA on a supplemental basis. The Company’s definition of this measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. The schedules below contain a reconciliation of Adjusted EBITDA to Net Income.

About OrthoPediatrics Corp.
Founded in 2006, OrthoPediatrics is an orthopedic company focused exclusively on providing a comprehensive product offering to the pediatric orthopedic market to improve the lives of children with orthopedic conditions. OrthoPediatrics currently markets 24 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This offering spans trauma & deformity, scoliosis, and sports medicine/other procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and 37 countries outside the United States.

Investor Contacts
The Ruth Group
Tram Bui / Emma Poalillo
(646) 536-7035 / 7024
tbui@theruthgroup.com / epoalillo@theruthgroup.com

ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share Data)

March 06, 2018

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 fourth quarter and fiscal year ended December 31, 2017.

Fourth Quarter Highlights

• Net sales grew 5.3% to $312.2 million, or 3.7% on a constant currency, sales-per-day basis, compared to the fourth quarter of 2016.
• Net income attributable to DJOFL was $61.2 million, including a one-time tax benefit of $69.9 million, compared to a net loss of $202.1 million in the prior year period.
• Adjusted EBITDA increased 35.4% over the prior year quarter to $80.6 million.

Full Year Highlights

• Net sales grew 2.7% to $1.19 billion, or 2.3% on a constant currency basis.
• Net loss attributable to DJOFL was $35.9 million compared to $286.3 million in the prior year.
• Adjusted EBITDA increased 14.0% to $268.2 million.

Business Transformation Outcomes

• Business Transformation drove profitability expansion and remains on track to deliver 7% to 10% annual cost reductions by end of 2018.
• Transformation actions taken to date expected to contribute $25.5 million in savings over the next four quarters.

“Our team delivered outstanding fourth quarter and full year operating results,” said Brady Shirley, DJO’s President and Chief Executive Officer. “We had continued double digit growth in the fourth quarter from our innovative surgical products, strong performance in our International business segment and realization of cost improvement from our broader business transformation. At 14% Adjusted EBITDA growth in 2017, we delivered not only our best performance in many years, but also believe we delivered a top performance in the Orthopaedic market. I am proud of the DJO team and happy to see their dedication and hard work pay off in 2017. We are excited to enter 2018 with a strong dedication to continued discipline and an opportunity to begin to invest in growth for the future.”

“With our transformation initiatives, we have greatly improved the foundation of our company both operationally and financially, producing the strongest Adjusted EBITDA growth for the company in many years,” commented Mike Eklund, DJO’s Chief Financial Officer and Chief Operating Officer. “There is certainly more work to do, but I am pleased with the team’s achievement thus far, and as confident as ever in our ability to continue improving operating metrics and profitability again in 2018.”

Sales Results

DJOFL achieved net sales for the fourth quarter of 2017 of $312.2 million, reflecting growth of 5.3%. The fourth quarter of 2017 included 61 selling days for our International segment compared to 62 for the same period in 2016, while domestic selling days remained constant at 61. On the basis of constant currency and sales per day, sales in the fourth quarter of 2017 grew 3.7% over sales in the fourth quarter of 2016. For the twelve months ending December 31, 2017, sales grew 2.7% over the comparable period in 2016 to $1.19 billion, or 2.3% on a constant currency basis.

Net sales for the Surgical Implant segment grew 12.8% in the fourth quarter of 2017 to $54.2 million. Sales across all three implant subcategories (knee, hip and shoulder) again grew at double digit rates compared to the prior year period. For the twelve months ending December 31, 2017, Surgical Implant sales grew 14.8% over the comparable period in 2016 to $200.4 million.

Net sales for DJO’s International segment grew 15.2% in the fourth quarter of 2017 to $85.3 million, or 9.1% on the basis of constant currency and sales per day. Growth was driven by strong performance in Germany, France and Australia. For the twelve months ending December 31, 2017, International sales grew 6.3% to $320.1 million, or 4.7% on a constant currency basis over the comparable period in 2016.

Net sales for DJO’s Recovery Sciences segment were $41.7 million in the fourth quarter of 2017, down 1.2% compared to the fourth quarter of 2016. For the twelve months ending December 31, 2017, Recovery Sciences sales grew 0.8% over the comparable period in 2016 to $158.3 million.

Net sales for DJO’s Bracing and Vascular segment were $131.0 million in the fourth quarter of 2017, a decline of 0.9% compared to the fourth quarter of 2016. For the twelve months ending December 31, 2017, Bracing and Vascular sales declined 2.9% from the comparable period in 2016 to $507.4 million.

Earnings Results

For the fourth quarter of 2017, DJOFL reported net income of $61.2 million, including an income tax benefit of $69.9 million attributable to the enactment of the Tax Cuts and Jobs Act of 2017, compared to a net loss of $202.1 million for the fourth quarter of 2016, which included goodwill impairment and other non-cash charges of $178.0 million. For the twelve months of 2017, DJOFL reported a net loss of $35.9 million compared to a net loss of $286.3 million for the twelve months of 2016. As detailed in the attached financial tables, the results for the current and prior fourth quarter and twelve month periods were impacted by significant non-cash items, non-recurring items and other adjustments.

Adjusted EBITDA for the fourth quarter of 2017 was $80.6 million compared with Adjusted EBITDA of $59.5 million in the fourth quarter of 2016. For the twelve months ending December 31, 2017, Adjusted EBITDA was $268.2 million compared with Adjusted EBITDA of $235.3 million for the twelve months ending December 31, 2016. Including projected future savings of $25.5 million from cost savings programs currently underway as permitted under our credit agreement and the indentures governing our outstanding notes, Adjusted EBITDA for the twelve months ended December 2017 was $293.7 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 twelve months ending December 31, 2017 was $44.6 million compared to $8.6 million in 2016. The improvement in cash flow was attributable to both higher earnings and 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 11:00 am Eastern Time, Tuesday, March 6, 2018. 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, enabling people to regain or maintain their natural motion. Its products are used by orthopaedic 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.

March 01, 2018

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical, Inc. (Nasdaq:RTIX), a global surgical implant company, reported operating results for the fourth quarter and full year of 2017.

“We are pleased to have delivered on our 2017 commitments through four consecutive quarters and produced organic growth in every core product category,” said Camille Farhat, chief executive officer. “As I approach my first anniversary at the Company, I believe we have made significant progress. We have assembled a world class management team and began implementation of our strategic transformation. We successfully divested the cardiothoracic closure business to initiate the reduction in complexity and implemented programs to drive operational excellence and margin enhancement, while reorienting the organization around key customer segments. We are making the necessary investments to accelerate the growth of our spine franchise, most notably, the acquisition of Zyga Technology announced at the start of 2018.”

Farhat added, “While our initial progress is gratifying, we are still in the midst of our transformation with considerable work ahead of us. Moving forward, we are focused on executing our strategic initiatives to create a dynamic company focused on its core capabilities with consistent, predictable earnings and cash flow and growing spine focused operations.”

Fourth Quarter 2017

RTI’s worldwide revenues for the fourth quarter of 2017 were $70.8 million, a slight decline from the prior year quarter revenues of $71.3 million. Fourth quarter revenues were driven by stable performance in most product lines with growth in OEM, which were offset by a $2.8 million reduction from the sale of substantially all the assets of the cardiothoracic closure business completed in August 2017. Gross profit for the fourth quarter of 2017 was $36.3 million, or 51.2% of revenues, compared to $28.1 million, or 39.4% of revenues in the fourth quarter of 2016.

During the fourth quarter of 2017, RTI incurred substantial non-recurring pre-tax charges to support the ongoing strategic transformation of the business and to optimize the tax benefit of the related actions. The company incurred $1.6 million in severance and restructuring charges primarily in support of initiatives to reduce the complexity of its organizational structure; $2.8 million in executive transition costs primarily for non-cash executive inducement awards and stock-based compensation expenses; $3.7 million related to asset impairment and abandonments of certain long-term assets as part of efforts to reduce complexity and improve operational excellence; and $0.6 million in expenses related to the January 2018 acquisition of Zyga Technologies to support the acceleration of growth. During the fourth quarter of 2016, the company incurred $6.2 million of non-recurring pre-tax charges primarily driven by $5.4 million asset impairment and abandonment charges in our German facility.

Net loss applicable to common shares was $8.6 million loss, or $0.14 per fully diluted common share in the fourth quarter of 2017, compared to a net loss applicable to common shares of $11.8 million, or $0.20 per fully diluted common share in the fourth quarter of 2016. As outlined in the reconciliation tables that follow, excluding the impact of the various non-recurring charges and the impact of the Tax Cuts and Jobs Act in the fourth quarter of 2017, adjusted net income applicable to common shares was $1.6 million, or $0.03 per fully diluted common share in the fourth quarter of 2017.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA)¹, for the fourth quarter of 2017 was $9.4 million, or 13% of revenues compared with $6.1 million, or 9% of revenues for the fourth quarter of 2016. The increase in Adjusted EBITDA is primarily driven by the reduction in operating expenses through the efforts to reduce complexity and increase operational excellence implemented during 2017.

Full Year 2017

Worldwide revenues were $279.6 million for the full year 2017, an increase of 2.5 percent compared to revenues of $272.9 for the full year 2016. Growth across all product categories were offset by a $3.0 million reduction from the sale of substantially all of the assets of the cardiothoracic closure business in August 2017 and a reduction in other revenues. Gross profit for the full year 2017 was $142.5 million, or 51.0% of revenues compared to $132.3 million, or 48.5% of revenues in 2016.

During the year, the company recorded non-recurring pre-tax charges including: $12.2 of severance and restructuring charges; $2.8 million of executive transition expenses, $3.7 million of asset impairment and abandonment expenses; and $0.6 million in expenses related to the January 2018 acquisition of Zyga Technologies. During 2016 the Company incurred $26.6 million of pre-tax non-recurring charges.

During the third quarter of 2017, RTI completed the sale of substantially all the assets related to its cardiothoracic closure business for total consideration of $54 million, plus an additional $6 million in contingent cash consideration. In conjunction with the sale of the cardiothoracic closure business, the company recognized a gain of $34.1 million, or $18.2 million after tax.

Net income applicable to common shares was $2.5 million, or $0.04 per fully diluted common share for the full year 2017, compared to net loss applicable to common shares of $17.9 million, or $0.31 per fully diluted common share for the full year 2016. As outlined in the reconciliation tables that follow, excluding the after-tax impact of the non-recurring charges and the impact of the cardiothoracic closure sale gain, adjusted net income applicable to common shares was $3.1 million, or $0.05 per fully diluted common share in 2017.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) for the full year 2017 was $32.3 million, or 12% of revenues compared with $29.8 million, or 11% of revenues in 2016.

Fiscal 2018 Outlook

Based on its 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 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^th, 2018;
• Ongoing positive impact of efforts to reduce complexity and implement operational excellence; and
• Continued marketing of map3® cellular allogeneic bone graft and minimal negative revenue impact related to recent FDA warning letter.

Farhat noted, “We believe 2018 will be a year of focused execution, which will include finalizing the remaining portfolio decisions to further reduce the complexity of our structure. We are also deploying lean manufacturing across additional manufacturing sites to continue the drive for operational excellence, while strengthening our R&D discipline and beginning to rebuild our innovation pipeline. In addition, we will opportunistically explore acquisition possibilities to further accelerate our growth trajectory.”

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, trauma and cardiothoracic 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.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. In addition, except for historical information, any statements made in this communication about anticipated financial results, growth rates, new product introductions, future operational improvements and results or regulatory actions or approvals or changes to agreements with distributors also are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties, including the risks described in public filings with the U.S. 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.

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CARLSBAD, Calif., Feb. 28, 2018 (GLOBE NEWSWIRE) — SeaSpine Holdings Corporation (NASDAQ:SPNE), a global medical technology company focused on surgical solutions for the treatment of spinal disorders, announced today financial results for the three-months and full-year ended December 31, 2017 and provided guidance for 2018.

Summary Fourth Quarter 2017 Financial Results and Recent Accomplishments

• Revenue of $34.0 million, an increase of 4.5% year-over-year
• U.S. revenue of $31.2 million, an increase of 4.8% year-over-year
  º  U.S. Orthobiologics revenue of $16.6 million, an increase of 10.1% year-over-year
  º  U.S. Spinal Implants revenue of $14.6 million, essentially unchanged year-over-year
• International revenue of $2.8 million, an increase of approximately 1% year-over-year
• Limited commercial launch of OsteoStrand™ and OsteoStrand Plus Demineralized Bone Fibers and OsteoBallast™ Demineralized Bone Matrix in Resorbable Mesh
• Launch of an expanded Ventura™ NanoMetalene® posterior interbody device portfolio with sagittally oriented lordosis options to accommodate a larger range of posterior procedures and a wider variety of patient anatomies

“Our 2017 results are marked by several accomplishments underpinned by our commitment to delivering improved procedural spine solutions and clinical value through our expanding and innovative product portfolio,” said Keith Valentine, President and Chief Executive Officer. “As we enter 2018, we are well positioned to continue upgrading our global distribution footprint while we execute on our strategy and deliver accelerated revenue growth and expanded gross margins.”

Fourth Quarter 2017 Financial Results
Revenue for the fourth quarter of 2017 totaled $34.0 million, an increase of 4.5% compared to the same period of the prior year. U.S. revenue was $31.2 million, a 4.8% increase compared to the same period of the prior year due to strong volume growth in the U.S. Orthobiologics franchise that was driven by new distribution.

Orthobiologics revenue totaled $18.1 million, an 8.8% increase compared to the fourth quarter of 2016. The increase in orthobiologics revenue was primarily driven by growth in U.S. sales across multiple product lines generated by recently added distributors.

Spinal implants revenue totaled $15.9 million, essentially unchanged compared to the same period of the prior year. Spinal implant sales in the U.S. also was essentially flat compared to the prior year, as continued low single-digit price declines and decreased usage of the Company’s legacy systems were mostly offset by revenue growth from recently launched products.

Gross margin for the fourth quarter of 2017 was 63.3%, compared to 58.6% for the same period in 2016. The increase in gross margin was mainly driven by lower raw material and manufacturing costs for orthobiologics products manufactured at the Company’s Irvine, California facility and lower provisions for excess and obsolete inventory in the fourth quarter of 2017.

Operating expenses for the fourth quarter of 2017 totaled $29.2 million, compared to $28.6 million for the same period of the prior year. The $0.6 million increase was driven primarily by higher commission expense and marketing costs, partially offset by a $1.5 million non-cash gain recorded in the fourth quarter of 2017 related to the release of a foreign capital tax liability based on the passage of the statute of limitations and lower consulting expenses.

Net loss for the fourth quarter of 2017 was $7.5 million, compared to a net loss of $9.8 million for the fourth quarter of 2016.

Cash and cash equivalents at December 31, 2017 totaled $10.8 million, and the Company had no amounts outstanding under its $30.0 million credit facility.

2017 Financial Results
Revenue for the year ended December 31, 2017 totaled $131.8 million, an increase of 2.3% compared to the prior year. U.S. revenue was $118.4 million, a 1.4% increase compared to the prior year. Orthobiologics revenue totaled $69.1 million, a 4.4% increase compared to the prior year. Spinal implant revenue totaled $62.7 million, essentially unchanged compared to the prior year.

Gross margin for 2017 was 60.7%, compared to 56.9% for 2016. The increase in gross margin was mainly driven by lower raw material and manufacturing costs for orthobiologics products manufactured at the Company’s Irvine, California facility, and by lower provisions for excess and obsolete inventory in 2017.

Operating expenses for 2017 totaled $112.7 million, compared to $116.8 million for 2016.  The $4.1 million decrease was driven primarily by lower intangible asset amortization expense, the absence of a $0.9 million instrument impairment charge recorded in 2016, and a decrease in general and administrative expenses, all of which were partially offset by higher selling commissions and increased investment in marketing and product development in 2017.  The decrease in general and administrative expenses was driven primarily by lower consulting and legal expenses, the $1.5 million non-cash gain related to the release of a foreign capital tax liability, a $0.9 million non-cash gain recorded in 2017 related to a decrease in the fair value of contingent consideration liabilities related to the NLT acquisition, and lower facility and related operating costs resulting from the shutdown of the Company’s Vista, California facility in late 2016.

Net loss for 2017 was $32.1 million, compared to a net loss of $43.2 million for 2016.

2018 Financial Outlook
SeaSpine continues to expect full-year 2018 revenue to be in the range of $135 million to $139 million, reflecting growth of 2.5% to 5.5% over full-year 2017 revenue.

Webcast and Conference Call Information
The Company’s management team will host a conference call beginning today at 1:30pm PT/4:30pm ET to discuss the financial results and recent business developments. Individuals interested in listening to the conference call may do so by dialing (877) 418-4766 for domestic callers or (614) 385-1253 for international callers, using Conference ID: 7067009.  To listen to a live webcast, please visit the Investors section of the SeaSpine website at: www.seaspine.com.

About SeaSpine
SeaSpine (www.seaspine.com) is a global medical technology company focused on the design, development and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. SeaSpine has a comprehensive portfolio of orthobiologics and spinal implants solutions to meet the varying combinations of products that neurosurgeons and orthopedic spine surgeons need to perform fusion procedures on the lumbar, thoracic and cervical spine. SeaSpine’s orthobiologics products consist of a broad range of advanced and traditional bone graft substitutes that are designed to improve bone fusion rates following a wide range of orthopedic surgeries, including spine, hip, and extremities procedures. SeaSpine’s spinal implants portfolio consists of an extensive line of products to facilitate spinal fusion in minimally invasive surgery (MIS), complex spine, deformity and degenerative procedures. Expertise in both orthobiologic sciences and spinal implants product development allows SeaSpine to offer its surgeon customers a differentiated portfolio and a complete solution to meet their fusion requirements. SeaSpine currently markets its products in the United States and in over 30 countries worldwide.

Forward-Looking Statements
SeaSpine cautions you that statements included in this news release that are not a description of historical facts are forward-looking statements that are based on the Company’s current expectations and assumptions. Such forward-looking statements include, but are not limited to, statements relating to: the Company delivering improved procedural spine solutions and clinical value through an expanded and innovative product portfolio; the Company’s position to continue to upgrade its global distribution footprint; and the Company’s expectations for full-year 2018 revenue, as well as to deliver accelerated revenue growth and expanded gross margins.  Among the factors that could cause or contribute to material differences between the Company’s actual results and the expectations indicated by the forward-looking statements are risks and uncertainties that include, but are not limited to: surgeons’ willingness to continue to use the Company’s existing products and to adopt its newly launched products, including the risk that the Company’s products do not demonstrate adequate safety or efficacy, independently or relative to competitive products, to support expected levels of demand or pricing; the ability of newly launched products to perform as designed and intended and to meet the needs of surgeons and patients, including as a result of the lack of clinical validation of products in limited commercial (or “alpha”) launch; the Company’s ability to attract new, high-quality distributors, whether as a result of inability to reach agreement on financial or other contractual terms or otherwise, disruption to the Company’s existing distribution network as new distributors are added, and the ability of new distributors to generate growth or offset disruption to existing distributors; continued pricing pressure, whether as a result of consolidation in hospital systems, competitors or others, as well as exclusion from major healthcare systems, whether as a result of unwillingness to provide required pricing or otherwise; the risk of supply shortages and the associated, potentially long-term disruption to product sales, including as a result of the Company’s dependence on a limited number of third-party suppliers for components and raw materials, or otherwise; unexpected expense and delay, including as a result of developing and supporting the launch of new products, the fact that newly launched products may require substantial additional development activities, which could introduce further expense and delay, or as a result of obtaining regulatory clearances; the Company’s ability to continue to invest in medical education and training, product development, and/or sales and marketing initiatives at levels sufficient to drive future revenue growth, including as a result of its inability to obtain funding on a timely basis on acceptable terms, or at all; general economic and business conditions in the markets in which the Company does business, both in the U.S. and abroad; and other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission. The Company’s public filings with the Securities and Exchange Commission are available at www.sec.gov.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date when made. SeaSpine does not intend to revise or update any forward-looking statement set forth in this news release to reflect events or circumstances arising after the date hereof, except as may be required by law.

Investor Relations Contact
Lynn Pieper Lewis
(415) 937-5402
ir@seaspine.com

LEESBURG, Va., Feb. 28, 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 fourth quarter and fiscal year ended December 31, 2017.

Fiscal Year 2017 Financial Summary:

• Total fiscal year 2017 revenue of $258.0 million, up 9% year-over-year on both a reported basis and on a constant currency basis.
• Domestic fiscal year 2017 revenue of $197.3 million, up 9% year-over-year, comprised of:
  • U.S. Complex Spine growth of 8% year-over-year
  • U.S. Minimally Invasive Surgery (MIS) growth of 16% year-over-year
  • U.S. Degenerative growth of 8% year-over-year
• International fiscal year 2017 revenue of $60.7 million, up 9% year-over-year, or 10% on a constant currency basis.
• Net loss of $37.1 million for fiscal year 2017, compared to a net loss of $41.7 million in prior year.
• Adjusted EBITDA loss of $0.7 million for fiscal year 2017, compared to Adjusted EBITDA of $1.4 million in the prior year.

Fourth Quarter 2017 Financial Summary:

• Total fourth quarter revenue of $67.8 million, up 10% year-over-year on a reported basis and 9% on a constant currency basis.
• Domestic fourth quarter revenue of $51.9 million, up 9% year-over-year, comprised of:
  • U.S. Complex Spine growth of 12% year-over-year
  • U.S. Minimally Invasive Surgery (MIS) growth of 11% year-over-year
  • U.S. Degenerative growth of 6% year-over-year
• International fourth quarter revenue of $15.9 million, up 13% year-over-year, and 10% on a constant currency basis.
• Net loss of $8.7 million for the fourth quarter, compared to a net loss of $12.5 million in the comparable quarter last year.
• Adjusted EBITDA loss of $1.9 million for the fourth quarter, compared to Adjusted EBITDA loss of $28,000 in the comparable quarter last year.

Fourth Quarter Product Introductions and Strategic Highlights:

• On October 4, 2017, the Company announced that President and Chief Executive Officer Eric Major had been elected Chairman of the Company’s Board of Directors, effective immediately. Major succeeded Dan Pelak, who assumed the role of Independent Lead Director after serving as Chairman since 2010.
• On October 23, 2017, the Company announced that it has acquired from Cardinal Spine, a privately held medical device company, the PALO ALTO^® Cervical Static Corpectomy Cage System. PALO ALTO, a cervical vertebral body replacement device, is the first and only static corpectomy cage in the world to receive a cervical 510(k) clearance from the FDA. In addition to PALO ALTO, K2M has also acquired the associated intellectual property and product inventory.
• On October 25, 2017, the Company announced a global compatibility and co-marketing agreement with Brainlab. The two companies will collaborate in the commercial release of future navigated K2M spinal systems, which would be compatible with Brainlab spinal navigation systems.
• On November 30, 2017, the Company announced the completion of 300 surgical cases using the RHINE™ Cervical Disc System*. The RHINE Cervical Disc System* is an artificial disc replacement that features a one-piece compressible polymer core design with dome-shaped, plasma-coated endplates and a central-split keel.
• On December 20, 2017, the Company announced that it received a CE Mark for its CAPRI® Cervical 3D Expandable Corpectomy Cage System* featuring Lamellar 3D Titanium Technology™ and the successful completion of its first surgical case.  * These products are intended for export and not sold or offered for sale in the United States.

“Our financial results for calendar year 2017 reflect total revenue growth of approximately 9% year-over-year, above the high-end of our guidance range,” said Chairman, President, and Chief Executive Officer, Eric Major. “We delivered approximately 9% growth in the United States in 2017—well above-market growth rates—driven by solid execution against our strategic goal of increasing market share by introducing new and innovative spinal implant solutions and expanding our distribution footprint. We have supplemented this organic growth activity with exciting product introductions in both the complex spine and degenerative categories.  Looking out to 2018, we are excited about the opportunity of 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, the first and only static corpectomy cage in the world to receive a cervical 510(k) clearance. We also announced an important strategic collaboration with Brainlab, one of the world’s leading imaging and navigation companies, that we believe will represent additional implant sales opportunities in the second half of 2018.  Our Brainlab collaboration will complement our recent launches of the BACS^® platform and the EVEREST^®Minimally Invasive XT Spinal System.”

Mr. Major continued, “We remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies. We have introduced our 2018 guidance expectations for revenue growth of 9% to 10% with improved profitability.”

Fourth Quarter 2017 Financial Results

Total revenue for the fourth quarter of 2017 increased $6.0 million, or 9.7%, to $67.8 million, compared to $61.8 million for the fourth quarter of 2016. Total revenue increased 9% 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 Denmark.

Revenue in the United States increased $4.2 million, or 8.8% year-over-year, to $51.9 million, and international revenue increased $1.8 million, or 12.9% year-over-year, to $15.9 million. Fourth quarter 2017 international revenue increased 10% year-over-year on a constant currency basis. Foreign currency exchange positively impacted fourth quarter international revenue by $0.4 million, representing approximately 73 basis points of 2017 international growth year-over-year.

The following table represents domestic revenue by procedure category.

By procedure category, U.S. revenue in the Company’s complex spine, MIS and degenerative categories represented 38.6%, 17.2% and 44.2% of U.S. revenue, respectively, for the three months ended December 31, 2017.

Gross profit for the fourth quarter of 2017 increased 13.6% to $43.6 million, compared to $38.4 million for the fourth quarter of 2016.  Gross margin was 64.3% for the fourth quarter of 2017, compared to 62.1% for the prior year period. Gross profit includes amortization expense on investments in surgical instruments of $3.6 million, or 5.3% of sales, for the three months ended December 31, 2017, compared to $3.6 million, or 5.8% of sales, for the comparable period last year.

Operating expenses for the fourth quarter of 2017 increased $4.7 million, or 9.9%, to $52.5 million, compared to $47.7 million for the fourth quarter of 2016. The increase in operating expenses was driven primarily by a $4.9 million increase in sales and marketing expenses, compared to the comparable period last year.  The Company increased the number of domestic sales agencies who represent our products in the United States by nine agencies to a total of 109 independent sales agencies, an increase of 9% sequentially.  In addition, the Company’s U.S. and non-U.S. direct sales employees remained flat at 158 employees, despite active management of this group.

Loss from operations for the fourth quarter of 2017 decreased $0.5 million to $8.9 million compared to a loss from operations of $9.4 million for the comparable period last year. Loss from operations included intangible amortization of $0.2 million for the three months ended December 31, 2017, compared to $2.6 million for the comparable period last year.  The Company recorded approximately $1.4 million in non-recurring accruals primarily reflecting legal and administrative expenses updated in 2018 and inventory adjustments.

Total other expenses for the fourth quarter of 2017 decreased $1.6 million to $1.5 million, compared to $3.1 million last year. The decrease in other expense, net, was primarily attributable to a unrealized gain of $0.3 million from foreign currency remeasurement on intercompany payable balances, compared to unrealized loss of $1.3 million in the comparable period last year.

Net loss for the fourth quarter of 2017 was $8.7 million, or $0.20 per diluted share, compared to a loss of $12.5 million, or $0.30 per diluted share, for the fourth quarter of 2016.

Fiscal Year 2017 Financial Results

For the fiscal year 2017, total revenue increased $21.4 million, or 9.0%, to $258.0 million, compared to $236.6 million for the fiscal year 2016. Total revenue increased 9.1% year-over-year on a constant currency basis. U.S. revenue increased $16.2 million, or 9.0%, to $197.3 million, compared to $181.1 million last year. International revenue increased $5.2 million, or 9.3%, to $60.7 million, compared to $55.6 million last year. International revenue increased 9.7% year-over-year on a constant currency basis.

The following table represents domestic revenue by procedure category:

Sales in our complex spine, MIS and degenerative categories represented 39.3%, 16.9% and 43.9% of U.S. revenue, respectively, for the fiscal year 2017.

As of December 31, 2017, we had cash and cash equivalents of $24.0 million as compared to $45.5 million as of December 31, 2016. We had working capital of $99.6 million as of December 31, 2017 as compared to $115.9 million as of December 31, 2016.

At December 31, 2017, outstanding long-term indebtedness included the carrying value of the Convertible Senior Notes of $39.2 million and the capital lease obligation of $33.8 million. The Company had unused capacity on its revolving credit facility of $49.0 million and no borrowings outstanding as of December 31, 2017.

2018 Outlook

The Company is providing fiscal year 2018 revenue guidance expectations of:

• Total revenue on an as reported basis in the range of $280.0 million to $284.0 million, representing growth of 9% to 10% year-over-year, compared to total revenue of $258.0 million in fiscal year 2017.
  • The Company expects growth in its U.S. business of approximately 10% to 11% year-over-year in 2018.
  • The Company expects growth in its International business of approximately 5% to 7% year-over-year in 2018.
  • Assuming current currency rates remain similar for the rest of the year, the Company expects currency to have a positive impact on total revenue in 2018 of approximately $2 million.

The Company is providing fiscal year 2018 guidance expectations for net loss and Adjusted EBITDA. The Company expects:

• Total net loss of $34.0 million to $30.0 million, compared to net loss of $37.1 million in fiscal year 2017.
• Adjusted EBITDA benefit in the range of $4.0 million to $8.0 million, compared to Adjusted EBITDA loss of $740,000 in fiscal year 2017.

Conference Call

Management will host a conference call at 5:00 p.m. Eastern Time on February 28th to discuss the results of the fourth quarter and fiscal year 2017, and to host a question and answer session. Those who would like to participate may dial 844-579-6824 (734-385-2616 for international callers) and provide access code 3754359 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 3754359. The webcast will be archived on the investor relations section of the Company’s website.

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Fourth Quarter Highlights

• Net sales of $116.9 million, an increase of 7.7% compared to prior year and 6.1% on a constant currency basis
• Net income from continuing operations of $1.5 million; compared to net loss of $5.1 million in the prior year
• Adjusted EBITDA of $24.3 million; an increase of $3.2 million, or 15.1%, over prior year

Fiscal Year 2017 Highlights

• Net sales of $433.8 million, an increase of 5.9% compared to prior year and 5.5% on a constant currency basis
• Net income from continuing operations of $7.3 million; an increase of $3.8 million over prior year
• Adjusted EBITDA of $81.6 million; an increase of $2.3 million, or 2.9%, over prior year

LEWISVILLE, Texas–(BUSINESS WIRE)– Orthofix International N.V. (NASDAQ:OFIX) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2017. For the fourth quarter of 2017, net sales were $116.9 million, earnings per share from continuing operations was $0.08 and adjusted earnings per share from continuing operations was $0.52. For fiscal year 2017, net sales were $433.8 million, earnings per share from continuing operations was $0.39 and adjusted earnings per share from continuing operations was $1.62.

“2017 was a very strong year for Orthofix. We exceeded our topline expectations and finished the year with a solid margin improvement trajectory. We also made significant progress in the transformation of our Spine Fixation business and completed our worldwide restructuring initiatives,” said Brad Mason, President and Chief Executive Officer.

“With 2017 in the rear-view mirror, we are now focused fully on executing our 2018 global and business unit strategies. Globally, we expect to drive shareholder value through three pillars, topline organic growth better than market growth rates, margin expansion through operational improvements, and strategic deployment of our capital in ways that we believe will accelerate topline growth in our core businesses. We are well positioned and expect to execute in each of these areas in 2018.”

Financial Results Overview

Fourth Quarter

The following table provides net sales by strategic business unit (“SBU”):

Gross profit increased $8.1 million to $93.3 million. Gross margin increased to 79.8% compared to 78.5% in the prior year period, primarily due to increased revenue from international Extremity Fixation stocking distributors, as well as our domestic and international restructuring initiatives during 2017. Non-GAAP net margin (gross profit less sales and marketing expenses) was $41.5 million, an increase of 13.6% compared to $36.5 million in the prior year period. The increase in non-GAAP net margin was primarily due to the increase in gross margin and a slight decrease in sales and marketing expenses as a percent of sales.

Net income from continuing operations was $1.5 million, or $0.08 per share, compared to net loss of $5.1 million, or ($0.29) per share in the prior year period. Adjusted net income from continuing operations was $9.7 million, or $0.52 per share, compared to adjusted net income of $7.7 million, or $0.42 per share in the prior year period.

EBITDA was $21.8 million, compared to $8.6 million in the prior year period. Adjusted EBITDA was $24.3 million or 20.8% of net sales for the fourth quarter, compared to $21.1 million or 19.4% of net sales in the prior year period.

Fiscal Year 2017

The following table provides net sales by SBU:

Driven by the increase in net sales, gross profit increased $18.9 million to $340.8 million, while gross margin was flat at 78.6% compared to the prior year period. Non-GAAP net margin was $142.4 million, an increase of 1.3% compared to $140.6 million in the prior year period. The increase in Non-GAAP net margin was due to the increase in net sales, partially offset by higher commission expenses from geographic mix in Extremity Fixation and higher commission rates from Biologics and Spine Fixation distributors.

Net income from continuing operations was $7.3 million, or $0.39 per share, compared to net income of $3.5 million, or $0.19 per share in the prior year. Adjusted net income from continuing operations was $30.1 million, or $1.62 per share, compared to adjusted net income of $27.0 million, or $1.46 per share in the prior year.

EBITDA was $56.9 million in 2017, compared to $39.1 million in the prior year. Adjusted EBITDA was $81.6 million or 18.8% of net sales for the year, compared to $79.3 million or 19.4% of net sales in the prior year.

Adoption of Revenue Recognition Standard ASU 2014-09

On January 1, 2018, the Company adopted the new revenue recognition standard, ASU 2014-09, as amended, using a cumulative effect adjustment, which resulted in a significant increase in accounts receivable, a decrease in inventories, and a related change to deferred income taxes. These changes were offset by an adjustment to the Company’s opening retained earnings of approximately $5 million. One of the primary impacts of this new standard is the timing of revenue recognition for our sales to international Extremity Fixation and Spine Fixation stocking distributors that were historically accounted for using the sell-through method. This revenue will now be recorded on invoiced sales instead of deferring recognition until cash is received. If the Company were to have adopted the new standard as of January 1, 2017, pro-forma net sales for the year ended December 31, 2017 would have been approximately $431 million. Refer to the table under the subheading “2017 Pro-forma Net Sales Under the New Revenue Recognition Standard” for the detail of pro-forma 2017 net sales by quarter as would have been reported under the new revenue recognition standard.

Liquidity

As of December 31, 2017, cash and cash equivalents were $81.2 million compared to $39.6 million as of December 31, 2016. As of December 31, 2017, we had no outstanding indebtedness and borrowing capacity of $125 million. Cash flow from operations increased $8.6 million to $53.3 million, while free cash flow increased $10.0 million to $36.4 million.

Redomicile

The Company is in the final stages of evaluating the impact of moving its parent company’s domicile from Curacao to the United States. Based on the analysis to date, including the assessment of the recent U.S. tax reform, the Company believes that executing this change could provide a number of benefits to Orthofix, including organizational simplification, more efficient cash deployment, a lower tax rate and increased cash flow. Subject to the outcome of final diligence, the Company currently anticipates requesting shareholder approval for this move in conjunction with its annual shareholder meeting later this year. The Company also expects to incur costs this year to complete all of the underlying steps required for this transition. These estimated costs are included in our 2018 guidance.

2018 Outlook

For the year ending December 31, 2018, the Company expects the following results, assuming exchange rates are the same as those currently prevailing. This guidance reflects the new revenue recognition standard that is required as of January 1, 2018 and discussed above, for which net sales will be recorded on invoiced sales instead of deferring recognition until cash is received.

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Episurf Medical AB (publ) (“Episurf”) has signed an agreement relating to a financing of up to SEK 70 million. The capital will be used for execution of the company’s growth strategy. The transaction is carried out through the issuance of convertible notes (the “Notes”) with warrants attached (the “Warrants”) in several tranches spread over 36 months (each a ”Tranche”). Episurf will receive SEK 7 million through the first Tranche. Existing shareholders will receive free warrants to protect them against dilution. The financing is conditioned upon the shareholders’ meeting resolving on a new authorization for issuance and the board of directors will propose to the annual shareholders’ meeting, which is to be held on 9 April 2018, to resolve such new authorization.

“We are happy to conclude this financing agreement as it puts Episurf Medical in a great position to execute on its strategy. We are continuing to report strong clinical results and as the Episealer® technology is gaining traction in Europe, we are just about to launch additional growth initiatives in US, Asia and in the Middle East.” comments Pål Ryfors, CEO, Episurf Medical.

The Tranches will be subscribed by European Select Growth Opportunities Fund (the “Investor”) which is a fund focusing on smallcap companies in the technology and healthcare sectors presenting a strong growth potential.

The financing relates to an issuance agreement entered into by Episurf with the Investor signed on the evening of 22 February 2018 (the “Agreement”). The first Tranche in the amount of SEK 7 million will be the first transaction pursuant to the Agreement.

In connection with the issue of the first Tranche of Notes and Warrants being carried out, which will occur subsequent to the annual general meeting 2018, Episurf will also issue free warrants to existing shareholders to protect them against dilution (the “Shareholders Warrants”). The Shareholders Warrants will be issued to Episurf’s subsidiary and thereafter be transferred to Episurf’s shareholders. The record date and the allocation proportion for the Shareholders Warrants will be announced at a later stage. The Shareholders Warrants will have the same characteristics as those of the Investor.

Highlights about the transaction:

•  The first Tranche will be carried out as a directed issue of SEK 7 million through the issuance of Notes with Warrants attached to the Investor.
  •  Upon the full exercise of the Warrants and the Shareholders Warrants of the first Tranche Episurf will receive an additional SEK 7 million.
  •  Maximum additional potential financing of up to SEK 63 million (plus approximately SEK 63 million upon exercise of all the Warrants and the Shareholders Warrants) through similar directed issues in subsequent Tranches over the next 36 months, subject to fulfilment of certain conditions.
  •  As a technical measure in order to meet the Investor’s demand for immediate access to its shares, certain shareholders will, during a transitional period, lend shares to the issuing agent engaged for this Agreement.
    •  Episurf’s board of directors will propose to the annual shareholders’ meeting 2018 to resolve a new authorization for the board of directors so that the board of directors may be able to issue convertible notes and warrants. Provided that the shareholders’ meeting resolves on a new authorization, the board of directors will decide the issuance of the first Tranche under the Agreement as it is within the limitations of the company’s articles of association.

Main characteristics of the Notes, the Warrants and the Shareholders Warrants:

•  The Notes have a principal amount of SEK 50,000 each. They bear no interest and have a maturity of 12 months from the date of the registration of their issuance with the Swedish Companies Registration Office. During their term, the Investor may request to convert some or all of the Notes at a variable conversion price representing an 8% discount to the lowest daily volume weighted average price over the last 15 trading days during which the Investor has not sold any share on the market prior to the conversion date (the “Reference Price”).
•  Upon such conversion request, Episurf has the option to remit, at its discretion, cash, shares in Episurf or a combination of both. This characteristic will enable Episurf to manage the potential dilution resulting from the Notes.
•  The Warrants have a term of five (5) years from the date of the registration of their issuance with the Swedish Companies Registration Office and will immediately be detached from the Notes. Each Warrant gives right to subscribe for one (1) new share (subject to standard adjustments in accordance with the terms and conditions of the Warrants) in Episurf at a fixed strike price representing a 120 % premium to the Reference Price on the date of the request from Episurf to issue a new Tranche.
•  The strike price for Warrants under the first Tranche will be set at 120% of the lowest Reference Price on the following two dates: (i) the day of issuance of the first Tranche by the board of directors and (ii) 8 January 2018, the date of signature of the term sheet between Episurf and the Investor (being SEK 5.1132). Episurf will publicly announce the strike price of the Warrants in connection with the issuance of the first Tranche.
•  The Shareholders Warrants will have the same characteristics as the Warrants and will be admitted to public trading.

Issuance of the subsequent Tranches

•  Each subsequent Tranche will amount to SEK 7 million each (such amount may be increased upon mutual consent of the Investor and Episurf). Episurf will also issue Shareholders Warrants upon each subsequent Tranche.
•  Episurf can require the Investor to subscribe a subsequent Tranche subject to the fulfillment of the following conditions on the date of the request and the date of funding of the requested Tranche:
  • all outstanding Notes have been completely converted or redeemed;
  • no material adverse change having occurred;
  • no event of default is in existence;
  • conversion of the Notes has not been prevented over the 90 preceding calendar days;
  • no suspension of trading of the shares having occurred over the 90 preceding calendar days;
  • The board of directors of Episurf is authorized to issue a sufficient number of shares for conversion of the Notes into shares and exercise of the Warrants;
  • the closing price and the daily volume weighted average price of the shares on each of the 10 preceding trading days is at least equal to SEK 4.00;
  • the average daily value traded of the shares over the 10 preceding trading days is at least equal to SEK 200,000;
  • post subscription of the requested Tranche, the Investor does not hold more than 7.5% of the then resulting outstanding number of shares of Episurf neither directly nor indirectly through the ownership of both shares and Notes.

The full terms and conditions of the Notes and the Warrants will be published on Episurf’s website, together with a follow-up table setting out information about the number of outstanding Notes, Warrants and Shares issued upon conversion of the Notes or exercise of the Warrants.

Example based on one Tranche:

•  Issuance of Tranche:
  • Tranche amount: SEK 7,000,000
  • Tranche issuance Reference Price: SEK 5.70
  • Strike price of Warrants: SEK 5,70 * 120% ≈ SEK 6.84
  • Number of Notes: 7,000,000/50,000 = 140 Notes
  • Number of Warrants: 7,000,000 * 50% / 6.84 = 511,696
  • Number of additional Shareholders’ Warrants: 511,696 (100 % of number of Warrants to the Investor)
  •  Conversion of Notes:
    • Conversion Price: SEK 5.70 * 92% ≈ SEK 5.24
    • Number of shares: SEK 7,000,000/ SEK 5.24 = 1,335,877 shares
  •  Full exercise of warrants:
    • Investment from Investor’s Warrants at exercise: SEK 6.84 * 511,696 ≈ SEK 3,500,000
    • Investment from Shareholders’ Warrants at exercise: SEK 6.84 * 511,696 ≈ SEK 3,500,000
    • Total number of shares from warrants: 1,023,392
    • Total additional investment from warrants: SEK 7,000,000
  •  Dilution of shareholders per current number of shares from Notes and at full exercise of all warrants (the Investor’s and the shareholders’): ~7.17%

For more  information, please contact:

Pål Ryfors, CEO, Episurf Medical

Tel:+46 (0) 709 62 36 69

Email: pal.ryfors@episurf.com

About Episurf Medical

Episurf Medical is endeavoring to bring people with painful joint injuries a more active, healthier life through the availability of minimally invasive and personalized treatment alternatives. Episurf Medical’s Episealer® personalized implants and Epiguide® surgical drill guides are developed for treating localized cartilage injury in joints. Episurf Medical’s μiFidelity® system enables implants to be cost-efficiently tailored to each individual’s unique injury for the optimal fit and minimal intervention. Episurf Medical’s head office is in Stockholm, Sweden. Its share (EPIS B) is listed on Nasdaq Stockholm. For more information, go to the company’s website: www.episurf.com.

This information is information that Episurf Medical AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08.20 CET on 23 February 2018.