Global Ambulatory Surgical Centers Market to Witness a CAGR of 3.5% during 2018-2024

NEW YORK, Nov. 21, 2018 (GLOBE NEWSWIRE) — The global ambulatory surgical centers (ASCs) market was valued at USD 77.1 billion in 2017 and is expected to reach USD 97.3 billion by 2024, at a CAGR of 3.5%. The growth is primarily attributed to the growing number of surgeries performed in ASCs and growing incidence of accidental cases. There are several advantages of using ambulatory surgical centers such as the personal attention, the patient receive and the lack of exposure to a wide range of infections. This is also one of the reason that ASCs market is expected to increase in coming years globally.

Ambulatory surgery centers (ASCs) are providing surgical and emergency care services on an outpatient basis. It offers improved patient care quality along with the reduction in healthcare cost. The growth of this industry is attributed to increasing prevalence of acute and chronic diseases and growing incidence of accidental cases across the globe. Patients are opting for ambulatory services owing to rising burden of treatment cost and better outcomes with higher patient satisfaction. Moreover, technological advancements in the surgical techniques have allowed increasing number of procedure performed in ASCs. Furthermore, as healthcare industry and investors look for new methods to cut costs, an ambulatory surgical center offers additional benefits as compared to hospitals. The lower rate of infections and cost effectiveness of ASCs will drive the ambulatory surgical centers market over the forecast period.

Global Ambulatory Surgical Centers Market Regional Insight

Geographically, North America held the largest market share of the global market in 2017. The growth in the region is attributed to the growing investments in ASCs by major private healthcare companies and patients adopting minimally invasive therapies. Europe held the second largest share of the global market owing to higher volume of orthopedic surgery, and high number of eyes disorders. Additionally, local governments of this region are also promoting the adoption of ASCs. Asia-Pacific is expected to be the fastest growing market due to growing number of aging population and increasing accidental cases and more chronic conditions are expected to propel the market growth in this region.

Browse full research report with TOC on “Global Ambulatory Surgical Centers Market Outlook, Trend and Opportunity Analysis, Competitive Insights, Actionable Segmentation & Forecast 2024” at: https://www.energiasmarketresearch.com/global-ambulatory-surgical-centers-market-outlook/

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Key findings from the report:

  • On the basis of specialty, the multi-specialty surgical centers segment held the share of the market in 2017. The growth is attributed to growing number of surgeries procedure performed, and people moving towards multi-specialty surgical centers due to presence of highly skilled and qualified surgeons, nurse, and staff.
    • On the basis of multi-specialty surgical centers, the orthopedic segment held the major share of the market
  • On the basis of services, the surgical services held the major share of the market in 2017, and expected to continue its dominance over the forecast period
    • Based on the ownership type, the physician only, segment held the major share of the market in 2017
  • Geographically, North America held the largest share of the global market in 2017 and the trend is likely to continue over the forecast period
  • Some of the key companies operating in the market include, Proliance Surgeons, Inc., Tenet Healthcare Corporation, Regent Surgical Health, Surgical Management Professionals, ASD Management, United Surgical Partners International, Symbion Pty Ltd., AmSurg Corp., Medical Facilities Corporation, Ambulatory Surgical Centers of America, and HCA Healthcare, Inc.

This report segments global ambulatory surgical centers market by specialty, services, location, ownership type, modality, and region.

By Specialty

  • Single Specialty Surgical Centers
    • Podiatry
    • Dental
    • Otolaryngology
    • Endoscopy
    • Gynecology
    • Ophthalmology
    • Orthopedic
    • Pain management
    • Plastic surgery
    • Other
  • Multi-Specialty Surgical Centers
    • Podiatry
    • Dental
    • Otolaryngology
    • Endoscopy
    • Gynecology
    • Ophthalmology
    • Orthopedic
    • Pain management
    • Plastic surgery
    • Other

By Services

  • Surgical services
  • Diagnostic services

By Location

  • Rural
  • Urban

By Ownership Type

  • Physician only
  • Corporate-physician
  • Hospital-physician
  • Corporate-hospital
  • Corporate only
  • Hospital only

By Modality

  • Hospital-based ambulatory surgical center
  • Freestanding ambulatory surgical center 

By Region

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East and Africa

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Altus Capital Partners, Inc. Acquires ChoiceSpine, LP

November 20, 2018

WILTON, Conn.–(BUSINESS WIRE)–Altus Capital Partners, Inc. (“Altus”), an investment firm focused on the North American manufacturing sector, today announced it has acquired ChoiceSpine, LP, a leading designer, manufacturer, and marketer of specialized spinal implants, instrumentation and biologics for the surgical treatment of complex spine disorders. Financial terms of the transaction were not disclosed.

Based in Knoxville, TN and founded in 2006, ChoiceSpine, LP and Knox Spine, LLC (collectively, the Company) collaborates with physicians to develop new products which incorporate current medical technology with customized patient solutions. ChoiceSpine products include minimally invasive, cervical, thoracolumbar, interbody, lateral, and biologics kits and implants that increase procedural efficiency and efficacy.

“We recognize the need in the medical technology space for proven spinal products that can enhance the quality of life for spinal patients,” said Altus Co-Founder and Senior Partner Gregory L. Greenberg. “ChoiceSpine, a global medical device corporation specializing in innovative solutions for both spinal fusion hardware and biologics, demonstrates a track record of proven innovation, strong sales growth, increased distribution and the necessity of their products in the marketplace.”

Management will continue to invest in the expansion of the business. Altus Capital Partner Heidi Goldstein added, “We look forward to working with Founders Rick Henson and Marty Altshuler, who continue to invest alongside us in the Company, in further capitalizing on the depth of their design and engineering capabilities, sales growth and momentum.”

“We have built a deep bench of talent that has led the company with an increased focus on product design and engineering which benefit so many patients experiencing spinal injuries,” said Rick Henson. “We look forward to working with Altus in further developing our offerings as well as expanding into new product verticals to continue to grow the company and provide patient solutions for the treatment of spinal disorders,” added Marty Altshuler.

This is Altus’ third acquisition in less than two years and its second in the medical technology space. The firm successfully completed the tender offer for all of the outstanding shares of common stock of MGC Diagnostics Corporation (“MGC”), a global medical technology company dedicated to cardiorespiratory health solutions in December 2017, and the acquisition of Max Environmental Technologies, Inc., an integrated environmental solutions company, in February, 2017.

About ChoiceSpine

ChoiceSpine is a privately-held spinal device company located in Knoxville, TN. The company prides itself on providing excellent products and exceptional service to meet the needs of their customers. ChoiceSpine offers a breadth of innovative and surgeon-focused systems that are designed to be safe, efficient, and easy-to-use. By working closely with physicians and maintaining a service-focused distribution, ChoiceSpine will continue to bring technically-superior spinal products to market.

About Altus Capital Partners

Altus Capital Partners is a private equity firm that makes control investments in middle market manufacturing businesses. We believe that our exclusive focus on manufacturing provides us with a unique understanding of the opportunities and challenges faced by companies in the sector. We utilize a patient, thoughtful investment approach and seek to partner with the management teams of our operating companies to achieve growth. With offices in Wilton, CT and Lincolnshire, IL, Altus Capital Partners has completed 18 platform investments and numerous add on acquisitions since 2003. For more information, please visit www.altuscapitalpartners.com/.

Contacts

Laura Brophy
Marketcom PR
203-331-7618
lbrophy@marketcompr.com

Mazor Robotics Shareholders Approve Merger Agreement With Medtronic

CAESAREA, IsraelNov. 19, 2018 /PRNewswire/ — Mazor Robotics Ltd. (TASE: MZOR; NASDAQGM: MZOR), a pioneer and a leader in the field of robotic guidance systems, today announced that at a Special General Meeting of Shareholders held earlier today, Mazor Robotics shareholders approved the previously announced definitive merger agreement with wholly-owned subsidiaries of Medtronic plc (NYSE: MDT).

Approximately 53 percent of Mazor Robotics ordinary shares were represented in the meeting. Approximately 95 percent of the shares represented in the meeting which are neither held by a Medtronic affiliated party nor by a controlling shareholder of the Company or a shareholder with a personal interest in the merger proposal, were cast in favor of the merger.

Upon completion of the transaction, Mazor Robotics shareholders will receive $58.50 per American Depository Share, or $29.25 per ordinary share, in cash, for a total of approximately $1.64 billion. The transaction remains subject to certain closing conditions and is expected to close during Medtronic’s third fiscal quarter ending January 25, 2019.

About Mazor

Mazor Robotics (TASE: MZOR; NASDAQGM: MZOR) believes in healing through innovation by developing and introducing revolutionary technologies and products aimed at redefining the gold standard of quality care. Mazor Robotics Guidance System enables surgeons to conduct spine and brain procedures in an accurate and secure manner. For more information, please visit www.MazorRobotics.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Any statements in this release about future expectations, plans or prospects for the Company, including without limitation, statements regarding the acquisition of Mazor, including the expected timing of the closing of the transaction, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions are forward-looking statements. These statements are only predictions based on Mazor’s current expectations and projections about future events. There are important factors that could cause Mazor’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include, but are not limited to, the impact of general economic conditions, competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results, and other factors indicated in Mazor’s filings with the Securities and Exchange Commission (SEC) including those discussed under the heading “Risk Factors” in Mazor’s annual report on Form 20-F filed with the SEC on April 30, 2018 and in subsequent filings with the SEC. For more details, refer to Mazor’s SEC filings. Mazor undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

U.S. Contacts: EVC Group 
Michael Polyviou/Doug Sherk– Investors  
mpolyviou@evcgroup.comdsherk@evcgroup.com 
732-933-2754; 415-652-9100

SOURCE Mazor Robotics Ltd.

Colfax to Acquire DJO Global for $3.15 Billion in Cash

ANNAPOLIS JUNCTION, MD, Nov. 19, 2018 (GLOBE NEWSWIRE) — Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced it has entered into a definitive agreement to acquire DJO Global Inc. (“DJO”) from private equity funds managed by Blackstone for $3.15 billion in cash. DJO is a global leader in orthopedic solutions, providing orthopedic devices, software and services spanning the full continuum of patient care, from injury prevention to rehabilitation.

“The acquisition of DJO is a compelling next step in the strategic evolution of Colfax that creates a new growth platform in the high-margin orthopedic solutions market,” said Matt Trerotola, President and Chief Executive Officer of Colfax. “As a clear market leader in bracing and rehabilitation systems – with a track record of innovative new products, globally recognized brands, and a diverse product portfolio – DJO is well-positioned to benefit from secular trends driven by changing demographics and increased preventive healthcare. This transaction reflects our strategic intent to diversify our portfolio and end-market exposure, reduce cyclicality, and increase profitability. We see significant opportunities to apply our proven Colfax Business System across DJO to create a continuous improvement culture, further improve productivity and margins, and accelerate innovation and new product development.”

Mr. Trerotola continued, “We are committed to reducing leverage and restoring balance sheet flexibility near-term and will explore strategic options for our Air and Gas Handling business. Longer term, we see tremendous opportunities to build our new medical technology platform with additional investment. We are excited to welcome DJO’s strong management team and talented associates to the Colfax family.”

“Joining Colfax is a win for our customers, and all DJO stakeholders,” said Brady Shirley, DJO President and CEO. “Colfax has the financial strength, experience, and proven business system to support our operational performance and growth.  Importantly, they are committed to our mission to get and keep people moving, and we are confident that the Colfax team’s operating expertise across a broad array of businesses makes them the ideal partner to help us build on our momentum, drive new levels of innovation, and continue to deliver outstanding service to our customers.”

Upon closing of the transaction, DJO Global will operate as a new segment within Colfax and be led by Mr. Shirley, who will report directly to Mr. Trerotola.

With leadership positions in most product categories, DJO provides a broad range of orthopedic care solutions including bracing, reconstructive implants, rehabilitation devices, software and services. Known for its innovative products, DJO’s portfolio of iconic brands are trusted by patients, athletes, and healthcare professionals globally. Headquartered in Vista, California, DJO has approximately 5,000 employees across 18 locations around the world. DJO’s revenue was $1.2 billion and adjusted EBITDA was $269 million for the twelve-month period ending September 2018.

Financing & Transaction Details
The transaction, which is expected to close in the first quarter of 2019, is expected to deliver adjusted EPS accretion in the first full year after closing. In addition, Colfax expects to realize future tax benefits from DJO’s approximately $800 million of net operating loss carryforwards.

Colfax expects to finance the transaction with approximately $100 million of cash from its balance sheet, proceeds from credit facilities and a contemplated debt offering, and $500 to $700 million from a contemplated offering of equity or equity-linked securities. J.P. Morgan and Credit Suisse have committed to provide bridge financing for the transaction. Colfax expects to maintain its existing debt ratings and will prioritize deleveraging to reduce its net leverage ratio to the mid-3x range by the end of calendar 2019. In connection with its deleveraging plans, Colfax is evaluating strategic options for its Air and Gas Handling business. Colfax does not intend to undertake any material acquisitions or share repurchases until its leverage metrics return to targeted levels.

The acquisition is subject to customary closing conditions, including receipt of applicable regulatory approvals.

Advisors
J.P Morgan is serving as financial advisor and Kirkland & Ellis is serving as legal advisor to Colfax.  Goldman, Sachs & Co. LLC, Credit Suisse, and Wells Fargo Securities, LLC are serving as financial advisors and Simpson Thacher & Bartlett LLP is serving as legal advisor to DJO.

Conference Call and Webcast
Colfax will host a conference call to discuss the transaction today at 8:30 a.m. Eastern. The call will be open to the public through 877-303-7908 (U.S. callers) or +1-678-373-0875 (international callers) and referencing the conference ID number 6068397 or through webcast via Colfax’s website at www.colfaxcorp.com under the “Investors” section. Access to a supplemental slide presentation can also be found at the Colfax website under the same heading. Both the audio of this call and the slide presentation will be archived on the website later today and will be available until the next quarterly call.

About Colfax Corporation
Colfax Corporation is a leading diversified technology company that provides air & gas handling and fabrication technology products and services to customers around the world principally under the Howden and ESAB brands. Colfax believes that its brands are among the most highly recognized in each of the markets that it serves. The Company uses its Colfax Business System (CBS), a comprehensive set of tools, processes and values, to create superior value for customers, shareholders and associates. Colfax is traded on the NYSE under the ticker “CFX.” Additional information about Colfax is available at www.colfaxcorp.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 orthopedic 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 orthopedic 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™.
Additional information about DJO Global is available at www.DJOglobal.com.

CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Colfax’s plans, objectives, expectations and intentions and other statements that are not historical or current fact. Forward-looking statements are based on Colfax’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause Colfax’s results to differ materially from current expectations include, but are not limited to risks and uncertainties regarding Colfax and DJO’s respective businesses and the proposed acquisition, and actual results may differ materially. These risks and uncertainties include, but are not limited to, (i) the ability of the parties to successfully complete the proposed acquisition on anticipated terms and timing, including obtaining required regulatory approvals and other conditions to the completion of the acquisition, (ii)  access to available financing on a timely basis and reasonable terms, (iii) the effects of the transaction on Colfax and DJO operations, including on the combined company’s future financial condition and performance, operating results, strategy and plans, including anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations, and (iv) other factors detailed in Colfax’s and DJO’s respective reports filed with the U.S. Securities and Exchange Commission on Form 10-K and Form 10-Q.  In addition, these statements are based on a number of assumptions that are subject to change. This press release speaks only as of the date hereof. Colfax disclaims any duty to update the information herein.

The term “Colfax” in reference to the activities described in this press release may mean one or more of Colfax’s global operating subsidiaries and/or their internal business divisions and does not necessarily indicate activities engaged in by Colfax Corporation.

Non-GAAP Financial Measures and Other Adjustments  
Colfax has provided in this press release financial measures for DJO Global that have not been prepared in accordance with GAAP, including Adjusted EBITDA and Leverageable Adjusted EBITDA.  DJO Global provided Colfax with this information, which was derived from DJO Global’s historical unaudited financial statements for the twelve months ended September 29, 2018 and has not been audited or reviewed by Colfax’s or DJO Global’s independent public accountants.  DJO Global defines Adjusted EBITDA as net income (loss) attributable to DJO Global 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 the agreements governing the outstanding debt of DJO Global’s subsidiary DJO Finance, LLC (DJO Finance).  DJO Global defines Leverageable Adjusted EBITDA as Adjusted EBITDA, as further adjusted to reflect certain additional non-cash items, non-recurring items and other adjustment items permitted in calculating covenant compliance and other ratios under the agreements governing the outstanding debt of DJO Finance. Adjusted EBITDA and Leverageable Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to DJO Global or other performance measures presented in accordance with GAAP, or as an alternative to cash flow from operations as a measure of liquidity.

Colfax believes this presentation of DJO Global’s Adjusted EBITDA and Leverageable Adjusted EBITDA is useful and helps management, investors and rating agencies enhance their understanding of the impact of the DJO Global acquisition on Colfax’s financial performance.  However, Adjusted EBITDA and Leverageable Adjusted EBITDA do not have a standardized meaning, and different companies may use different Adjusted EBITDA definitions.  Therefore, DJO Global’s definition of Adjusted EBITDA and Leverageable Adjusted EBITDA may not be comparable to the definitions used by other companies.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of Adjusted EBITDA and Leverageable Adjusted EBITDA to the most directly comparable GAAP financial measure. A reconciliation of Adjusted EBITDA and Leverageable Adjusted EBITDA to GAAP net income has been provided below.

DJO Global, Inc.
Adjusted EBITDA Reconciliation of GAAP
Dollars in thousands
(Unaudited)

Twelve 
Months 
Ended September 29, 2018
Adjusted EBITDA
Net income attributable to DJO Global $ 397
Discontinued operations (567 )
Interest expense, net 181,091
Income tax provision (benefit) (55,196 )
Depreciation and amortization 107,646
Loss on disposal of assets, net 295
Restructuring and reorganization (1) 41,121
Acquisition integration 2,096
Blackstone monitoring fee 975
Financial reporting alignment (9,071 )
Adjusted EBITDA $ 268,787
Future cost savings 20,533
Stock compensation expense 4,522
Leverageable Adjusted EBITDA $ 293,842

(1) Consists of costs related to the company’s business transformation projects to improve the company’s operational profitability and liquidity.

NO OFFER OR SOLICITATION
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended or via an exemption from the requirements of the Securities Act.

Investors:                                                                    
Kevin Johnson, Vice President                                   
Colfax Corporation                                                      
+1-301-323-9090                                                        
investorrelations@colfaxcorp.com

Media:
Jim Barron or Jenny Gore
Sard Verbinnen & Co.
+1-212-687-8080

Value-Based Reimbursement Reduces Costs 15.6%, Improves Quality

November 14, 2018 / By Jacqueline LaPointe

Value-based reimbursement models are moving the needle on quality and cost, a new analysis from Humana shows.

In 2017, medical costs for patients attributed to primary care practices (PCPs) in Humana’s value-based reimbursement models for Medicare Advantage (MA) were 15.6 percent lower compared to Medicare fee-for-service, the insurer reported.

Internally, medical costs were also one percent lower for patients seeing PCPs in value-based payment models compared to patients treated by PCPs in Humana’s Medicare Advantage fee-for-service (FFS) setting.

“Humana MA value-based physicians had better results than their peers in FFS,” Kathryn Lueken, MD, MMM, Humana’s Corporate Medical Director of Medical Market Clinical Integration, wrote in the report. “The goal of taking costs out of the system and creating more value for the care received is showing results. Thus, value-based care is achieving the goal of creating higher quality medical care for lower cost.”

The transition to value-based care and payment has been a long and bumpy road for the healthcare industry.

READ MORE: Best Practices for Value-Based Purchasing Implementation

The Affordable Care Act really pushed the value-based care movement, but since then only about one-third of healthcare payments are tied to an alternative payment model with some degree of shared savings or risk, the Health Care Payment Learning & Action Network (LAN) recently reported.

Recent research also questions if value-based reimbursement can truly lower costs while maintaining or improving care quality. For example, a 2018 Healthcare Financial Management Association (HMFA) study of commercial payer and Medicare data from 2007 to 2015 found that the efficacy of alternative payment models reducing costs and improving care quality has yet to be proven.

However, value-based reimbursement at Humana is working to improve not only costs, but also utilization and quality, the insurer reported on Tuesday.

Patients in value-based reimbursement agreements were admitted to the hospital inpatient department 23.4 percent less than patients in traditional Medicare in 2017. And the patients went to the emergency room 15.6 percent less.

Even patients attributed to PCPs in bonus-only arrangements, which had limited upside shared savings, had fewer hospital admissions and emergency room visits. Hospital inpatient admissions and emergency room visits were 19.1 percent and 10.1 percent lower, respectively.

 

READ THE REST HERE

 

Premier Inc. Survey: Nearly 75% of Health Systems Report Interest in Value-Based Contracting

November 15, 2018

CHARLOTTE, N.C. – Although 73 percent of healthcare providers rank value-based contracting with suppliers as a priority for improving return on investments, opportunities lag in the healthcare supply chain, according to a new Premier Inc. survey .

Premier®, a leading healthcare improvement company, surveyed health system C-suite leaders, operations managers and heads of materials management to determine the prevalence of value-based contracts for products and services across the industry, as well as potential barriers to implementation. Broadly, value-based contracts are those with terms and conditions that hold suppliers accountable for delivering on cost, service or product attribute guarantees.

According to the survey, 38 percent of respondents participate in added value programs, requiring suppliers to meet or beat historical pricing targets or guarantee specific service levels. However, only 16 percent of respondents participate in true, value-based, two-sided risk contracts with suppliers, where the vendor agrees to pay providers back for costs incurred if their product fails to meet pre-determined cost and quality outcomes.

“In today’s healthcare environment, health systems are increasingly being pushed to assume risk for the total cost and quality outcomes of all delivered care,” said Myla Maloney, Vice President of Strategic Accounts for Premier Applied Sciences. “In an environment where value is the new economy and measures are its currency, we are seeing an uptick in the number of providers interested in securing outcome guarantees from their business partners. The challenge is that value-based contracts between providers and suppliers are a relatively new phenomenon, and there are few best practice examples for how they should be structured.”

A majority of providers indicated a lack of understanding of value-based, two-sided risk contracts in the supply chain (55 percent of respondents) as the main reason they have not implemented one.

Of the value-based contracts that have been deployed, respondents indicated that the most common are for surgical services, with 13 percent of respondents reporting contracts in this category, followed by cardiovascular (12 percent) and purchased services (11 percent) categories. However, respondents faced challenges to implementation, mainly around access to and agreement on the data sources that would be used to evaluate performance (22 percent), as well as internal communications about the structure of the contracts and how they should be implemented (14 percent).

Additionally, although 81 percent of respondents said they were interested in securing more of these types of contracts, most indicated they were unable to do so due to a lack of supplier engagement, cited by 67 percent of all respondents.

Premier actively works with its members to develop and deploy value-based contracts across a range of suppliers and product lines. Leveraging the PremierConnect® performance improvement platform with clinical outcomes data on 45 percent of all U.S. inpatient discharges, Premier has the ability to mine data and develop relevant outcomes metrics that can be tracked and validated by scientific best practices. Moreover, as a leading contracting entity in healthcare, Premier can secure supplier interest and deploy value-based contracts at scale by making them available across its membership base.

Premier has negotiated a range of value-based contracts with suppliers, including:

  • Evidence-based care discounts: More common among pharmaceutical companies, these contracts provide a discount off the purchase price in exchange for the reliable performance of an evidence-based clinical intervention. For instance, a perioperative nutritional supplement maker under contract with Premier gives a price discount if health systems can document that they are discussing perioperative nutrition as part of their standard care model.
  • Product or service guarantee: These contracts reimburse health systems for the purchase price of a product in the event of a quality or performance failure. One interventional device company under contract with Premier guarantees that the use of its product will reduce pressure ulcer rates by a specific percentage. If that commitment is not met, the providers are eligible for a rebate.
  • Risk share by product: These contracts reimburse providers for another, added cost in the system as a result of a poor outcome, as opposed to the actual cost of the product. For instance, one cardiovascular device company under contract with Premier reimburses health systems for the cost of treating a specific type of infection if a patient contracts it within six months of receiving their intervention.

Survey Methodology

Premier’s survey on value-based contracting trends was conducted online, with the results based off responses from 203 healthcare leaders, including the C-suite (CEO, COO, CMO, CFO, CIO or CTIO), as well as heads of materials management and operations from October 2 – October 22, 2018. Survey respondents included both members and non-members of Premier.

About Premier, Inc.

Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of approximately 4,000 U.S. hospitals and health systems and approximately 165,000 other providers and organizations to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, Premier enables better care and outcomes at a lower cost. Premier plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on www.premierinc.com; as well as TwitterFacebookLinkedInYouTubeInstagram, and Premier’s blog for more information about the company.

Contact: Public_Relations@premierinc.com

Xtant Medical Announces Third Quarter 2018 Financial Results

BELGRADE, MT, Nov. 14, 2018 (GLOBE NEWSWIRE) — Xtant Medical Holdings, Inc. (NYSE American: XTNT), a leader in the development of regenerative medicine products and medical devices, today reported financial and operating results for the third quarter ended September 30, 2018.

Third Quarter 2018 Financial Highlights and Recent Announcements:

  • Revenue for the third quarter of 2018 was $17.3 million, compared to $19.8 million for the third quarter of 2017
  • Gross profit for the third quarter of 2018 was 66.7%, compared to 57.5% for the same period in the prior year
  • Net loss incurred in the third quarter 2018 was $3.2 million compared to a loss of $8.5 million for the same period in the prior year
  • Non-GAAP Adjusted EBITDA was $1.5 million, compared to $1.4 million for the same period of the prior year
  • As previously announced, the Company appointed Michael Mainelli as Interim Chief Executive Officer and Kathie Lenzen as Senior Vice President, Finance & Administration and Chief Financial Officer

Xtant Interim CEO Michael Mainelli said “After my first few weeks on the job, it’s clear to me that Xtant is a company with great products, strong business partners, and talented employees.  We are pleased that we are starting to see the benefits of the recent facility consolidation efforts and cost reduction initiatives.   At the same time, our sales results are below our potential.  We are working on plans that are expected to improve sales through a combination of new products, marketing programs, and more effective channel management.”

Third Quarter 2018 Financial Results

Revenue for the third quarter of 2018 was $17.3 million, compared to $19.8 million in the same period last year.  This decrease occurred primarily due to company-initiated discontinued distributor arrangements and channel management challenges.

Gross profit for the third quarter of 2018 was 66.7%, up from 57.5% for the same period in 2017. This improvement is largely due to expenses for inventory reserves and impairment of surgical instrument asset values in the third quarter of 2017 that did not recur in 2018, and favorable impacts from cost reduction initiatives.

Operating expenses for the third quarter of 2018 were $13.0 million, a decrease of $3.1 million compared to $16.1 million in the quarter ended September 30, 2017. The reduction is primarily due to lower commission expense as a result of lower revenue due to discontinued distributor arrangements and channel management challenges. In addition, the Company continued to execute its cost reduction initiatives to consolidate facilities used for biologics and fixation systems operations.

Net loss from operations for the third quarter of 2018 was $3.2 million, or $0.24 per share, compared to a net loss of $8.5 million, or $5.62 per share, for the same period in the prior year, primarily the result of the reduced operating expenses and lower interest expense, and in the case of the net share decrease, increased shares outstanding during the current year period.

Non-GAAP Adjusted EBITDA for the third quarter of 2018 was $1.5 million compared to $1.4 million for the same period during 2017. Non-GAAP Adjusted EBITDA for the nine-month period ended September 30, 2018 was $3.4 million, compared to a loss of $0.8 million in the same period in the prior year.  The Company defines Adjusted EBITDA as net income/loss from operations before depreciation, amortization and interest expense, and as further adjusted to add back in or exclude, as applicable, non-cash compensation, change in warrant derivative liability, separation related expenses, litigation reserve, facility consolidation costs and restructuring expenses.  A calculation and reconciliation of non-GAAP Adjusted EBITDA to net loss can be found in the attached financial tables.

Amendments to Credit Facility and Issuance of Warrants

On September 17, 2018, the Company announced the execution of 24th and 25th amendments to its Amended and Restated Credit Agreement, which, among other provisions, reduced interest payable under the credit facility.  In connection with the 25th amendment, the Company issued warrants for the purchase of 1.2 million shares of Xtant common stock with an exercise price of $0.01 per share and an expiration date of August 1, 2028, to OrbiMed Royalty Opportunities II, LP and ROS Acquisition Offshore LP, which collectively own approximately 70% of Xtant’s outstanding common stock and are the sole holders of the Company’s outstanding long-term debt under the credit facility.

Conference Call

The Company will host a webcast and conference call to discuss the third quarter 2018 financial results on Wednesday, November 14, 2018 at 4:30 PM ET.  To access the webcast, Click Here.  To access the conference call, dial 877-407-6184 within the U.S. or 201-389-0877 outside the U.S.  A replay of the call will be available at www.xtantmedical.com, under “Investor Info.”

About Xtant Medical Holdings, Inc.

Xtant Medical Holdings, Inc. (www.xtantmedical.com) is a global medical technology company focused on the design, development, and commercialization of a comprehensive portfolio of orthobiologics and spinal implant systems to facilitate spinal fusion in complex spine, deformity and degenerative procedures.  Xtant people are dedicated and talented, operating with the highest integrity to serve our customers.

™ and ® denote trademarks and registered trademarks of Xtant Medical Holdings, Inc. or its affiliates, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.

Non-GAAP Financial Measures  

To supplement the Company’s consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA. Reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP measures for the respective periods can be found in tables later in this release. The Company’s management believes that the presentation of these measures provides useful information to investors.  These measures may assist investors in evaluating the Company’s operations, period over period. Management uses the non-GAAP measures in this release internally for evaluation of the performance of the business, including the allocation of resources.  Investors should consider non-GAAP financial measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

Important Cautions Regarding Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as ‘‘expects,’’ ‘‘anticipates,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘believes,’’ ‘‘estimates,’’ “continue,” “future,” ‘‘will,’’ “potential,” similar expressions or the negative thereof, and the use of future dates. Forward-looking statements in this release include the Company’s plans to improve sales through a combination of new products, marketing programs, and more effective channel management.  The Company cautions that its forward-looking statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the Company’s future operating results and financial performance; its ability to increase revenue,  remain competitive and innovate and develop new products; the effect of management changes and ability to engage and retain qualified personnel; government and third-party coverage and reimbursement for Company products, ability to obtain and maintain regulatory approvals; government regulations; product liability claims and other litigation to which the Company may be subject; product recalls and defects; timing and results of clinical studies; the ability to obtain and protect Company intellectual property and proprietary rights and operate without infringing the rights of others; the ability to service Company debt and comply with debt covenants; the ability to raise additional financing and other factors. Additional risk factors are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (SEC) on April 2, 2018 and subsequent SEC filings by the Company, including without limitation its most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 filed with the SEC on August 8, 2018. Investors are encouraged to read the Company’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this cautionary statement.

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares and par value)

As of As of
September 30, 
2018
December 31, 
2017
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,064 $ 2,856
Trade accounts receivable, net of allowance for doubtful accounts of $2,108 and $1,923, respectively 9,869 12,714
Current inventories, net 22,187 22,229
Prepaid and other current assets 738 1,706
Total current assets 37,858 39,505
Non-current inventories, net 194
Property and equipment, net 8,069 9,913
Goodwill 41,535 41,535
Intangible assets, net 11,248 13,826
Other assets 560 732
Total Assets $ 99,270 $ 105,705
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable $ 5,918 $ 9,316
Accounts payable – related party 160
Accrued liabilities 3,976 15,845
Warrant derivative liability 48 131
Current portion of capital lease obligations 478 366
Total current liabilities 10,420 25,818
Long-term Liabilities:
Capital lease obligations, less current portion 251 624
Long-term convertible debt, less issuance costs 70,853
Long-term debt, less issuance costs 75,944 67,109
Total Liabilities 86,615 164,404
Commitments and Contingencies (note 10)
Stockholders’ Equity (Deficit):
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.000001 par value; 50,000,000 shares authorized; 13,171,347 shares issued and outstanding as of September 30, 2018 and 1,514,899 shares issued and outstanding as of December 31,2017
Additional paid-in capital 171,008 86,247
Accumulated deficit (158,353 ) (144,946 )
Total Stockholders’ Equity (Deficit) 12,655 (58,699 )
Total Liabilities & Stockholders’ Equity (Deficit) $ 99,270 $ 105,705

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except number of shares and per share amounts)

Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2018 2017 2018 2017
Revenue
Orthopedic product sales $ 17,139 $ 19,618 $ 53,622 $ 62,986
Other revenue 127 171 319 294
Total Revenue 17,266 19,789 53,941 63,280
Cost of sales 5,743 8,416 17,711 23,472
Gross Profit 11,523 11,373 36,230 39,808
Operating Expenses
General and administrative 2,505 3,330 8,931 11,985
Sales and marketing 7,847 8,904 24,742 31,038
Research and development 347 504 1,179 1,843
Depreciation and amortization 1,029 1,354 3,074 4,105
Restructuring expenses 614 1,194 2,582 2,814
Separation related expenses 436 792 490 1,396
Non-cash compensation expense 180 (20 ) 585 217
Total Operating Expenses 12,958 16,058 41,583 53,398
Loss from Operations (1,435 ) (4,685 ) (5,353 ) (13,590 )
Other (Expense) Income
Interest expense (1,790 ) (3,809 ) (8,156 ) (10,538 )
Change in warrant derivative liability 42 (20 ) 83 136
Other (expense) income 30 18
Total Other (Expense) Income (1,718 ) (3,829 ) (8,055 ) (10,402 )
Net Loss from Operations $ (3,153 ) $ (8,514 ) $ (13,408 ) $ (23,992 )
Net loss per share:
Basic $ (0.24 ) $ (5.62 ) $ (1.19 ) $ (15.94 )
Dilutive $ (0.24 ) $ (5.62 ) $ (1.19 ) $ (15.94 )
Shares used in the computation:
Basic 13,158,326 1,514,126 11,262,642 1,505,493
Dilutive 13,158,326 1,514,126 11,262,642 1,505,493


XTANT MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)

Nine Months Ended 
September 30,
2018 2017
Operating activities:
Net loss $ (13,408 ) $ (23,992 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 4,943 7,433
Non-cash interest 7,853 9,966
(Gain) loss on disposal of fixed assets (15 ) 1,909
Non-cash compensation expense/stock option expense 585 593
Provision for losses on accounts receivable and inventory 298 1,711
Change in derivative warrant liability (83 ) (136 )
Changes in operating assets and liabilities:
Accounts receivable 2,842 4,135
Inventories (508 ) 1,718
Prepaid and other assets 1,138 (211 )
Accounts payable (3,557 ) (3,418 )
Accrued liabilities (867 ) (897 )
Net cash used in operating activities (779 ) (1,189 )
Investing activities:
Purchases of property and equipment and intangible assets (308 ) (1,456 )
Proceeds from sale of fixed assets 251
Net cash used in investing activities (57 ) (1,456 )
Financing activities:
Proceeds from long-term debt 12,787
Payments on capital leases (260 ) (203 )
Payments on revolving line credit (10,448 )
Expenses associated with private placement and convertible debt conversion (3,507 )
Proceeds from equity private placement 6,810
Proceeds from issuance of stock 1
Net cash provided by financing activities 3,044 2,136
Net change in cash and cash equivalents 2,208 (509 )
Cash and cash equivalents at beginning of period 2,856 2,578
Cash and cash equivalents at end of period $ 5,064 $ 2,069

XTANT MEDICAL HOLDINGS, INC.
CALCULATION OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
AND RECONCILIATION TO NET LOSS FOR THE PERIODS ENDED
SEPTEMBER 30, 2018 AND 2017
(Unaudited, in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Net loss $ (3,153 ) $ (8,514 ) $ (13,408 ) $ (23,992 )
Other expense (30 ) (18 )
Depreciation and amortization 1,655 2,797 4,943 7,037
Interest expense 1,790 3,810 8,156 10,538
Non-GAAP EBITDA gain (loss) 262 (1,907 ) (327 ) (6,417 )
Non-GAAP EBITDA/Total revenue 1.5 % -9.6 % -0.6 % -10.1 %
NON-GAAP ADJUSTED EBITDA CALCULATION
Non-cash compensation 180 (20 ) 585 217
Change in warrant derivative liability (42 ) 20 (83 ) (136 )
Separation related expenses 436 792 490 1,396
Litigation reserve 1,342 1,342
Facility consolidation costs 9 195
Restructuring expenses 614 1,194 2,582 2,814
Non-GAAP Adjusted EBITDA gain (loss) $ 1,459 $ 1,421 $ 3,442 $ (784 )
Non-GAAP Adjusted EBITDA/Total revenue 8.5 % 7.2 % 6.4 % -1.2 %

Contact
Kathie Lenzen, Senior Vice President, Finance & Administration and Chief Financial Officer
406.388.0480
Email: klenzen@xtantmedical.com

Medicare Costs Drop As Humana Shifts Doctors To Value-Based Models

Nov 13, 2018 – Bruce Japsen, 

Humana’s shift from fee-for-service medicine to value-based payments for physicians continues to reduce costs and improve quality of care for seniors enrolled in Medicare Advantage plans, the insurer says, citing a new internal study.

Medical costs were nearly 16% lower for seniors enrolled in Humana Medicare Advantage plans that paid physicians via value-based models in 2017 compared to costs of those in traditional fee-for service Medicare, the Louisville-based insurer’s study, released Tuesday showed. Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs.

“Humana MA value-based physicians had better results than their peers in fee-for-service,” Humana corporate medical director of medical market clinical integration Dr. Kathryn Lueken wrote in the report. “The goal of taking costs out of the system and creating more value for the care received is showing results. Thus, value-based care is achieving the goal of creating higher quality medical care for lower cost.”

For the analysis, Humana looked at about 1.5 million Medicare Advantage members who were cared for by medical care providers paid via value-based models, which tied reimbursement to quality measures and outcomes during 2017. They were compared to about 146,000 “Humana members affiliated with physicians under standard MA settings and to original fee-for-service Medicare,” the insurer said in its report.

In the value-based approach, insurers reimburse providers for services plus additional pay if they meet quality measures, control costs and improve health outcomes of their patients. The traditional fee-for-service system pays for the volume of care delivered and can lead to excess costs and the focus isn’t on getting patients their care in the right place, in the right amount and at the right time.

 

READ THE REST HERE

 

DJO Global Announces Financial Results for Third Quarter 2018

November 13, 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 third quarter ended September 29, 2018.

On January 1, 2018, DJO adopted Accounting Standards Update 2014-09, Revenue From Contracts with Customers, (“ASC 606”). Under ASC 606, in the third quarter the Company reclassified $5.0 million of costs from selling, general and administrative costs to net sales. The table below summarizes net sales and growth rates with, and without, the adoption of ASC 606. The currency impact and constant currency growth rates in the table below and throughout this press release are determined by reference to revenue excluding the ASC 606 adoption. Constant currency as presented herein is defined as reported growth adjusted for (i) the impact of year-over-year currency rate changes in the current period and (ii) the impact of the adoption of ASC 606.

$000’s

Q3 2018 Net Sales Overview

Including ASC 606 Adoption Excluding ASC 606 Adoption Currency Constant
Revenue Growth Revenue Growth Impact Currency
Surgical $ 53,401 14.6 % $ 53,401 14.6 % 0.0 % 14.6 %
International 78,211 1.6 % 78,211 1.6 % -2.2 % 3.9 %
Recovery Sciences 35,812 -9.0 % 37,977 -3.5 % 0.0 % -3.5 %
Bracing and Vascular 126,626 -1.1 % 129,453 1.2 % 0.0 % 1.2 %
Total DJO Global $ 294,051 1.1 % $ 299,042 2.8 % -0.6 % 3.4 %

Third Quarter Highlights

  • Net sales grew 2.8% to $299.0 million, or $294.1 million as reported with the adoption of ASC 606, compared to $290.9 million in the prior year period.
  • Adjusted EBITDA continued to expand, increasing 8.1% over the prior year quarter to $72.2 million.
  • Operating income was $19.9 million compared to $21.8 million in the prior year period.
  • Net loss attributable to DJOFL was $29.5 million, compared to a net loss of $22.7 million in the prior year period.

Business Transformation

  • The business transformation that began in early 2017 continues to drive profitability, with Adjusted EBITDA margins (excluding the impact of ASC 606 adoption) up 118 basis points, or 92 basis points on a constant currency basis, in the third quarter of 2018 compared to the prior year. Year-to-date Adjusted EBITDA margin was 23.6% (excluding the impact of ASC 606 adoption), up 211 basis points from the prior year period.
  • Including $20.5 million in future annual run-rate savings from transformation actions taken to date, Adjusted EBITDA for the twelve months ended September 29, 2018 was $313.8 million.

“Our growth initiatives are working,” said Brady Shirley, DJO’s President and Chief Executive Officer. “We’re seeing revenue growth return in key segments and ongoing margin expansion, evidence that our efforts are driving results, and we continue to anticipate a stronger trajectory for the remainder of our fiscal year.”

Mike Eklund, Chief Financial Officer and Chief Operating Officer of DJO, added, “We have made such great progress in our transformation journey. Productivity was strong again in the quarter, as it has been the last several quarters, with Adjusted EBITDA for the quarter increasing 8.1%, or 2.9 times the growth in revenue, and margins improving about 120 basis points.”

Sales Results

Net sales for DJOFL for the third quarter of 2018 were $299.0 million, an increase of 2.8% from the prior year period, or $294.1 million with the adoption of ASC 606. On a constant currency basis, sales increased 3.4%. For the nine months ending September 29, 2018, net sales increased 3.2% to $901.9 million, or $891.5 million with the adoption of ASC 606. On a constant currency basis, net sales for the first nine months of 2018 increased 1.9% over net sales in the first nine months of 2017. The number of selling days in the quarter was the same as in the prior year period.

Net sales for DJO’s Surgical Implant segment grew 14.6% in the quarter to $53.4 million. There was strong double-digit growth across all three implant product lines compared to the same quarter in the prior year. For the nine months ending September 29, 2018, the Surgical Implant segment grew 10.1% over the prior year period to $160.9 million.

Net sales for DJO’s International segment grew 1.6% in the third quarter to $78.2 million, or 3.9% on a constant currency basis. There was strong growth in France and Australia, partially offset by market conditions in the Benelux region and in the United Kingdom. For the nine months ending September 29, 2018, the International segment revenue was $253.8 million, an increase of 8.1%, or 3.1% on a constant currency basis.

Net sales for DJO’s Recovery Sciences segment declined 3.5% in the third quarter to $38.0 million, or $35.8 million with the adoption ASC 606. Strong growth in the segment’s Regeneration CMF product line was offset by softness in the Chattanooga product line compared to the prior year period. For the nine months ending September 29, 2018, the Recovery Sciences segment declined 4.5% to $111.3 million, or $109.2 million with the adoption of ASC 606.

Net sales for DJO’s Bracing and Vascular segment grew 1.2% to $129.5 million in the third quarter, or $126.6 million with the adoption of ASC 606. There was strong growth in the segment’s DonJoy product line, partially offset by weakness in the Dr. Comfort footwear product line. Strength in acute care, demand for new products, and continued progress in transformation initiatives to improve service levels contributed to the results. For the nine months ending September 29, 2018, Bracing and Vascular net sales were $375.9 million, a slight decline of 0.1% from the first nine months of 2017, or $367.6 million with the adoption of ASC 606.

Earnings Results

Operating income was $19.9 million in the quarter compared to $21.8 million in the prior year period. For the nine months ending September 29, 2018, operating income was $89.1 million compared to $37.5 million in the prior year period, an increase of 138.0%. Net loss attributable to DJOFL was $29.5 million in the quarter compared to $22.7 million in the prior year period. For the nine months ended September 29, net loss was $60.8 million compared to $97.0 million in the nine months ended September 30, 2017.

Adjusted EBITDA for the third quarter was $72.2 million, an increase of 8.1% from the prior year period, or 7.5% based on constant currency rates. For the nine months ended September 29, 2018, Adjusted EBITDA was $212.6 million, up 13.3% from the prior year, or 12.0% on a constant currency basis. Including projected future run-rate savings of $20.5 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 September 29, 2018 was $313.8 million.

Net cash provided by continuing operating activities was $51.2 million for the nine months ended September 29, 2018 compared to $61.7 million for the nine months ended September 30, 2017. The change in cash flow was primarily attributable to higher inventory balances to allow for the modernization and consolidation of distribution facilities as part of the Company’s transformation initiatives, and to the payment in 2018 of certain non-recurring costs accrued in 2017 offset by the reduced net loss recognized during the period.

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.

Conference Call Information

DJO has scheduled a conference call to discuss this announcement beginning at 8:30 am, Eastern Time Tuesday, November 13, 2018. Individuals interested in listening to the conference call may do so by dialing (866) 394-8509 (International callers please use (346) 265-0698), 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 ExosTM. 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 payers; 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, 2017, filed with the Securities and Exchange Commission on March 16, 2018. 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 Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

Net sales $ 294,051 $ 290,876 $ 891,517 $ 874,011
Operating expenses:
Cost of sales (exclusive of amortization of intangible assets of $6,635 and $19,929 for the three and nine months ended September 29, 2018, respectively and $6,981 and $20,942 for the three and nine months ended September 30, 2017, respectively) 129,400 122,325 375,780 366,779
Selling, general and administrative 119,964 122,066 351,459 391,967
Research and development 10,249 8,864 30,687 27,066
Amortization of intangible assets 14,557 15,852 44,445 50,713
274,170 269,107 802,371 836,525
Operating income 19,881 21,769 89,146 37,486
Other (expense) income:
Interest expense, net (46,598 ) (43,691 ) (136,299 ) (129,446 )
Other (expense) income, net (554 ) 824 (1,040 ) 2,008
(47,152 ) (42,867 ) (137,339 ) (127,438 )
Loss before income taxes (27,271 ) (21,098 ) (48,193 ) (89,952 )
Income tax provision (2,182 ) (1,504 ) (12,201 ) (6,677 )
Net loss from continuing operations (29,453 ) (22,602 ) (60,394 ) (96,629 )
Net income from discontinued operations 164 123 486 228
Net loss (29,289 ) (22,479 ) (59,908 ) (96,401 )

Net income attributable to noncontrolling interests

(208 ) (214 ) (846 ) (644 )
Net loss attributable to DJO Finance LLC $ (29,497 ) $ (22,693 ) $ (60,754 ) $ (97,045 )
DJO FINANCE LLC
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

September 29,
2018

December 31,
2017

ASSETS
Current assets:
Cash and cash equivalents $ 27,619 $ 31,985
Accounts receivable, net 172,492 190,324
Inventories, net 183,837 169,137
Prepaid expenses and other current assets 30,818 20,218
Current assets of discontinued operations 511 511

Total current assets

415,277 412,175
Property and equipment, net 143,041 133,522
Goodwill 878,689 864,112
Intangible assets, net 570,725 607,088
Other assets 4,523 5,128
Total assets $ 2,012,255 $ 2,022,025
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable $ 102,009 $ 98,331
Accrued interest 47,329 18,015
Current portion of debt obligations 23,488 15,936
Other current liabilities 128,989 126,360
Total current liabilities 301,815 258,642
Long-term debt obligations 2,397,975 2,398,184
Deferred tax liabilities, net 145,606 142,597
Other long-term liabilities 20,675 13,080
Total liabilities $ 2,866,071 $ 2,812,503
Commitments and contingencies (Note 15)
Deficit:
DJO Finance LLC membership deficit:
Member capital 847,111 844,115
Accumulated deficit (1,676,347 ) (1,615,536 )
Accumulated other comprehensive loss (26,189 ) (21,072 )
Total membership deficit (855,425 ) (792,493 )
Noncontrolling interests 1,609 2,015
Total deficit (853,816 ) (790,478 )
Total liabilities and deficit $ 2,012,255 $ 2,022,025

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DJO FINANCE LLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended

September 29,
2018

September 30,
2017

Cash flows from operating activities:
Net loss $ (59,908 ) $ (96,401 )
Net income from discontinued operations (486 ) (228 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 34,942 32,288
Amortization of intangible assets 44,445 50,713
Amortization of debt issuance costs and non-cash interest expense 6,608 6,153
Stock-based compensation expense 2,155 1,329
Loss on disposal of assets, net 641 1,001
Deferred income tax (benefit) expense (3,225 ) 2,865
Changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable 16,123 7,472
Inventories (15,885 ) (7,959 )
Prepaid expenses and other assets (5,646 ) (562 )
Accrued interest 29,596 24,998
Accounts payable and other current liabilities 1,826 40,080
Net cash provided by continuing operating activities 51,186 61,749
Net cash provided by discontinued operations 486 228
Net cash provided by operating activities 51,672 61,977
Cash flows from investing activities:
Acquisition of business, net of cash acquired (9,392 )
Purchases of property and equipment (40,758 ) (33,597 )
Net cash used in investing activities (50,150 ) (33,597 )
Cash flows from financing activities:
Proceeds from revolver borrowings 88,500 65,275
Proceeds from capital lease 15,000
Repayments of debt obligations (107,136 ) (87,290 )
Repurchase of common stock (3,600 )
Investment by parent 443
Dividends paid to minority interests (1,169 ) (1,102 )
Net cash used in financing activities (4,805 ) (26,274 )
Effect of exchange rate changes on cash and cash equivalents (1,083 ) 1,700
Net (decrease) increase in cash and cash equivalents (4,366 ) 3,806
Cash and cash equivalents at the beginning of the period 31,985 35,212
Cash and cash equivalents at the end of the period $ 27,619 $ 39,018
Non-cash investing activities:
Purchases of surgical instruments included in accounts payable $ 6,193 $ 4,731
Stock issued as part of acquisition consideration $ 698 $
DJO FINANCE LLC
UNAUDITED SEGMENT INFORMATION
(in thousands)
Three Months Ended Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

Net sales:
Bracing and Vascular $ 126,627 $ 127,971 $ 367,627 $ 376,439
Recovery Sciences 35,812 39,346 109,159 116,622
Surgical Implant 53,401 46,613 160,938 146,197
International 78,211 76,946 253,793 234,753
$ 294,051 $ 290,876 $ 891,517 $ 874,011
Operating income:
Bracing and Vascular $ 29,180 $ 27,060 $ 78,436 $ 72,292
Recovery Sciences 11,400 11,322 29,649 30,938
Surgical Implant 11,074 9,126 34,005 27,328
International 16,742 14,894 55,592 42,013
Expenses not allocated to segments and eliminations (48,515 ) (40,633 ) (108,536 ) (135,085 )
$ 19,881 $ 21,769 $ 89,146 $ 37,486

DJO Finance LLC
Adjusted EBITDA
For the Nine Months Ended September 29, 2018 and September 30, 2017
(unaudited)

Our Senior Secured Credit Facilities, consisting of a $1,055.0 million term loan facility (including a $20.0 million delayed draw term loan facility) and a $150.0 million asset-based revolving credit facility, under which $87.5 million was outstanding as of September 29, 2018, 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 reconciliation between net income (loss) attributable to DJOFL and Adjusted EBITDA (in thousands):

Twelve
Months 
Ended
Three Months Ended Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

September 29,
2018

Net loss attributable to DJO Finance LLC $ (29,497 ) $ (22,693 ) $ (60,754 ) $ (97,045 ) $ 397
Income (loss) from discontinued operations, net (164 ) (123 ) (486 ) (228 ) (567 )
Interest expense, net 46,598 43,691 136,299 129,446 181,091
Income tax provision (benefit) 2,182 1,504 12,201 6,677 (55,196 )
Depreciation and amortization 26,010 26,285 79,386 83,001 107,646
Non-cash charges (a) 1,280 1,204 2,030 2,312 4,817
Non-recurring and integration charges (b) 24,989 15,712 41,272 59,296 51,240
Other adjustment items (c) 841 1,249 2,701 4,160 3,797
72,239 66,829 212,649 187,619 293,225
Permitted pro forma adjustments applicable
to the twelve months period only (Note 1)
Future cost savings 20,533
Adjusted EBITDA $ 72,239 $ 66,829 $ 212,649 $ 187,619 $ 313,758

Note 1 — Permitted pro forma adjustments include future cost savings from cost reduction actions related to our business transformation initiative, recognized as permitted under our credit agreement and the indentures governing our notes.

(a) Non-cash charges are comprised of the following (in thousands):

Twelve
Months 
Ended
Three Months Ended Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

September 29,
2018

Stock compensation expense $ 1,260 $ 483 $ 2,155 $ 1,329 $ 4,522
Loss (gain) on disposal of fixed assets and assets held for sale, net 20 721 (125 ) 983 295
Total non-cash charges $ 1,280 $ 1,204 $ 2,030 $ 2,312 $ 4,817

(b) Non-recurring and integration charges are comprised of the following (in thousands):

Twelve
Months 
Ended
Three Months Ended Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

September 29,
2018

Restructuring and reorganization (1) $ 21,105 $ 11,391 $ 35,222 $ 50,441 $ 41,121
Acquisition related expenses and integration (2) 698 879 1,447 1,457 2,096
Executive transition (49 )
Litigation and regulatory costs and settlements, net (3) 3,186 3,336 4,603 6,748 8,029
IT automation projects 106 699 (6 )
Total non-recurring and integration charges $ 24,989 $ 15,712 $ 41,272 $ 59,296 $ 51,240

(1) Consist of costs related to the Company’s business transformation projects to improve the Company’s operational profitability and liquidity.
(2) Consists of direct acquisition costs and integration expenses related to acquired businesses and costs related to potential acquisitions.
(3) For the twelve months ended September 29, 2018, litigation and regulatory costs consisted of $1.5 million in litigation costs related to ongoing product liability issues and $6.5 million related to other litigation and regulatory costs and settlements.

(c) Other adjustment items before permitted pro forma adjustments are comprised of the following (in thousands):

Twelve
Months 
Ended
Three Months Ended Nine Months Ended

September 29,
2018

September 30,
2017

September 29,
2018

September 30,
2017

September 29,
2018

Blackstone monitoring fees $ $ 1,750 $ $ 5,250 $ 975
Non-controlling interests 208 214 846 644 1,001
Foreign currency transaction losses (gains) and other expense (income) 481 (793 ) 967 (2,229 ) 1,098
Franchise and other tax 80 109 816 273 925
Other 72 (31 ) 72 222 (202 )
Total other adjustment items $ 841 $ 1,249 $ 2,701 $ 4,160 $ 3,797

Contacts

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

Company Profiles in Artificial Disc Market| Key Players: Zimmer Biomet, Stryker, Globus Medical, Orthofix, Medtronic, DePuy Synthes Companies, NuVasive

11-09-2018 / Press release from: Global Market Insights Inc.

Cervical artificial disc segment accounted for the largest revenue share of USD 790.1 million in 2017 and is estimated to show significant growth over the forecast period. Cervical disc replacement is a motion preserving surgery and offers benefits over motion creating surgical fusion procedures. According to a clinical trial conducted for cervical artificial discs, cervical discs proved efficient for reducing neck pain by 70-80%. Advantages offered by cervical artificial discs such as better compatibility and ease of insertion, decreases the need for revision surgery. Availability of advanced products as well as increasing demand for minimally invasive surgeries will drive the segmental growth over the forecast timeframe.

Request for a sample of this research report @ www.gminsights.com/request-sample/detail/1183

Lumbar artificial disc segment is estimated to show 21.0% CAGR over the forecast period due to rapidly growing elderly patient population suffering from orthopaedic diseases. Low back pain (LBP) is one of the major disabilities among the geriatric population that limits functionality and decreases the quality of life. Increasing prevalence of LBP will increase the demand for lumbar total disc replacement (LTDR) procedures, thereby boosting the lumbar artificial disc segment growth. Growing applications of LTDR procedure in patients with discogenic pain and degenerated lumbar spine should further accelerate the segmental growth.

Company profiled in this report based on Business overview, Financial data, Product landscape, Strategic outlook & SWOT analysis:
• Medtronic
• DePuy Synthes Companies
• NuVasive
• Zimmer Biomet
• Stryker
• Globus Medical
• Orthofix
• Paradigm Spine, LLC
• SPINEART
• Simplify Medical, Inc.
• K2M Design, Inc.
• AxioMed, LLC
• BKK B. Braun Melsungen AG

North America market dominated industry with 52.0% revenue share in 2017 and is forecasted to show lucrative growth over the forecast period. Rising prevalence of degenerative disc diseases due to sedentary lifestyle is the major factor that will spur the artificial disc market size. Moreover, established presence of key industry players in the region will subsequently increase availability of new and advanced devices among people, thereby driving the North America artificial disc market in foreseeable future. Partial government support for disc replacement procedures due to its advantages over the traditional methods will further augment the regional growth.

Make an inquiry for purchasing this report @ www.gminsights.com/inquiry-before-buying/1183

Artificial Disc Market, by Material, 2013-2024 (USD Million)
• Metal-on-Metal
• Metal-on-Biopolymer

Artificial Disc Market, by Type, 2013-2024 (USD Million)
• Cervical artificial disc
• Lumbar artificial disc

Global Market Insights Inc. is a global market research and management consulting company catering to leading corporations, non-profit organizations, universities and government institutions. Our main goal is to assist and partner organizations to make lasting strategic improvements and realize growth targets. Our industry research reports are designed to provide granular quantitative information, combined with key industry insights, aimed at assisting sustainable organizational development.

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Email:sales@gminsights.com

This release was published on openPR.