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RTI Surgical® Schedules 2017 Second Quarter Earnings Call for August 8, 2017

Posted On August 1, 2017 By OrthoSpineNews In Financial /  

August 01, 2017

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical Inc. (RTI) (Nasdaq: RTIX), a global surgical implant company, announced today that it plans to release financial results from the second quarter 2017 on Tuesday, August 8, 2017, prior to the market open.

RTI will host a conference call and simultaneous audio webcast to discuss second quarter results at 8:30 a.m. ET the same day. The conference call can be accessed by dialing (877) 383-7419 (U.S.) or (760) 666-3754 (International). The webcast can be accessed through the investor section of RTI’s website at www.rtix.com. A replay of the conference call will be available on RTI’s website for one month following the call.

About RTI Surgical Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, general surgery, spine, orthopedic, trauma and cardiothoracic procedures and are distributed in nearly 50 countries. RTI is headquartered in Alachua, Fla., and has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com.

Forward Looking Statement

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, except for historical information, any statements made in this communication about anticipated financial results, growth rates, new product introductions, future operational improvements and results or regulatory approvals or changes to agreements with distributors also are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties, including the risks described in public filings with the U.S. Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company’s SEC filings may be obtained by contacting the company or the SEC or by visiting RTI’s website at www.rtix.com or the SEC’s website at www.sec.gov.

Contacts

RTI Surgical Inc.
Robert Jordheim, 386-418-8888
Executive Vice President and Chief Financial Officer
rjordheim@rtix.com
or
Roxane Wergin, 386-418-8888
Director, Corporate Communications
rwergin@rtix.com

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Mazor Robotics Reports Record Second Quarter 2017 Revenue Increased 87% to $15.5 Million

Posted On August 1, 2017 By OrthoSpineNews In Financial /  

August 1, 2017 – CAESAREA, Israel–(BUSINESS WIRE)–

Mazor Robotics Ltd. (TASE: MZOR; NASDAQGM: MZOR), a pioneer and a leader in the field of surgical guidance systems, reported record second quarter revenue of $15.5 million. As previously announced, the Company received purchase orders for 19 systems in the 2017 second quarter and ended the quarter with a backlog of 14 systems.

“Our Q2 performance is highlighted by record quarterly revenue and a year-over-year increase of 87%, which reflects the market’s excitement for Mazor X and the successful sales execution with our partner,” commented Ori Hadomi, Chief Executive Officer. “The market traction and recognition of the system’s benefits is generating robust demand for our surgical guidance systems, which strengthens our leadership position in the U.S. market. Our sales team is continuing to pursue these opportunities and during the first few weeks of the third quarter we have received purchase orders for six systems.”

SECOND QUARTER 2017 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

Revenue for the three months ended June 30, 2017 increased 87% to $15.5 million compared to $8.3 million in the year-ago second quarter. U.S. revenue increased 110% to $14.1 million compared to $6.7 million in the year-ago second quarter, as the Company recognized revenue from 14 Mazor X systems compared to 5 Renaissance systems in the 2016 second quarter. The Company ended the quarter with a backlog of 14 systems, which are expected to be shipped and recorded as revenues in the second half of 2017. International revenue was $1.4 million compared to $1.6 million in the year-ago second quarter. Recurring revenue from kit sales, services and others increased 50% to $6.3 million in the second quarter of 2017 compared to $4.2 million in the year-ago second quarter. The growth is attributed mainly to the increase of the installed base.

The Company’s gross margin for the three months ended June 30, 2017 was 69.4% compared to 76.9% in the year-ago second quarter. This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X compared to the Renaissance system and the inclusion of four Renaissance trade-ins to Mazor X. Total operating expenses were $14.6 million compared to $10.3 million in the year-ago second quarter primarily reflecting the Company’s increased investment in sales and marketing activities. Operating loss was $3.9 million compared to an operating loss of $4.0 million in the year-ago second quarter. Net loss for the second quarter of 2017 was $3.7 million, or $0.08 per share, compared to a net loss of $4.1 million, or $0.09 per share, for the year-ago second quarter.

Cash used in operating activities during the 2017 second quarter was $7.4 million compared to $0.6 million cash used in operating activities in the year-ago second quarter. The Increase in cash used in the period is due to increase of Accounts receivable and Inventory to support the growing installed base and backlog orders in the second quarter of 2017. As of June 30, 2017, cash, cash equivalents and investments totaled $57.4 million.

SECOND QUARTER 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

The tables below include reconciliation of the Company’s GAAP results to non-GAAP results. The reconciliation relates to non-cash expenses in the amount of $1.3 million with respect to amortization of intangible assets and to share-based expenses recorded in the second quarter of 2017. On a non-GAAP basis, the net loss in the second quarter of 2017 was $2.4 million, or $0.05 per share, compared to $3.9 million, or $0.09 per share, for the year-ago second quarter.

SIX MONTHS ENDED JUNE 30, 2017 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

For the six months ended June 30, 2017, revenue increased 85% and totaled $27.2 million compared to $14.7 million for the six months ended June 30, 2016, due to higher system sales and an increase in recurring revenue. Recurring revenue totaled $11.5 million, an increase of 44% compared to $8.0 million in the six months ended June 30, 2016. The growth in recurring revenue is attributed to the increase in the installed base and high utilization of the Company’s surgical guidance systems, both in the U.S. and globally. Gross margin for the six months ended June 30, 2017 was 67.3% compared with 75.7% in the six months ended June 30, 2016. This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X compared to the Renaissance system and the inclusion of six Renaissance trade-ins to Mazor X. Net loss for the six months ended June 30, 2017 was $8.9 million, or $0.19 per share, compared to a net loss of $9.2 million, or $0.21 per share, in the first six months of 2016.

SIX MONTHS ENDED JUNE 30, 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

On a non-GAAP basis, the net loss for the first six months of 2017 was $6.3 million, or $0.13 per share, compared to a net loss of $8.1 million, or $0.19 per share, in the first six months of 2016.

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss its second quarter financial results as well as recent corporate developments on August 1, 2017 at 8:30 AM EDT (3:30 PM IDT). Investors within the United States interested in participating are invited to call 888-539-3679. Participants in Israel can use the toll-free dial-in number 1-80-924-6042. All other international participants can use the dial-in number 719-325-2322. For all callers, refer to Conference ID 8824893.

A replay of the event will be available for two weeks following the conclusion of the call. To access the replay, callers in the United States can call 1-866-375-1919 and reference the Replay Access Code: 8824893. All international callers can dial +1-719-457-0820, using the same Replay Access Code. To access the webcast, please visit www.mazorrobotics.com and select ‘Investor Relations.’

Use of Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with generally accepted accounting principles in conformity with International Financial Reporting Standards (GAAP), this press release contains Non-GAAP financial measures for gross profit, operating expenses, operating loss, net loss and basic and diluted earnings per share that exclude the effects of capitalization of development costs, non-cash expense of amortization of intangible assets and share-based payments. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance that enhances management’s and investors’ ability to evaluate the Company’s net income and earnings per share and to compare them to historical net income and earnings per share.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when operating and evaluating the Company’s business internally and therefore decided to make these non-GAAP adjustments available to investors.

About Mazor

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Any statements in this release about future expectations, plans or prospects for the Company, including without limitation, statements regarding robust demand for the Company’s products, third quarter purchase orders, the amount of and timing of recording of additional revenue from backlog, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions are forward-looking statements. These statements are only predictions based on Mazor’s current expectations and projections about future events. There are important factors that could cause Mazor’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include, but are not limited to, the impact of general economic conditions, competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results, and other factors indicated in Mazor’s filings with the Securities and Exchange Commission (SEC) including those discussed under the heading “Risk Factors” in Mazor’s annual report on Form 20-F filed with the SEC on May 1, 2017 and in subsequent filings with the SEC. For more details, refer to Mazor’s SEC filings. Mazor undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

Mazor Robotics Ltd.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands, except per share data)
(UNAUDITED)
Six month period Three month period
ended June 30, ended June 30,
2017 2016 2017 2016
Revenue $ 27,174 $ 14,703 $ 15,455 $ 8,284
Cost of revenue $ 8,875 $ 3,566 $ 4,726 $ 1,912
Gross profit $ 18,299 $ 11,137 $ 10,729 $ 6,372
Operating expenses:
Research and development, net $ 4,034 $ 3,242 $ 2,242 $ 1,111
Selling and marketing $ 20,209 $ 14,656 $ 10,316 $ 7,783
General and administrative $ 3,657 $ 2,412 $ 2,086 $ 1,429
Total operating cost and expenses $ 27,900 $ 20,310 $ 14,644 $ 10,323
Loss from operations $ (9,601) $ (9,173) $ (3,915) $ (3,951)
Financing income, net $ 443 $ 203 $ 232 $ 28
Loss before taxes on income $ (9,158) $ (8,970) $ (3,683) $ (3,923)
Income tax expense (benefit) $ (250) $ 209 $ (7) $ 144
Net loss $ (8,908) $ (9,179) $ (3,676) $ (4,067)
Net loss per share – Basic and diluted $ (0.19) $ (0.21) $ (0.08) $ (0.09)
Weighted average common shares outstanding – Basic and diluted 47,990 42,880 48,227 43,347
Mazor Robotics Ltd.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF
(U.S. Dollars in thousands)
June 30, December 31,
2017 2016
(Unaudited) (Audited)
Current assets
Cash and cash equivalents $ 20,347 $ 14,954
Short-term investments 33,267 37,862
Trade receivables 6,298 8,225
Other current assets 2,411 1,728
Inventory 7,365 4,715
Total current assets 69,688 67,484
Non-current assets
Long-term investments 3,800 9,017
Property and equipment, net 4,168 3,615
Intangible assets, net 2,093 2,258
Other non-current assets 981 351
Total non-current assets 11,042 15,241
Total assets $ 80,730 $ 82,725
Current liabilities
Trade payables $ 2,526 $ 5,018
Deferred revenue 3,481 4,031
Other current liabilities 11,772 8,462
Total current liabilities 17,779 17,511
Non-current liabilities
Employee benefits 461 325
Total non-current liabilities 461 325
Total liabilities 18,240 17,836
Equity
Share capital 126 124
Share premium 180,318 174,647
Capital reserve for share-based payment transactions 10,695 9,859
Foreign currency translation reserve 2,119 2,119
Accumulated loss (130,768) (121,860)
Total equity 62,490 64,889
Total liabilities and equity $ 80,730 $ 82,725
Mazor Robotics Ltd.
CONSOLIDATED CASH FLOW STATEMENTS
(U.S. Dollars in thousands)
(UNAUDITED)
Six months ended Three months ended
June 30, June 30,
2017 2016 2017

2016
Cash flows from operating activities:
Loss for the period $ (8,908) $ (9,179) $ (3,676) $ (4,067)
Adjustments:
Depreciation and amortization $ 714 $ 296 $ 372 $ 150
Finance income, net $ (119) $ (173) $ (69) $ (31)
Share-based payments $ 2,422 $ 2,134 $ 1,221 $ 1,218
Income tax expense (tax benefit) $ (250) $ 209 $ (7) $ 144
$ 2,767 $ 2,466 $ 1,517 $ 1,481
Change in inventory $ (2,950) $ (635) $ (1,588) $ (610)
Change in trade and other accounts receivable $ 1,260 $ 2,377 $ (3,511) $ 639
Change in prepaid lease fees $ (22) $ (4) $ (1) $ 6
Change in trade and other accounts payable $ 792 $ 1,333 $ (311) $ 1,869
Change in employee benefits $ 136 $ 68 $ 58 $ (8)
$ (784) $ 3,139 $ (5,353) $ 1,896
Interest received $ 183 $ 137 $ 111 $ 73
Income tax paid $ (15) $ (39) $ (15) $ (2)
$ 168 $ 98 $ 96 $ 71
Net cash used in operating activities $ 6,757 $ 3,476 $ 7,416 $ 619
Cash flows from investing activities:
Proceeds from (investment in) short-term investments and deposits, net $ 10,435 $ (2,377) $ 1,478 $ (9,023)
Investment in long-term investments $ (623) $ (1,125) $ (525) $ (629)
Purchase of property and equipment $ (1,313) $ (1,203) $ (504) $ (785)
Capitalization of development costs $ – $ (597) $ – $ (597)
Net cash provided by (used in) investing activities $ 8,499 $ (5,302) $ 449 $ (11,034)
Cash flows from financing activities:
Proceeds from issuance of ADRs, net $ – $ 11,895 $ – $ 11,895
Proceeds from exercise of share options by employees $ 3,719 $ 123 $ 1,460 $ 48
Proceeds from exercise of share options and warrants, net $ – $ 481 $ – $ –
Net cash provided by financing activities $ 3,719 $ 12,499 $ 1,460 $ 11,943
Net increase (decrease) in cash and cash equivalents $ 5,461 $ 3,721 $ (5,507) $ 290
Cash and cash equivalents at the beginning of the period $ 14,954 $ 13,519 $ 25,896 $ 17,008
Effect of exchange rate differences on balances of cash and cash equivalents $ (68) $ 37 $ (42) $ (21)
Cash and cash equivalents at the end of the period $ 20,347 $ 17,277 $ 20,347 $ 17,277
Supplementary cash flows information:
Purchase of property and equipment in credit $ (55) $ (32) $ (55) $ (32)
Issuance costs in credit $ – $ (199) $ – $ (199)
Capitalization of development expenses on credit $ – $ (414) $ – $ (414)
Classification of inventory to fixed assets $ 300 $ – $ 164 $ –
Mazor Robotics Ltd.
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(U.S. Dollars in thousands, except per share data)
(UNAUDITED)
Six month period Three month period
ended June 30, ended June 30,
2017 2016 2017 2016
GAAP gross profit $ 18,299 $ 11,137 $ 10,729 $ 6,372
Amortization of intangible assets 165 – 83 –
Share-based payments 108 83 55 47
Non-GAAP gross profit $ 18,572 $ 11,220 $ 10,867 $ 6,419
GAAP gross profit as percentage of revenues 67.3% 75.7% 69.4% 76.9%
Non-GAAP gross profit as percentage of revenues 68.3% 76.3% 70.3% 77.5%
GAAP operating expenses $ 27,900 $ 20,310 $ 14,644 $ 10,323
Share-based payments:
Research and development $ 352 $ 347 $ 194 $ 197
Selling and marketing $ 851 $ 1,215 $ 411 $ 695
General and administrative $ 1,111 $ 489 $ 561 $ 279
Development costs capitalization $ – $ (1,011) $ – $ (1,011)
Non-GAAP operating expenses $ 25,586 $ 19,270 $ 13,478 $ 10,163
GAAP operating loss $ (9,601) $ (9,173) $ (3,915) $ (3,951)
Non-GAAP operating loss $ (7,014) $ (8,050) $ (2,611) $ (3,744)
GAAP net loss $ (8,908) $ (9,179) $ (3,676) $ (4,067)
Amortization of intangible assets $ 165 $ – $ 83 $ –
Share-based payments $ 2,422 $ 2,134 $ 1,221 $ 1,218
Development costs capitalization $ – $ (1,011) $ – $ (1,011)
Non-GAAP net loss $ (6,321) $ (8,056) $ (2,372) $ (3,860)
GAAP basic and diluted loss per share $ (0.19) $ (0.21) $ (0.08) $ (0.09)
Non-GAAP basic and diluted loss per share $ (0.13) $ (0.19) $ (0.05) $ (0.09)
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Stryker reports second quarter 2017 results

Posted On July 31, 2017 By OrthoSpineNews In Financial /  

By GlobeNewswire,  July 27, 2017

Kalamazoo, Michigan – July 27, 2017 – Stryker Corporation (NYSE:SYK) reported operating results for the second quarter of 2017:

Second Quarter Highlights

Net sales grew 6.1% to $3.0 billion (6.9% constant currency)

Orthopaedics 5.5 % or 6.5% constant currency
MedSurg 6.2 % or 6.8% constant currency
Neurotechnology and Spine 6.9 % or 7.9% constant currency

Adjusted net earnings per diluted share(1) increased 10.1% to $1.53

Reported net earnings per diluted share increased 3.0% to $1.03

“Our growth momentum continued in the second quarter as we continue to drive share gains through new products and strong commercial execution,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “We are raising our full year guidance for both organic sales growth and EPS, which reflects our expectations for continued strong performance throughout the year.”

Sales Analysis

Consolidated net sales of $3.0 billion increased 6.1% in the quarter as reported and 6.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 0.2% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 8.2% from increased unit volume partially offset by 1.5% due to lower prices.

Orthopaedics net sales of $1.1 billion increased 5.5% in the quarter as reported and 6.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Excluding the 0.3% impact of acquisitions, net sales in the quarter increased 6.2% in constant currency, including 8.6% from increased unit volume partially offset by 2.4% due to lower prices.

MedSurg net sales of $1.3 billion increased 6.2% in the quarter as reported and 6.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%. Excluding the 0.1% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 7.1% from increased unit volume partially offset by 0.4% due to lower prices.

Neurotechnology and Spine net sales of $0.5 billion increased 6.9% in the quarter as reported and 7.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Net sales in the quarter increased 10.0% from increased unit volume partially offset by 2.1% due to lower prices.

Earnings Analysis

Reported net earnings of $391 million increased 2.9% in the quarter. Reported net earnings per diluted share of $1.03 increased 3.0% in the quarter. Reported net earnings include certain charges for the amortization of purchased intangible assets, Rejuvenate and ABG II and other recall matters, restructuring-related activities, legal matters and acquisition and integration related activities. The effect of each of these matters on reported net earnings and net earnings per diluted share appears in the reconciliation of actual results to adjusted results below. Excluding the impact of these charges increases gross profit margin in the quarter from 66.1% to 66.3% and increases operating income margin from 16.6% to 25.0%. Excluding the impact of the items described above, adjusted net earnings(2) of $581 million increased 10.7% in the quarter. Adjusted net earnings per diluted share(1) of $1.53 increased 10.1% in the quarter.

2017 Outlook

We now expect 2017 organic net sales growth to be in the range of 6.5% to 7.0% and adjusted net earnings per diluted share(3) to be in the range of $6.45 to $6.55. For the third quarter we expect adjusted net earnings per diluted share(3) to be in the range of $1.50 to $1.55. If foreign currency exchange rates hold near current levels, we expect net sales in the third quarter and full year to be negatively impacted by approximately 0.5% and adjusted net earnings per diluted share to be negatively impacted by approximately $0.02 in the third quarter and $0.10 in the full year.

(1) A reconciliation of reported net earnings per diluted share to adjusted net earnings per diluted share, a non-GAAP financial measure, and other important information appears below.

(2) A reconciliation of reported net earnings to adjusted net earnings, a non-GAAP financial measure, and other important information appears below.

(3) A reconciliation of expected net earnings per diluted share to expected adjusted net earnings per diluted share for the third quarter and full year and other important information appears below.

Conference Call on Thursday, July 27, 2017

As previously announced, the Company will host a conference call on Thursday, July 27, 2017 at 4:30 p.m., Eastern Time, to discuss the Company’s operating results for the quarter ended June 30, 2017 and provide an operational update.

To participate in the conference call dial (844) 826-0610 (domestic) or (973) 453-3249 (international) and be prepared to provide conference ID number 26061645 to the operator.

A simultaneous webcast of the call will be accessible via the Company’s website at www.stryker.com. The call will be archived on the Investors page of this site.

A recording of the call will also be available from 8:00 p.m., Eastern Time, on Thursday, July 27, 2017, until 11:59 p.m., Eastern Time, on Thursday, August 3, 2017. To hear this recording, you may dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and enter conference ID number 26061645.

Caution Concerning Forward-Looking Statements

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities laws that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; potential supply disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Stryker is one of the world’s leading medical technology companies and, together with our customers, we are driven to make healthcare better. The Company offers a diverse array of innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes. Stryker is active in over 100 countries around the world. Please contact us for more information at www.stryker.com.

For investor inquiries please contact:

Katherine A. Owen, Stryker Corporation, 269-385-2600 or katherine.owen@stryker.com

For media inquiries please contact:

Yin Becker, Stryker Corporation, 269-385-2600 or yin.becker@stryker.com

 

STRYKER CORPORATION

For the Three and Six Months June 30

(Unaudited – Millions of Dollars, Except Per Share Amounts)

CONDENSED STATEMENTS OF EARNINGS
Three Months Six Months
2017 2016 % Change 2017 2016 % Change
Net sales $ 3,012 $ 2,840 6.1 % $ 5,967 $ 5,335 11.8 %
Cost of sales 1,022 998 2.4 2,015 1,799 12.0
Gross profit $ 1,990 $ 1,842 8.0 % $ 3,952 $ 3,536 11.8 %
% of sales 66.1 % 64.9 % 66.2 % 66.3 %
Research, development and engineering expenses 192 183 4.9 384 342 12.3
Selling, general and administrative expenses 1,130 1,043 8.3 2,232 1,987 12.3
Recall charges 72 28 157.1 98 47 108.5
Amortization of intangible assets 95 88 8.0 183 141 29.8
Total operating expenses $ 1,489 $ 1,342 11.0 % $ 2,897 $ 2,517 15.1 %
Operating income $ 501 $ 500 0.2 % $ 1,055 $ 1,019 3.5 %
% of sales 16.6 % 17.6 % 17.7 % 19.1 %
Other income (expense), net (57 ) (67 ) (14.9 ) (112 ) (105 ) 6.7
Earnings before income taxes $ 444 $ 433 2.5 % $ 943 $ 914 3.2 %
Income taxes 53 53 – 108 132 (18.2 )
Net earnings $ 391 $ 380 2.9 % $ 835 $ 782 6.8 %
Net earnings per share of common stock:
Basic $ 1.04 $ 1.02 2.0 % $ 2.23 $ 2.09 6.7 %
Diluted $ 1.03 $ 1.00 3.0 % $ 2.20 $ 2.07 6.3 %
Weighted-average shares outstanding – in millions:
Basic 373.9 374.2 373.7 373.7
Diluted 379.8 378.5 379.6 378.0

 

CONDENSED BALANCE SHEETS
June December
2017 2016
Assets
Cash and cash equivalents $ 3,649 $ 3,316
Marketable securities 98 68
Accounts receivable, net 1,905 1,967
Inventories 2,279 2,030
Other current assets 547 480
Total current assets $ 8,478 $ 7,861
Property, plant and equipment, net 1,758 1,569
Goodwill and other intangibles, net 9,853 9,864
Other noncurrent assets 1,203 1,141
Total assets $ 21,292 $ 20,435
Liabilities and shareholders’ equity
Current liabilities $ 3,014 $ 2,554
Accrued recall expenses 538 594
Other noncurrent liabilities 1,113 1,051
Long-term debt, excluding current maturities 6,592 6,686
Shareholders’ equity 10,035 9,550
Total liabilities and shareholders’ equity $ 21,292 $ 20,435

 

CONDENSED STATEMENTS OF CASH FLOWS
Six Months
2017 2016
Operating activities
Net earnings $ 835 $ 782
Depreciation 127 106
Amortization of intangible assets 183 141
Changes in operating assets and liabilities and other, net (344 ) (274 )
Net cash provided by operating activities $ 801 $ 755
Investing activities
Acquisitions, net of cash acquired $ (38 ) $ (4,219 )
Change in marketable securities, net (30 ) 536
Purchases of property, plant and equipment (270 ) (229 )
Net cash used in investing activities $ (338 ) $ (3,912 )
Financing activities
Borrowings/repayments of debt, net $ 443 $ 3,611
Dividends paid (318 ) (284 )
Repurchases of common stock (230 ) (13 )
Other financing (72 ) (56 )
Net cash (used in) provided by financing activities $ (177 ) $ 3,258
Effect of exchange rate changes on cash and cash equivalents 47 10
Change in cash and cash equivalents $ 333 $ 111

 

STRYKER CORPORATION

For the Three and Six Months Ended June 30

(Unaudited – Millions of Dollars)

CONDENSED SALES ANALYSIS
Three Months Six Months
Percentage Change Percentage Change
2017 2016 As Reported Constant

Currency

 2017 2016 As Reported Constant

Currency
Geographic:
United States $ 2,201 $ 2,050 7.4 % 7.4 % $ 4,364 $ 3,871 12.7 % 12.7 %
International 811 790 2.7 5.7 1,603 1,464 9.5 11.9
Total $ 3,012 $ 2,840 6.1 % 6.9 % $ 5,967 $ 5,335 11.8 % 12.5 %
Segment:
Orthopaedics $ 1,141 $ 1,082 5.5 % 6.5 % $ 2,276 $ 2,139 6.4 % 7.2 %
MedSurg 1,336 1,258 6.2 6.8 2,641 2,216 19.2 19.7
Neurotechnology and Spine 535 500 6.9 7.9 1,050 980 7.1 7.8
Total $ 3,012 $ 2,840 6.1 % 6.9 % $ 5,967 $ 5,335 11.8 % 12.5 %

 

SUPPLEMENTAL SALES GROWTH ANALYSIS
Three Months
Percentage Change
United States International
2017 2016 As Reported Constant Currency As Reported As Reported Constant Currency
Orthopaedics:
Knees $ 389 $ 370 5.0 % 5.9 % 7.0 % 0.1 % 3.0 %
Hips 322 323 (0.3 ) 1.0 2.1 (4.3 ) (0.8 )
Trauma and Extremities 351 328 7.0 8.0 11.4 (0.5 ) 2.4
Other 79 61 32.0 32.1 34.8 20.1 20.9
Total Orthopaedics $ 1,141 $ 1,082 5.5 % 6.5 % 8.8 % (1.0 )% 2.1 %
MedSurg:
Instruments $ 392 $ 377 4.1 % 4.7 % 4.2 % 3.6 % 6.2 %
Endoscopy 406 357 13.9 14.3 15.5 8.4 10.2
Medical 474 465 1.6 2.4 2.3 (0.7 ) 2.8
Sustainability 64 59 10.0 10.0 10.0 8.4 13.0
Total MedSurg $ 1,336 $ 1,258 6.2 % 6.8 % 7.0 % 3.4 % 6.2 %
Neurotechnology and Spine:
Neurotechnology $ 352 $ 312 12.8 % 13.9 % 10.3 % 17.3 % 20.4 %
Spine 183 188 (2.9 ) (2.1 ) (1.3 ) (7.7 ) (4.7 )
Total Neurotechnology and Spine $ 535 $ 500 6.9 % 7.9 % 5.5 % 10.0 % 13.1 %
Total $ 3,012 $ 2,840 6.1 % 6.9 % 7.4 % 2.7 % 5.7 %

 

Six Months
Percentage Change
United States International
2017 2016 As Reported Constant Currency As Reported As Reported Constant Currency
Orthopaedics:
Knees $ 780 $ 731 6.8 % 7.3 % 7.2 % 5.5 % 7.4 %
Hips 642 639 0.4 1.5 2.1 (2.2 ) 0.6
Trauma and Extremities 703 655 7.3 8.1 10.7 1.5 4.0
Other 151 114 33.0 33.0 30.5 45.2 44.6
Total Orthopaedics $ 2,276 $ 2,139 6.4 % 7.2 % 8.3 % 2.6 % 4.9 %
MedSurg:
Instruments $ 786 $ 742 5.9 % 6.4 % 6.0 % 5.7 % 8.0 %
Endoscopy 779 685 13.8 14.0 15.0 9.4 10.7
Medical 949 672 41.2 42.3 38.9 49.8 55.2
Sustainability 127 117 8.8 8.8 8.7 27.0 28.2
Total MedSurg $ 2,641 $ 2,216 19.2 % 19.7 % 18.9 % 20.3 % 22.9 %
Neurotechnology and Spine:
Neurotechnology $ 683 $ 613 11.3 % 12.0 % 10.0 % 13.7 % 15.6 %
Spine 367 367 0.1 0.6 0.5 (1.3 ) 1.1
Total Neurotechnology and Spine $ 1,050 $ 980 7.1 % 7.8 % 6.1 % 9.4 % 11.5 %
Total $ 5,967 $ 5,335 11.8 % 12.5 % 12.7 % 9.5 % 11.9 %

NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; cost of sales excluding specified items; adjusted selling, general and administrative expenses; adjusted operating income; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share. We believe that these non-GAAP measures provide meaningful information to assist shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates and acquisitions that affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, operating income, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures:

STRYKER CORPORATION

For the Three Months and Six Months June 30

(Unaudited – Millions of Dollars, Except Per Share Amounts)

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2017 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective

Tax Rate

 Diluted EPS
Reported $ 1,990 $ 1,130 $ 95 $ 501 $ 391 11.8 % $ 1.03
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 1 – – 1 – 0.1 –
Other acquisition and integration related – (8 ) – 8 7 – 0.02
Amortization of purchased intangible assets – – (95 ) 95 63 3.7 0.16
Restructuring-related charges (b) 6 (39 ) – 45 41 (0.6 ) 0.11
Rejuvenate and other recall matters (c) – – – 72 54 1.3 0.14
Legal matters (d) – (30 ) – 30 25 – 0.07
Adjusted $ 1,997 $ 1,053 $ – $ 752 $ 581 16.3 % $ 1.53

 

Three Months 2016 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective

Tax Rate

 Diluted EPS
Reported $ 1,842 $ 1,043 $ 88 $ 500 $ 380 12.3 % $ 1.00
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 35 – – 35 22 1.6 0.06
Other acquisition and integration related – (31 ) – 31 21 1.0 0.06
Amortization of purchased intangible assets – – (88 ) 88 59 3.1 0.16
Restructuring-related charges (b) 2 (20 ) – 22 20 (0.4 ) 0.05
Rejuvenate and other recall matters (c) – – – 28 23 – 0.06
Adjusted $ 1,879 $ 992 $ – $ 704 $ 525 17.6 % $ 1.39

 

Six Months 2017 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective

Tax Rate

 Diluted EPS
Reported $ 3,952 $ 2,232 $ 183 $ 1,055 $ 835 11.4 % $ 2.20
Acquisition and integration related charges: (a)
Other acquisition and integration related – (18 ) – 18 14 0.2 0.04
Amortization of purchased intangible assets – – (183 ) 183 124 3.1 0.32
Restructuring-related charges (b) 11 (72 ) – 83 68 0.2 0.18
Rejuvenate and other recall matters (c) – – – 98 75 0.9 0.20
Legal matters (d) – (30 ) – 30 25 – 0.07
Adjusted $ 3,963 $ 2,112 $ – $ 1,467 $ 1,141 15.8 % $ 3.01

 

Six Months 2016 Gross Profit Selling, General & Administrative Expenses Amortization of Intangible Assets Operating Income Net Earnings Effective

Tax Rate

 Diluted EPS
Reported $ 3,536 $ 1,987 $ 141 $ 1,019 $ 782 14.5 % $ 2.07
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value 35 – – 35 22 0.7 0.06
Other acquisition and integration related – (36 ) – 36 25 0.5 0.07
Amortization of purchased intangible assets – – (141 ) 141 98 2.0 0.26
Restructuring-related charges (b) 5 (37 ) – 42 34 0.1 0.09
Rejuvenate and other recall matters (c) – – – 47 39 – 0.10
Legal matters (d) – 12 – (12 ) (7 ) (0.3 ) (0.02 )
Adjusted $ 3,576 $ 1,926 $ – $ 1,308 $ 993 17.5 % $ 2.63

 

(a) Charges represent certain acquisition and integration related costs associated with acquisitions.
(b) Charges represent the cost associated with certain restructuring-related charges associated with workforce reductions and other restructuring-related activities.
(c) Charges represent changes in our best estimate of the minimum end of the range of probable loss to resolve the Rejuvenate recall and other recall matters.
(d) Amount represents gains or losses associated with legal settlements.

 

STRYKER CORPORATION

For the Three Months September 30, 2017 and Full Year December 31, 2017

Reconciliation of Expected Net Earnings Per Diluted Share to Expected Adjusted Net Earnings per Diluted Share
Three Months Full Year
Low High Low High
Expected – Reported $ 1.15 $ 1.28 $ 5.05 $ 5.25
Acquisition and integration related charges 0.05 0.02 0.13 0.08
Amortization of purchased intangible assets 0.15 0.15 0.65 0.65
Restructuring-related charges 0.15 0.10 0.35 0.30
Rejuvenate and other recall matters – – 0.20 0.20
Legal matters – – 0.07 0.07
Expected – Adjusted $ 1.50 $ 1.55 $ 6.45 $ 6.55


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Stryker Corporation via Globenewswire

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SPINEWAY : Reinforcement of the balance-sheet structure with a reserved issue of Notes with Warrants

Posted On July 28, 2017 By OrthoSpineNews In Financial /  

Spineway, specialist in surgical implants and instruments for treating disorders of the spinal column (spine), announces that it is setting up an issue of Tranche Warrants for Notes with Warrants to finance the acceleration of its development.

Legal framework

In accordance with the delegation of power granted to the Board of Directors and approved by the Ordinary and Extraordinary General Meeting of Spineway (the “Company“) shareholders held on June 19, 2017, Spineway’s Board of Directors approved – on July 20, 2017 – the plan for an issue of 200 warrants (the “Tranche Warrants“), the exercise of which gives access to the issue of 200 notes redeemable in cash and/or convertible into new and/or existing shares (the “Notes“) with warrants to subscribe shares (the “Warrants“), representing  a bond issue in the amount of €2M in favor of the YA II PN, LTD investment fund (the “Investor“), a fund managed by the US management company Yorkville Advisors, and empowered the CEO to decide to launch this transaction, approve its final terms and conditions, and issue the Tranche Warrants.

Pursuant to an issuance agreement entered into today between the Investor and Spineway, the Investor has agreed to subscribe – during a period of 36 months as from the date of issue of the Tranche Warrants – up to 200 Notes with Warrants, representing a total par value of €2M, in several successive tranches (each referred to as a “Tranche“), which investor is not, however, intended to remain as Spineway capital in the long term.

This issuance is subject to the transfer of the Spineway shares to the “Public Offering” compartment of Euronext Growth and obtaining prior approval from the Autorité des Marchés Financiers of the prospectus to be prepared by the Company by December 31, 2017, at the latest. Therefore, if this condition precedent is met, the issuance of the Tranche Warrants and subscription for the first Tranche should take place by the end of 2017.

Purpose of the transaction

The purpose of the issuance of these Notes with Warrants is to provide Spineway with the financial means necessary to carry out its international-development plan and launch new innovative products. It could result in a capital investment of approximately €3.96M: €1.96M corresponding to the subscription of all the Notes and €2M corresponding to the exercise of all the Warrants.

Stéphane Le Roux, CEO of the Spineway Group, commented on this potential €3.96M in additional financial resources: “We are thrilled about this agreement with Yorkville Advisors that will allow us to diversify the financing we have to support our growth. The issuance of a first tranche of €1M by the end of the year will allow us to finance our development in new areas, such as in the USA, and accelerate the launch of our new products.”

Characteristics of the Tranche Warrants, Notes and Warrants

The main characteristics of the Tranche Warrants, Notes and Warrants (the detailed terms and conditions of which are available on the Company’s website) are as follows:

  • Main characteristics of the Tranche Warrants

The Tranche Warrants require their bearer, at the Company’s request(1) (a “Request“) or on the Investor’s initiative(2), to subscribe Notes with Warrants attached, i.e., one Note per Tranche Warrant exercised, at a price set at 98% of the par value of a Note. The Company can therefore request the exercise of the Tranche Warrants in order to allow the issuance of Notes in several tranches. Each exercise date of each Tranche Warrant is a “Tranche Warrant Exercise Date.”

The Tranche Warrants are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

  • Main characteristics of the Notes

The Notes shall be issued in several Tranches. The aggregate principal amount of the first Tranche will be equal to €1M. The aggregate principal amount of each of the following Tranches shall, in principle, be equal to €0.5M, unless otherwise mutually agreed by the Investor and the Company.

The Notes have a par value of €10,000 each and are subscribed at 98% of par.

The Notes have a maturity of 12 months from their date of issuance. Upon maturity or an event of default(3), the Notes that have not been converted shall be redeemed by the Company at par (plus accrued interest, if any). The Notes do not bear interest (except in the event of default).

At its discretion, the Investor may convert all or any of its Notes into new and/or existing shares (a “Conversion“). Upon a Conversion, the Investor shall determine the number of Notes to be converted and the corresponding aggregate principal amount and interest (if any) so converted (the “Conversion Amount“). The number of shares to be issued to the Investor upon each Conversion will be equal to the Conversion Amount divided by 92% of the Market Price (as defined below) on the Conversion Date.

Upon a Conversion, the Company shall have the right at its sole discretion to remit to the Investor: (1) the corresponding new and/or existing shares (as described above), (2) the value in cash or (3) an amount in cash and new and/or existing shares.

If the Company chooses to remit a cash amount, such amount shall be equal to:

M = (Vn / P) * C

“M”: cash amount payable to the Note bearer;
“Pv”: bond claim that the Note represents (par value of a Note, plus accrued interest, if any);
“P”: 92% of Market Price;
“C”: daily volume weighted average price of the Company’s share on the Conversion Date.

The market price (the “Market Price“) shall be the lowest daily volume weighted average price of the Company’s share over the ten (10) consecutive trading days immediately preceding the applicable date (the “Pricing Period“). By way of exception, in the case of a Conversion, or upon exercise of Tranche Warrants on the Investor’s initiative, Pricing Period shall mean the trading days during which the Investor has not sold any share of the Company in the market among the ten (10) consecutive trading days immediately preceding the applicable date.

The Notes, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

  • Main characteristics of the Warrants

Each Note shall be issued with a number of Warrants equal to the par value of a Note divided by the applicable strike price of the Warrants (the “Strike Price“). The Warrants shall immediately be detached from the Notes and each Warrant shall give its bearer the right to subscribe for one (1) new share in the Company, subject to possible adjustments.

The Strike Price of the Warrants attached to the Notes of the first Tranche shall be equal to 115% of the lower of (1) the Market Price on the issuance date of the Tranche Warrants (2) the Market Price on July 13, 2017, i.e., 3.2572 euros.

The Strike Price of the Warrants attached to the Notes of the subsequent Tranches shall be equal 115% of the Market Price on the date of the applicable Request (or Tranche Warrant Exercise Date in the case of an exercise of Tranche Warrants on the Investor’s initiative).

The Warrants shall be exercisable in new shares for a period of 5 years from their respective issuance dates.

The Warrants, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed, unless the Company and the Investor agree otherwise.

For reference, based on the share’s closing price on July 27, 2017 (i.e., €3.66), the theoretical value of a Warrant would be between €0.78 and €1.69 depending on the volatility applied (between 30% and 60%). The theoretical value of a Warrant is obtained using the Black & Scholes formula based on the following hypotheses:

  • maturity: 5 years;
  • risk-free interest rate: 0%;
  • dividend payout rate: 0%.

New shares resulting from the Conversion of Notes or the exercise of Warrants

The new shares issued upon conversion of the Notes and/or exercise of the Warrants shall be admitted to trading on Euronext Growth as from their issuance, will carry immediate and current dividend rights and will be fully assimilated to and fungible with the existing ordinary shares.

The Company shall update a summary table on its website showing the Tranche Warrants, Notes, Warrants and number of shares outstanding.

Theoretical impact of the issuance of the Notes with Warrants attached (based on the Company share’s closing price on July 27, 2017, i.e., €3.66)

For reference, assuming the Company decides to remit only new shares upon Conversion of the Notes, the impact of the issuance of the Notes with Warrants attached would be as follows:

  • Impact of the issuance on the consolidated net assets per share (based on the shareholders’ equity as at December 31, 2016, and the number of shares making up the Company’s share capital as at July 27, 2017, i.e., 3,907,846 shares):
Consolidated net assets per share (in €)
Non-diluted basis Diluted basis(1)
1sttranche Total tranches 1sttranche Total tranches
Before issuance €0.47 €0.80
After issuance of a maximum of 296 982 (1st tranche) or of 593 964 (total tranches) new shares resulting from the Conversion of the Notes €0.65 €0.82 €0.95 €1.08
After issuance of a maximum of 564 361  (1st tranche) or of 1 099 438 (total tranches) new shares resulting from the Conversion of the Notes and the exercise of the Warrants €0.84 €1.13 €1.10 €1.35
(1) assuming the exercise of all the dilutive instruments existing to date that could result in the creation of a maximum of 390,786 new shares.
  • Impact of the issuance on the investment of a shareholder currently holding 1% of the Company’s share capital (based on the number of shares making up the Company’s share capital as at July 27, 2017, i.e., 3,907,846 shares):
Consolidated net assets per share (%)
Non-diluted basis Diluted basis (1)
1sttranche Total tranches 1sttranche Total tranches
Before issuance 1.00% 0.91%
After issuance of a maximum of 296 982 (1st tranche) or of 593 964  (total tranches) new shares resulting from the Conversion of the Notes 0.93% 0.87% 0.85% 0.80%
After issuance of a maximum of 564 361  (1st tranche) or of 1 099 438 (total tranches) new shares resulting from the Conversion of the Notes and the exercise of the Warrants 0.87% 0.78% 0.80% 0.72%
(1) assuming the exercise of all the dilutive instruments existing to date that could result in the creation of a maximum of 390,786 new shares.

The Company specifies that, upon Conversion of the Notes, it shall have the right to remit a cash amount and/or existing shares instead of new shares in order to limit dilution for its shareholders.

(1) The following conditions must be met on the day of the Request and the day the Warrants are exercised:

  • more than then (10) calendar days have passed since the conversion or the redemption in full of the Notes from the previous Tranches;
  • no material adverse change shall have occurred;
  • the closing price of the Company’s share is greater than or equal to €1.60;
  • no event of default or event that could constitute an event of default that is not resolved shall have occurred;
  • no impossibility for the holders of Notes to convert the Notes into shares shall have occurred in the previous 90 days;

no suspension of the listing of the Company’s shares (other than an intraday suspension by Euronext) shall have occurred in the previous 90 days;

  • the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued.

(2) The following conditions must be met if a Tranche is issued on the Investor’s initiative:

  • the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued;
  • the closing price of the Spineway share on the trading day prior to the Tranche Warrant Exercise Date is greater than or equal to €3.50. It is specified that if the closing price is between €3.50 (excluded) and €4.50 (included), the Investor may exercise up to 50 Tranche Warrants on its own initiative. If the closing price exceeds €4.50 (excluded), the Investor may exercise up to 100 Tranche Warrants on its own initiative.

(3) Events of default include, in particular, the suspension of the listing of the Company’s shares (other than a suspension of less than five (5) consecutive days at the Company’s request) and the Company’s failure to remit shares or cash owed to the Investor pursuant to the terms of the Issuance Agreement.

This press release is entered into in both English and French languages. In case of discrepancies, French language shall prevail.

SPINEWAY IS ELIGIBLE FOR THE PEA-PME (EQUITY SAVINGS PLAN FOR SMES)

Find out all about Spineway at www.spineway.com

Spineway designs, manufactures and markets innovative implants and surgical instruments for treating severe disorders of the spinal column.
Spineway has an international network of over 50 independent distributors and 90% of its turnover comes from exports.
Spineway, which is eligible for investment through FCPIs (French unit trusts specializing in innovation), received the OSEO Excellence award as well as the Deloitte Fast 50 award in 2011. Rhône Alpes INPI Patent Innovation Award (2013) – Talent INPI award (2015). 
ISIN code: FR0011398874 – Euronext Growth

Contacts:              

SPINEWAY

Investor Relations
David Siegrist – Finance Director
+33 (0)4 72 77 01 52
finance.dsg@spineway.com		 AELIUM

Financial Communication
Jérôme Gacoin / Solène Kennis
+33 (0)1 75 77 54 68
skennis@aelium.fr

Attachments:

http://www.globenewswire.com/NewsRoom/AttachmentNg/d5916663-a95b-438c-b949-b93e46b9e13d

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AVANZA_57891-1.jpg

Exactech Q2 Revenue $67.3 Million On Continuing Strong Extremities Revenue

Posted On July 28, 2017 By OrthoSpineNews In Financial /  

July 27, 2017

GAINESVILLE, Fla.–(BUSINESS WIRE)–Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products and biologic solutions for extremities, knee and hip, announced today that revenue for the second quarter of 2017 increased 2% to $67.3 million from $66.1 million in the second quarter of 2016, and 3% on a constant currency basis. Domestic revenue increased 2% to $45.7 million, and international revenue increased 1% to $21.6 million in the second quarter of 2017. Diluted earnings per share for the second quarter was $0.33 based on net income of $4.8 million, compared to second quarter 2016 net income of $4.4 million and diluted earnings per share of $0.31.

Second Quarter Segment Performance

  • Extremities revenue increased 19% to $29.5 million from $24.8 million, a 19% constant currency increase
  • Knee revenue was flat at $19.6 million, a 1% constant currency increase
  • Hip revenue decreased 8% to $11.5 million from $12.5 million, a 7% constant currency decrease
  • Other revenue decreased 27% to $6.7 million from $9.2 million, a 26% constant currency decrease. The Other segment includes an aggregation of the former Biologics and Spine segment

Six Months Highlights and Segment Performance

For the first six months of 2017, revenue was $136.8 million, an increase of 4% over $131.4 million for the comparable period last year. On a constant currency basis, revenue for the first half of 2017 was up 5%. Net income for the first six months of 2017 increased 7% to $9.4 million, or $0.65 per diluted share compared to $8.8 million, or $0.62 per diluted share, for the first six months of 2016. First six month product revenue was as follows:

  • Extremities revenue increased 20% to $59.4 million, a 20% constant currency increase
  • Knee revenue increased 1% to $39.7 million, a 1% constant currency increase
  • Hip revenue decreased 1% to $23.6 million, flat on a constant currency basis
  • Other revenue decreased 24% to $14.1 million, a 23% constant currency decrease

Management Comment

Exactech CEO and President David Petty said, “For the first half of 2017, we reported a 4% increase in our revenue; however, excluding the impact of the divested spine products from the prior year we reported 7% growth in revenue during the first half of the year. Our hip revenue was negatively impacted by distribution transitions underway in certain markets outside the U.S. We continue to be pleased with the performance of our Extremities segment, which benefited modestly in the quarter from the pilot launch of the Vantage® ankle and also the Equinoxe® Preserve humeral stem. In terms of our product pipeline, additional pilot launches of the ExactechGPS® shoulder application, Alteon® H.A. hip stem and the Truliant® knee system are also going well.

“During the third and fourth quarters we will be building inventory for these systems and hope to move into a limited launch late this year. Our channel development strategy remains important and will be enhanced as we more fully launch the Truliant knee system,” Petty said.

Chief Financial Officer Jody Phillips said, “Gross margins decreased to 68.7% from 69.3% for the second quarter a year ago, as average selling price decreases offset the increases in higher margin extremity sales. Total operating expenses for the quarter remained relatively flat at $39.3 million due to the divestiture of the spine segment being offset by an increase in product launch and development expenses. As a result, we produced a net income increase of 10% to $4.8 million and $0.33 diluted EPS for the second quarter which was in the range of our expectations.”

Looking forward, Exactech narrowed 2017 revenue guidance to $267-$271 million and diluted EPS target to $1.25-$1.29, including the impact of the first quarter $0.02 diluted earnings per share costs related to the spine business transition. On an adjusted basis, the diluted EPS target is $1.27-$1.31. For the third quarter of 2017, the company anticipates revenues of $60.5-$62.5 million and diluted EPS of $0.23-$0.25. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance.

The financial statements are below.

Conference Call

The company will hold a conference call with CEO David Petty and key members of the management team, Friday, July 28th at 10:00 a.m. Eastern Time. The call will cover Exactech’s second quarter 2017 results. Mr. Petty will open the conference call and a question-and-answer session will follow.

To participate in the call, dial 888-417-2254 any time after 9:50 a.m. Eastern Time on July 28. International and local callers should dial 719-325-4790. A live webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm or

http://public.viavid.com/index.php?id=125497.

About Exactech

Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech’s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States, in addition to more than 30 markets in Europe, Latin America, Asia and the Pacific. Additional information about Exactech, Inc. can be found at http://www.exac.com. Copies of Exactech’s press releases, SEC filings, current price quotes and other valuable information for investors may be found at http://www.exac.com and http://www.hawkassociates.com.

An investment profile on Exactech may be found at http://www.hawkassociates.com/profile/exac.cfm. To receive future releases in e-mail alerts, sign up at http://www.hawkassociates.com/about/alert.

This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent the company’s expectations or beliefs concerning future events of the company’s financial performance. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include the effect of competitive pricing, the company’s dependence on the ability of third party manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company’s products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.

EXACTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited) (audited)
June 30, December 31,
2017 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,917 $ 13,052
Trade receivables, net of allowances of $1,707 and $1,473 57,733 53,051
Prepaid expenses and other assets, net 3,606 3,075
Income taxes receivable 1,848 2,140
Inventories, current 67,358 65,264
Assets held for sale 2,695 6,477
Total current assets 142,157 143,059
PROPERTY AND EQUIPMENT:
Land 4,530 4,474
Machinery and equipment 43,033 42,034
Surgical instruments 144,018 132,134
Furniture and fixtures 4,713 4,700
Facilities 21,690 21,726
Projects in process 6,818 2,473
Total property and equipment 224,802 207,541
Accumulated depreciation (108,160 ) (100,234 )
Net property and equipment 116,642 107,307
OTHER ASSETS:
Deferred financing, deposits and other 4,326 968
Equity investment 1,952 2,047
Deferred tax asset — 887
Non-current inventory 11,823 15,723
Product licenses and designs, net 8,933 9,102
Patents and trademarks, net 717 821
Customer relationships, net 467 476
Goodwill 14,758 13,819
Total other assets 42,976 43,843
TOTAL ASSETS $ 301,775 $ 294,209
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 16,602 $ 17,566
Income taxes payable 1,772 780
Accrued expenses 13,017 11,832
Liabilities held for sale 325 —
Other current liabilities 2,884 2,927
Total current liabilities 34,600 33,105
LONG-TERM LIABILITIES:
Deferred tax liabilities 3,243 1,773
Long-term debt, net of current portion 14,000 20,000
Other long-term liabilities 3,152 5,089
Total long-term liabilities 20,395 26,862
Total liabilities 54,995 59,967
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock 145 144
Additional paid-in capital 90,228 87,319
Treasury Stock (3,042 ) (3,042 )
Accumulated other comprehensive loss, net of tax (8,398 ) (8,611 )
Retained earnings 167,847 158,432
Total shareholders’ equity 246,780 234,242
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 301,775 $ 294,209

EXACTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
Three Month Periods Six Month Periods
Ended June 30, Ended June 30,
2017 2016 2017 2016
NET SALES $ 67,327 $ 66,124 $ 136,809 $ 131,422
COST OF GOODS SOLD 21,054 20,268 41,695 40,636
Gross profit 46,273 45,856 95,114 90,786
OPERATING EXPENSES:
Sales and marketing 23,569 23,835 48,622 47,154
General and administrative 5,621 5,640 12,157 11,554
Research and development 5,380 5,329 11,604 10,399
Depreciation and amortization 4,732 4,410 9,391 8,734
Total operating expenses 39,302 39,214 81,774 77,841
INCOME FROM OPERATIONS 6,971 6,642 13,340 12,945
OTHER INCOME (EXPENSE):
Interest income 52 2 55 6
Other income (loss) 185 32 328 72
Interest expense (238 ) (268 ) (464 ) (530 )
Foreign currency exchange gain 168 98 730 592
Total other income (expenses) 167 (136 ) 649 140
INCOME BEFORE INCOME TAXES 7,138 6,506 13,989 13,085
PROVISION FOR INCOME TAXES 2,255 2,120 4,479 4,297
INCOME BEFORE EQUITY IN LOSS OF INVESTEE 4,883 4,386 9,510 8,788
EQUITY IN LOSS OF INVESTEE, NET OF TAX (52 ) — (95 ) —
NET INCOME $ 4,831 $ 4,386 $ 9,415 $ 8,788
BASIC EARNINGS PER SHARE $ 0.34 $ 0.31 $ 0.66 $ 0.62
DILUTED EARNINGS PER SHARE $ 0.33 $ 0.31 $ 0.65 $ 0.62
SHARES – BASIC 14,321 14,112 14,297 14,084
SHARES – DILUTED 14,574 14,298 14,513 14,243

Non-GAAP Disclosure and Reconciliation

We present certain non-GAAP results as a supplement to our financial results based on GAAP, as we believe it is useful to exclude certain items in order to focus on what we regard to be a more reliable indicator of the underlying operating performance of our business. Because we operate internationally, we present the percentage change in sales by reporting segment on a constant currency basis, which is a non-GAAP financial measure. We calculate this change on a constant currency basis by translating current period sales at the comparable average historical exchange rates for the same period in the prior year. We believe that presenting the percentage change in sales on a constant currency basis assists in the understanding of actual sales fluctuations by excluding the impact of foreign currency fluctuations.

Additionally, we report on a non-GAAP basis adjusted sales, gross margin, operating expenses, income, and diluted earnings per share excluding charges related to the spine assets we sold January 2017. We believe the exclusion of spine sales and costs provides the reader with more comparable financials to better analyze the reported periods. The following items have been adjusted:

  • Sales, cost of goods sold, and operating expenses from our spine products
  • Transition charges related to the sale of our spine assets
  • Personnel and severance costs related to the transition
Six Months June 30, 2017 Six Months June 30, 2016 Change %
Reported US Spine Adjusted Reported US Spine Adjusted Reported Adjusted
Domestic sales $ 93,355 $ 282 $ 93,073 $ 89,185 $ 3,758 85,427
International sales 43,454 — 43,454 42,237 — 42,237
Total sales 136,809 282 136,527 131,422 3,758 127,664 4.1% 6.9%
Gross profit 95,114 187 94,927 90,786 1,700 89,086 4.8 6.6
Operating expense 81,774 715 81,059 77,841 1,886 75,955 5.1 6.7
Other income 649 — 649 140 — 140 363.6 363.6
Income before income tax and equity in loss of investee 13,989 (528 ) 14,517 13,085 (186 ) 13,271 6.9 9.4
Income tax 4,479 (140 ) 4,619 4,297 (67 ) 4,364 4.2 5.9
Equity in loss of investee (95 ) — (95

)

—

 — —
Net income (loss) $ 9,415 $ (388 ) $ 9,803 $ 8,788 $ (119 ) $ 8,907 7.1 10.1
Diluted EPS $ 0.65 $ (0.03 ) $ 0.68 $ 0.62 $ (0.01 ) $ 0.63

We also provide adjusted forward looking guidance on diluted earnings per share for the full year for 2017. We believe this adjusted guidance will assist in comparative measures. The following reconciles the guidance ranges to expected guidance on a GAAP basis:

Twelve Months Ended
December 31, 2017
Expected diluted EPS range on GAAP basis $1.25 – $1.29
Adjustment: Spine asset divestiture 0.02
Adjusted total diluted EPS range $1.27-$1.31

Contacts

Exactech, Inc.
Investor contacts
Jody Phillips, 352-377-1140
Executive Vice President of Finance &
Chief Financial Officer
or
Hawk Associates
Julie Marshall or Frank Hawkins, 305-451-1888
EXAC@hawkassociates.com
or
Exactech, Inc.
Media contact
Priscilla Bennett, 352-377-1140
Vice President, Corporate & Marketing Communication

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NuVasive Reports Second Quarter 2017 Financial Results

Posted On July 27, 2017 By OrthoSpineNews In Financial /  

SAN DIEGO, July 27, 2017 /PRNewswire/ — NuVasive, Inc. (Nasdaq: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended June 30, 2017.

Second Quarter 2017 Highlights

  • Revenue increased 10.3% to $260.6 million, or 10.7% on a constant currency basis;
  • GAAP operating profit margin of 11.4%; Non-GAAP operating profit margin up 40 basis points from prior year to 16.3%;
  • GAAP diluted earnings per share of $0.22; Non-GAAP diluted earnings per share up 15.0% from prior year to $0.46; and
  • Company reiterates revenue, non-GAAP operating margin and non-GAAP diluted earnings per share guidance for 2017.

“NuVasive delivered better than expected operating profitability and earnings per share results in the second quarter 2017, along with continued strength across our International business, growing at more than 20% for the third quarter in a row,” said Gregory T. Lucier, chairman and chief executive officer of NuVasive. “In addition, several of our industry-disrupting technologies completed alpha and beta testing this quarter and will commercially launch over the next few months, giving surgeons and patients access to some of the most innovative technologies to address spine and trauma conditions, as well as radiation reduction in the operating room.”

A full reconciliation of GAAP to non-GAAP measures can be found in the tables of this news release.

Second Quarter 2017 Results

NuVasive reported second quarter 2017 total revenue of $260.6 million, a 10.3% increase compared to $236.2 million for the second quarter 2016. On a constant currency basis, second quarter 2017 total revenue increased 10.7% compared to the same period last year.

For the second quarter 2017, both GAAP and non-GAAP gross profit was $194.2 million, while both GAAP and non-GAAP gross margin was 74.5%. These results compared to GAAP and non-GAAP gross profit of $176.5 million and $183.8 million, respectively, and GAAP and non-GAAP gross margin of 74.7% and 77.8% respectively, for the second quarter 2016. Total GAAP and non-GAAP operating expenses were $164.4 million and $151.7 million, respectively, for the second quarter 2017. These results compared to GAAP and non-GAAP operating expenses of $116.4 million and $146.4 million, respectively, for the second quarter 2016.

NuVasive reported a GAAP net income of $12.7 million, or $0.22 per share, for the second quarter 2017 compared to $30.2 million, or $0.57 per share, for the second quarter 2016.

On a non-GAAP basis, the Company reported net income of $24.1 million, or $0.46 per share for the second quarter 2017 compared to $20.6 million, or $0.40 per share, for the second quarter 2016.

Cash, cash equivalents and short and long-term marketable securities were approximately $130.9 million at June 30, 2017.

Annual Guidance for 2017

The Company reiterated full year 2017 financial guidance in line with prior expectations, with the exception of the impact of updated foreign exchange rates.

2017 Guidance 1

(in Million’s; except %’s and EPS)

 GAAP 

 Non-GAAP 

Revenue

$  1,065

$          1,065

  % Growth – Reported

10.7%

10.7%

% Growth – Constant Currency 2

11.1%

Operating margin

12.4%

17.1%

Earnings per share

$    1.13

$            2.00

EBITDA

23.6%

26.7%

Tax Rate

~33%

~35%

    1

Current guidance reflects guidance provided July 27, 2017.

    2

Constant currency is a measure that adjusts US GAAP revenue for
the impact of currency over the same period in the prior year.

 

  • Revenue of $1.065 billion, which now includes approximately $4 million in year-over-year currency headwinds, and reflects 10.7% growth on a reported basis and 11.1% growth on a constant currency basis compared to revenue of $962.1 million for 2016;
  • Non-GAAP diluted earnings per share of $2.00, an increase of 20% compared to non-GAAP diluted earnings per share of $1.66 for 2016;
  • Non-GAAP operating profit margin of 17.1%, an increase of 100 basis points compared to 16.1% for 2016; and
  • Adjusted EBITDA margin of 26.7%, an increase of 150 basis points compared to 25.2% for 2016.

Supplementary Financial Information

For additional financial detail, please visit the Investor Relations section at www.nuvasive.com to access Supplementary Financial Information.

Reconciliation of Full Year EPS Guidance

2017 Guidance

2016
Actuals

Prior 1, 2

Current 1, 3

GAAP net income per share

$  0.69

$  1.13

$         1.13

Impact of change to diluted share count

0.02

0.07

0.09

GAAP net income per share, adjusted to diluted Non-GAAP share count

$  0.71

$  1.20

$         1.22

Litigation liability gain

(0.83)

–

–

Business transition costs 4

0.35

0.04

0.05

Non-cash interest expense on convertible notes

0.38

0.33

0.33

Non-cash purchase accounting adjustments on acquisitions 5

0.28

–

–

Loss on repurchase of convertible notes

0.37

–

–

Amortization of intangible assets 6

0.78

0.89

0.88

Tax effect of adjustments 7

(0.38)

(0.46)

(0.48)

Non-GAAP earnings per share

$  1.66

$  2.00

$         2.00

GAAP Weighted shares outstanding – basic

50,077

50,967

50,864

GAAP Weighted shares outstanding – diluted

54,102

56,269

56,617

Non-GAAP Weighted shares outstanding – diluted

51,981

53,069

52,738

  1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

 2

Effective tax expense rate of ~34% applied to GAAP earnings and ~35% applied to Non-GAAP earnings.

 3

Effective tax expense rate of ~33% applied to GAAP earnings and ~35% applied to Non-GAAP earnings.

 4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

5

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 6

Excludes the amortization associated with non-controlling interest.

7

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis. 

Reconciliation of Non-GAAP Operating Margin %

2017 Guidance

(in thousands, except %)

2016
Actuals

Prior 1

Current 1

Non-GAAP Gross Margin %[A]

76.6%

76.1%

75.6%

Non-cash purchase accounting adjustments on acquisitions 2

(1.5%)

0.0%

0.0%

GAAP Gross Margin [B]

75.0%

76.1%

75.6%

GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C]

55.5%

54.0%

53.5%

Non-GAAP Research & Development Expense [D]

5.0%

5.0%

5.0%

In-process research & development

0.0%

0.0%

0.0%

GAAP Research & Development Expense [E]

5.0%

5.0%

5.0%

Litigation liability [F]

(4.5%)

0.0%

0.0%

Amortization of intangible assets [G] 3

4.4%

4.6%

4.5%

Business transition costs [H] 4

1.9%

0.2%

0.2%

Non-GAAP Operating Margin % [A – C – D]

16.1%

17.1%

17.1%

GAAP Operating Margin % [B – C – E – F – G – H]

12.8%

12.3%

12.4%

               1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

          2

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

             3

Excludes the amortization associated with non-controlling interest.

          4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

Reconciliation of EBITDA %

 2017 Guidance 

(in thousands, except %)

2016
Actuals

Prior 1

Current 1

Net Income / (Loss)

3.9%

6.0%

6.0%

Interest (income) / expense, net 2

6.1%

3.5%

3.6%

Provision for income taxes

3.0%

3.0%

2.9%

Depreciation and amortization 3

10.5%

11.1%

11.0%

EBITDA

23.5%

23.6%

23.6%

Non-cash stock based compensation

2.8%

3.0%

3.0%

Business transition costs 4

1.9%

0.2%

0.2%

Non-cash purchase accounting adjustments on acquisitions 5

1.5%

0.0%

0.0%

In-process research & development

0.0%

0.0%

0.0%

Litigation liability gain

(4.5%)

0.0%

0.0%

Adjusted EBITDA

25.2%

26.7%

26.7%

1

Prior guidance provided April 25, 2017.  Current guidance reflects guidance provided July 27, 2017.

2

Interest (income) / expense, net for the quarter and year ended December 31, 2016 includes loss on extinguishment of debt for $1.6 million and $19.1 million, respectively.

3

Excludes the amortization associated with non-controlling interest.

4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

5

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Reconciliation of Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating profit margin, which exclude amortization of intangible assets, purchase accounting related charges, leasehold related charges, integration related expenses associated with acquired businesses, one-time restructuring and acquisition related items, CEO transition related costs, certain litigation charges, non-cash interest expense and/or losses on convertible notes, and the impact from taxes related to these items, including those taxes that would have occurred in lieu of these items. Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations.  The measure constant currency is the use of an exchange rate that eliminates fluctuations when calculating financial performance numbers.

The Company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital.  Additionally, the Company uses an adjusted EBITDA measure which represents earnings before interest, taxes, depreciation and amortization and excludes the impact of stock-based compensation, purchase accounting related changes, leasehold related charges, integration related expenses associated with acquired businesses, CEO transition related costs, certain litigation liabilities, acquisition related items and other significant one-time items. Management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non-GAAP financial measures to enable it to further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional information to enable them to assess, in the same way management assesses, the Company’s current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

Reconciliation of Second Quarter 2017 Results

GAAP Net Income per Share to Non-GAAP Earnings per Share

(in thousands, except per share data)

Adjustments

Diluted Earnings Per
Share

GAAP net income

$    12,661

$                     0.22

Business transition costs 1

1,369

Non-cash interest expense on convertible notes

4,665

Amortization of intangible assets 2

11,028

Tax effect of adjustments 3

(5,661)

Adjustments to GAAP net income

11,401

Non-GAAP earnings

$    24,062

$                     0.46

GAAP weighted shares outstanding – diluted

58,330

Non-GAAP weighted shares outstanding – diluted 4

52,743

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

2

Excludes the amortization associated with non-controlling interest.

3

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis.

4

Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Year To Date 2017 Results

GAAP Net Income per Share to Non-GAAP Earnings per Share

(in thousands, except per share data)

Adjustments

Diluted Earnings Per
Share

GAAP net income

$    25,429

$                     0.44

   Business transition costs 1

1,424

   Non-cash interest expense on convertible notes

9,264

   Amortization of intangible assets 2

22,766

   Tax effect of adjustments 3

(14,784)

Adjustments to GAAP net income

18,670

Non-GAAP earnings

$    44,099

$                     0.84

GAAP weighted shares outstanding – diluted

58,059

Non-GAAP weighted shares outstanding – diluted 4

52,713

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

2

Excludes the amortization associated with non-controlling interest.

3

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~35% on a non-GAAP basis.

4

Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Second Quarter and Six Months 2017 Results

GAAP net income to Adjusted EBITDA

Three months ended

Six months ended

(in thousands, except per share data)

June 30, 2017

June 30, 2017

GAAP net income

$                            12,661

$                                   25,429

Interest expense/(income), net

9,944

19,606

Provision for income taxes

7,079

8,569

Depreciation and amortization 1

28,856

58,014

EBITDA

$                            58,540

$                                 111,618

Business transition costs2

1,369

1,424

Non-cash stock based compensation

8,394

15,411

Adjusted EBITDA

$                            68,303

$                                 128,453

As a percentage of revenue

26.2%

25.2%

1

Excludes the amortization associated with non-controlling interest.

2

Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

Investor Conference Call

NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the second quarter 2017. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company’s website at www.nuvasive.com. After the live webcast, the call will remain available on NuVasive’s website through August 28, 2017. In addition, a telephone replay of the call will be available until August 3, 2017. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6617 for international callers. Please use pin number: 13665648.

About NuVasive

NuVasive, Inc. (NASDAQ: NUVA) is transforming spine surgery and beyond with minimally invasive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company’s portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With $962 million in revenues (2016), NuVasive has an approximate 2,300 person workforce in more than 40 countries serving surgeons, hospitals and patients. For more information, please visit www.nuvasive.com.

Forward-Looking Statements

NuVasive cautions you that statements included in this news release or made on the investor conference call referenced herein that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. In addition, this news release contains selected financial results from the second quarter 2017, as well as projections for 2017 financial guidance and longer-term financial performance goals. The numbers for the second quarter 2017 are prior to the completion of review procedures by the Company’s external auditors and are subject to adjustment. In addition, the Company’s projections for 2017 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which are subject to the risk of being inaccurate because of the preliminary nature of the forecasts, the risk of further adjustment, or unanticipated difficulty in selling products or generating expected profitability. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive’s revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; and those other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission. NuVasive’s public filings with the Securities and Exchange Commission are available at www.sec.gov. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.

NuVasive, Inc. 

Consolidated Statements of Operations 

(in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

(unaudited)

2017

2016

2017

2016

Revenue

$ 260,573

$ 236,210

$ 510,437

$ 451,314

Cost of goods sold (excluding below amortization of intangible assets)

66,421

59,745

128,034

113,971

Gross profit

194,152

176,465

382,403

337,343

Operating expenses:

Sales, marketing and administrative

139,109

134,487

279,611

259,325

Research and development

12,572

11,871

24,986

22,500

Amortization of intangible assets

11,349

10,603

23,410

18,474

Litigation liability (gain)

—

(43,310)

—

(43,310)

Business transition costs

1,369

2,756

1,424

8,063

Total operating expenses

164,399

116,407

329,431

265,052

Interest and other expense, net:

Interest income

139

406

276

734

Interest expense

(10,083)

(10,537)

(19,882)

(19,009)

Loss on repurchases of convertible notes

—

—

—

(17,444)

Other expense, net

(501)

(246)

(243)

(196)

Total interest and other expense, net

(10,445)

(10,377)

(19,849)

(35,915)

Income before income taxes

19,308

49,681

33,123

36,376

Income tax expense

(7,079)

(19,891)

(8,569)

(10,411)

Consolidated net income

$   12,229

$   29,790

$   24,554

$   25,965

Add back net loss attributable to non-controlling interest

$      (432)

$      (423)

$      (875)

$      (880)

Net income attributable to NuVasive, Inc.

$   12,661

$   30,213

$   25,429

$   26,845

Net income per share attributable to NuVasive, Inc.:

Basic

$       0.25

$       0.60

$       0.50

$       0.54

Diluted

$       0.22

$       0.57

$       0.44

$       0.51

Weighted average shares outstanding:

Basic

51,082

50,027

50,825

49,822

Diluted

58,330

53,159

58,059

52,354

NuVasive, Inc. 

Consolidated Balance Sheets 

(in thousands, except par values and share amounts) 

June 30, 2017

December 31, 2016

ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$       130,932

$                153,643

Restricted cash and investments

2,402

—

Accounts receivable, net of allowances of $9,399 and $8,912, respectively

190,169

171,595

Inventory, net

236,839

208,249

Prepaid income taxes

19,576

31,926

Prepaid expenses and other current assets

12,310

10,030

Total current assets

592,228

575,443

Property and equipment, net

214,601

181,524

Intangible assets, net

268,466

291,143

Goodwill

486,439

485,685

Deferred tax assets

5,961

5,810

Restricted cash and investments

4,945

7,405

Other assets

33,744

23,794

Total assets

$    1,606,384

$             1,570,804

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$         82,933

$                  77,585

Contingent consideration liabilities

19,271

49,742

Accrued payroll and related expenses

49,323

51,000

Income tax liabilities

11,995

2,469

Short-term borrowings

20,000

—

Senior convertible notes

63,302

61,701

Total current liabilities

246,824

242,497

Long-term senior convertible notes

573,532

564,412

Deferred and income tax liabilities, non-current

16,110

18,607

Other long-term liabilities

46,312

44,764

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding

—

—

Common stock, $0.001 par value; 120,000,000 shares authorized at June 30, 2017 and December 31, 2016, 58,081,702 and 55,184,660 issued and outstanding at June 30, 2017 and December 31, 2016, respectively

58

55

Additional paid-in capital

1,033,546

1,010,238

Accumulated other comprehensive loss

(8,131)

(10,631)

Accumulated deficit

(53,077)

(66,859)

Treasury stock at cost; 4,974,534 shares and 4,758,828 shares at June 30, 2017 and December 31, 2016, respectively

(253,503)

(237,867)

Total NuVasive, Inc. stockholders’ equity

718,893

694,936

Non-controlling interest

4,713

5,588

Total equity

723,606

700,524

Total liabilities and equity

$    1,606,384

$             1,570,804

NuVasive, Inc. 

Consolidated Statements of Cash Flows 

(in thousands) 

Six Months Ended June 30,

(unaudited)

2017

2016

Operating activities:

Consolidated net income

$   24,554

$   25,965

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

58,688

46,329

Loss on repurchases of convertible notes

—

17,444

Amortization of non-cash interest

10,882

10,943

Stock-based compensation

15,411

12,357

Reserves on current assets

(95)

6,751

Other non-cash adjustments

7,380

8,387

Deferred income taxes

(2,570)

14,691

Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable

(17,586)

(8,615)

Inventory

(29,012)

(12,019)

Prepaid expenses and other current assets

(2,485)

728

Contingent consideration liabilities

(11,200)

—

Accounts payable and accrued liabilities

4,987

14,384

Litigation liability

—

(43,310)

Accrued payroll and related expenses

(2,004)

(4,356)

Income taxes

10,172

10,534

Net cash provided by operating activities

67,122

100,213

Investing activities:

Acquisition of Ellipse Technologies, net of cash acquired

—

(380,080)

Other acquisitions and investments

(14,417)

(8,079)

Purchases of intangible assets

(1,695)

(5,918)

Purchases of property and equipment

(68,690)

(52,566)

Purchases of marketable securities

—

(128,956)

Proceeds from sales of marketable securities

—

339,320

Net cash used in investing activities

(84,802)

(236,279)

Financing activities:

Proceeds from the issuance of common stock

5,369

6,150

Purchase of treasury stock

(10,844)

(22,549)

Payment of contingent consideration

(18,800)

—

Proceeds from issuance of convertible debt, net of issuance costs

—

634,140

Proceeds from sale of warrants

—

44,850

Purchase of convertible note hedge

—

(111,150)

Repurchases of convertible notes

—

(343,835)

Proceeds from revolving line of credit

20,000

50,000

Repayments on revolving line of credit

—

(50,000)

Other financing activities

(2,205)

(1,545)

Net cash (used in)provided by financing activities

(6,480)

206,061

Effect of exchange rate changes on cash

1,449

748

(Decrease) increase in cash and cash equivalents

(22,711)

70,743

Cash and cash equivalents at beginning of period

153,643

192,339

Cash and cash equivalents at end of period

$ 130,932

$ 263,082

 

SOURCE NuVasive, Inc.

Related Links

http://www.nuvasive.com

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orthobiologics-1.jpg

Global Orthobiologics Market Forecast 2017-2025

Posted On July 27, 2017 By OrthoSpineNews In Biologics, Financial /  

LONDON, July 26, 2017 /PRNewswire/ — KEY FINDINGS
The orthobiologics global market is anticipated to grow from $ 6596 million in 2016 to $ 12019 million by 2025. The market is expected to grow at a CACR of 6.97% between 2017-2027. The base year considered for the market study is 2016. The forecast period is 2017-2025. Evolvement in orthobiologics has led to the development of tissue regeneration products and bone grafts that minimize hospital visits, stays and bone healing process.

MARKET INSIGHTS
The global orthobiologics market is segmented on the basis of product type, application, end-user, and geography. The global orthobiologics market by product type is segmented into the demineralized bone matrix (DBM), allograft, bone morphogenetic protein, viscosupplementation, synthetic bone graft substitutes, stem cell therapy and others.

The application segment is further bifurcated into spinal fusion, trauma repair, and reconstructive surgery and others. The end-user is segmented into hospitals and clinics. The orthobiologics market by geography is classified into North America, Europe, Asia-Pacific and rest of the world. The rise in the demand for spinal fusion surgeries, development in Strategic Partnerships, and growth in Orthobiologics Material are the major drivers for the global Orthopedics market. Healthcare reforms (such as Stark self-referral law and fraud & abuse law) are estimated to have affected the Orthobiologics surgeons. Bone Regeneration Technology, Larger Spend on Healthcare is the major opportunities in the Orthobiologics Market.

REGIONAL INSIGHTS
The Orthobiologics market in North America is expected to hold the colossal share by 2024. The increase in research and a rising demand for the products, increasing research investments, aging population growth and an increased number of road accidents are major drivers of the region. Asia-Pacific is estimated with the highest CAGR of 7.09% due to the increased demand for biological implants over mechanical implants, coupled with the growing awareness levels about the benefits of Orthobiologics. Europe has generated revenue of $1705 million in 2016 and is expected to generate revenue of $3077 million by 2024. The rise in the aging population, increased incidences of osteoarthritis and osteoporosis, technological advancements in the European countries are driving the market to grow at a faster pace.

COMPETITIVE INSIGHTS
Major players for the Orthobiologics market are Bioventus, DePuy Inc. (Acquired by Johnson and Johnson), Exatech Inc., Globus Medical Inc., Integra Life sciences Holding Corporation, Johnson& Johnson, Medtronic Inc., Nuvasive Inc., RTI Surgical, Sanofi, Stryker Corporation, Zimmer Biomet Inc., and Mölnlycke Health Care AB. DePuy Inc.
Download the full report: https://www.reportbuyer.com/product/4825329/
About Reportbuyer
Reportbuyer is a leading industry intelligence solution that provides all market research reports from top publishers
http://www.reportbuyer.com

For more information:
Sarah Smith
Research Advisor at Reportbuyer.com
Email: query@reportbuyer.com
Tel: +44 208 816 85 48
Website: www.reportbuyer.com

SOURCE ReportBuyer

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67028-1.jpg

Zimmer Biomet Reports Second Quarter 2017 Financial Results

Posted On July 27, 2017 By OrthoSpineNews In Financial /  

WARSAW, Ind., July 27, 2017 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended June 30, 2017.  The Company reported second quarter net sales of $1.954 billion, an increase of 1.1% over the prior year period, and an increase of 2.1% on a constant currency basis.  Excluding approximately 240 basis points of contribution from the LDR Holding Corporation acquisition, second quarter 2017 revenues decreased 1.3% from the second quarter of 2016, or 0.3% on a constant currency basis.

Diluted earnings per share for the quarter were $0.90.  Adjusted diluted earnings per share for the quarter were $2.08, an increase of 3.0% over the prior year period.

“During the second quarter, we increased production output from our Warsaw North Campus manufacturing facility, and continued to drive efforts to achieve best-in-class quality systems.  Our sales growth fell short of our expectations, due in part to production delays of certain key brands and slower-than-expected sales recapture from previously affected customers in the United States.  These factors have informed our updated outlook for the full year,” said Daniel P. Florin, Interim Chief Executive Officer, Senior Vice President and Chief Financial Officer of Zimmer Biomet.  “Looking forward, we remain focused on fully restoring product supply to enhance our commercial execution, while continuing to closely engage with our customers and take advantage of the opportunities in front of us.”

“We have great confidence in Dan as he transitions into the role of Interim CEO. He has already begun to leverage his deep knowledge of Zimmer Biomet and decades of medical device industry experience to lead the Company during this period,” said Larry C. Glasscock, Chairman of the Board of Zimmer Biomet.  “We have initiated a thorough search to identify the best candidate to serve as Zimmer Biomet’s next CEO.  We are seeking a strong leader, whose strategic and operational track record aligns with Zimmer Biomet’s commitment to growth and enhancing stockholder value.”

Net earnings for the second quarter were $184.2 million, and $424.6 million on an adjusted basis, an increase of 4.3% over the prior year period.  Operating cash flow for the second quarter was $440.5 million.

In the quarter, the Company paid $48.4 million in dividends and declared a second quarter dividend of $0.24 per share.  The Company has made approximately $650 million of net debt repayments through the first half of 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 $7.80 billion to $7.87 billion, representing constant currency revenue growth of 1.8% to 2.7% 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 3.2% and 4.2%, 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 $4.15 to $4.35, and in a range of $8.20 to $8.30 on an adjusted basis.  Previously, the Company had expected full-year 2017 diluted earnings per share to be in a range of $4.68 to $4.88, and in a range of $8.50 to $8.60 on an adjusted basis.

For the third quarter of 2017, the Company expects revenue in the range of $1.815 billion to $1.845 billion, representing constant currency revenue growth of negative 0.5% to positive 1.0% compared to the prior year period, inclusive of approximately 30 basis points of contribution from the LDR transaction.  Additionally, the Company expects its diluted earnings per share for the third quarter to be in a range of $0.60 to $0.70, and in a range of $1.72 to $1.77 on an adjusted basis.

Conference Call
The Company will conduct its second quarter 2017 investor conference call today, July 27, 2017, at 8:00 a.m. Eastern Time.  The live audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at http://investor.zimmerbiomet.com.  It 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 July 28, 2017 to August 26, 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 six months, on both a reported and a constant currency basis.

NET SALES – THREE MONTHS ENDED JUNE 30, 2017

(in millions, unaudited)

Constant

Net

Currency

Sales

% Change

% Change

Geographic Results

      Americas

$

1,209

2.3

%

2.5

%

      EMEA

438

(4.9)

(1.8)

      Asia Pacific

307

5.3

6.8

            Total 

$

1,954

1.1

%

2.1

%

Product Categories

     Knees

        Americas

$

406

(2.7)

%

(2.6)

%

        EMEA

159

(5.3)

(1.7)

        Asia Pacific

115

3.4

4.2

            Total

680

(2.4)

(1.3)

Hips

       Americas

245

(1.4)

(1.2)

       EMEA

131

(5.7)

(3.0)

       Asia Pacific

94

4.4

6.6

            Total

470

(1.5)

(0.2)

S.E.T (1)

423

2.6

3.6

Dental

110

(6.4)

(5.7)

Spine & CMF

194

33.0

33.5

Other

77

(8.0)

(7.0)

     Total

$

1,954

1.1

%

2.1

%

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

NET SALES – SIX MONTHS ENDED JUNE 30, 2017

(in millions, unaudited)

Constant

Net

Currency

Sales

% Change

% Change

Geographic Results

     Americas

$

2,444

3.6

%

3.6

%

     EMEA

891

(2.8)

0.6

     Asia Pacific

597

6.1

6.4

          Total 

$

3,932

2.4

%

3.3

%

Product Categories

     Knees

       Americas

$

835

(1.4)

%

(1.4)

%

       EMEA

328

(4.4)

(0.4)

       Asia Pacific

219

4.1

3.7

             Total

1,382

(1.3)

(0.4)

Hips

   Americas

492

(0.6)

(0.6)

   EMEA

267

(3.1)

(0.2)

   Asia Pacific

187

6.9

7.8

            Total

946

–

1.1

S.E.T (1)

848

4.3

5.0

Dental

218

(3.7)

(2.9)

Spine & CMF

380

32.5

32.8

Other

158

(4.9)

(4.1)

     Total

$

3,932

2.4

%

3.3

%

(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 six-month periods ended June 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.  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 diluted earnings per share excludes 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 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; challenges relating to changes in and compliance with governmental laws and regulations, 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; price and product competition; 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 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 and general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the impact of the ongoing economic uncertainty affecting 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 March 31, 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.

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF EARNINGS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, except per share amounts, unaudited) 

2017

2016

 Net Sales 

$     1,954.4

$     1,934.0

 Cost of products sold, excluding intangible asset amortization 

527.7

640.1

 Intangible asset amortization 

147.7

133.8

 Research and development 

90.1

88.6

 Selling, general and administrative 

748.0

732.0

 Special items 

158.6

137.9

      Operating expenses 

1,672.1

1,732.4

 Operating Profit 

282.3

201.6

 Other expense, net 

(3.9)

(3.8)

 Interest income  

0.3

0.8

 Interest expense 

(82.3)

(88.1)

 Earnings before income taxes 

196.4

110.5

 Provision for income taxes 

12.3

142.2

 Net Earnings (Loss) 

184.1

(31.7)

 Less: Net Loss attributable to noncontrolling interest 

(0.1)

(0.4)

 Net Earnings (Loss) of Zimmer Biomet Holdings, Inc. 

$       184.2

$        (31.3)

 Earnings (Loss) Per Common Share 

     Basic 

$          0.91

$        (0.16)

     Diluted 

$          0.90

$        (0.16)

 Weighted Average Common Shares Outstanding 

     Basic 

201.8

199.4

     Diluted 

203.7

199.4

 Cash Dividends Declared Per Common Share 

$          0.24

$          0.24

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF EARNINGS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, except per share amounts, unaudited) 

2017

2016

 Net Sales 

$     3,931.7

$     3,838.0

 Cost of products sold, excluding intangible asset amortization 

1,040.6

1,280.7

 Intangible asset amortization 

299.7

260.4

 Research and development 

181.2

174.3

 Selling, general and administrative 

1,508.8

1,448.9

 Special items 

268.7

226.6

      Operating expenses 

3,299.0

3,390.9

 Operating Profit 

632.7

447.1

 Other expense, net 

(6.7)

(7.6)

 Interest income  

0.8

2.1

 Interest expense 

(165.2)

(176.3)

 Earnings before income taxes 

461.6

265.3

 (Benefit) provision for income taxes 

(21.8)

188.3

 Net Earnings 

483.4

77.0

 Less: Net Loss attributable to noncontrolling interest 

(0.2)

(0.5)

 Net Earnings of Zimmer Biomet Holdings, Inc. 

$        483.6

$          77.5

 Earnings Per Common Share 

     Basic 

$          2.40

$          0.39

     Diluted 

$          2.38

$          0.38

 Weighted Average Common Shares Outstanding 

     Basic 

201.4

199.8

     Diluted 

203.4

202.1

 Cash Dividends Declared Per Common Share 

$          0.48

$          0.48

 ZIMMER BIOMET HOLDINGS, INC. 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (in millions, unaudited) 

June 30,

December 31,

2017

2016

 Assets 

 Current Assets: 

   Cash and cash equivalents 

$               450.0

$               634.1

   Receivables, net 

1,464.0

1,604.4

   Inventories 

2,023.9

1,959.4

   Other current assets 

527.2

465.7

       Total current assets 

4,465.1

4,663.6

 Property, plant and equipment, net 

2,057.4

2,037.9

 Goodwill 

10,859.5

10,643.9

 Intangible assets, net 

8,544.0

8,785.4

 Other assets 

568.2

553.6

 Total Assets 

$          26,494.2

$          26,684.4

 Liabilities and Stockholders’ Equity 

 Current liabilities 

$            1,708.1

$            1,805.9

 Current portion of long-term debt 

1,329.3

575.6

 Other long-term liabilities 

3,822.9

3,967.2

 Long-term debt 

9,354.4

10,665.8

 Stockholders’ equity 

10,279.5

9,669.9

 Total Liabilities and Stockholders’ Equity 

$          26,494.2

$          26,684.4

 ZIMMER BIOMET HOLDINGS, INC. 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

2017

2016

 Cash flows provided by (used in) operating activities 

Net earnings 

$       483.4

$         77.0

Depreciation and amortization 

531.7

499.2

Share-based compensation 

27.7

30.7

Intangible asset impairment 

26.8

28.0

Inventory step-up 

30.9

286.4

Changes in operating assets and liabilities, net of acquired assets and liabilities

     Income taxes 

(210.4)

13.6

     Receivables 

187.8

(120.8)

     Inventories 

(68.8)

60.2

     Accounts payable and accrued expenses 

(162.7)

(141.9)

     Other assets and liabilities 

(130.5)

(80.0)

 Net cash provided by operating activities 

715.9

652.4

 Cash flows provided by (used in) investing activities 

 Additions to instruments 

(172.6)

(157.3)

 Additions to other property, plant and equipment 

(73.8)

(73.7)

 Purchases of investments 

–

(1.2)

 Sales of investments 

–

273.3

 Business combination investments, net of acquired cash 

(4.0)

(184.1)

 Other investing activities 

(11.7)

(27.4)

 Net cash used in investing activities 

(262.1)

(170.4)

 Cash flows provided by (used in) financing activities 

 Proceeds from multicurrency revolving facility 

400.0

–

 Payments on multicurrency revolving facility 

(400.0)

–

 Redemption of senior notes 

(500.0)

–

 Payments on term loan 

(150.0)

(500.0)

 Net payments on other debt 

(0.7)

(18.8)

 Dividends paid to stockholders 

(96.5)

(92.4)

 Proceeds from employee stock compensation plans 

105.5

78.6

 Business combination contingent consideration payments 

(8.1)

–

 Restricted stock witholdings 

(7.1)

(5.2)

 Repurchase of common stock 

–

(415.5)

 Net cash used in financing activities 

(656.9)

(953.3)

 Effect of exchange rates on cash and cash equivalents 

19.0

(11.7)

–

 Decrease in cash and cash equivalents 

(184.1)

(483.0)

 Cash and cash equivalents, beginning of period 

634.1

1,459.3

 Cash and cash equivalents, end of period 

$       450.0

$      976.3

 ZIMMER BIOMET HOLDINGS, INC. 

 NET SALES BY GEOGRAPHY 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

% Inc / (Dec)

2017

2016

% Inc / (Dec)

Americas 

$    1,208.8

$    1,181.0

2.3 %

$    2,443.6

$    2,358.2

3.6 %

EMEA 

438.2

460.9

(4.9)

891.4

917.2

(2.8)

Asia Pacific 

307.4

292.1

5.3

596.7

562.6

6.1

Total 

$    1,954.4

$    1,934.0

1.1

$    3,931.7

$    3,838.0

2.4

 ZIMMER BIOMET HOLDINGS, INC. 

 NET SALES BY PRODUCT CATEGORY 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

Three Months Ended June 30, 

Six Months Ended June 30, 

2017

2016

% Inc / (Dec)

2017

2016

% Inc / (Dec)

 Knees 

$        680.4

$        697.0

(2.4) %

$     1,382.2

$     1,400.2

(1.3) %

 Hips 

469.8

477.2

(1.5)

945.5

945.1

–

 S.E.T 

422.8

412.2

2.6

847.9

813.2

4.3

 Dental 

110.4

118.0

(6.4)

218.2

226.6

(3.7)

 Spine & CMF 

194.0

145.8

33.0

380.3

287.0

32.5

 Other 

77.0

83.8

(8.0)

157.6

165.9

(4.9)

 Total 

$     1,954.4

$     1,934.0

1.1

$     3,931.7

$     3,838.0

2.4

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE AND

% CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

For the Three Months Ended

June 30, 2017

Foreign

Constant

Exchange

Currency

 % Change 

Impact

% Change

Geographic Results

Americas

2.3

%

(0.2)

%

2.5

%

EMEA

(4.9)

(3.1)

(1.8)

Asia Pacific

5.3

(1.5)

6.8

Total 

1.1

%

(1.0)

%

2.1

%

Product Categories

Knees

   Americas

(2.7)

%

(0.1)

%

(2.6)

%

   EMEA

(5.3)

(3.6)

(1.7)

   Asia Pacific

3.4

(0.8)

4.2

       Total

(2.4)

(1.1)

(1.3)

Hips

   Americas

(1.4)

(0.2)

(1.2)

   EMEA

(5.7)

(2.7)

(3.0)

   Asia Pacific

4.4

(2.2)

6.6

       Total

(1.5)

(1.3)

(0.2)

–

S.E.T

2.6

(1.0)

3.6

–

Dental

(6.4)

(0.7)

(5.7)

–

Spine & CMF

33.0

(0.5)

33.5

–

–

Other

(8.0)

(1.0)

(7.0)

–

Net Sales % Change

1.1

%

(1.0)

%

2.1

%

–

Impact of LDR Holding Corporation

(2.4)

–

(2.4)

% Change excluding LDR Holding Corporation

(1.3)

%

(1.0)

%

(0.3)

%

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE AND

% CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

For the Six Months Ended

June 30, 2017

Foreign

Constant

Exchange

Currency

 % Change 

Impact

% Change

Geographic Results

Americas

3.6

%

–

%

3.6

%

EMEA

(2.8)

(3.4)

0.6

Asia Pacific

6.1

(0.3)

6.4

Total 

2.4

%

(0.9)

%

3.3

%

Product Categories

Knees

   Americas

(1.4)

%

–

%

(1.4)

%

   EMEA

(4.4)

(4.0)

(0.4)

   Asia Pacific

4.1

0.4

3.7

       Total

(1.3)

(0.9)

(0.4)

Hips

   Americas

(0.6)

–

(0.6)

   EMEA

(3.1)

(2.9)

(0.2)

   Asia Pacific

6.9

(0.9)

7.8

       Total

–

(1.1)

1.1

S.E.T

4.3

(0.7)

5.0

Dental

(3.7)

(0.8)

(2.9)

Spine & CMF

32.5

(0.3)

32.8

–

Other

(4.9)

(0.8)

(4.1)

       Total

2.4

%

(0.9)

%

3.3

%

Impact of LDR Holding Corporation

(2.3)

–

(2.3)

% Change excluding LDR Holding Corporation

0.1

%

(0.9)

%

1.0

%

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Three Months 

 Ended June 30, 

2017

2016

Net Earnings of Zimmer Biomet Holdings, Inc.

$       184.2

$        (31.3)

Inventory step-up and other inventory 

   and manufacturing-related charges

24.9

156.6

Intangible asset amortization

147.7

133.8

Special items

   Biomet merger-related

88.2

120.6

   Other special items

70.4

17.3

Merger-related and other (income) expense in other expense, net

(0.6)

1.5

Taxes on above items (1)

(102.2)

(96.3)

Biomet merger-related measurement period tax adjustments (2) 

–

73.2

Other certain tax adjustments(3)

12.0

31.7

Adjusted Net Earnings

$       424.6

$       407.1

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to charges from internal restructuring transactions that provide the 

    Company access to cash in a tax efficient manner partially offset by net favorable resolutions of various tax matters.  

    The 2016 adjustment relates to internal restructuring transactions that provide the Company access to cash in 

    a tax efficient manner.

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Six Months 

 Ended June 30, 

2017

2016

Net Earnings of Zimmer Biomet Holdings, Inc.

$       483.6

$         77.5

Inventory step-up and other inventory 

   and manufacturing-related charges

48.1

334.9

Intangible asset amortization

299.7

260.4

Special items

   Biomet merger-related

125.2

199.7

   Other special items

143.5

26.9

Merger-related and other expense in other expense, net

0.9

1.5

Taxes on above items (1)

(185.2)

(185.3)

Biomet merger-related measurement period tax adjustments (2) 

–

52.7

Other certain tax adjustments(3)

(57.8)

46.0

Adjusted Net Earnings

$       858.0

$       814.3

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to 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.  The 2016 adjustment relates to internal restructuring transactions that provide the Company access to 

     cash in a tax efficient manner.

 ZIMMER BIOMET HOLDINGS, INC. 

      RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS 

 FOR THE THREE MONTHS ENDED JUNE 30, 2017 and 2016 

 (unaudited) 

 Three Months 

 Ended June 30, 

2017

2016

Diluted EPS

$                   0.90

$                     (0.16)

Inventory step-up and other inventory 

   and manufacturing-related charges

0.12

0.77

Intangible asset amortization

0.73

0.66

Special items

   Biomet merger-related

0.43

0.60

   Other special items

0.35

0.09

Merger-related expense in other expense, net

–

0.01

Taxes on above items (1)

(0.51)

(0.48)

Biomet merger-related measurement period tax adjustments (2) 

–

0.36

Other certain tax adjustments(3)

0.06

0.16

Effect of dilutive shares assuming net earnings (4)

–

0.01

Adjusted Diluted EPS

$                   2.08

$                       2.02

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to charges from internal restructuring transactions that provide the 

    Company access to cash in a tax efficient manner partially offset by net favorable resolutions of various tax matters.  

    The 2016 adjustment relates to internal restructuring transactions that provide the Company access to cash in 

    a tax efficient manner.

(4) Diluted share count used in Adjusted Diluted EPS:

Three Months Ended
June 30, 2016

         Diluted shares 

199.4

         Dilutive shares assuming net earnings 

2.5

      Adjusted diluted shares 

201.9

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS 

 FOR THE SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (unaudited) 

 Six Months 

 Ended June 30, 

2017

2016

Diluted EPS

$                   2.38

$                       0.38

Inventory step-up and other inventory 

   and manufacturing-related charges

0.24

1.66

Intangible asset amortization

1.47

1.29

Special items

   Biomet merger-related

0.62

0.98

   Other special items

0.71

0.13

Merger-related and other expense in other (expense) income, net

–

0.01

Taxes on above items (1)

(0.91)

(0.91)

Biomet merger-related measurement period tax adjustments (2) 

–

0.26

Other certain tax adjustments(3)

(0.29)

0.23

Adjusted Diluted EPS

$                   4.22

$                       4.03

(1) The tax effect for the U.S. jurisdiction is calculated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is calculated based upon the statutory 

     rates where the items were incurred.

(2) The 2016 period includes negative effects from finalizing the tax accounts for the Biomet merger.  Under the

     applicable U.S. GAAP rules, these measurement period adjustments are recognized on a prospective basis

     in the period of change.

(3) In 2017, other certain tax adjustments relate to 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.  The 2016 adjustment relates to internal restructuring transactions that provide the Company access to 

     cash in a tax efficient manner.

  ZIMMER BIOMET HOLDINGS, INC. 

  SUMMARY OF EXPENSES INCLUDED IN SPECIAL ITEMS 

 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 and 2016 

 (in millions, unaudited) 

 Three Months 

 Six Months 

 Ended June 30, 

 Ended June 30, 

2017

2016

2017

2016

 Biomet merger-related 

 Consulting and professional fees 

$     22.1

$     43.3

$     40.8

$     79.4

 Employee termination benefits 

9.6

3.1

6.6

7.2

 Dedicated project personnel 

14.2

21.2

22.9

42.9

 Relocated facilities 

1.5

6.3

4.3

8.0

 Contract terminations 

–

15.2

–

25.3

 Information technology integration 

1.3

3.1

3.6

4.5

 Intangible asset impairment 

26.8

28.0

26.8

28.0

 Other 

12.7

0.4

20.2

4.4

 Total Biomet merger-related 

88.2

120.6

125.2

199.7

 Other 

 Consulting and professional fees 

51.7

8.8

102.1

15.7

 Employee termination benefits 

1.4

–

2.6

–

 Dedicated project personnel 

8.7

1.5

21.5

3.3

 Relocated facilities 

0.1

–

2.5

0.2

 Certain litigation matters 

–

–

7.0

–

 Contract terminations 

–

1.0

–

1.0

 Information technology integration 

0.3

0.2

0.8

0.3

 Certain R&D agreements 

2.5

–

2.5

–

 Loss/impairment on assets 

–

1.1

–

1.1

 Contingent consideration adjustments 

0.4

–

(3.2)

–

 Other 

5.3

4.7

7.7

5.3

 Total Other 

70.4

17.3

143.5

26.9

 Special items 

$   158.6

$   137.9

$   268.7

$   226.6

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF 2017 PROJECTED REVENUE % CHANGE TO

2017 PROJECTED CONSTANT CURRENCY % CHANGE AND

CHANGE EXCLUDING LDR HOLDING CORPORATION

(unaudited)

 Projected Three Months Ended September 30, 2017: 

 High

 Low

 Revenue % change 

0.5

%

(1.0)

%

 Foreign exchange impact 

0.5

0.5

    Constant currency % change 

1.0

%

(0.5)

%

 Impact of LDR Holding Corporation 

(0.3)

(0.3)

    Constant currency % change excluding LDR Holding Corporation 

0.7

%

(0.8)

%

 Projected Year Ended December 31, 2017: 

 High

 Low

 Revenue % change 

2.4

%

1.5

%

 Foreign exchange impact 

0.3

0.3

    Constant currency % change 

2.7

%

1.8

%

 Impact of LDR Holding Corporation 

(1.2)

(1.2)

    Constant currency % change excluding LDR Holding Corporation 

1.5

%

0.6

%

 ZIMMER BIOMET HOLDINGS, INC. 

 RECONCILIATION OF 2017 PROJECTED DILUTED EPS 

 AND PROJECTED ADJUSTED DILUTED EPS 

 (unaudited) 

Projected Three Months Ended September 30, 2017:

High

Low

Diluted EPS

$                      0.70

$            0.60

Inventory step-up and other inventory and manufacturing related

   charges, intangible asset amortization, special items and other expense 

1.51

1.58

Taxes on above items(1) and other certain tax adjustments

(0.44)

(0.46)

Adjusted Diluted EPS

$                      1.77

$            1.72

Projected Year Ended December 31, 2017:

High

Low

Diluted EPS

$                      4.35

$            4.15

Inventory step-up and other inventory and manufacturing related

   charges, intangible asset amortization, special items and other expense 

6.08

6.23

Taxes on above items(1) and other certain tax adjustments

(2.13)

(2.18)

Adjusted Diluted EPS

$                      8.30

$            8.20

(1) The tax effect for the U.S. jurisdiction is estimated based on an effective rate considering federal and state taxes, 

     as well as permanent items.  For jurisdictions outside the U.S., the tax effect is estimated based upon the statutory 

     rates where the items are projected to be incurred.

 

SOURCE Zimmer Biomet Holdings, Inc.

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AMPLITUDE-1.jpg

Amplitude Surgical – FY 2016-17: H2 Sales of over €50m; Annual Sales of €93m, up +16%

Posted On July 27, 2017 By OrthoSpineNews In Financial /  

July 26, 2017

VALENCE, France–(BUSINESS WIRE)–Regulatory News:

Amplitude Surgical (Paris:AMPLI) (ISIN: FR0012789667, Ticker: AMPLI, PEA-PME eligible), a leading French player on the global surgical technology market for lower-limb orthopedics, today announces its sales for its 2016-17 financial year.

Olivier Jallabert, Chairman and CEO of Amplitude Surgical, says: “With new record half and full-year sales, 2016-17 perfectly illustrates Amplitude Surgical’s excellent dynamism since its creation in 1997, with 20 years of continuous strong organic growth. The result of the Group’s numerous assets, and notably its innovation and execution ability supported by efficient and motivated teams in every country in which we operate, the 16% increase in sales recorded over the financial year is perfectly in line with our implementation strategy, and bolsters our target of doubling sales in five years.”

Q4 2016-17 sales

 30/06/2017 30/06/2016 Δ actual

Δ constant
currency
€ thousands – IFRS
France 13,883 12,940 7.3% 7.3%
International 10,285 9,108 12.9% 10.2%
of which: Subsidiaries 7,400 6,085 21.6% 17.5%
of which: Distributors 2,885 3,023 -4.6% -4.6%
Total 24,168 22,048 9.6% 8.5%

FY 2016-17 sales

 30/06/2017 30/06/2016 Δ actual

Δ constant
currency
€ thousands – IFRS
France 58,145 52,318 11.1% 11.1%
International 35,192 28,416 23.8% 18.8%
of which: Subsidiaries 25,380 20,477 23.9% 16.6%
of which: Distributors 9,812 7,939 23.6% 23.6%
Total 93,337 80,734 15.6% 13.8%

Amplitude Surgical’s buoyant growth momentum continued over its 2016-17 financial year to June 30, 2017, with sales totaling €93.3 million, up +15.6% in actual terms and +13.8% at constant currency. Over the fourth quarter (from April to June), sales totaled €24.2 million, an increase of +9.6%, or +8.5% at constant currency.

On the French market, Amplitude Surgical continued to record solid growth, with annual sales of €58.1 million, up +11.1%, and fourth quarter sales of €13.9 million, up +7.3%. Thanks to the recruitment of numerous surgeons, the Group has again recorded significant market share gains.

The +23.8% growth in international sales to €35.2 million over the year can be attributed to both the buoyant growth achieved by the Group’s subsidiaries and the strong level of sales recorded through its distributors, and it also benefited from a positive currency effect. Indeed, at constant currency sales growth was 10.2% and 18.8% in the fourth quarter and in 2016-17 as a whole, respectively.

Over the year, the activity recorded by the Group’s subsidiaries, accounting for 72% of international sales, notably benefited from the solidity of the German and Benelux markets, while billings exceeded $3 million in the United States and sales from the Group’s new subsidiaries in South Africa and Japan totaled almost €1.3 million.

During the third year of marketing of Novastep products, innovative solutions for extremities (foot and ankle) surgery, sales totaled €6.1 million, up by over 60%, and now account for almost 7% of total Group sales. On the French market, which accounts for 40% of activity, sales grew by almost 45%, while on the extensive American market they virtually doubled to exceed $3 million.

Recent highlights

  • Strengthening of the sales teams in France

Amplitude Surgical has just completed the recruitment of a sizeable sales team in the Auvergne-Rhône-Alpes region. This 8-person team headed by Ralph Tempion has excellent knowledge of this region’s network of surgeons and hospitals.

  • Strengthening of the American sales teams

Amplitude Surgical is currently recruiting its American sales team with a view to shortly launching the commercialization of its hip and knee implants on the world’s largest market, estimated at around $10 billion.

With a cash position in excess of €40 million at the end of its 2016-17 financial year, Amplitude Surgical has the necessary means to finance its growth.

Next financial press release: 2016-17 annual results, Wednesday October 18, 2017, after market.

About Amplitude Surgical
Founded in 1997 in Valence, France, Amplitude Surgical is a leading French player on the global surgical technology market for lower-limb orthopedics. Amplitude Surgical develops and markets high-end products for orthopedic surgery covering the main disorders affecting the hip, knee and extremities, and notably foot and ankle surgery. Amplitude Surgical develops, in close collaboration with surgeons, numerous high value-added innovations in order to best meet the needs of patients, surgeons and healthcare facilities. A leading player in France, Amplitude Surgical is developing abroad through its subsidiaries and a network of exclusive distributors and agents. Amplitude Surgical operates on the lower-limb market through the intermediary of its Novastep subsidiaries in France and the United States. Amplitude Surgical distributes its products in more than 30 countries. At June 30, 2017, Amplitude Surgical had a workforce of over 300 employees and recorded sales of over 93 million euros.

Contacts

Amplitude Surgical
Philippe Garcia
CFO
+33 (0)4 75 41 87 41
finances@amplitude-surgical.com
or
NewCap
Investor Relations
Marc Willaume, +33 (0)1 44 71 00 13
amplitude@newcap.eu
or
NewCap
Media Relations
Nicolas Merigeau, +33 (0)1 44 71 98 55
amplitude@newcap.eu

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Anika Reports Strong Second Quarter 2017 Financial Results

Posted On July 26, 2017 By OrthoSpineNews In Financial /  

July 26, 2017

BEDFORD, Mass.–(BUSINESS WIRE)–Anika Therapeutics, Inc. (NASDAQ: ANIK), a global, integrated orthopedic medicines company specializing in therapeutics based on its proprietary hyaluronic acid (“HA”) technology, today reported financial results for the second quarter ended June 30, 2017, along with business progress in the period.

“Anika delivered strong double-digit revenue and earnings growth in the second quarter of 2017, driven primarily by very robust demand for MONOVISC worldwide,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. “MONOVISC U.S. end-user revenue increased 56% year-over-year in the second quarter, and exceeded our expectations for the quarter. We also made significant progress executing our global expansion strategy, as evidenced by international Orthobiologics revenue growth of 50% year-over-year for the quarter. Additionally, CINGAL continued to gain momentum in Canada and Europe, and we made considerable progress enrolling patients in our supplemental Phase III trial of CINGAL during the quarter.”

Second Quarter Financial Results

  • Total revenue for the second quarter of 2017 increased 26% year-over-year to $33.5 million, compared to $26.6 million for the second quarter of 2016. Total revenue for the second quarter of 2017 included $5.0 million in milestone revenue earned as a result of MONOVISC achieving $100 million in U.S. end-user sales within a consecutive 12-month period ending in June 2017.
  • Product revenue for the second quarter of 2017 increased 7% year-over-year to $28.3 million, compared to $26.6 million for the second quarter of 2016. Worldwide Orthobiologics revenue grew 5% year-over-year in the second quarter of 2017. The main driver of this product revenue growth was an increase in global MONOVISC revenue of 22% year-over-year in the second quarter of 2017, which was partially offset by a decline in ORTHOVISC revenue in the same period.
  • International Orthobiologics revenue increased 50% year-over-year for the second quarter of 2017, due primarily to the global expansion of MONOVISC, as well as growth of CINGAL in Canada and Europe. Domestically, ORTHOVISC and MONOVISC continue to maintain a combined market leading position.
  • Total operating expenses for the second quarter of 2017 were $15.7 million, compared to $13.1 million for the second quarter of 2016. The increase in total operating expenses was due primarily to higher research and development spending required to advance the Company’s product pipeline, expanded operational efforts, and increased professional service fees.
  • Net income for the second quarter of 2017 increased 32% to $11.4 million, or $0.76 per diluted share, compared to $8.6 million, or $0.57 per diluted share, for the second quarter of 2016. The increase in net income was due primarily to an increase in total revenue.

Recent Business Highlights

The Company made key commercial, operational, pipeline, and financial advancements, including:

  • Completing all site qualification activities and enrolling approximately 30 patients for the Company’s supplemental Phase III trial evaluating the efficacy and safety of CINGAL, its novel HA-corticosteroid combination viscosupplement for the treatment of symptoms associated with osteoarthritis (OA) of the knee. The Company expects to complete patient enrollment by the end of 2017.
  • Publishing results from the Company’s original Phase III trial of CINGAL in the peer-reviewed journal Cartilage. The data demonstrated that CINGAL provided improved immediate and short term pain relief after injection as compared to HA alone, and enhanced relief from OA-related pain, stiffness and function through 26 weeks as compared to saline.
  • Receiving regulatory approval for MONOVISC in India for the treatment of pain associated with osteoarthritis of all human synovial joints. The Company plans to expand into India, Australia, and New Zealand over the next six to nine months.
  • Advancing its product pipeline with continued progress on enrolling patients in the FastTRACK Phase III HYALOFAST Study for cartilage repair, as well as the Phase III MONOVISC study for the treatment of osteoarthritis pain in the hip.
  • Progressing the consolidation of the Company’s global manufacturing operations at Anika’s Bedford, Massachusetts corporate headquarters. The Company also opened its new European headquarters and surgical training center in Padova, Italy.

Conference Call Information

Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights tomorrow, Thursday, July 27th at 9:00 am ET. The conference call can be accessed by dialing 1-855-468-0611 (toll-free domestic) or 1-484-756-4332 (international). A live audio webcast will be available in the “Investor Relations” section of Anika’s website, www.anikatherapeutics.com. An accompanying slide presentation may also be accessed via the Anika website. A replay of the webcast will be available on Anika’s website approximately two hours after the completion of the event.

About Anika Therapeutics, Inc.

Anika Therapeutics, Inc. (NASDAQ: ANIK) is a global, integrated orthopedic medicines company based in Bedford, Massachusetts. Anika is committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions with clinically meaningful therapies along the continuum of care, from palliative pain management to regenerative cartilage repair. The Company has over two decades of global expertise developing, manufacturing, and commercializing more than 20 products based on its proprietary hyaluronic acid (HA) technology. Anika’s orthopedic medicine portfolio includes ORTHOVISC®, MONOVISC®, and CINGAL®, which alleviate pain and restore joint function by replenishing depleted HA, and HYALOFAST®, a solid HA-based scaffold to aid cartilage repair and regeneration. For more information about Anika, please visit www.anikatherapeutics.com.

Forward-Looking Statements

The statements made in the last sentence of the first bullet point and the last sentence of third bullet point in the section captioned “Recent Business Highlights” of this press release, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, those relating to patient enrollment expectations with regard to the Company’s supplemental Cingal Phase III clinical trial and the Company’s international expansion expectations in the near future. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks, uncertainties, and other factors. The Company’s actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company’s ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company’s ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company’s research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company’s clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company’s ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company’s ability to provide an adequate and timely supply of its products to its customers; and (x) the Company’s ability to achieve its growth targets. Additional factors and risks are described in the Company’s periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC’s website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,
2017 2016 2017 2016
Product revenue $ 28,340 $ 26,575 $ 51,721 $ 48,853
Licensing, milestone and contract revenue 5,122 6 5,127 11
Total revenue 33,462 26,581 56,848 48,864
Operating expenses:
Cost of product revenue 6,315 6,065 12,398 11,490
Research and development 4,449 2,792 8,679 4,951
Selling, general and administrative 4,972 4,255 10,039 8,245
Total operating expenses 15,736 13,112 31,116 24,686
Income from operations 17,726 13,469 25,732 24,178
Interest income, net 16 49 74 121
Income before income taxes 17,742 13,518 25,806 24,299
Provision for income taxes 6,373 4,903 8,944 8,789
Net income $ 11,369 $ 8,615 $ 16,862 $ 15,510
Basic net income per share:
Net income $ 0.78 $ 0.59 $ 1.16 $ 1.05
Basic weighted average common shares outstanding 14,588 14,679 14,582 14,778
Diluted net income per share:
Net income $ 0.76 $ 0.57 $ 1.12 $ 1.02
Diluted weighted average common shares outstanding 15,044 15,111 15,046 15,210
Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
June 30, December 31,
ASSETS 2017 2016
Current assets:
Cash and cash equivalents $ 117,874 $ 104,261
Investments 25,000 20,500
Accounts receivable, net of reserves of $210 and $194 at June 30, 2017 and December 31, 2016, respectively 30,450 27,598
Inventories, net 17,584 15,983
Prepaid expenses and other current assets 1,973 2,098
Total current assets 192,881 170,440
Property and equipment, net 52,272 52,296
Long-term deposits and other 1,389 69
Intangible assets, net 10,626 10,227
Goodwill 7,836 7,214
Total assets $ 265,004 $ 240,246
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 5,465 $ 2,303
Accrued expenses and other current liabilities 7,976 6,496
Total current liabilities 13,441 8,799
Other long-term liabilities 422 2,126
Deferred tax liability 7,003 6,548
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; 1,250 shares authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively – –
Common stock, $.01 par value; 60,000 authorized, 14,658 and 14,627 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively 146 146
Additional paid-in-capital 65,171 61,735
Accumulated other comprehensive loss (5,736 ) (7,317 )
Retained earnings 184,557 168,209
Total stockholders’ equity 244,138 222,773
Total liabilities and stockholders’ equity $ 265,004 $ 240,246
Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
Revenue by Product Line and Product Gross Margin
(in thousands, except percentages)
(unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,
Product Line: 2017 % 2016 % 2017 % 2016 %
Orthobiologics $ 24,468 86 % $ 23,304 88 % $ 44,695 86 % $ 42,891 88 %
Surgical 1,335 5 % 1,433 5 % 2,631 5 % 2,751 6 %
Dermal 453 2 % 582 2 % 878 2 % 963 2 %
Other 2,084 7 % 1,256 5 % 3,517 7 % 2,248 4 %
Product Revenue $ 28,340 100 % $ 26,575 100 % $ 51,721 100 % $ 48,853 100 %
Product Gross Profit $ 22,025 $ 20,510 $ 39,323 $ 37,363
Product Gross Margin 78 % 77 % 76 % 76 %
Product Revenue by Geographic Region
(in thousands, except percentages)
(unaudited)
For the Three Months Ended June 30,

For the Six Months Ended June 30,
2017 % 2016 % 2017 % 2016 %
Geographic Region:
United States $ 22,331 79 % $ 21,895 82 % $ 41,261 80 % $ 39,906 82 %
Europe 4,060 14 % 2,977 11 % 6,889 13 % 5,542 11 %
Other 1,949 7 % 1,703 7 % 3,571 7 % 3,405 7 %
Product Revenue $ 28,340 100 % $ 26,575 100 % $ 51,721 100 % $ 48,853 100 %

Contacts

Anika Therapeutics, Inc.
Charles H. Sherwood, Ph.D., President and CEO
Sylvia Cheung, CFO
Tel: 781-457-9000

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