LEESBURG, Va., Nov. 10, 2016 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (“K2M” or the “Company”), a global medical device company focused on designing, developing and commercializing innovative and proprietary complex spine and minimally invasive spine technologies and techniques, today announced an offering of 4,500,000 shares of its common stock by affiliates of Welsh, Carson, Anderson & Stowe XI, L.P. (the “selling stockholders”). The offering is expected to close on or about November 17, 2016, subject to customary closing conditions. In addition, the underwriter has a 30-day option to purchase up to 675,000 additional shares of common stock from the selling stockholders on a pro rata basis.

The Company will not receive any proceeds from the sale of shares of common stock in the offering, including from any exercise by the underwriter of its option to purchase additional shares from the selling stockholders.

Wells Fargo Securities, LLC will act as the sole book-running manager and underwriter for the offering.  Wells Fargo Securities, LLC proposes to offer the shares of common stock from time to time to purchasers directly or through agents, or through brokers in brokerage transactions on the Nasdaq Global Select Market, or to dealers in negotiated transactions or in a combination of such methods of sale, at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

Following the offering, the selling stockholders will continue to beneficially own 9,486,263 shares, or approximately 22.5%, of K2M’s outstanding common stock after giving effect to the offering (or 8,811,263 shares, or approximately 20.9%, if the underwriter fully exercises its option to purchase additional shares from the selling stockholders).

A registration statement (including a prospectus) relating to these securities has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and has become effective.  Before you invest, you should read the prospectus in that registration statement and other documents filed with the SEC for more information about the Company and this offering.  You may obtain these documents free of charge by visiting the SEC’s website at www.sec.gov. A copy of the prospectus supplement and the accompanying prospectus related to the offering may be obtained from Wells Fargo Securities, LLC, Attention: Equity Syndicate Department, 375 Park Avenue New York, New York 10152 or by telephone at: 800-326-5897 or email at: cmclientsupport@wellsfargo.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About K2M Group Holdings, Inc.

K2M Group Holdings, Inc. is a global medical device company focused on designing, developing and commercializing innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most difficult and challenging spinal pathologies. K2M has leveraged these core competencies to bring to market an increasing number of products for patients suffering from degenerative spinal conditions. These technologies and techniques, in combination with a robust product pipeline, enable the company to favorably compete in the global spinal surgery market.

Forward-Looking Statements

This press release contains forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts such as our statements about our expected financial results and guidance and our expectations for future business prospects, including with respect to our international distribution partners in Australia and Japan. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among other things: our ability to achieve or sustain profitability; our ability to successfully demonstrate the merits of our technologies; pricing pressure from our competitors, hospitals and changes in third-party coverage and reimbursement; competition and our ability to develop and commercialize new products; aggregation of hospital purchasing from collaboration and consolidation; hospitals and other healthcare providers may be unable to obtain adequate coverage and reimbursement for procedures performed using our products; the safety and efficacy of our products is not yet supported by long-term clinical data; our dependence on a limited number of third-party suppliers; our ability to maintain and expand our network of direct sales employees, independent sales agencies and international distributors and their level of sales or distribution activity with respect to our products; the proliferation of physician-owned distributorships; concentration of sales from a limited number of spinal systems or products that incorporate these technologies; loss of the services of key members of our senior management, consultants or personnel; ability to enhance our product offerings through our research and development efforts; failure to properly manage our anticipated growth; acquisitions of or investments in new or complementary businesses, products or technologies; ability to train surgeons on the safe and appropriate use of our products; requirements to maintain high levels of inventory; impairment of our goodwill or intangible assets; disruptions in our information technology systems; any disruption or delays in operations at our facilities, including our new headquarter facility; or an ability to ship a sufficient number of our products to meet demand; ability to strengthen our brand; fluctuations in insurance cost and availability; extensive governmental regulation in the United States and foreign jurisdictions; failure to obtain or maintain regulatory approvals and clearances; requirements for new 510(k) clearances, premarket approvals or new or amended CE Certificates of Conformity; medical device reporting regulations in the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; a recall of our products; withdrawal or restrictions on our products or the discovery of serious safety issues with our products; possible enforcement action if we engage in improper marketing or promotion of our products; the misuse or off-label use of our products; delays or failures in any future clinical trials; the results of clinical trials; procurement and use of allograft bone tissue; environmental laws and regulations; compliance by us or our sales representatives with FDA regulations or fraud and abuse laws; U.S. legislative or regulatory healthcare reforms; medical device tax provisions in the healthcare reform laws; our need to generate significant sales to become profitable; potential fluctuations in sales volumes and our results of operations may fluctuate over the course of the year; uncertainty in our future capital needs; failure to comply with the restrictions in our revolving credit facility; continuing worldwide economic instability; our inability to protect our intellectual property rights; our reliance on patent rights that we either license from others or have obtained through assignments; our patent litigation; the outcome of potential claims that we, our employees, our independent sales agencies or our distributors have wrongfully used or disclosed alleged trade secrets or are in breach of non-competition or non-solicitation agreements with our competitors; potential product liability lawsuits; operating risks relating to our international operations; foreign currency fluctuations; our ability to comply with the Foreign Corrupt Practices Act and similar laws associated with our activities outside the United States; possible conflicts of interest with our large shareholders; increased costs and additional regulations and requirements as a result of becoming a public company; our ability to implement and maintain effective internal control over financial reporting in the future; the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make; and other risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and our filings with the SEC.

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

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA
443-213-0500

CARLSBAD, Calif., Nov. 09, 2016 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced today financial results for the third quarter ended September 30, 2016. Today the Company also announced that Donald Williams, the Chairman of the Company’s Audit Committee, has been named Lead Independent Director, effective immediately.

• Third quarter total net revenues of $26.7 million; revenue from the Company’s U.S. commercial business of $25.2 million.
• Cash totaled $25.6 million at the end of the third quarter.

Highlights of the Third quarter 2016 and Recent Activities

Operational Activities

• Closed sale of international business to Globus Medical on September 1, 2016 for $80 million in cash and $30 million, 5-year term loan.
• New capital structure established — reduced overall Company debt to $40.9 million at September 30, 2016.
• CEO search actively underway with a nationally recognized executive search firm.

Products and Portfolio

• Actively developing and commercializing products in the minimally invasive (MIS) and complex spine markets — two of the fastest growth segments for spine.
• Arsenal™ Deformity  — limited launch underway, including the addition of the Adolescent Idiopathic Scoliosis (AIS) module in Q4 2016.
• Battalion™ Lateral Spacer System and Squadron™ Lateral Retractor — received FDA 510(k) market clearance; preparing for limited market release in Q1 2017.
• XYcor® Expandable Spinal Spacer System — received FDA 510(k) market clearance; introduced to surgeons at NASS; limited market release anticipated in Q4 2016.

Supply Chain Operations

• Completed transition of international business to Globus Medical; successfully operating supply chain model to support ongoing supply agreement for international products.
• Completed corporate restructuring to align with the Company’s targeted focus on the U.S. markets and reduced workforce by 20%.
• Suppliers are engaged and actively collaborating with the Company to ensure the continuous flow of new and existing products through the supply chain.

“We are in the process of building an exciting new company, a new Alphatec, with a simplified operating model, new senior leadership and a positive new culture for our employees and our customers — all of which are supported by a broad portfolio of innovative products,” said Leslie Cross, Chairman and Chief Executive Officer of Alphatec Spine.  “Strategically, our focus for the new Alphatec is simple.  We must excel at managing our supply chain and we need to reinvigorate our sales performance and grow our U.S. business.  Today, we are actively working on both initiatives with a collective passion and sense of urgency.  This journey will take time and we anticipate both challenges and opportunities along the way.  I am confident that the leadership team has the skills and experience to drive the change needed to improve our performance and deliver enduring, profitable growth.   We look forward to sharing more details about our plans early in the new year.”

Mr. Cross added, “In addition, I am pleased to announce that Don Williams has accepted to serve as the Company’s Lead Independent Director.  Don has been an Alphatec board member since May 2015 and the Chairman of the Audit Committee since October 2015.  His experience in the public accounting industry and his contributions as a director on our board have been invaluable and we appreciate his continuing commitment to Alphatec.”

Discontinued and Continuing Operations
On September 1, 2016, the Company completed the sale of the Company’s international operations and distribution channel to Globus Medical.   Consequently, the Company’s financial results from the international business, excluding revenue and cost of sales with wholly owned subsidiaries, are reflected within discontinued operations for all periods presented. Going forward, the financial results from continuing operations will consist of net product revenue for the U.S. commercial business and the revenue associated with the supply agreement with Globus Medical. For more information on the details related to discontinued operations, please see the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 9, 2016.

Quarter Ended September 30, 2016

U.S. commercial revenues for the third quarter of 2016 were $25.2 million, down 8%, compared to $27.4 million reported for the third quarter of 2015.   Within the Company’s direct hospital business, implant unit volume has increased over the prior year, however, this growth has been offset by mid-single digit price decline consistent with the pricing trends the Company has experienced for the past several years.  Revenue from the Company’s stocking business is down approximately 50% from the prior year.  The third quarter of 2016 was a difficult quarter for the Company given the distraction related to the sale of the international business, which contributed to a sequential decline in hospital implant unit volumes from the second quarter of 2016.  Today, with the successful sale and transition of the international business complete and an improved balance sheet, the Company is actively engaging with surgeon and distributor customers and building a plan to regain sales momentum and improve U.S. sales.

U.S. gross profit and gross margin for the third quarter of 2016 were $15.2 million and 60.4%, respectively, compared to $19.5 million and 71.3%, respectively, for the third quarter of 2015.

Gross margin declined 10.9 percentage points from the third quarter of 2016 primarily as a result of increased inventory costs due to lower than anticipated purchase volume and obsolete inventory reserve adjustments related to optimizing the Company’s product portfolio through active product lifecycle management.

Total operating expenses for the third quarter of 2016, excluding charges for restructuring and intangible asset impairment, were $17.1 million, reflecting a decrease of $4.6 million compared to the third quarter of 2015.  The Company has been actively monitoring its expenses and reducing costs across the general and administrative (G&A), research and development (R&D) and marketing and selling areas of the business, which contributed to this 21% overall reduction in total operating expenses.  The Company is making steady progress on its goal of reducing its operating expenses by $20 million and continues to look for additional opportunities to improve its cost structure to better align with its focus on the U.S. market going forward.

GAAP net loss for the third quarter of 2016 was $13.7 million or ($1.18) per share (basic and diluted), compared to a net loss of $160.3 million, or ($18.96) per share basic and diluted for the third quarter of 2015.  GAAP net loss for the third quarter of 2015 was unfavorably impacted by $164.3 million of non-cash impairment charges, as well as favorable $6.3 million of warrant fair-value adjustments attributable to the Company’s underlying stock price.

Adjusted EBITDA in the third quarter of 2016 was $709 thousand, or 2.7% of revenues, compared to $3.5 million, or 11.0% of revenues reported in the third quarter of 2015.  Third quarter 2016 adjusted EBITDA represents net income excluding effects of interest, taxes, depreciation, amortization, stock-based compensation and restructuring expenses.

Cash and cash equivalents were $25.6 million at September 30, 2016, compared to $9.5 million reported at June 30, 2016.  The increase is primarily the result of the proceeds from the sale of the international business and the associated borrowing under the debt facility with Globus Medical.

Total Current and Long-term Debt, which includes both MidCap Financial and Globus Medical, was $40.9 million at September 30, 2016.  This represents a decrease of $34.7 million from June 30, 2016 as a result of the Company applying a significant portion of the net proceeds from the sale of the international business to reduce the Company’s total debt and the addition of the $25 million initial draw down from the credit facility with Globus that occurred upon closing of the Globus transaction.

Nine Months Ended September 30, 2016

U.S. net revenues for the nine months ended September 30, 2016 were $82.4 million, down 3.1%, compared to $85.1 million reported for the nine months ended September 30, 2015.   Sales in the Company’s direct hospital business increased over the same period in the prior year, however, this growth was partially offset by mid-single digit price declines consistent with pricing trends the Company has experienced for the past several years.  Revenue from the Company’s stocking business is down approximately 50% from the same period in the prior year.

U.S. gross profit and gross margin for the nine months ended September 30, 2016 were $56.4 million and 68.4%, respectively, compared to $58.1 million and 68.3%, respectively, for the nine months ended September 30, 2015.

Gross margin increased slightly from the prior period primarily as a result of the absence of one-time charges that were present during the nine months in 2015 that are not present over the same period in 2016.

Total operating expenses for the nine months ended September 30, 2016, excluding charges for restructuring and intangible asset impairment, were $66.3 million, reflecting a decrease of $3.8 million compared to the nine months ended September 30, 2015.  The 5.5% improvement from prior period is primarily driven by expense reductions across R&D, marketing and G&A.

GAAP net loss for the nine months ended September 30, 2016 was $25.6 million or ($1.91) per share (basic and diluted), compared to a net loss of $168.8 million, or ($19.92) per share basic and diluted for the nine months ended September 30, 2015.  GAAP net loss for the nine months ended September 30, 2015 was unfavorably impacted by $164.3 million of non-cash impairment charges, as well as favorable $6.3 million of warrant fair-value adjustments attributable to the Company’s underlying stock price.

Adjusted EBITDA in the nine months ended September 30, 2016 was $3.3 million, or 3.5% of revenues, compared to $7.1 million, or 7.1% of revenues reported in the nine months ended September 30, 2015.  Nine months ended September 30, 2016 adjusted EBITDA represents net income excluding effects of interest, taxes, depreciation, amortization, stock-based compensation and restructuring expenses.

Non-GAAP Information

Alphatec Spine reports certain non-GAAP financial measures such as non-GAAP earnings and earnings per share, adjusted for effects of amortization and other non-recurring or expense items, such as impairments, loss on extinguishment of debt, and restructuring expenses.  Adjusted EBITDA included in this press release is a non-GAAP financial measure that represents net income (loss) excluding the effects of interest, taxes, depreciation, amortization, stock-based compensation expenses, in process research and development (IPR&D) expenses and other non-recurring income or expense items, such as impairments, restructuring expenses, severance expenses, litigation expenses, damages associated with ongoing litigation and transaction-related expenses.  The Company believes that non-GAAP adjusted EBITDA provides investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of continuing operating performance, and a base-line for assessing the future earnings potential of the Company.  For completeness, management uses non-GAAP adjusted EBITDA in conjunction with GAAP earnings and earnings per common share measures.  These non-GAPP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.   Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

About Alphatec Spine

Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec Holdings, Inc., is a medical device company that designs, develops and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities and trauma. The Company’s mission is to improve lives by delivering advancements in spinal fusion technologies. The Company markets products in the U.S. via a direct sales force and independent distributors.

Additional information can be found at www.alphatecspine.com.

Forward Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Alphatec Spine cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward looking statements include the references to the success of the Company’s initiatives to drive sales growth, increase margins and increase operating efficiencies.  The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to:  the uncertainty of success in developing new products or products currently in Alphatec Spine’s pipeline, including the products discussed in this press release; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of Alphatec Spine’s products by the surgeon community, including Battalion, Arsenal Deformity and XYcor; the Company’s ability to meet the product supply obligations set forth in the supply agreement with Globus Medical; failure to obtain FDA clearance or approval or international regulatory approvals for new products, including the products discussed in this press release, or unexpected or prolonged delays in the process; continuation of favorable third party payor reimbursement for procedures performed using the Company’s products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to successfully control its costs or achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other competing products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation in which the Company is a defendant; patent infringement claims; claims related to the Company’s intellectual property and the Company’s ability to meet its financial obligations under its credit agreements and the Orthotec settlement agreement. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement.  Please refer to the risks detailed from time to time in Alphatec Spine’s SEC reports, including its Annual Report Form 10-K for the year ended December 31, 2015, filed on March 15, 2016 with the Securities and Exchange Commission, and its Amended Annual Report Form 10-K/A filed on April 29, 2016, as well as other filings on Form 10-Q and periodic filings on Form 8-K. Alphatec Spine disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

CONTACT: Investor/Media Contact:

Christine Zedelmayer

Investor Relations

Alphatec Spine, Inc.

(760) 494-6610

czedelmayer@alphatecspine.com

DUBLIN and DALLAS – Nov. 10, 2016 – Medtronic plc (NYSE: MDT) today announced the launch of Medtronic Orthopedic Solutions, a comprehensive offering for total joint replacement episodes of care designed to drive clinical and economic outcomes. This offering is in response to the high costs associated with hip and knee replacements, along with the growing emphasis on improving patient outcomes, and specifically addresses the Centers for Medicare & Medicaid Services (CMS) recently implemented Comprehensive Care for Joint Replacement (CJR) model – a bundled payment initiative that holds approximately 800 hospitals accountable for the quality of care they deliver for hip and knee replacements. Medtronic Orthopedic Solutions offers a consultative program designed to help providers meet CJR requirements by reducing system costs while addressing patient satisfaction and outcomes; it will support providers from pre-surgical planning through the 90th day post discharge. In addition, Medtronic is launching a value-based total knee arthroplasty system at the American Association of Knee and Hip Surgeons Annual Meeting (AAKHS), which is currently taking place in Dallas. The Total Knee Arthroplasty System will be widely available in the first half of 2017.

“Medtronic is here to help speed the adoption of value-based healthcare in orthopedics by helping hospitals drive down costs while keeping outcomes top of mind,” said Geoff Martha, EVP and president of Medtronic Restorative Therapies Group. “Our technological and operational efficiency know-how – along with our insight into the various points along the care continuum – helps us develop effective solutions, tailored to client needs. And we back this up by sharing potential savings with our customer, which means we get paid if our program is successful in reducing episode costs for customers. This is about more than just offering implants or individual technologies and services; it’s about partnering with all stakeholders throughout the entire episode of care to enable patient-centered care at the best value.”

CMS targeted hip and knee replacements because they are the most commonly performed inpatient procedures for Medicare patients and often entail lengthy recoveries.¹ More than 400,000 procedures took place in 2014, with hospital costs of $7 billion.¹ There is significant variance in complication rates and overall costs across hospitals and geographies. CJR aims to improve patient care by encouraging hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from the initial hospitalization through recovery, and financially rewarding hospitals for providing cost effective and high quality care, while levying penalties for poor outcomes.

“CJR represents a completely new approach to healthcare with bundled payments rewarding the best outcomes, which will ultimately improve patient care,” said Joseph A. Bosco, M.D., an orthopedic surgeon in New York, NY. “But to succeed, hospitals need new solutions to streamline the delivery of care and evaluate outcomes. The way CJR works, target episode prices will be set in comparison to large regions, so there will be a premium to figuring things out very quickly.”

Medtronic Orthopedic Solutions was developed in partnership with leading physicians who have successfully implemented bundled payment programs. It is designed to create tailored solutions that improve quality and patient experience, while lowering costs across the care continuum. These solutions include:

• Care Pathways – A comprehensive, patient-focused program designed to uncover opportunities to reduce costs and improve efficiencies, patient satisfaction, and outcomes at every point of care. It also provides technology to monitor success and course-correct as needed. This service will be offered as a performance-based partnership; Medtronic is compensated when the company achieves successful outcomes and cost savings for customers.
• Patient Monitoring with Medtronic Care Management Services (MCMS) – Our remote patient monitoring and engagement solutions are designed to help patients recover at home, deliver actionable information to providers to help enable timely and effective clinical interventions, and provide patient context and education important for self-care. With a remote patient monitoring program designed specifically for patients recovering from total hip and total knee arthroscopy, MCMS may help clinicians manage readmission risk and improve patient satisfaction – important factors in CJR evaluations.
• Total Knee Arthroplasty System – Medtronic’s FDA-cleared knee implant was designed to facilitate cost savings by leading orthopedic surgeons who have significant clinical and design experience. The implants are made in the United States using well-studied materials and supported intraoperatively by trained clinical specialists.
• Bleeding Control with the Aquamantys(TM) System – This well-established Medtronic technology combines radiofrequency energy and saline to provide hemostatic sealing of soft tissue and bone. Aquamantys use has been shown to decrease length of stay and hematoma rate, and increase the number of patients discharged to home self-care following primary total hip arthroplasty.² In total knee arthroplasty, Aquamantys use has been shown to reduce blood loss, transfusion rates, and drain output, and to maintain hematocrit levels.³  

“Quality, lower-cost implants are a very attractive option as we seek to improve patient’s lives while also providing value-driven healthcare,” said Richard Scott, M.D., professor of Orthopedic Surgery, Emeritus, at Harvard Medical School and formerly chief of Joint Arthroplasty at The New England Baptist Hospital and co-designer of Medtronic’s total knee arthroplasty system. “We designed Medtronic’s total knee arthroplasty system to be simple, versatile and intuitive without unnecessary complexity and inventory. The goal is to benefit everyone – first and foremost the patients, but also the surgeons, hospitals and payers who are providing their care.”

Medtronic intends to report results from the Medtronic Orthopedic Solutions business as part of its Spine division within the Restorative Therapies Group. For more information about Medtronic Orthopedic Solutions, please visit
http://www.medtronic.com/us-en/healthcare-professionals/services/orthopedic-solutions.html.
Medtronic’s Total Knee Arthroplasty System
Medtronic Launches Orthopedic Solutions Business and Total Knee Arthroplasty System
Click the thumbnails above for a larger image.

About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among the world’s largest medical technology, services and solutions companies – alleviating pain, restoring health, and extending life for millions of people around the world. Medtronic employs more than 88,000 people worldwide, serving physicians, hospitals and patients in approximately 160 countries. The company is focused on collaborating with stakeholders around the world to take healthcare Further, Together.

Any forward-looking statements are subject to risks and uncertainties such as those described in Medtronic’s periodic reports on file with the Securities and Exchange Commission. Actual results may differ materially from anticipated results.

References:

1. Comprehensive Care for Joint Replacement Model, Centers for Medicare and Medicaid Services website. https://innovation.cms.gov/initiatives/CJR. Accessed 10-18-16.
2. Ackerman SJ, Tapia CI, Baik R, Pivec R, Mont MA. Use of a bipolar sealer in total hip arthroplasty: medical resource use and costs using a hospital administrative database. Orthopedics. 2014;37(5):e472 – 481.
3. Sah A, Dearborn J. Aquamantys bipolar sealer in primary total knee arthroplasty: experience with 3,172 consecutive knee replacements. Poster presentation at American Academy of Orthopaedic Surgeons Annual Meeting 2012; San Francisco, CA.

Knee replacement surgery is intended to relieve knee pain and improve knee function. There are potential risks with knee replacement surgery such as loosening, wear and infection that may result in the need for additional surgery.

Contacts:
Victor Rocha
Public Relations
+1-901-399-2401

Ryan Weispfenning
Investor Relations
+1-763-505-4626

CARLSBAD, Calif., Nov. 09, 2016 (GLOBE NEWSWIRE) — SeaSpine Holdings Corporation (NASDAQ:SPNE), a global medical technology company focused on surgical solutions for the treatment of spinal disorders, announced today financial results for the third quarter ended September 30, 2016 and updated guidance for 2016.

Summary Third Quarter 2016 Financial Results and Recent Accomplishments

• Revenue of $31.7 million, a decline of 2.9% year-over-year
• S. revenue of $28.5 million, a decline of 5.5% year over year
  • S. orthobiologics revenue of $14.6 million
  • S. spinal hardware revenue of $13.9 million
• International revenue of $3.3 million, a 28.2% increase year over year
• Acquired minimally invasive expandable interbody portfolio technology from NLT Spine Ltd. (NLT), an Israel-based medical device company developing innovative spinal products
• Received 510(k) clearance from the FDA and launched three new products
  • Shoreline™ ACS Anterior Cervical Standalone System, featuring TruProfile™ technology
  • Mariner™ Posterior Lumbar Fixation System, designed to reduce the number of trays needed for surgery
  • Newport™ Extension System, designed to enable minimally invasive approaches in more complex surgical situations

“We continue to make progress towards expanding and upgrading our product portfolio with the launch of several new products and product line extensions. We are also building and strengthening relationships with high-potential distributors who are committed and excited for our new and future products,” said Keith Valentine, President and Chief Executive Officer.

“Revenue in the quarter, however, was impacted by larger than anticipated decline in sales volume of our legacy hardware and orthobiologics products that outpaced sales of our recently launched products, as well as ongoing pricing pressure. We have initiated several targeted, cost-reduction measures which we expect to significantly reduce our cash spend in 2017 while allowing us to continue to invest in the product development, sales and marketing initiatives that will drive future revenue growth.  I am confident that the cadence of new product introductions and traction we are building with new distributors, combined with our recent actions to streamline operations and reduce our cash spend, will put us back on track for growth in 2017.”

Third Quarter 2016 Financial Results

Revenue for the third quarter of 2016 totaled $31.7 million, a decrease of $1.0 million compared to $32.7 million reported for the same period of the prior year. Total revenue in the U.S. was $28.5 million, a 5.5% decrease over the prior year.

Revenue from orthobiologics products was $16.2 million, a 1.7% decrease compared to the third quarter of 2015. The decline in orthobiologics revenue was primarily driven by lower average selling prices and product mix due to increasing pricing pressures in the U.S. market. Revenue from spinal hardware was $15.6 million, a 4.0% decrease compared to the third quarter of 2015. The decline in spinal hardware revenue was primarily driven by lower demand for the Company’s older spinal fusion hardware products and continued pricing pressures in the U.S. market.

Gross margin for the third quarter of 2016 was 56.3%, compared to 46.9% for the same period in 2015.  The increase in gross margin was mainly driven by a $4.4 million charge recorded in the third quarter of 2015 for excess and obsolete spinal fusion hardware inventory, the substantial majority of which was purchased prior to the spin-off and a large portion of which was primarily intended for distribution in international markets.

Operating expenses for the third quarter of 2016 totaled $27.4 million, a decline of 8.7% compared to $30.0 million for the same period of the prior year, primarily the result of lower SG&A expenses.

Net loss for the third quarter of 2016 was $9.5 million, compared to a net loss of $14.2 million for the third quarter of 2015.

Cash and cash equivalents at September 30, 2016 were $20.8 million and the Company had $3.8 million of outstanding borrowings against its credit facility.

2016 Financial Outlook

SeaSpine lowered its estimate for full-year 2016 revenue to a range of $128 to $130 million, reflecting a 2% to 4% decline over full-year 2015 revenue.

Reduction-in-Force and Other Cost-Reduction Initiatives

In response to lower revenue expectations, the Company initiated a number of activities that, collectively, are expected to reduce cash spend in 2017 by approximately $9 million relative to 2016.  In particular, the Company today initiated a reduction-in-force that will contribute to an overall reduction in its current employee base of approximately 8%.

Webcast and Conference Call Information The Company’s management team will host a conference call beginning today at 1:30pm PT/4:30pm ET to discuss the financial results and recent business developments. Individuals interested in listening to the conference call may do so by dialing (877) 418-4766 for domestic callers or (614) 385-1253 for international callers, using Conference ID: 98611494. To listen to the webcast, please visit the investor relations section of the SeaSpine website at www.seaspine.com.

About SeaSpine

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

Forward-Looking Statements

SeaSpine cautions you that statements included in this news release that are not a description of historical facts are forward-looking statements that are based on the Company’s current expectations and assumptions. Such forward-looking statements include, but are not limited to, statements relating to: revenue expectations for full-year 2016 and estimated reductions in, and the Company’s ability to reduce, cash spend in 2017; the Company’s ability to continue to invest adequately in activities that will drive future revenue growth in light of cost-reduction initiates; and the Company’s ability to achieve revenue growth in 2017.  Among the factors that could cause or contribute to material differences between the Company’s actual results and the expectations indicated by the forward-looking statements are risks and uncertainties that include, but are not limited to: surgeons’ willingness to continue to use our existing products and to adopt our newly launched products; continued pricing pressure, whether as a result of consolidation in hospital systems, competitors or others, as well as exclusion from major healthcare systems, whether as a result of unwillingness to provide required pricing or otherwise; disruption to our existing distribution network as new distributors are added and the inability of new distributors to generate growth, or even offset lost business; the risk that our products do not demonstrate adequate safety or efficacy, independently or relative to competitive products, to support expected levels of demand or pricing, including in ongoing and future studies, the outcomes of which inherently are uncertain; the lack of clinical validation of products in “alpha release” and the fact they may require substantial additional development activities, which could introduce unexpected expense and delay; the risk of supply shortages, including as a result of our dependence on a limited number of third-party suppliers for components and raw materials, or otherwise; third-party payors’ willingness to continue to provide, for our existing products, and to initiate, for our newly launched products, appropriate coverage, coding and reimbursement and uncertainty resulting from healthcare reform, both in the U.S. and abroad; unexpected expense, including as a result of developing and launching new and next generation products and product line extensions; our ability to sustain current operations and to continue to invest in product development, sales and marketing initiatives at levels sufficient to drive future revenue growth in light of cost-reduction initiates; our ability to obtain funding on a timely basis on acceptable terms, or at all, to execute our business strategy; general economic and business conditions in the markets in which we do business, both in the U.S. and abroad; and other risks and uncertainties more fully described in our news releases and periodic filings with the Securities and Exchange Commission. The Company’s public filings with the Securities and Exchange Commission are available at www.sec.gov.

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

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

CAMBRIDGE, Mass., Nov. 07, 2016 (GLOBE NEWSWIRE) — Vericel Corporation (NASDAQ:VCEL), a leading developer of autologous expanded cell therapies for the treatment of severe diseases and conditions, today reported financial results for the third quarter ended September 30, 2016.

Total net revenues for the quarter ended September 30, 2016 were approximately $10.9 million and included approximately $8.3 million of Carticel^® (autologous cultured chondrocytes) net revenues and approximately $2.6 million of Epicel^® (cultured epidermal autografts) net revenues.  Total Carticel and Epicel net revenues for the quarter ended September 30, 2016 were approximately flat compared to total net product revenues in the third quarter of 2015, with Carticel net revenues increasing $0.6 million and Epicel net revenues decreasing $0.6 million compared to the same period in 2015.  While Epicel orders for the quarter ended September 30, 2016 were equal to the number of orders in the third quarter of 2015, the average number of grafts per order was lower in this quarter.  For the nine months ended September 30, 2016, total Carticel and Epicel net revenues were $37.9 million and included over $26.1 million of Carticel net revenues and over $11.7 million of Epicel net revenues.  Total Carticel and Epicel net revenues increased approximately 8% compared to the first nine months of 2015, with Carticel revenue increasing 9% and Epicel revenues increasing 5%, respectively, compared to the same period in 2015.

Gross profit for the quarter ended September 30, 2016 was $4.1 million, or 37% of net revenues, compared to $4.5 million, or 40% of net product revenues, for the third quarter of 2015.  Gross profit for the first nine months of 2016 was $17.1 million, or 45% of net revenues, compared to $16.5 million, or 46% of net product revenues, for the first nine months of 2015.

Research and development expenses for the quarter ended September 30, 2016 were $3.4 million compared to $3.7 million in the third quarter of 2015.  The decrease in third quarter research and development expenses is primarily due to a decrease in research, development, and regulatory consulting expenses for MACI^® (autologous cultured chondrocytes on porcine collagen membrane).  MACI is Vericel’s investigational third-generation autologous cultured chondrocyte product intended for the treatment of symptomatic full-thickness cartilage defects of the knee.  Development expenses for the ixmyelocel-T program were $1.9 million for the third quarter of 2016, which were primarily due to ongoing clinical development activities related to the double-blind portion of the ixCELL-DCM study and preparations for the open-label crossover extension portion of the study.

Selling, general and administrative expenses for the quarter ended September 30, 2016 were $7.0 million compared to $5.7 million for the same period in 2015.  The increase in selling, general and administrative expenses in 2016 is primarily due to the costs associated with Vericel’s new provider of patient support and reimbursement services for Carticel and MACI, if approved, and professional services related to preparing for the potential launch of MACI.

Loss from operations for the quarter ended September 30, 2016 was $6.4 million, compared to $4.9 million for the third quarter of 2015.  Material non-cash items impacting the operating loss for the quarter included $0.7 million of stock-based compensation expense and $0.5 million in depreciation and amortization expense.

Other expense for the quarter ended September 30, 2016 was $0.3 million compared to other income of $0.5 million for the same period in 2015.  The change in other expense for the quarter is primarily due to the change in the fair value of warrants in the third quarter of 2016 compared to the same period in 2015.

Vericel’s GAAP net loss for the quarter ended September 30, 2016 was $6.7 million, or $0.38 per share, compared to a net loss of $4.4 million, or $0.26 per share, for the same period in 2015. Vericel reported an adjusted net loss for the quarter ended September 30, 2016 of $6.5 million dollars, or $0.27 per share, compared to an adjusted net loss of $4.9 million, or $0.21 per share, for the same period in 2015.  The adjusted net loss excludes the non-cash change in the fair value of warrants and the non-cash accumulated dividend on the Series B convertible preferred stock.  The adjusted net loss per share includes common shares reserved as treasury shares received in exchange for the Series A non-voting convertible preferred stock.

As of September 30, 2016, the company had $8.9 million in cash compared to $14.6 million in cash at December 31, 2015.

Recent Business Highlights
During and since the third quarter of 2016, the company:

• Increased total Carticel and Epicel net revenues approximately 8% compared to the first nine months of 2015, with Carticel revenue increasing 9% and Epicel revenues increasing 5%, respectively, compared to the same period in 2015;
• Implemented the new agreement with Dohmen Life Science Services, LLC for patient support services, as well as payer contracting and product reimbursement services, for Carticel and MACI, if approved;
• Increased preparations for the potential launch of MACI in anticipation of the January 3, 2017 PDUFA goal date;
• Received FDA approval for in-house production of 3T3 cells used in the Epicel manufacturing process, which is expected to yield more than $1 million in annual savings in cost of product sales once the current inventory of purchased 3T3 cells is exhausted;
• Entered into an expanded $20 million credit facility and term loan with Silicon Valley Bank and MidCap Financial Services and a $25 million common stock at the market offering program with Cowen and Company, LLC;
• Announced the acceptance of an abstract for presentation on November 14, 2016 at the American Heart Association’s Scientific Sections 2016 entitled: “Reduction in Ventricular Arrhythmias with Ixmyelocel-T: Results from the ixCELL-DCM Trial”; and
• Initiated the open-label crossover portion of the ixCELL-DCM study with the first patient treated in October 2016.

“This is an exciting time for Vericel as we head into our historically strongest quarter of the year, prepare for the potential launch of MACI and expand our promotional efforts for Epicel,” said Nick Colangelo, president and CEO of Vericel. “We believe that the investments we are making to expand our commercial organization and implement new programs to support our patients and other key stakeholders will drive a period of significant growth for the company in 2017 and beyond.”

Conference Call Information
Today’s conference call will be available live at 4:30pm Eastern time in the Investors section of the Vericel website at http://investors.vcel.com/events.cfm. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary.  To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation’s third-quarter 2016 investor conference call.  If calling from outside the U.S., please use the international phone number (253) 237-1173.

If you are unable to participate in the live call, the webcast will be available November 7, 2016. A replay of the call will also be available until 7:29 pm (EDT) on November 11, 2016 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406.  The conference ID is 765207.

About Vericel Corporation
Vericel develops, manufactures, and markets autologous expanded cell therapies for the treatment of patients with serious diseases and conditions.  The company markets two cell therapy products in the United States.  Carticel^® (autologous cultured chondrocytes) is an autologous chondrocyte implant for the treatment of cartilage defects in the knee in patients who have had an inadequate response to a prior arthroscopic or other surgical repair procedure.  Epicel^® (cultured epidermal autografts) is a permanent skin replacement for the treatment of patients with deep dermal or full thickness burns greater than or equal to 30% of total body surface area.  Vericel is also developing two additional cell products.  MACI^®(autologous cultured chondrocytes on porcine collagen membrane) is a third generation autologous chondrocyte implant intended to treat cartilage defects in the knee.  Ixmyelocel‑T is an autologous multicellular therapy intended to treat advanced heart failure due to ischemic dilated cardiomyopathy (DCM).  For more information, please visit the company’s website at www.vcel.com.  

Epicel^®, Carticel^®, and MACI^® are registered trademarks of Vericel Corporation. © Vericel Corporation. All rights reserved.

Non-GAAP Financial Measures
Vericel has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP.  Vericel believes that the use of these non-GAAP financial measures provides supplementary information for investors to use in evaluating operating performance and in comparing its financial measures with other companies in Vericel’s industry.  The adjusted net loss excludes the non-cash change in the fair value of warrants and the non-cash accumulated dividend on the Series B convertible preferred stock.  The adjusted earnings per share includes common shares reserved as treasury shares received in exchange for the Series A non-voting convertible preferred stock.  Non-GAAP financial measures that Vericel uses may differ from measures that other companies may use.  In addition, non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP.

This document contains forward-looking statements, including, without limitation, statements concerning anticipated progress, objectives and expectations regarding the commercial potential of our products and growth in revenues, intended product development, clinical activity timing, regulatory progress, including the potential clearance of MACI, and objectives and expectations regarding our company described herein, all of which involve certain risks and uncertainties. These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “intends,” “estimates,” “plans,” “expects,” “we believe,” “we intend,” and similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “potential,” “could,” “may,” or similar expressions. Actual results may differ significantly from the expectations contained in the forward-looking statements. Among the factors that may result in differences are the inherent uncertainties associated with competitive developments, clinical trial and product development activities, regulatory approval requirements, estimating the commercial growth potential of our products and product candidates and growth in revenues and improvement in costs, market demand for our products, and our ability to supply or meet customer demand for our products. These and other significant factors are discussed in greater detail in Vericel’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2016, Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements reflect management’s current views and Vericel does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this release except as required by law. 

CONTACT:             
Chad Rubin
The Trout Group
crubin@troutgroup.com
(646) 378-2947
or
Lee Stern
The Trout Group
lstern@troutgroup.com
(646) 378-2922

8 November 2016

Smith & Nephew (NYSE:SNN; LSE:SN), the global medical technology business, announces that the U.S. health and wellness organization, Provider PPI LLC, has adopted its Episode of Care Assurance Program (eCAP), an innovation designed to mitigate risk associated with readmissions in value-based healthcare reimbursement models. Provider PPI LLC is a subsidiary of Highmark Health that provides group purchasing benefits to the hospitals of Allegheny Health Network and 60 additional healthcare providers in the western Pennsylvania region.

Unplanned readmissions are costly to hospitals, surgeons and patients and can result in significant financial implications under the Comprehensive Care for Joint Replacement Model (CJR) and Bundled Payments for Care Improvement (BPCI) initiative. For patients, an unplanned readmission can turn an elective procedure into an emergent procedure, complicating and extending the 90-day episode of care. For hospitals and surgeons focused on value, as defined by quality outcomes achieved through efficiency, unplanned readmissions can negatively influence overall quality scores.

“We are excited about the significant value that Smith & Nephew’s Episode of Care Assurance Program will bring to our member hospitals,” said Paul Gallagher, VP, Provider PPI.  “Joint replacement and wound care are important, busy clinical service lines for most every hospital in our group and this unique program provides an added level of quality assurance and cost control to their associated bundled payment protocols.”

The eCAP initiative pairs together Smith & Nephew’s entire line of primary total hip and knee reconstructive systems with two of its most innovative wound care products: PICO™ Single Use Negative Pressure Wound Therapy and ACTICOAT™ Flex 7 Silver-coated Antimicrobial Barrier Dressing. Smith & Nephew warrants the performance of its primary total knee systems, primary total hip systems, PICO Single Use Negative Pressure Wound Therapy System and ACTICOAT Flex 7 to perform as expected. If a patient is readmitted within 90 days following a procedure for a surgical site infection or to revise the implant due to a failure of a Smith & Nephew product, Smith & Nephew will pay a hospital’s unreimbursed costs for the readmission up to the purchase prices of the implant, PICO and ACTICOAT Flex 7.

This pioneering program can provide value and help to improve quality associated with lower extremity joint reconstruction surgery (LEJR). Building strong partnerships with healthcare institutions and providers is the core of Smith & Nephew’s mission and has been a central pillar of the company for over 160 years. By providing viable solutions in healthcare, Smith & Nephew supports healthcare professionals in their daily efforts to improve the lives of patients.

Enquiries

About Smith & Nephew

Smith & Nephew is a global medical technology business dedicated to helping healthcare professionals improve people’s lives. With leadership positions in Orthopaedic Reconstruction, Advanced Wound Management, Sports Medicine and Trauma & Extremities, Smith & Nephew has around 15,000 employees and a presence in more than 100 countries. Annual sales in 2015 were more than $4.6 billion. Smith & Nephew is a member of the FTSE100 (LSE:SN, NYSE:SNN).

For more information about Smith & Nephew, please visit our website www.smith-nephew.com, follow @SmithNephewplc on Twitter or visit SmithNephewplc on Facebook.com.

^{Forward-looking Statements}

^{This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading margins, market trends and our product pipeline are forward-looking statements. Phrases such as “aim”, “plan”, “intend”, “anticipate”, “well-placed”, “believe”, “estimate”, “expect”, “target”, “consider” and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. For Smith & Nephew, these factors include: economic and financial conditions in the markets we serve, especially those affecting health care providers, payers and customers; price levels for established and innovative medical devices; developments in medical technology; regulatory approvals, reimbursement decisions or other government actions; product defects or recalls or other problems with quality management systems or failure to comply with related regulations; litigation relating to patent or other claims; legal compliance risks and related investigative, remedial or enforcement actions; disruption to our supply chain or operations or those of our suppliers; competition for qualified personnel; strategic actions, including acquisitions and dispositions, our success in performing due diligence, valuing and integrating acquired businesses; disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; and numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature. Please refer to the documents that Smith & Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith & Nephew’s most recent annual report on Form 20-F, for a discussion of certain of these factors. Any forward-looking statement is based on information available to Smith & Nephew as of the date of the statement. All written or oral forward-looking statements attributable to Smith & Nephew are qualified by this caution. Smith & Nephew does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Smith & Nephew’s expectations.}

^{◊ Trademark of Smith & Nephew.}

November 8, 2016

Seikagaku Corporation (“Seikagaku”) (head office: Tokyo, Japan) today announced that it has entered into an exclusive distributorship agreement in the United States for VISCO-3™, a hyaluronic acid based viscosupplement product which requires three injections for the treatment of knee osteoarthritis pain, with Zimmer Biomet Holdings, Inc. (“Zimmer Biomet”) (head office: Warsaw, Indiana, U.S.A.).

As an aging population is growing in the U.S, expansion of the market for viscosupplement products is expected to continue. The market supports products with different numbers of injections, which are used according to the diverse needs of physicians and patients. Zimmer Biomet has sold Gel-One®, a single-injection viscosupplement product manufactured by Seikagaku, in the U.S. since 2012. With the conclusion of this agreement, Zimmer Biomet adds VISCO-3™ to its product line.

Seikagaku will have a line of products with three different numbers of injections, whole type of injection product, after the introduction of VISCO-3™ in the U.S. market, in addition to the existing Gel-One® single-injection treatment and SUPARTZ FX® five-injection treatment. In its role as the manufacturer of VISCO-3™, Seikagaku will continue to work to increase the presence of its products in the U.S., a key region in the growth strategy, by supporting the sales activities of the sales partner through the provision of academic information and measures to enhance the added value of products.

The impact of this matter on the consolidated financial results for the fiscal year ending March 31, 2017 will be minor and has been taken into account in the revised forecast of consolidated financial results disclosed on November 8, 2016.

< About VISCO-3™, a three-injection viscosupplement product > VISCO-3™, an injectable treatment the active ingredient of which is hyaluronic acid, was approved by the U.S. Food and Drug Administration (FDA) in December 2015 as a medical device indicated for knee osteoarthritis. It is a three-injection kit product for administering a three-dose treatment cycle (three doses given once weekly). Knee osteoarthritis is a disease characterized by the degeneration of articular cartilage and consequent swelling and pain. Injection of hyaluronic acid is a therapy used to curb the progress of symptoms.

< About Zimmer Biomet Holdings, Inc. > Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare. Zimmer Biomet designs, manufactures and markets orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; office based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products. In the field of viscosupplement products, Zimmer Biomet is the sales partner in the U.S. for Gel-One® , Seikagaku’s single-injection product.

< Cautionary Notes > This press release contains forward-looking statements regarding future management strategies or performance forecasts. These statements are based on judgments derived from information that is currently available to Seikagaku and are subject to risk and uncertainty. Actual results and developments may differ significantly from these forward-looking statements due to various factors. Information about pharmaceutical products or medical devices (including products currently in development) included in this press release is not intended to constitute an advertisement or medical advice.

November 08, 2016

AUDUBON, PA, November 8, 2016: Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal implant manufacturer, today announced its financial results for the third quarter ended September 30, 2016.

• Worldwide sales decreased 1.0% as reported to $135.7 million, or a decrease of 0.7% on a
  constant currency basis
• Third quarter net income was $26.2 million, or 19.3% of sales
• Diluted earnings per share (EPS) were $0.27
• Non-GAAP diluted EPS were $0.29
• Non-GAAP adjusted EBITDA (AEBITDA) remained at 37.0% of sales
• Company issues new 2016 guidance for sales of $560 million

David Paul, Chairman and CEO said, “Third quarter sales were $135.7 million, a year-over-year decrease of 1%. Despite our increased spending in support of our pending robotics and trauma launches, our EBITDA margins remained stable with the prior year, at 37.0%. We also delivered non-GAAP EPS of $0.29, in line with the prior year.

“During the third quarter, we continued progress with product development, sales force expansion and completed the acquisition of Alphatec’s international business. We also made further progress expanding our in-house manufacturing capacity. We launched 7 new products in the third quarter, bringing our 2016 total to 15. We remain confident in our long term growth prospects and our ability to sustain our industry leading profitability by the continued execution of our strategy of introducing innovative products, expanding our U.S. and international sales footprint, and diligent expense control.”

Third quarter sales in the U.S. decreased by 4.1% compared to the third quarter of 2015. International sales increased by 34.1% over the third quarter of 2015 on an as reported basis and 38.0% on a constant currency basis.

Third quarter net income was $26.2 million, a decrease of 1.0% over the same period last year. Diluted EPS for the third quarter was $0.27, as compared to $0.28 for the third quarter 2015. Non-GAAP diluted EPS for the third quarter, was $0.29, consistent with the third quarter of 2015.

The company generated net cash provided by operating activities of $41.9 million and non-GAAP free cash flow of $24.6 million in the third quarter. Cash, cash equivalents and marketable securities ended the quarter at $322.4 million. The company remains debt free.

2016 and 2017 Annual Guidance
The company today issued new guidance for full year 2016 sales of $560 million and GAAP earnings per share of approximately $1.13. Guidance for non-GAAP diluted EPS, remains unchanged at $1.20 per share. The company currently projects 2017 full year sales of $625 million and expects to provide further guidance at the fourth quarter call.

Conference Call Information
Globus Medical will hold a teleconference to discuss its 2016 third quarter results with the investment community at 5:30 p.m. Eastern Time today. Globus invites all interested parties to join the call by dialing:

1-855-533-7141 United States Participants
1-720-545-0060 International Participants
There is no pass code for the teleconference.

For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at investors.globusmedical.com.

If you are unable to participate during the live teleconference, the call will be archived until Tuesday, November 15, 2016. The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 1961965.

About Globus Medical, Inc.
Globus Medical, Inc. is a leading musculoskeletal implant company based in Audubon, PA. The company was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders.

Non-GAAP Financial Measures
To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures. For example, non-GAAP adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation, provisions for litigation, and acquisition related costs, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense. Our management also uses non-GAAP adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized. Acquisition related costs represents the change in fair value of business acquisition related contingent consideration; costs related to integrating recently acquired businesses including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees.

In addition, for the period ended September 30, 2016 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP diluted earnings per share, which represents net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs, and the tax effects of such adjustments. We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs, and the tax effects of such adjustments, which we believe are not reflective of underlying business trends. Additionally, for the periods ended September 30, 2016 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment. We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions. Furthermore, the non-GAAP measure of constant currency sales growth is calculated by translating current year sales at the same average exchange rates in effect during the applicable prior year period. We believe constant currency sales growth provides insight to the comparative increase or decrease in period sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.

Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth are not calculated in conformity with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP. These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results. Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth may differ from that of other companies and therefore may not be comparable. Additionally, we have recast prior periods for non-GAAP net income and non-GAAP diluted earnings per share.

Safe Harbor Statements
All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms. These forwardlooking statements are based on our current assumptions, expectations and estimates of future events and trends. Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted. These risks and uncertainties include, but are not limited to, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to successfully integrate the international operations acquired from Alphatec, both in general and on our anticipated timeline, our ability to transition Alphatec’s international customers to Globus products, our ability to realize the expected benefits to our results from the Alphatec acquisition, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks. For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission. These documents are available at www.sec.gov. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.

Download The Full Report Here

Contact:
Daniel Scavilla
Senior Vice President, Chief Financial Officer
Phone: (610) 930-1800
Email: investors@globusmedical.com
www.globusmedical.com