CARLSBAD, Calif., Nov. 02, 2017 (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 third quarter ended September 30, 2017.

Third Quarter 2017 Financial Highlights and Recent Accomplishments

• Revenue of $31.7 million, unchanged compared to the prior year
  • U.S. revenue of $28.2 million, a decrease of 0.8% year-over-year
    • U.S. Orthobiologics revenue of $14.9 million, an increase of 2.0% year-over-year
    • U.S. Spinal Implants revenue of $13.3 million, a decrease of 3.9% year-over-year
  • International revenue of $3.5 million, an increase of 7.4% year-over-year
• Full commercial launch of the Shoreline Anterior Cervical Standalone (ACS) System, featuring TruProfile™ technology, providing surgeons the ability to intraoperatively address a wide range of anatomy, surgical situations or bone
• Limited commercial launch of OsteoStrand™ Demineralized Bone Fibers and initial surgeries successfully completed
• Improved liquidity position, with total cash balance $4.4 million higher than at June 30, 2017, and all outstanding debt and interest paid down during the third quarter

“We are pleased with our results this quarter and confident that our strategy to reposition SeaSpine for growth is on track,” said Keith Valentine, President and Chief Executive Officer of SeaSpine. “We are confident that our recent and upcoming product launches, combined with an even stronger distribution network, will generate growth as we head into 2018.”

Third Quarter 2017 Financial Results
Revenue for the third quarter of 2017 totaled $31.7 million, unchanged compared to the same period of the prior year. U.S. revenue was $28.2 million, a decrease of 0.8% compared to the same period of the prior year.  The decrease in U.S. revenue was primarily due to low-single digit price declines and decreased usage of SeaSpine’s legacy spinal implant systems, which outpaced the revenue growth contributed by recently launched products.

U.S. Orthobiologics revenue totaled $14.9 million, increasing 2.0% compared to the third quarter of 2016. U.S. Spinal Implants revenue totaled $13.3 million, decreasing 3.9% compared to the third quarter of 2016.

Gross margin for the third quarter of 2017 was 61.6%, compared to 56.3% for the same period in 2016.  The increase in gross margin was mainly driven by lower manufacturing costs for orthobiologics products manufactured at the Company’s Irvine, California facility.

Operating expenses for the third quarter of 2017 totaled $27.3 million, compared to $27.4 million for the same period of the prior year.  A $0.2 million increase in R&D expense was more than offset by lower selling, general and administrative and intangible amortization expenses.  SG&A expense for the third quarter of 2017 included the benefit of a $1.2 million non-cash gain related to a reduction in the fair market value of contingent consideration liabilities associated with the NLT Spine acquisition, which was mostly offset by higher selling commissions compared to the third quarter of 2016.

Net loss for the third quarter of 2017 was $7.5 million, compared to a net loss of $9.5 million for the third quarter of 2016.

Cash and cash equivalents at September 30, 2017 totaled $16.7 million, and the Company had no amounts outstanding under its $30.0 million credit facility. During the third quarter of 2017, the Company paid off all outstanding borrowings plus accrued interest totaling $4.1 million. The Company realized $11.0 million in net proceeds in the third quarter of 2017 through the sale of approximately 1,023,000 shares of its common stock under its “at the market” equity offering program and used a portion of those proceeds to fully pay down the credit facility.

2017 Financial Outlook
SeaSpine expects full-year 2017 revenue guidance to be in the range of $130 million to $132 million, reflecting growth of 1% to 2.5% over full-year 2016 revenue.

Webcast and Conference Call Information
SeaSpine will report complete financial results for the third quarter of 2017 on November 2, 2017 at 1:30 p.m. PT / 4:30 p.m. ET. 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: 97240039. To listen to a live webcast, please visit the Investors section of the SeaSpine website at: www.seaspine.com. A replay of the webcast will be available until Wednesday, November 15, 2017.

About SeaSpine
SeaSpine 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 ability of the Company’s recent and upcoming product launches, as well as its distribution network, to generate growth as it heads into 2018; and the Company’s expectations for full-year 2017 revenue.  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 clinical needs of surgeons and patients; 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, 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, including as a result of developing and supporting the launch of new products; the Company’s ability to continue to invest in product development and sales and marketing initiatives at levels sufficient to drive future revenue growth; 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
Carrie Mendivil
(415) 937-5405
ir@seaspine.com

November 02, 2017

WARSAW, Ind., Nov. 1, 2017 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2017.  The Company reported third quarter net sales of $1.818 billion, a decrease of 0.8% from the prior year period, and a decrease of 1.2% on a constant currency basis.  Excluding approximately 30 basis points of contribution from the LDR Holding Corporation acquisition, third quarter 2017 revenues decreased 1.1% from the third quarter of 2016, or 1.5% on a constant currency basis.

Diluted earnings per share for the quarter were $0.48, a decrease of 38.5% from the prior year period.  Adjusted diluted earnings per share for the quarter were $1.72, a decrease of 3.9% from the prior year period.

“Our top line results remained challenged during the third quarter, due to the pace of supply recovery of certain key brands, as well as softened domestic market conditions and slower than anticipated sales recapture, particularly in the United States,” said Daniel P. Florin, Interim Chief Executive Officer, Senior Vice President and Chief Financial Officer of Zimmer Biomet.  “While we are not satisfied with our overall performance during the quarter, we remain confident in the Company’s dedicated sales forces, the breadth of our portfolio and our strategic innovation pipeline.  Looking forward, our global teams will continue to make progress towards increasing supply availability and enabling commercial execution, which we expect will translate into accelerated sales growth.”

Net earnings for the third quarter were $98.8 million, a decrease of 37.8% from the prior year period, and $349.9 million on an adjusted basis, a decrease of 3.4% from the prior year period.  Operating cash flow for the third quarter was $455.1 million.

In the quarter, the Company paid $48.5 million in dividends and declared a third quarter dividend of $0.24 per share.  The Company has repaid approximately $950 million of debt year-to-date in 2017.

Guidance

The Company is updating its full-year 2017 constant currency revenue and adjusted earnings per share guidance.  For the full year, the Company now expects revenue in the range of $7.76 billion to $7.80 billion, representing growth of 1.0% to 1.5% compared to the prior year and constant currency revenue growth of 0.9% to 1.4% compared to the prior year, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Previously, the Company had expected full-year, constant currency revenue growth between 1.8% and 2.7%, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Additionally, the Company now expects its full-year 2017 diluted earnings per share to be in a range of $3.80 to $3.93, and in a range of $8.01 to $8.07 on an adjusted basis.  Previously, the Company had expected full-year 2017 diluted earnings per share to be in a range of $4.15 to $4.35, and in a range of $8.20 to $8.30 on an adjusted basis.

For the fourth quarter of 2017, the Company expects revenue in the range of $2.01 billion to $2.05 billion, representing growth of 0% to positive 2.0% compared to the prior year period and constant currency revenue growth of negative 1.8% to positive 0.2% compared to the prior year period.  Additionally, the Company expects its diluted earnings per share for the fourth quarter to be in a range of $0.94 to $1.08, and in a range of $2.08 to $2.14 on an adjusted basis.

Conference Call and Earnings Release Information

The Company will conduct its third quarter 2017 investor conference call today, November 1, 2017 at 8:00 a.m. Eastern Time.  The audio webcast and earnings release information, including the Company’s third quarter investor presentation, can be accessed via Zimmer Biomet’s Investor Relations website at http://investor.zimmerbiomet.com.  The audio webcast will be archived for replay following the conference call.

Individuals in the U.S. and Canada who wish to dial into the conference call may do so by dialing (888) 312-9837 and entering conference ID 7278985.  For a complete listing of international toll-free and local numbers, please visit http://investor.zimmerbiomet.com.  A digital recording will be available 24 hours after the completion of the conference call, from November 2, 2017 to December 1, 2017.  To access the recording, U.S. callers should dial (888) 203-1112 and international callers should dial +1 (719) 457-0820, and enter the Access Code ID 7278985.

Sales Tables

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

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

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

About the Company

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

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

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

Website Information

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

Note on Non-GAAP Financial Measures

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

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

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

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

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding sales and earnings guidance and any statements about our expectations, plans, strategies or prospects.  We generally use the words “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees,” “seeks,” “should,” “could,” “intends” and similar expressions to identify forward-looking statements.  Such statements are based upon the current beliefs and expectations of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially.  These risks, uncertainties and changes in circumstances include, but are not limited to: our chief executive officer transition, including disruptions and uncertainties related thereto, our ability to appoint a permanent successor with the desired level of experience and expertise in a timely manner, the potential impact on our business and future strategic direction resulting from our transition to a new chief executive officer, and our ability to retain other key members of senior management; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, vendors and lenders and on our operating results and businesses generally; compliance with the Deferred Prosecution Agreement entered into in January 2017; the success of our quality and operational excellence initiatives, including ongoing quality enhancement and remediation efforts at the legacy Biomet Warsaw facility; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration (FDA) and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the ability to remediate matters identified in any inspectional observations or warning letters issued by the FDA, while continuing to satisfy the demand for our products; the outcome of government investigations; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts of healthcare purchasing organizations; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; control of costs and expenses; the ability to obtain and maintain adequate intellectual property protection; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability and intellectual property litigation losses; the ability to retain the independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the impact of the ongoing financial and political uncertainty on countries in the Euro zone on the ability to collect accounts receivable in affected countries.  For a further list and description of such risks and uncertainties, see our reports filed with the U.S. Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2016 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.  Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, www.zimmerbiomet.com or on request from us.  Forward-looking statements speak only as of the date they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Readers of this release are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate.  This cautionary statement is applicable to all forward-looking statements contained in this release.

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LEESBURG, Va., Nov. 01, 2017 (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 third fiscal quarter ended September 30, 2017.

Third Quarter 2017 Financial Summary:

• Total Q3 revenue of $62.7 million, up 6% year-over-year on a reported basis and 5% on a constant currency basis
• Domestic Q3 revenue of $48.5 million, up 5% year-over-year, comprised of:
  • U.S. Complex Spine growth of 3% year-over-year
  • U.S. Minimally Invasive Surgery (MIS) growth of 14% year-over-year
  • U.S. Degenerative growth of 5% year-over-year
• International Q3 revenue of  $14.2 million, up 6% year-over-year, or 5% on a constant currency basis.
• Net loss of $8.5 million for the three months ended September 30, 2017, compared to a net loss of $7.9 million in the comparable period last year.
• Adjusted EBITDA of $0.9 million for the three months ended September 30, 2017, compared to Adjusted EBITDA of $2.8 million in the comparable period last year.

Third Quarter Product Introductions:

• On July 6, 2017, the Company announced that its NILE^® Proximal Fixation Spinal System, a spinal system specifically designed for proximal construct augmentation, received 510(k) clearance from the U.S. Food & Drug Administration (FDA) and a CE Mark.
• On September 14, 2017, the Company announced the global launch of the EVEREST^® Minimally Invasive (MI) XTower^®instrumentation—an enhancement to the EVEREST MI XT Spinal System.
• On September 29, 2017, the Company announced that it received 510(k) clearance from FDA for its YUKON^™ OCT Spinal System.

Recent Strategic Highlights:

• On July 10, 2017, the Company announced the signing of a new, long-term, exclusive agreement with Mitsubishi Corporation subsidiary Japan Medicalnext Co., Ltd., a wholly-owned entity of MC Healthcare, Inc. and a prominent supplier of medical devices in Japan, for the distribution of K2M’s innovative spinal technologies.
• On August 3, 2017, the Company announced that it had acquired the exclusive license to a portfolio of 17 issued and pending patents for expandable interbody technology.
• 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 will assume 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 24, 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.

“Our revenue results for the third quarter of 2017 reflect total revenue growth of 6% year-over-year on a GAAP basis and 5% on a constant currency basis,” said Chairman, President and Chief Executive Officer, Eric Major. “Although we continued to see growth, our third quarter revenue performance was impacted by slower initial on-boarding of the new distribution team in the U.S., disruption of account activity and canceled procedures related to the hurricanes in Texas, Florida and Puerto Rico in early September.  Third quarter deformity trends were strong in July and August and we experienced strong headwinds in September. U.S. sales growth in our degenerative procedure category continued to be fueled by our new product introductions including our industry-leading 3D-printed portfolio, offset partially by modestly weaker procedure volumes as compared to last year.”

Major continued, “We have made significant progress in 2017 toward our goal of introducing new and innovative spinal implant solutions. We have supplemented this organic growth activity with exciting strategic acquisitions of intellectual property for expandable implants and a cervical vertebral body replacement device that is 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. 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.”

Third Quarter 2017 Financial Results

Total revenue for the third quarter of 2017 increased $3.3 million, or 5.6%, to $62.6 million, compared to $59.3 million for the third quarter of 2016. Total revenue increased 5.4% year-over-year on a constant currency basis. The increase in revenue was primarily driven by higher sales volume from new surgeon users in the United States, partially offset by a decrease in revenues from our existing U.S. and U.K. customer base and a reduction of revenue in Japan.

Revenue in the United States increased $2.5 million, or 5.4% year-over-year, to $48.5 million, and international revenue increased $0.8 million, or 6.4% year-over-year, to $14.2 million. Third quarter 2017 international revenue increased 5.2% year-over-year on a constant currency basis. Foreign currency exchange impacted third quarter international revenue by approximately $0.1 million, representing approximately 112 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 41.4%, 15.9% and 42.7% of U.S. revenue, respectively, for the three months ended September 30, 2017.

Gross profit for the third quarter of 2017 increased 6.1% to $42.2 million, compared to $39.8 million for the third quarter of 2016.  Gross margin was 67.4% for the third quarter of 2017, compared to 67.1% for the prior year period. Gross profit includes amortization expense on investments in surgical instruments of $3.5 million, or 5.5% of sales, for the three months ended September 30, 2017, compared to $3.5 million, or 5.8% of sales, for the comparable period last year.

Operating expenses for the third quarter of 2017 increased $3.7 million, or 8.0%, to $49.6 million, compared to $45.9 million for the third quarter of 2016. The increase in operating expenses was driven primarily by a $2.2 million increase in sales and marketing expenses, compared to the comparable period last year.

Loss from operations for the third quarter of 2017 increased $1.2 million to $7.3 million compared to a loss from operations of $6.1 million for the comparable period last year. Loss from operations included intangible amortization of $1.8 million and $2.6 million for the third quarters of 2017 and 2016, respectively.

Total other expenses for the third quarter of 2017 decreased $0.8 million to $1.1 million, compared to $1.9 million last year. The decrease in other expense, net, was primarily attributable to an increase of $1.2 million in unrealized gains from foreign currency remeasurement on intercompany payable balances, partially offset by an increase in interest expense of $0.4 million from the Convertible Senior Notes issued in August 2016.

Net loss for the third quarter of 2017 was $8.5 million, or $0.20 per diluted share, compared to a loss of $7.9 million, or $0.19 per diluted share, for the third quarter of 2016.

Nine-Months 2017 Financial Results

For the nine months ended September 30, 2017, total revenue increased $15.4 million, or 8.8%, to $190.2 million, compared to $174.8 million for the nine months ended September 30, 2016. Total revenue increased 9.2% year-over-year on a constant currency basis. U.S. revenue increased $12.1 million, or 9.0%, to $145.5 million for the first nine months of 2017, compared to $133.4 million last year. International revenue increased $3.4 million, or 8.1%, to $44.8 million for the first nine months of 2017, compared to $41.4 million last year. International revenue increased 9.6% year-over-year on a constant currency basis.

Sales in our complex spine, MIS and degenerative categories represented 39.5%, 16.7% and 43.8% of U.S. revenue, respectively, for the first nine months of 2017.

As of September 30, 2017, we had cash and cash equivalents of $33.9 million as compared to $45.5 million as of December 31, 2016. We had working capital of $107.0 million as of September 30, 2017 as compared to $115.9 million as of December 31, 2016.

At September 30, 2017, outstanding long-term indebtedness included the carrying value of the Convertible Senior Notes of $38.6 million and the capital lease obligation of $34.1 million. The Company had no borrowings outstanding on its revolving credit facility as of September 30, 2017.

2017 Outlook

The Company is reaffirming its fiscal year 2017 revenue guidance expectations which were updated in a press release on October 8, 2017. The Company expects:

• Total revenue on an as reported basis in the range of $255.0 million to $257.0 million, representing growth of 8% to 9% year-over-year, compared to total revenue of $236.6 million in fiscal year 2016.
  • Total revenue on a constant currency basis is expected to increase 8% to 9% year-over-year in 2017.
  • The Company expects growth in its U.S. business of approximately 8% to 9% year-over-year in 2017.
  • The Company expects growth in its International business of approximately 9% on a constant currency basis in 2017.

The Company is updating its fiscal year 2017 guidance expectations for net loss and adjusted EBITDA loss. The Company now expects:

• Total net loss of approximately $37.0 million to $35.0 million, compared to prior expectations for net loss in a range of approximately $34.0 million to $31.0 million.
• Adjusted EBITDA in a range of $1.0 million to $3.0 million, compared to prior expectations for Adjusted EBITDA in a range of approximately $6.0 million to $10.0 million.

Conference Call

Management will host a conference call at 5:00 p.m. Eastern Time on November 1st to discuss the results of the third quarter, 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 99297954 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 99297954. The webcast will be archived on the investor relations section of the Company’s website.

About K2M Group Holdings, Inc.

K2M Group Holdings, Inc. is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. Since its inception, K2M has designed, developed, and commercialized innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most complicated spinal pathologies. K2M has leveraged these core competencies into Balance ACS^™, a platform of products, services, and research to help surgeons achieve three-dimensional spinal balance across the axial, coronal, and sagittal planes, with the goal of supporting the full continuum of care to facilitate quality patient outcomes. The Balance ACS platform, in combination with the Company’s technologies, techniques and leadership in the 3D-printing of spinal devices, enable K2M to compete favorably in the global spinal surgery market. For more information, visit www.K2M.com and connect with us on Facebook, Twitter, Instagram, LinkedIn and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements that reflect current views with respect to, among other things, operations and financial performance.  Forward-looking statements include all statements that are not historical facts such as our statements about our expected financial results and guidance and our expectations for future business prospects.  In some cases, you can identify these forward-looking statements by the use of words such as, “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.  Such forward-looking statements are subject to various risks and uncertainties including, among other things: our ability to achieve or sustain profitability in the future; our ability to demonstrate to spine surgeons the merits of our products and retain their use of our products; pricing pressures and our ability to compete effectively generally in our industry; collaboration and consolidation in hospital purchasing; inadequate coverage and reimbursement for our products from third-party payors; lack of long-term clinical data supporting the safety and efficacy of our products; dependence on a limited number of third-party suppliers; our ability to maintain and expand our network of direct sales employees, independent sales agencies and international distributors and their level of sales or distribution activity with respect to our products; proliferation of physician-owned distributorships in the industry; decline in the sale of certain key products; loss of key personnel; our ability to enhance our product offerings through research and development; our ability to manage expected growth; our ability to successfully acquire or invest in new or complementary businesses, products or technologies; our ability to educate surgeons on the safe and appropriate use of our products; costs associated with high levels of inventory; impairment of our goodwill and intangible assets; disruptions to our corporate headquarters and operations facilities or critical information technology systems, distributors or surgeon users; our ability to ship a sufficient number of our products to meet demand; our ability to strengthen our brand; fluctuations in insurance cost and availability; our ability to comply with extensive governmental regulation within the United States and foreign jurisdictions; our ability  to maintain or obtain regulatory approvals and clearances within the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; recalls or serious safety issues with our products; enforcement actions by regulatory agencies for improper marketing or promotion; misuse or off-label use of our products; delays or failures in clinical trials and results of clinical trials; legal restrictions on our procurement, use, processing, manufacturing or distribution of allograft bone tissue; negative publicity concerning methods of tissue recovery and screening of donor tissue; costs and liabilities relating to environmental laws and regulations; our failure or the failure of our agents to comply with fraud and abuse laws; U.S. legislative or Food and Drug Administration regulatory reforms; adverse effects of medical device tax provisions; potential tax changes in jurisdictions in which we conduct business; our ability to generate significant sales; potential fluctuations in sales volumes and our results of operations over the course of the year; uncertainty in future capital needs and availability of capital to meet our needs; our level of indebtedness and the availability of borrowings under our credit facility; restrictive covenants and the impact of other provisions in the indenture governing our convertible  senior notes and our credit facility;  continuing worldwide economic instability; our ability to protect our intellectual property rights; patent litigation and product liability lawsuits; damages relating to trade secrets or non-competition or non-solicitation agreements; risks associated with operating internationally; fluctuations in foreign currency exchange rates; our ability to comply with the Foreign Corrupt Practices Act and similar laws; our ability to implement and maintain effective internal control over financial reporting; potential volatility in our stock price; our lack of current plans to pay cash dividends; our ability to take advantage of certain reduced disclosure requirements and exemptions as a result of being an emerging growth company; increased costs and additional regulations and requirements as a result of no longer qualifying as an emerging growth company as of December 31, 2017; potential dilution by the future issuances of additional common stock in connection with our incentive plans, acquisitions or otherwise; anti-takeover provisions in our organizational documents and our ability to issue preferred stock without shareholder approval; potential limits on our ability to use our net operating loss carryforwards; and other risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC and our Quarterly Report filed with the SEC on August 2, 2017, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and our filings with the SEC.

We operate in a very competitive and challenging environment.  New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release.  We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made.  We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.  We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Unless specifically stated otherwise, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

K2M GROUP HOLDINGS, INC.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
 (In Thousands)

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP financial measures of revenue in constant currency, Adjusted Gross Profit, and Adjusted EBITDA.

The Company presents these non-GAAP measures because it believes these measures are useful indicators of the Company’s operating performance.  Management uses these non-GAAP measures principally as a measure of the Company’s operating performance and believes that these measures are useful to investors because they are frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry.  The Company also believes that these measures are useful to its management and investors as a measure of comparative operating performance from period to period.

Constant currency information compares results between periods as if exchange rates had remained constant period-to-period.  We calculate constant currency by converting the prior-year results using current-year foreign currency exchange rates.

Adjusted Gross Profit represents Gross Profit less amortization expense of surgical instruments.  The Company presented Adjusted Gross Profit because it believes it is a useful measure of the Company’s gross profit and operating performance because the measure is not burdened by the timing impact of instrument purchases and related amortization.

Adjusted EBITDA represents net loss plus interest expense, income tax expense, depreciation and amortization, stock-based compensation expense and foreign currency transaction (gain) loss.

The Company presents Adjusted EBITDA because it believes it is a useful indicator of the Company’s operating performance.  Management uses Adjusted EBITDA principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating budget and financial projections.

Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to net 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 as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.  In addition, Adjusted EBITDA 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 tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future.  Adjusted EBITDA contains certain other limitations, including the failure to reflect the Company’s cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized.  In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation.  The Company’s presentation of Adjusted EBITDA should not be construed to imply that the Company’s future results will be unaffected by any such adjustments.  Management compensates for these limitations by primarily relying on its GAAP results in addition to using Adjusted EBITDA supplementally.  The Company’s definition of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.

The following table presents reconciliations of gross profit to adjusted gross profit and net loss to Adjusted EBITDA for the periods presented.

The following table presents a reconciliation of net loss to Adjusted EBITDA for our 2017 guidance:

The reconciliation assumes the mid-point of the Adjusted EBITDA range and the mid-point of each component of the reconciliation, corresponding to guidance of $1.0 million to $3.0 million for 2017.

October 30, 2017

WARSAW, Ind., Oct. 30, 2017 (GLOBE NEWSWIRE) — OrthoPediatrics Corp. (“OrthoPediatrics”) (NASDAQ:KIDS), an orthopedic company focused exclusively on providing a comprehensive product offering to the pediatric orthopedic market, announced today that the Company plans to release its third quarter 2017 financial results on Wednesday, November 8, 2017 after the market closes.

OrthoPediatrics will host a conference call on Thursday, November 9, 2017 at 8:00 a.m. ET to discuss the results. The dial-in numbers are (855) 289-4603 for domestic callers and (614) 999-9389 for international callers. The conference ID number is 9169647. A live webcast of the conference call will be available online from the investor relations page of the OrthoPediatrics’ corporate website at www.orthopediatrics.com.

A replay of the webcast will remain available on OrthoPediatrics’ website, www.orthopediatrics.com, until the Company releases its fourth quarter and full year 2017 financial results. In addition, a telephonic replay of the call will be available until November 16, 2017. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 9169647.

About OrthoPediatrics Corp.
Founded in 2006, OrthoPediatrics is the only diversified orthopedic company focused exclusively on providing a comprehensive product offering to the pediatric orthopedic market.  The Company is dedicated to the cause of improving the lives of children with orthopedic conditions. OrthoPediatrics currently markets 22 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This offering spans trauma & deformity, complex spine and ACL reconstruction procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and 35 countries outside the United States.

Investor Contact
The Ruth Group
Zack Kubow
(646) 536-7020
zkubow@theruthgroup.com

October 30, 2017