BILLERICA, Mass., Aug. 03, 2017 (GLOBE NEWSWIRE) — ConforMIS, Inc. (NASDAQ:CFMS), a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are customized to fit each patient’s unique anatomy, announced today financial results for the second quarter ended June 30, 2017.

Q2 Summary:

• Total revenue of $18.5 million, down 4.4% year-over-year on a reported basis and down 3.6% on a constant currency basis
• Product revenue of $18.0 million, down 5.5% year-over-year on a reported basis and down 4.8% on a constant currency basis
  – U.S. product revenue increased 1.5% year-over-year
  – Rest of World product revenue decreased 31.1% year-over-year on a reported basis and decreased 27.5% year-over-year on a constant currency basis

“As ConforMIS continues into this transition year, we experienced mixed results in the second quarter,” said Mark Augusti, President and Chief Executive Officer of ConforMIS, Inc. “The impact from changes in the field sales organization and in reimbursement adversely affected our overall revenue growth, while on a positive note, we were able to achieve a 300 basis point improvement in gross margin and a $2 million reduction in net loss over the prior year.”

Mr. Augusti continued, “We believe the changes that we are making will have a positive impact on our results moving forward. That said, we have adjusted our 2017 guidance to reflect our revenue expectations for the remainder of the year.”

Second Quarter 2017 Financial Results

Total revenue decreased $0.8 million to $18.5 million, or 4.4% year-over-year on a reported basis and decreased 3.6% on a constant currency basis. Total revenue in the second quarter of 2017 included royalty revenue related to patent license agreements of $0.4 million, as compared to $0.2 million in the second quarter of 2016.

Product revenue decreased $1.1 million to $18.0 million, or 5.5% year-over-year on a reported basis and decreased 4.8% on a constant currency basis. U.S. product revenue increased $0.2 million to $15.2 million, or 1.5% year-over-year, and Rest of World product revenue decreased $1.3 million to $2.8 million, or 31% year-over-year on a reported basis and decreased 27.5% on a constant currency basis. Product revenue from sales of iTotal CR, iDuo and iUni was $13.3 million for the three months ended June 30, 2017 compared to $15.7 million for the three months ended June 30, 2016, a decrease of $2.4 million, or 15.3% year-over-year, on a reported basis and 14.8% on a constant currency basis.  Product revenue from sales of iTotal PS was $4.8 million for the three months ended June 30, 2017 compared to $3.4 million for the three months ended June 30, 2016, an increase of $1.4 million, or 41.2% year-over-year, on a reported and constant currency basis.

Gross profit increased $0.2 million to $6.2 million, or 34% of revenue, in the second quarter of 2017, compared to $6.0 million, or 31% of revenue, in the second quarter of 2016. The increase in gross margin year-over-year was driven primarily by manufacturing efficiencies and cost reductions as a result of vertical integration and the timing of royalty payments received.

Total operating expenses increased $0.1 million to $20.2 million, or 0.2% year-over-year.

Net loss was $12.1 million, or $0.28 per basic share, in the second quarter of 2017, compared to a net loss of $14.1 million, or $0.34 per basic share, for the same period last year. The decrease in second quarter net loss was driven primarily by higher foreign currency exchange transaction income related to international intercompany receivables and higher royalty revenue.

As of June 30, 2017, the Company’s cash and cash equivalents and investments totaled $71.2 million, compared to $65.5 million as of December 31, 2016.  As previously announced, in January 2017 the Company secured up to $50 million in term debt financing, of which $15 million was borrowed in January and $15 million was borrowed in June.

2017 Financial Guidance

For the full year 2017, the Company expects total revenue in a range of $75 million to $78 million, representing year-over-year decline of 6% to 3% on a reported basis and 6% to 2% on a constant currency basis.  This is updated from previous guidance in a range of $80 million to $84 million, representing year-over-year growth of 0% to 5% on a reported basis and 1% to 6% on a constant currency basis.  The Company’s 2017 revenue guidance assumes the following:

• Product revenue in a range of $74 million to $77 million, representing year-over-year decline of 6% to 2% on a reported basis and 5% to 2% on a constant currency basis.  This is updated from previous guidance in a range of $79 million to $83 million, representing year-over-year growth of 0% to 5% on a reported basis and 1% to 6% on a constant currency basis.
• Royalty revenue of approximately $0.8 million related to ongoing patent license royalty payments has not changed.

For the full year 2017, the Company expects gross margin in a range of 34% to 36%, from previous guidance of 36% to 38%.

Note on Non-GAAP Financial Measures

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

Conference Call

As previously announced, ConforMIS will conduct a conference call and webcast today at 4:30 PM Eastern Time. Management will discuss financial results and strategic matters. To participate in the conference call, please call 877-809-6331 (or 615-247-0224 for international) and use conference ID number 57887575 or listen to the webcast in the investor relations section of the company’s website at ir.conformis.com. The online archive of the webcast will be available on the company’s website for 30 days.

About ConforMIS, Inc.

ConforMIS is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are individually sized and shaped, or customized, to fit each patient’s unique anatomy. ConforMIS offers a broad line of customized knee implants and pre-sterilized, single-use instruments delivered in a single package to the hospital. In clinical studies, ConforMIS’ iTotal CR demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants. ConforMIS owns or exclusively in-licenses approximately 450 issued patents and pending patent applications that cover customized implants and patient-specific instrumentation for all major joints.

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

Cautionary Statement Regarding Forward-Looking Statements

Any statements in this press release about our future expectations, plans and prospects, including statements about our strategy, future operations, future financial position and results, market growth, total revenue and revenue mix by product and geography, gross margin, operating trends, the potential impact and advantages of using customized implants, and potential transition at the Company as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make as a result of a variety of risks and uncertainties, including risks related to our estimates regarding the potential market opportunity for our current and future products, our expectations regarding our revenue, gross margin, expenses, revenue growth, transition and other results of operations, and the other risks and uncertainties described in the “Risk Factors” sections of our public filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

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

AMSTERDAM, The Netherlands, Aug. 02, 2017 (GLOBE NEWSWIRE) — Wright Medical Group N.V. (NASDAQ:WMGI) today reported financial results for its second quarter ended June 25, 2017 and reaffirmed 2017 annual guidance.

Net sales from continuing operations totaled $179.7 million during the second quarter ended June 25, 2017, representing 5% as reported growth, and 6% growth on a constant currency basis.  Gross margins from continuing operations were 78.8% during the quarter ended June 25, 2017.  Reconciliations of all historical non-GAAP financial measures used in this release to the most comparable GAAP measures can be found in the attached financial tables.

Robert Palmisano, president and chief executive officer, commented, “All of our most important financial results are right on track with our plan for the year.  We also continued to make significant progress in the second quarter on the initiatives that will enable us to achieve our longer term goals.  Global net sales growth of 5%, including expected dis-synergies, adjusted EBITDA of $19.8 million and gross margins of 78.8% reflect the strength of our markets and our unique position in them.  We believe we are well positioned as we head into the back half of the year to accelerate our business momentum.”

Palmisano continued, “Highlights in the quarter included 16% sales growth in U.S. shoulders, driven by strong contributions from the ongoing rollout of our SIMPLICITI shoulder system, as well as the launch of our PERFORM Reversed glenoid, which is off to a terrific start.  We anticipate that our PERFORM Reversed launch will drive accelerating revenue in the second half of the year as we deliver additional instrument sets to the U.S. field.  In our U.S. lower extremities and biologics business, we saw outstanding growth of 32% in the most technologically advanced portions of our portfolio, which include AUGMENT Bone Graft, SALVATION Limb Salvage and Total Ankle Replacement.  We also launched our INVISION Total Ankle Revision System in July and believe the combination of INVISION, our continuum of care total ankle replacement portfolio and significantly improved reimbursement could create a tipping point in the adoption of total ankle replacement.”

Palmisano further commented, “Growth in the core U.S. lower extremities and biologics portfolio was significantly lower than our more technologically advanced products, partially due to the revenue dis-synergies in the quarter, which we anticipated.  As previously announced, we completed the hiring and training of approximately 100 sales representatives in our U.S. lower extremities business in the quarter.  We expect to see some benefit from these rep adds beginning in the third quarter and meaningful benefit in the fourth quarter and beyond as the expanded footprint, greater focus on the core product portfolio and greater incentives to drive growth begin to take effect.”

Net loss from continuing operations for the second quarter of 2017 totaled $21.0 million, or $(0.20) per diluted share.

The company’s net loss from continuing operations for the second quarter of 2017 included the after-tax effects of $3.2 million of transition costs, an unrealized gain of $4.3 million related to mark-to-market adjustments on derivatives, $11.2 million of non-cash interest expense related to its convertible notes, and a $3.9 million unrealized gain related to mark-to-market adjustments on contingent value rights (CVRs) issued in connection with the BioMimetic acquisition.

The company’s second quarter 2017 non-GAAP net loss from continuing operations, as adjusted for the above items, was $14.6 million.  The company’s second quarter 2017 non-GAAP adjusted EBITDA from continuing operations, as defined in the non-GAAP to GAAP reconciliation provided later in this release, was $19.8 million. The attached financial tables include reconciliations of all historical non-GAAP measures to the most comparable GAAP measures.

Cash, cash equivalents and restricted cash totaled $378.9 million as of the end of the second quarter of 2017.  This amount includes $150 million classified as restricted cash on the company’s balance sheet that is held in escrow to fund a portion of the metal-on-metal hip litigation Master Settlement Agreement (MSA).

Palmisano concluded, “We are right on track with the key revenue growth drivers for 2017, and remain confident in our full-year revenue guidance of $755 million to $765 million and full-year adjusted EBITDA guidance of $78.5 million to $85.5 million.  We continue to expect there will be strong acceleration in the second half of the year as we annualize the impact of the merger revenue dis-synergies and begin to realize the benefits from an expanded U.S. sales force and new product launches.  In addition, I believe we are positioned well for future success and achieving our key financial goals of mid-teens constant currency net sales growth, gross margins in the high 70% range and non-GAAP adjusted EBITDA margins of approximately 20% in the next one to two years.”

Outlook

The company continues to anticipate net sales for full-year 2017 of approximately $755 million to $765 million, representing an as reported growth rate of 9% to 11% over 2016.  This guidance range assumes an approximate 1% headwind from currency for the full year, which is approximately 1% of cushion as compared to current rates.  In addition, this range implies second half of 2017 constant currency revenue growth of 12% to 15%, excluding the estimated impact of the four extra selling days in Q4 of 2017.

The company continues to anticipate full-year 2017 non-GAAP adjusted EBITDA from continuing operations, as described in the non-GAAP reconciliation provided later in this release, of $78.5 million to $85.5 million.

The company continues to anticipate non-GAAP adjusted earnings per share from continuing operations, including share-based compensation, as described in the non-GAAP to GAAP reconciliation provided later in this release, for full-year 2017 of $(0.33) to $(0.26) per diluted share.

The company estimates approximately 105.1 million diluted weighted average ordinary shares outstanding for fiscal year 2017.

The company’s non-GAAP adjusted EBITDA from continuing operations target is measured by adding back to net loss from continuing operations charges for interest, income taxes, depreciation and amortization expenses, non-cash share-based compensation expense and non-operating income and expense.  Additionally, the company’s adjusted EBITDA from continuing operations target excludes possible future acquisitions; other material future business developments; and due diligence, transaction and transition costs associated with acquisitions and divestitures.  Further, this adjusted EBITDA from continuing operations target excludes any expenses, earnings or losses related to the divested large joints business, legacy Wright’s divested OrthoRecon business and legacy Tornier’s divested ankle replacement and silastic toe products.

The company’s non-GAAP adjusted earnings per share from continuing operations target is measured by adding back to net loss from continuing operations non-cash interest expense associated with the 2017, 2020 and 2021 convertible notes; due diligence, transaction and transition costs associated with acquisitions and divestitures; mark-to-market adjustments to CVRs; non-cash mark-to-market derivative adjustments; and charges for non-cash amortization expenses, net of taxes. Note that as a result of the company’s relatively low effective tax rate due to the valuation allowance impacting a substantial portion of the company’s income/loss, the company is currently estimating the tax effect on amortization expense at 0%. Further, this adjusted earnings per share from continuing operations target excludes possible future acquisitions; other material future business developments; and any expenses, earnings or losses related to the divested large joints business.

All of the historical non-GAAP financial measures used in this release are reconciled to the most directly comparable GAAP measures. With respect to the company’s 2017 financial guidance regarding non-GAAP adjusted EBITDA from continuing operations and non-GAAP adjusted earnings per share from continuing operations, however, the company cannot provide a quantitative reconciliation to the most directly comparable GAAP measures without unreasonable effort due to its inability to make accurate projections and estimates related to certain information needed to calculate some of the adjustments as described above, including the market driven fair value adjustments to CVRs and derivatives. The anticipated differences between these non-GAAP financial measures and the most directly comparable GAAP measure are described above qualitatively.

The company’s anticipated ranges for net sales from continuing operations, non-GAAP adjusted EBITDA from continuing operations, and non-GAAP adjusted earnings per share from continuing operations are forward-looking statements, as are any other statements that anticipate or aspire to future events or performance.  They are subject to various risks and uncertainties that could cause the company’s actual results to differ materially from the anticipated targets.  The anticipated targets are not predictions of the company’s actual performance.  See the cautionary information about forward-looking statements in the “Cautionary Note Regarding Forward-Looking Statements” section of this release.

Supplemental Financial Information

To view the second quarter of 2017 supplemental financial information, visit ir.wright.com.  For historical information on Wright Medical Group N.V. segment reporting changes and non-GAAP combined pro forma financial information, please refer to the presentation posted on Wright’s website at ir.wright.com in the “Financial Information” section.

Internet Posting of Information

Wright routinely posts information that may be important to investors in the “Investor Relations” section of its website at www.wright.com.  The company encourages investors and potential investors to consult the Wright website regularly for important information about Wright.

Conference Call and Webcast

As previously announced, Wright will host a conference call starting at 3:30 p.m. Central Time today.  The live dial-in number for the call is (844) 295-9436 (U.S.) / (574) 990-1040 (Outside U.S.).  The participant passcode for the call is “Wright.”  A simultaneous webcast of the call will be available via Wright’s corporate website at www.wright.com.

A replay of the call will be available beginning at 5:30 p.m. Central Time on August 2, 2017 through August 9, 2017.  To hear this replay, dial (855) 859-2056 (U.S.) / (404) 537-3406 (Outside U.S.) and enter code 13575026.  A replay of the conference call will also be available via the internet starting today and continuing for at least 12 months.  To access a replay of the conference call via the internet, go to the “Investor Relations – Presentations/Calendar” section of the company’s corporate website located at www.wright.com.

The conference call may include a discussion of non-GAAP financial measures.  Reference is made to the most directly comparable GAAP financial measures, the reconciliation of the differences between the two financial measures, and the other information included in this release, the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) today, or otherwise available in the “Investor Relations – Supplemental Financial Information” section of the company’s corporate website located at www.wright.com.

The conference call may include forward-looking statements.  See the cautionary information about forward-looking statements in the “Cautionary Note Regarding Forward-Looking Statements” section of this release.

About Wright Medical Group N.V.

Wright Medical Group N.V. is a global medical device company focused on extremities and biologics products. The company is committed to delivering innovative, value-added solutions improving the quality of life for patients worldwide.  Wright is a recognized leader of surgical solutions for the upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics markets, three of the fastest growing segments in orthopaedics.  For more information about Wright, visit www.wright.com.

™ and ® denote trademarks and registered trademarks of Wright Medical Group N.V. 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, the company uses certain non-GAAP financial measures in this release. Reconciliations of the historical 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. Wright’s non-GAAP financial measures include net sales, excluding the impact of foreign currency; net income, as adjusted; EBITDA, as adjusted; gross margin, as adjusted; earnings, as adjusted; and earnings, as adjusted, per diluted share, in each case, from continuing operations. 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. Wright’s non-GAAP financial measures exclude such items as non-cash interest expense related to the company’s 2017 convertible notes, 2020 convertible notes and 2021 convertible notes, net gains and losses on mark-to-market adjustments on and settlements of derivative assets and liabilities, write-off of unamortized debt discount and deferred financing charges following the partial settlement of 2017 convertible notes and 2020 convertible notes, mark-to-market adjustments on CVRs, and transaction and transition costs, all of which may be highly variable, difficult to predict and of a size that could have substantial impact on the company’s reported results of operations for a period.  It is for this reason that the company cannot provide without unreasonable effort a quantitative reconciliation to the most directly comparable GAAP measures for its 2017 financial guidance regarding non-GAAP adjusted EBITDA from continuing operations and non-GAAP adjusted earnings per share from continuing operations. Management uses the non-GAAP measures in this release internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to employee performance compensation targets.  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.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “intend,” “could,” “may,” “will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,” “target,” “project,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning and the use of future dates. Forward-looking statements in this release include, but are not limited to, statements about the company’s anticipated financial results for 2017, including net sales from continuing operations, adjusted EBITDA from continuing operations and adjusted earnings per share from continuing operations; anticipated sales acceleration in the second half of the year and benefits from expanded U.S. sales force and new product launches, anticipated sales and cost synergies and dis-synergies and the timing thereof; and the company’s ability to achieve its key financial goals. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward-looking statement contained in this release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the failure to integrate the legacy Wright and Tornier businesses and realize net sales synergies and cost savings from the merger with Tornier or delay in realization thereof; operating costs and business disruption as a result of the merger, including adverse effects on employee retention and sales force productivity and on business relationships with third parties; integration costs; actual or contingent liabilities; adverse effects of diverting resources and attention to providing transition services to the purchaser of the large joints business; the adequacy of the company’s capital resources and need for additional financing; the timing of regulatory approvals and introduction of new products; physician acceptance, endorsement, and use of new products; failure to achieve the anticipated benefits from approval of AUGMENT^® Bone Graft; the effect of regulatory actions, changes in and adoption of reimbursement rates; product liability claims and product recalls; pending and threatened litigation; risks associated with the metal-on-metal master settlement agreement and the settlement agreement with the three settling insurers; risks associated with international operations and expansion; fluctuations in foreign currency exchange rates; other business effects, including the effects of industry, economic or political conditions outside of the company’s control; reliance on independent distributors and sales agencies; competitor activities; changes in tax and other legislation; and the risks identified under the heading “Risk Factors” in Wright’s Annual Report on Form 10-K for the year ended December 25, 2016 filed by Wright with the SEC on February 23, 2017 and in other subsequent SEC filings by Wright. Investors should not place considerable reliance on the forward-looking statements contained in this release. Investors are encouraged to read Wright’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this release speak only as of the date of this release, and Wright undertakes no obligation to update or revise any of these statements. Wright’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

–Tables Follow–

Investors & Media:
Julie D. Tracy
Sr. Vice President, Chief Communications Officer
Wright Medical Group N.V.
(901) 290-5817
julie.tracy@wright.com

August 07, 2017

WARSAW, Ind., Aug. 7, 2017 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced that its Board of Directors has approved the payment of a quarterly cash dividend to stockholders for the third quarter of 2017.

The cash dividend of $0.24 per share will be paid on or about October 27, 2017 to stockholders of record as of the close of business on September 22, 2017.  Future declarations of dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.

About Zimmer Biomet

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

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

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

ZBH-Fin

SOURCE Zimmer Biomet Holdings, Inc.

Related Links

http://www.zimmerbiomet.com

CARLSBAD, Calif., Aug. 03, 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 second quarter ended June 30, 2017.

Second Quarter 2017 Financial Highlights and Recent Accomplishments

• Revenue of $34.2 million, an increase of 3.0% year-over-year
• U.S. revenue of $30.4 million, an increase of 1.1% year-over-year
  — U.S. orthobiologics revenue of $16.0 million
  — U.S. spinal instrumentation revenue of $14.4 million
• International revenue of $3.8 million, an increase of 20.5% year-over-year
• Full commercial launch of the Mariner® Posterior Fixation System, a modular pedicle screw system that provides surgeons with multiple intra-operative options to facilitate posterior lumbar fixation
• Limited commercial launch of the Skipjack™ Expandable Interbody System, an expandable interbody system that provides in-situ expansion in either height or lordosis for an improved anatomical fit

“We are pleased with our second quarter results, which reflect our ongoing commitment to develop innovative and cost effective solutions to treat spinal disorders and expand our distributor footprint,” said Keith Valentine, President and Chief Executive Officer. “We remain focused on our mission to drive improved procedural solutions that combine efficient spinal instrumentation systems with industry leading orthobiologics to deliver clinical value to surgeons, hospitals, and patients.”

Second Quarter 2017 Financial Results
Revenue for the second quarter of 2017 totaled $34.2 million, a 3.0% increase compared to the same period of the prior year. Total revenue in the U.S. was $30.4 million, a 1.1% increase compared to the same period of the prior year due primarily to the improved performance of orthobiologics distributors during the current year period.

Orthobiologics revenue totaled $17.6 million, a 4.8% increase compared to the second quarter of 2016. The growth in orthobiologics revenue was driven by an increase in U.S. sales. Spinal instrumentation revenue totaled $16.6 million, a 1.1% increase compared to the second quarter of 2016 that was driven by stocking orders from a recently added distributor in Latin America.

Gross margin for the second quarter of 2017 was 59.1%, compared to 58.0% 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.  This was partially offset by a $0.2 million increase in non-cash amortization of technology intangible assets acquired in September 2016 from N.L.T. Spine Ltd and by lower gross margins associated with international sales, which were slightly higher as a percentage of total revenue in the second quarter of 2017 compared to the same period of the prior year.

Operating expenses for the second quarter of 2017 totaled $28.4 million, compared to $31.5 million for the same period of the prior year.  The $3.1 million decrease in operating expenses was driven by lower selling, general and administrative and intangible amortization expenses.

Net loss for the second quarter of 2017 was $8.0 million, compared to a net loss of $12.0 million for the second quarter of 2016.

Cash and cash equivalents at June 30, 2017 were $12.3 million and the Company had $4.0 million of outstanding borrowings against its $30.0 million credit facility. The Company realized $4.6 million in net proceeds in the second quarter of 2017 through the sale of approximately 477,000 shares of its common stock under its “at the market” equity offering program.

2017 Financial Outlook
SeaSpine expects full-year 2017 revenue to be in the range of $130.0 million to $133.0 million, reflecting growth of 1% to 3% over full-year 2016 revenue.

Webcast and Conference Call Information
The Company’s management team will host a conference call beginning today at 1:30pm PT/4:30pm ET to discuss the financial results and recent business developments. Individuals interested in listening to the conference call may do so by dialing (877) 418-4766 for domestic callers or (614) 385-1253 for international callers, using Conference ID: 49156714. To listen to the webcast, please visit the investor relations section of the SeaSpine website at www.seaspine.com.

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 instrumentation 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 instrumentation 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 instrumentation 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: revenue expectations for full-year 2017.  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 and retain 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; 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; the limited clinical experience supporting the commercial launch of new products and the risk that such products may require substantial additional development activities, which could introduce unexpected expense and delay; the lack of long-term clinical data supporting the safety and efficacy of the Company’s products; 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; general economic and business conditions in the markets in which the Company does business, both in the U.S. and abroad; and other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission. The Company’s public filings with the Securities and Exchange Commission are available at www.sec.gov.

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

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

LEESBURG, Va., Aug. 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 second fiscal quarter ended June 30, 2017.

Second Quarter 2017 Financial Summary:

• Total Q2 revenue of $65.7 million, up 10.9% year-over-year. Total Q2 revenue increased 11.6% year-over-year on a constant currency basis.
• Domestic Q2 revenue of $50.8 million, up 12.2% year-over-year, comprised of:
  • U.S. Complex Spine growth of 9.7% year-over-year
  • U.S. Minimally Invasive Surgery (MIS) growth of 25.4% year-over-year
  • U.S. Degenerative growth of 9.9% year-over-year.
• International Q2 revenue of $14.9 million, up 6.6% year-over-year, or 9.3% on a constant currency basis.
• Net loss of $9.1 million for the three months ended June 30, 2017, compared to a net loss of $11.1 million in the comparable period last year.
• Adjusted EBITDA of $0.6 million for the three months ended June 30, 2017, compared to Adjusted EBITDA loss of $0.3 million in the comparable period last year.

 Recent Product Introductions:

• On May 25, 2017, the Company announced the launch of the MESA 2 Cricket^™, an enhancement to the Company’s innovative MESA^®2 Deformity Spinal System. The MESA 2 Cricket provides surgeons the ability to efficiently complete challenging correction maneuvers in all three anatomical planes, with the goal of achieving three-dimensional balance in patients with complex spinal deformities.
• On June 20, 2017, the Company announced the introduction of the SAHARA^® AL Expandable Stabilization System, the Company’s first expandable offering within its interbody portfolio. SAHARA AL is the only lordotic expandable interbody device with integrated screw fixation on the market to help achieve spinal balance.
• On June 22, 2017, the Company announced that its MOJAVE^TM PL 3D Expandable Interbody System received 510(k) clearance from the U.S. Food & Drug Administration (FDA). MOJAVE PL 3D is a first-to-market, 3D-printed, FDA-cleared expandable posterior-lumbar (PL) interbody system that features K2M’s Lamellar 3D Titanium Technology^™.
• 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 FDA and a CE Mark. NILE Proximal Fixation addresses complex spinal deformity cases and consists of bands and connectors that may be used in conjunction with spinal rod constructs for attachment to the posterior vertebral structures at the proximal end of the construct.

Recent Strategic Highlights:

• On April 6, 2017, K2M and LifeHealthcare Group Limited announced a new distribution agreement for K2M’s innovative spinal technologies in Australia and New Zealand (ANZ). The K2M/LifeHealthcare distribution partnership dates back to 2010 and has yielded strong growth and a significant spine market position in ANZ. Looking to build on this success, K2M and LifeHealthcare entered into a new five-year agreement with the shared goal of establishing a number one spine market position in ANZ.
• On April 21, 2017, K2M received key product registrations in Japan from the Pharmaceuticals and Medical Devices Agency (PMDA), which are now under its control, including the MESA and EVEREST^® product lines.
• On May 1, 2017, the Company announced that they hosted more than 100 international spine surgeons from 22 countries for its annual Meeting of Minds™ in Lisbon, Portugal, from April 28-29, 2017. Meeting of Minds is a premier, world-class curriculum in the latest approaches and techniques for the operative treatment of spinal disorders. The Company also demonstrated its Balance ACS^™ (or BACS^™) platform, which applies three-dimensional solutions across the entire clinical care continuum to help drive quality outcomes in spine patients.
• On May 3, 2017, the Company announced participation at the 2017 combined meeting of The European Pediatric Orthopaedic Society and The Pediatric Orthopaedic Society of North America (EPOSNA) from May 3-6 in Barcelona, Spain. The Company showcased the Balance ACS and Three-Dimensional Total Body Balance and hosted a clinical symposium in 3D spinal solutions.
• 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. Pursuant to the agreement, Japan Medicalnext is the exclusive distributor of K2M’s spine products in Japan. The terms of the agreement include a long-term partnership of up to seven years. With more than 250 employees—including 50 orthopedic sales professionals—in seven offices located throughout the country, Japan Medicalnext has significant experience in medical device distribution, including the Japanese spinal surgery market.

“Our second quarter product launches and strategic accomplishments reflect continued progress toward our strategic goals of introducing innovative spine surgery technologies, expanding our selling presence and improving our selling productivity which, together, help K2M to increase our share of the global spine market,” said President and Chief Executive Officer, Eric Major. “Revenue growth in the second quarter was driven by double-digit growth in the U.S. and high single-digit constant currency growth outside the U.S.  During the quarter, we also made progress toward achieving profitability, generating $0.6 million in Adjusted EBITDA, compared to an Adjusted EBITDA loss of $0.3 million last year. We have reaffirmed our full year financial outlook—including constant currency revenue growth of 12%-15% year-over-year and Adjusted EBITDA of $6 million to $10 million—and continue to expect improving results over the balance of 2017.”

Second Quarter 2017 Financial Results

Total revenue for the second quarter of 2017 increased $6.5 million, or 10.9%, to $65.7 million, compared to $59.2 million for the second quarter of 2016. Total revenue increased 11.6% year-over-year on a constant currency basis. The increase in revenue was primarily driven by greater sales volume from primarily domestic new surgeon users and newer product offerings, offset primarily by customer declines and lower sales in certain international direct markets as compared to last year.

Revenue in the United States increased $5.5 million, or 12.2% year-over-year, to $50.8 million, and international revenue increased $0.9 million, or 6.6% year-over-year, to $14.9 million. Second quarter 2017 international revenue increased 9.3% year-over-year on a constant currency basis. Foreign currency exchange impacted second quarter international revenue by approximately $0.3 million, representing approximately 265 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 40.1%, 17.3% and 42.6% of U.S. revenue, respectively, for the three months ended June 30, 2017.

Gross profit for the second quarter of 2017 increased 9.0% to $43.2 million, compared to $39.6 million for the second quarter of 2016.  Gross margin was 65.7% for the second quarter of 2017, compared to 66.9% for the prior year period. Gross profit includes amortization expense on investments in surgical instruments of $3.6 million, or 5.5% of sales, for the three months ended June 30, 2017, compared to $3.4 million, or 5.8% of sales, for the comparable period last year.

Operating expenses for the second quarter of 2017 increased $2.4 million, or 4.9%, to $51.3 million, compared to $48.9 million for the second 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 second quarter of 2017 improved $1.1 million, to $8.2 million, compared to a loss from operations of $9.3 million for the comparable period last year. Loss from operations included intangible amortization of $2.4 million and $2.6 million for the second quarters of 2017 and 2016, respectively.

Total other expenses for the second quarter of 2017 decreased $0.8 million to $0.9 million, compared to $1.7 million last year. The decrease in other expense, net, was primarily attributable to an increase of $1.8 million in unrealized gains from foreign currency remeasurement on intercompany payable balances, partially offset by an increase in interest expense of $1.0 million from the Convertible Senior Notes issued in August 2016.

Net loss for the second quarter of 2017 was $9.1 million, or $(0.21) per diluted share, compared to a loss of $11.1 million, or $(0.27) per diluted share, for the second quarter of 2016.

Six-Months 2017 Financial Results

For the six months ended June 30, 2017, total revenue increased $12.1 million, or 10.4%, to $127.6 million, compared to $115.5 million for the six months ended June 30, 2016. Total revenue increased 11.1% year-over-year on a constant currency basis. U.S. revenue increased $9.6 million, or 10.9%, to $97.0 million for the first six months of 2017, compared to $87.4 million last year. International revenue increased $2.5 million, or 8.9%, to $30.6 million for the first six months of 2017, compared to $28.1 million last year. International revenue increased 11.8% year-over-year on a constant currency basis.