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Orthofix International Reports Third Quarter 2016 Financial Results

Posted On November 1, 2016 By OrthoSpineNews In Financial /

October 31, 2016

LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix International N.V. (NASDAQ:OFIX) today reported its financial results for the third quarter ended September 30, 2016. For the third quarter of 2016, net sales were $98.5 million, earnings per share from continuing operations was $0.56 and adjusted earnings per share from continuing operations was $0.36.

“While we underperformed on the top-line during the quarter, primarily in our Spine Fixation business, I am very happy about where the company is today. We now have a solid infrastructure in place, a dominant position in the bone growth stimulation market, a strong balance sheet, improving free cash flow, and double-digit ROIC,” said President and Chief Executive Officer Brad Mason. “Although highly competitive, our markets remain very healthy, and we have plans in place to reinvigorate our top-line growth going forward.”

Third Quarter Financial Results

The following table provides net sales, net sales change and constant currency net sales change by strategic business unit (“SBU”) for the three months ended September 30, 2016 and 2015:


	Three Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2016		2015	Change		Constant Currency Change
BioStim	$	42,956	$	41,559	3.4	%	3.4	%
Biologics		14,335		14,639	(2.1	%)	(2.1	%)
Extremity Fixation		24,314		24,694	(1.5	%)	0.0	%
Spine Fixation		16,892		20,259	(16.6	%)	(16.7	%)
Total net sales	$	98,497	$	101,151	(2.6	%)	(2.3	%)

The growth in the BioStim SBU in the period was primarily driven by increased order counts from an expanding customer base and procedure volumes. The decrease in the Biologics SBU was due to underperformance in our largest of three sales regions, which has now been restructured, in addition to an increasing number of competitors in the stem cell allograft market and an associated reduction in average sales price. Trinity allograft tissue volumes and net sales increased slightly over prior year in the U.S. The decrease in the Extremity Fixation SBU was largely due to the negative impact of foreign currency translation. Excluding this impact, net sales were consistent with the prior year and up 5.4% on a trailing twelve month basis. The decrease in net sales in the Spine Fixation SBU was primarily due to the timing of international cash collections, the loss of several key surgeons early in the year in the U.S. and the exclusion from a large national hospital account in the second quarter.

Gross profit increased $1.3 million to $78.6 million. Gross margin increased to 79.8% as compared to 76.4% in the prior year period.

Sales and marketing expenses decreased primarily due to bad debt expense recorded for Puerto Rico in the third quarter of 2015 and a reduction of certain indirect tax liabilities in the current quarter.

Net margin (gross profit less sales and marketing expenses) was $36.9 million, an increase of 18.4% compared to $31.2 million in the prior year period.

General and administrative expenses decreased primarily due to a commercial litigation settlement whereby the Company will receive a $3.0 million cash payment and a decrease in other professional fees and consulting costs of $1.9 million, offset by an increase in share-based compensation expense of $5.8 million, which included $4.8 million in expense associated with the Company’s performance-based vesting restricted stock.

Charges related to U.S. Government resolutions were incurred during the quarter of $1.5 million relating to our ongoing settlement discussions with the SEC as further discussed in our Form 10-Q for the third quarter ended September 30, 2016.

Operating income was $9.3 million compared to operating income of $4.1 million in the prior year period.

Net income from continuing operations was $10.4 million, or $0.56 per share, compared to net loss of $0.8 million, or ($0.04) per share in the prior year period.

Adjusted net income from continuing operations was $6.6 million, or $0.36 per share, compared to adjusted net income of $5.3 million, or $0.28 per share in the prior year period.

EBITDA increased to $14.1 million, compared to $7.6 million in the prior year period. Adjusted EBITDA increased to $23.5 million or 23.9% of net sales for the third quarter, compared to $15.9 million or 15.7% of net sales in the prior year period.

As of September 30, 2016, cash and cash equivalents were $46.8 million compared to $63.7 million as of December 31, 2015. This change was primarily driven by share repurchases, partially offset by an increase in operating cash flows. As of September 30, 2016 the Company had no outstanding indebtedness and borrowing capacity of $125 million.

Share Repurchase Plan

As previously announced, the Company initiated a share repurchase plan in the fourth quarter of 2015 of up to $75 million of the Company’s common stock through the end of September 2017. As of September 30, 2016, the Company had repurchased a cumulative total of approximately 1,627,000 shares of common stock for $66.6 million under this plan, of which approximately 253,000 shares of common stock were repurchased for $11.1 million in the third quarter of 2016. From October 1, 2016, to October 28, 2016, the Company has made additional repurchases of 211,671 shares for an amount equal to $8.4 million to complete the share repurchase plan.

Fiscal 2016 Outlook

For the fiscal year ending December 31, 2016, the Company expects the following results, assuming exchange rates are the same as those currently prevailing.


	Previous 2016 Outlook				Current 2016 Outlook
(Unaudited, U.S. Dollars, in millions, except per share data)	Low		High		Low			High
Net sales	$	412.0	$	416.0	$	404.0	¹	$	408.0	¹
GAAP Net income from continuing operations	$	8.9	$	12.7	$	12.2	²	$	15.7	²
Adjusted EBITDA	$	69.0	$	72.0	$	76.0	³	$	79.0	³
GAAP EPS from continuing operations	$	0.48	$	0.68	$	0.65	⁴	$	0.85	⁴
Adjusted EPS from continuing operations	$	1.35	$	1.45	$	1.35	⁵	$	1.45	⁵

¹Represents a year-over-year increase of 1.9% to 2.9% on a reported basis.

²Represents a year-over-year increase of approximately $14.5 million to $18.0 million on a reported basis.

³Represents a year-over-year increase of 25.2% to 30.2%.

⁴Represents a year-over-year increase of approximately $0.77 to $0.97 per share.

⁵Represents a year-over-year increase of 28.6% and 38.1%.

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company’s financial results for the third quarter of 2016. Interested parties may access the conference call by dialing (888) 576-4398 in the U.S. and (719) 457-2601 outside the U.S., and referencing the conference ID 9383336. A replay of the call will be available for two weeks by dialing (888) 203-1112 in the U.S. and (719) 457-0820 outside the U.S., and entering the conference ID 9383336. A webcast of the conference call may be accessed by going to the Company’s website at www.orthofix.com, by clicking on the Investors link and then the Events and Presentations page.

About Orthofix

Orthofix International N.V. is a diversified, global medical device company focused on improving patients’ lives by providing superior reconstructive and regenerative orthopedic and spine solutions to physicians worldwide. Headquartered in Lewisville, Texas, the Company has four strategic business units that include BioStim, Biologics, Extremity Fixation and Spine Fixation. Orthofix products are widely distributed via the Company’s sales representatives, distributors and its subsidiaries. In addition, Orthofix is collaborating on research and development activities with leading clinical organizations such as the Musculoskeletal Transplant Foundation and the Texas Scottish Rite Hospital for Children. For more information, please visit www.orthofix.com.

Forward-Looking Statements

This communication contains certain forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may include, but are not limited to, statements concerning the projections, financial condition, results of operations and businesses of Orthofix and its subsidiaries, are based on management’s current expectations and estimates and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements.

The forward-looking statements in this release do not constitute guarantees or promises of future performance. Factors that could cause or contribute to such differences may include, but are not limited to, risks relating to: the expected sales of our products, including recently launched products; the continuation of our ongoing share repurchase program; our ongoing settlement discussions with the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) related to investigations that arose out of our prior accounting review and restatements of financial statements and our review of allegations of improper payments involving our Brazil-based subsidiary; the geographic concentration of certain of our sales and accounts receivable in countries or territories that are facing severe fiscal challenges; unanticipated expenditures; changing relationships with customers, suppliers, strategic partners and lenders; changes to and the interpretation of governmental regulations; the resolution of pending litigation matters (including our indemnification obligations with respect to certain product liability claims against our former sports medicine global business unit); our ongoing compliance obligations under a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (and related terms of probation); risks relating to the protection of intellectual property; changes to the reimbursement policies of third parties; the impact of competitive products; changes to the competitive environment; the acceptance of new products in the market; conditions of the orthopedic and spine industry; credit markets and the global economy; corporate development and market development activities, including acquisitions or divestitures; unexpected costs or operating unit performance related to recent acquisitions; and other risks described in the “Risk Factors” section of our 2015 Annual Report on Form 10-K, as well as in other reports that we file in the future. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information contained in this press release.


ORTHOFIX INTERNATIONAL N.V.
Condensed Consolidated Statements of Operations

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Unaudited, U.S. Dollars, in thousands, except share and per share data)		2016			2015			2016			2015
Product sales	$	84,997		$	87,761		$	261,490		$	251,461
Marketing service fees		13,500			13,390			39,761			40,406
Net sales		98,497			101,151			301,251			291,867
Cost of sales		19,880			23,865			64,533			65,114
Gross profit		78,617			77,286			236,718			226,753
Operating expenses
Sales and marketing		41,717			46,129			132,582			133,360
General and administrative		18,581			19,348			53,341			63,423
Research and development		6,858			6,523			21,294			18,819
Restatements and related costs		691			1,147			1,481			9,276
Charges related to U.S. Government resolutions		1,499			—			14,369			—
		69,346			73,147			223,067			224,878
Operating income		9,271			4,139			13,651			1,875
Other income and expense
Interest income (expense), net		471			(125	)		320			(323	)
Other income (expense), net		(634	)		(1,736	)		1,346			(192	)
		(163	)		(1,861	)		1,666			(515	)
Income before income taxes		9,108			2,278			15,317			1,360
Income tax benefit (expense)		1,276			(3,066	)		(6,703	)		(5,808	)
Net income (loss) from continuing operations		10,384			(788	)		8,614			(4,448	)
Discontinued operations
Loss from discontinued operations		(1,018	)		(804	)		(3,580	)		(2,315	)
Income tax benefit		530			221			1,258			585
Net loss from discontinued operations		(488	)		(583	)		(2,322	)		(1,730	)
Net income (loss)	$	9,896		$	(1,371	)	$	6,292		$	(6,178	)
Net income (loss) per common share—basic:
Net income (loss) from continuing operations	$	0.57		$	(0.04	)	$	0.47		$	(0.24	)
Net loss from discontinued operations		(0.02	)		(0.03	)		(0.13	)		(0.09	)
Net income (loss) per common share—basic	$	0.55		$	(0.07	)	$	0.34		$	(0.33	)
Net income (loss) per common share—diluted:
Net income (loss) from continuing operations	$	0.56		$	(0.04	)	$	0.46		$	(0.24	)
Net loss from discontinued operations		(0.02	)		(0.03	)		(0.12	)		(0.09	)
Net income (loss) per common share—diluted	$	0.54		$	(0.07	)	$	0.34		$	(0.33	)
Weighted average number of common shares:
Basic		18,091,650			18,855,533			18,238,533			18,785,696
Diluted		18,382,118			18,855,533			18,569,861			18,785,696


ORTHOFIX INTERNATIONAL N.V.
Condensed Consolidated Balance Sheets

	September 30,			December 31,
(U.S. Dollars, in thousands except share data)		2016			2015
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	46,824		$	63,663
Trade accounts receivable, less allowance for doubtful accounts of $8,840 and $8,923 at September 30, 2016 and December 31, 2015, respectively		52,893			59,839
Inventories		65,013			57,563
Prepaid expenses and other current assets		20,519			31,187
Total current assets		185,249			212,252
Property, plant and equipment, net		51,861			52,306
Patents and other intangible assets, net		8,020			5,302
Goodwill		53,565			53,565
Deferred income taxes		56,222			57,306
Other long-term assets		21,136			19,491
Total assets	$	376,053		$	400,222
Liabilities and shareholders’ equity
Current liabilities:
Trade accounts payable	$	14,375		$	16,391
Other current liabilities		68,900			65,597
Total current liabilities		83,275			81,988
Other long-term liabilities		19,598			27,923
Total liabilities		102,873			109,911
Contingencies
Shareholders’ equity
Common shares $0.10 par value; 50,000,000 shares authorized; 18,036,712 and 18,659,696 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively		1,804			1,866
Additional paid-in capital		208,109			232,126
Retained earnings		67,415			62,551
Accumulated other comprehensive loss		(4,148	)		(6,232	)
Total shareholders’ equity		273,180			290,311
Total liabilities and shareholders’ equity	$	376,053		$	400,222

ORTHOFIX INTERNATIONAL N.V.

Selected Financial Data

Non-GAAP Financial Measures

The following tables in this press release present reconciliations of net income (loss) from continuing operations, earnings per diluted share from continuing operations, gross profit, and net cash provided by operating activities, in each case calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to, as applicable, non-GAAP financial measures, referred to as “EBITDA,” “Adjusted EBITDA,” “Adjusted net income from continuing operations,” “Adjusted diluted earnings per share from continuing operations,” “Net margin” and “Free cash flow” that exclude items specified in the tables. A more detailed explanation of the items excluded from these non-GAAP measures, as well as why management believes the non-GAAP measures are useful to them, is included following the reconciliations of non-GAAP financial measures below.


Adjusted EBITDA


	Three Months Ended September 30,						Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2016			2015			2016			2015
Net income (loss) from continuing operations	$	10,384		$	(788	)	$	8,614		$	(4,448	)
Interest expense (income), net		(471	)		125			(320	)		323
Income tax (benefit) expense		(1,276	)		3,066			6,703			5,808
Depreciation and amortization		5,480			5,171			15,483			15,746
EBITDA	$	14,117		$	7,574		$	30,480		$	17,429
Share-based compensation¹		7,862			1,948			11,874			5,524
Foreign exchange impact		566			1,696			(1,434	)		3,374
Strategic investments		(62	)		199			342			1,100
Restatements and related costs		691			1,147			1,481			9,276
Infrastructure investments		827			1,270			3,073			4,732
Legal judgments/settlements		(3,000	)		—			(3,000	)		1,066
Gain on sale of assets		—			—			—			(3,100	)
Puerto Rico		—			2,024			—			2,024
Charges related to U.S. Government resolutions		1,499			—			14,369			—
Succession charges¹		1,026			—			1,026			—
Adjusted EBITDA	$	23,526		$	15,858		$	58,211		$	41,425

As a % of net sales		23.9	%		15.7	%		19.3	%		14.2	%

¹ The Succession charges adjustment includes $0.3 million of accelerated share-based compensation expense as a result of the termination of a former executive officer. This amount is not included within the Share-based compensation adjustment for adjusted EBITDA.


Adjusted Net Income from Continuing Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2016			2015			2016			2015
Net income (loss) from continuing operations	$	10,384		$	(788	)	$	8,614		$	(4,448	)
Income tax (benefit) expense as reported		(1,276	)		3,066			6,703			5,808
Income before income taxes from continuing operations		9,108			2,278			15,317			1,360
Foreign exchange impact		566			1,696			(1,434	)		3,374
Strategic investments		(62	)		199			342			1,100
Restatements and related costs		691			1,147			1,481			9,276
Infrastructure investments		827			1,270			3,073			4,732
Legal judgments/settlements		(3,000	)		—			(3,000	)		1,066
Gain on sale of assets		—			—			—			(3,100	)
Puerto Rico		—			2,024			—			2,024
Charges related to U.S. Government resolutions		1,499			—			14,369			—
Succession charges¹		1,026			—			1,026			—
Adjusted net income from continuing operations before income taxes		10,655			8,614			31,174			19,832
Income tax expense at 38%		(4,049	)		(3,273	)		(11,846	)		(7,536	)
Adjusted net income from continuing operations	$	6,606		$	5,341		$	19,328		$	12,296


Adjusted Earnings per Diluted Share from Continuing Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
(Unaudited, per diluted share)		2016			2015			2016			2015
EPS from continuing operations	$	0.56		$	(0.04	)	$	0.46		$	(0.24	)
Income tax (benefit) expense as reported		(0.07	)		0.16			0.36			0.31
EPS before income taxes from continuing operations		0.49			0.12			0.82			0.07
Foreign exchange impact		0.03			0.09			(0.08	)		0.18
Strategic investments		—			0.01			0.02			0.06
Restatements and related costs		0.04			0.05			0.08			0.48
Infrastructure investments		0.04			0.07			0.17			0.25
Legal judgments/settlements		(0.16	)		—			(0.16	)		0.06
Gain on sale of assets		—			—			—			(0.16	)
Puerto Rico		—			0.11			—			0.11
Charges related to U.S. Government resolutions		0.08			—			0.77			—
Succession charges¹		0.06			—			0.06			—
Adjusted EPS from continuing operations before income taxes		0.58			0.45			1.68			1.05
Income tax expense at 38%		(0.22	)		(0.17	)		(0.64	)		(0.40	)
Adjusted EPS from continuing operations	$	0.36		$	0.28		$	1.04		$	0.65

Weighted average number of diluted common shares		18,382,118			19,059,965			18,569,861			18,997,093


Net Margin

	Three Months Ended September 30,						Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2016			2015			2016			2015
Gross profit	$	78,617		$	77,286		$	236,718		$	226,753
Sales and marketing		(41,717	)		(46,129	)		(132,582	)		(133,360	)
Total net margin	$	36,900		$	31,157		$	104,136		$	93,393

BioStim	$	19,996		$	16,834		$	54,980		$	47,634
Biologics		6,821			6,296			19,642			19,525
Extremity Fixation		8,834			6,442			24,170			22,607
Spine Fixation		1,388			1,938			5,925			4,582
Corporate		(139	)		(353	)		(581	)		(955	)
Total net margin	$	36,900		$	31,157		$	104,136		$	93,393


Free Cash Flow

	Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2016			2015
Net cash provided by operating activities	$	38,396		$	26,539
Capital expenditures		(14,261	)		(21,199	)
Free cash flow	$	24,135		$	5,340


Fiscal 2016 Outlook

	Previous 2016 Outlook						Current 2016 Outlook
(Unaudited, U.S. Dollars, in millions)	Low			High			Low			High
Net income from continuing operations	$	8.9		$	12.7		$	12.2		$	15.7
Interest (income) expense, net		0.3			0.2			(0.5	)		(0.4	)
Income tax expense		13.0			15.2			11.7			12.3
Depreciation and amortization		20.5			20.0			20.5			20.0
EBITDA	$	42.7		$	48.1		$	43.9		$	47.6
Share-based compensation¹		8.4			8.4			15.4			15.1
Foreign exchange impact		(2.0	)		(2.0	)		(1.4	)		(1.4	)
Strategic investments		0.5			0.4			0.5			0.4
Restatements and related costs		1.3			0.8			1.5			1.5
Infrastructure investments		2.8			2.5			3.7			3.4
Legal judgments/settlements		—			—			(3.0	)		(3.0	)
Charges related to U.S. Government resolutions		14.4			12.9			14.4			14.4
Succession charges¹		0.9			0.9			1.0			1.0
Adjusted EBITDA	$	69.0		$	72.0		$	76.0		$	79.0


	Previous 2016 Outlook						Current 2016 Outlook
(Unaudited, per diluted share)	Low			High			Low			High
EPS from continuing operations	$	0.48		$	0.68		$	0.65		$	0.85
Income tax expense as forecasted		0.70			0.82			0.63			0.66
Foreign exchange impact		(0.11	)		(0.11	)		(0.08	)		(0.08	)
Strategic investments		0.03			0.02			0.03			0.02
Restatements and related costs		0.07			0.04			0.08			0.08
Infrastructure investments		0.15			0.14			0.20			0.18
Legal judgments/settlements		—			—			(0.16	)		(0.16	)
Charges related to U.S. Government resolutions		0.77			0.70			0.78			0.78
Succession charges¹		0.05			0.05			0.05			0.05
Income tax expense at 38%		(0.79	)		(0.89	)		(0.83	)		(0.93	)
Adjusted EPS from continuing operations	$	1.35		$	1.45		$	1.35		$	1.45

Weighted average number of diluted common shares		18,700,000			18,500,000			18,500,000			18,500,000

Reconciling Items for Adjusted EBITDA, Adjusted Net Income from Continuing Operations and Adjusted Earnings per Diluted Share from Continuing Operations

Share-based compensation – costs related to the Company’s share-based compensation plans, which include stock options, restricted stock awards, performance-based restricted stock awards and the Company’s stock purchase plan
Foreign exchange impact – gains and losses related to foreign currency transactions; guidance presented does not include the impact of any future foreign exchange fluctuations and may be adjusted based on future foreign exchange fluctuations
Strategic investments – costs related to the Company’s strategic investments, including our investment in eNeura, Inc.
Restatements and related costs – legal, accounting, and other professional costs related to the Company’s accounting review and restatements through March 2015 and legal fees associated with the ongoing SEC Investigation and Securities Class Action Complaint and Brazil subsidiary compliance review
Infrastructure investments – costs associated with our multi-year process and systems improvement effort, “Bluecore”
Legal judgments/settlements – adverse or favorable legal judgments or negotiated legal settlements
Gain on sale of assets – gain on the sale of the Company’s Tempus^™ Cervical Plate product line
Puerto Rico – bad debt expense in response to the recent fiscal and economic difficulties experienced by the Puerto Rico Commonwealth
Charges related to U.S. Government resolutions – charges for potential payments related to ongoing settlement discussions with the Division of Enforcement of the SEC as further discussed in our Form 10-Q for the third quarter ended September 30, 2016
Succession charges – costs related to the succession of certain of the Company’s former named executive officers

Net Margin

Net margin is a non-GAAP financial measure, which is calculated by subtracting sales and marketing from gross profit. Net margin is the primary metric used by the Company’s Chief Operating Decision Maker in managing the Company.

Free Cash Flow

Free cash flow is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operating activities. Free cash flow is an important indicator of how much cash is generated or used by our normal business operations, including capital expenditures. Management uses free cash flow as a measure of progress on its capital efficiency and cash flow initiatives.

Constant Currency

Constant currency measures actual performance using foreign currency rates from the comparable, prior-year period, to present actuals at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to compare revenues without the impact of changes in foreign currencies. When disclosed, constant currency measures are presented with the applicable GAAP measure for comparability.

Effective Tax Rate Used in Adjusted Net Income from Continuing Operations and Adjusted Earnings per Diluted Share from Continuing Operations

The Company believes using a 38% effective tax rate is meaningful given it reflects management’s expectation of its long-term normalized tax rate, which is based on current tax law and current expected income. The Company’s actual income tax expense will ultimately be based on its GAAP performance and may differ from the 38% rate used in the financial measures due to a variety of factors, including the jurisdictions in which profits are determined to be earned and taxed, the resolution of issues arising from tax audits with various tax authorities, and the ability to realize deferred tax assets.

Management use of, and economic substance behind, Non-GAAP Financial Measures

Management uses non-GAAP measures to evaluate performance period-over-period, to analyze the underlying trends in the Company’s business, to assess its performance relative to its competitors and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP measures as the basis for assessing the ability of the underlying operations to generate cash. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company’s business units.

Material Limitations Associated with the Use of Non-GAAP Measures

The non-GAAP measures used in this press release may have limitations as analytical tools, and should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are that they exclude items that reflect an economic cost to the Company and can have a material effect on cash flows. Similarly, certain non-cash expenses such as equity compensation expense does not directly impact cash flows, but is part of total compensation costs accounted for under GAAP.

Compensation for Limitations Associated with Use of Non-GAAP Measures

Orthofix compensates for the limitations of its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company’s performance. The GAAP results provide the ability to understand the Company’s performance based on a defined set of criteria. The non-GAAP measures reflect the underlying operating results of the Company’s businesses, which management believes is an important measure of the Company’s overall performance. The Company provides a detailed reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures, and encourages investors to review this reconciliation.

Usefulness of Non-GAAP Measures to Investors

Orthofix believes that providing non-GAAP measures that exclude certain items provides investors with greater transparency to the information used by the Company’s senior management in its financial and operational decision-making. Management believes it is important to provide investors with the same non-GAAP metrics it uses to supplement information regarding the performance and underlying trends of Orthofix’s business operations in order to facilitate comparisons to its historical operating results and internally evaluate the effectiveness of the Company’s operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of Orthofix’s underlying operating performance with other companies in its industry that also supplement their GAAP results with non-GAAP financial measures.

Contacts

Orthofix International N.V.
Mark Quick, 214-937-2924
markquick@orthofix.com

Exactech Q3 Revenue Up 7% to $59.9 Million. Net Income up 10% to $3.2 Million. Diluted EPS $0.22 vs. $0.20.

Posted On November 1, 2016 By OrthoSpineNews In Financial /

October 31, 2016

GAINESVILLE, Fla.–(BUSINESS WIRE)–Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products for hip, knee, extremity, spine and biologic materials, today announced revenue of $59.9 million for the third quarter of 2016, a 7% increase from $56.2 million in the third quarter of 2015. On a constant currency basis, revenue was up 6%. Net income increased 10% to $3.2 million, or $0.22 per diluted share, compared to $2.9 million, or $0.20 per diluted share, in the same quarter a year ago.

Third Quarter Segment Performance

The following are company revenue results, as well as adjusted revenue comparisons on a constant currency basis:

Extremity implant revenue increased 14% to $22.8 million, a 15% constant currency increase
Knee implant revenue increased 11% to $17.0 million, a 10% constant currency increase
Hip implant revenue increased 17% to $11.6 million, a 14% constant currency increase
Biologic and Spine revenue decreased 23% to $4.4 million, a 22% constant currency decrease
Other revenue decreased 21% to $4.2 million, a 22% constant currency decrease

Nine Months Highlights and Segment Performance

For the first nine months of 2016, revenue was $191.3 million, an increase of 7% over $179.1 million for the comparable period last year. On a constant currency basis, revenue for the first nine months of 2016 was also up 7%. Net income for the first nine months of 2016 increased 12% to $12.0 million, or $0.84 per diluted share compared to $10.7 million, or $0.75 per diluted share, for the first nine months of 2015. First nine month product revenues were as follows:

Extremity implant revenue increased 16% to $71.2 million, a 16% constant currency increase
Knee implant revenue increased 5% to $55.6 million, a 5% constant currency increase
Hip implant revenue increased 11% to $35.3 million, a 10% constant currency increase
Biologic and Spine revenue decreased 9% to $15.2 million, a 8% constant currency decrease
Other revenue decreased 14% to $14.1 million, a 14% constant currency decrease

Management Comment

Exactech CEO and President David Petty said, “We were very pleased with strong double digit growth in our Extremities, Knee and Hip businesses. The momentum in our Extremities segment is based on the continuing successful adoption of the Equinoxe shoulder system and notably with our highly competitive range of glenoid solutions. The Equinoxe Humeral Reconstruction Prosthesis launched earlier in the year also contributed positively to the good quarter. Success in developing our U.S. sales channels was helpful in all three major joint segments. We continued ramping up availability of the Alteon Monoblock Revision Hip stem, which supported 17% hip growth for the quarter. Similarly, our knee revision system contributed positively to 11% knee growth this quarter. In the fourth quarter and the first half of next year, we are moving from the pilot launch phase into a limited launch of the revision knee. This should be increasingly important to growth in coming quarters. We were disappointed with results in our smaller segments, attributable in part to pricing pressures and slower adoption of new products.

“Our new Vantage Total Ankle system achieved an important milestone during the third quarter with successful treatment of the first patient. The pilot launch phase starts in the fourth quarter and continues the first part of next year. During the third quarter we also recorded our first successful surgeries with the new ExactechGPS^® total shoulder application and we expanded our computer-assisted surgery system with a revision total knee application. Adding these two applications to the ExactechGPS platform can facilitate commercial adoption of the system in 2017.

“Worldwide sales increased 7% to $191.3 million for the first nine months of 2016. U.S. sales were up 7% to $131.4 million compared with $123.3 million in the first nine months a year ago. International sales increased 7% to $59.9 million in the first nine months of 2016 and increased 7% on a constant currency basis. U.S. sales for the third quarter of 2016 were up 4% to $42.2 million compared with $40.7 million in the third quarter a year ago. International sales increased 14% to $17.7 million from $15.5 million in the third quarter of 2015 which reflected a 12% constant currency increase. U.S. sales represented 70% of total, sales and international sales represented 30% of total sales during the third quarter.”

Chief Financial Officer Jody Phillips said, “Gross margins decreased to 68.7% from 70.5% for the third quarter a year ago, primarily due to growth in our international distribution business and general pricing pressures. Total operating expenses for the quarter increased 4% to $36.6 million; however, as a percentage of sales, decreased to 61% for the third quarter of 2016. Sales and marketing expenses increased 5% to $21.7 million, due to expanding medical education programs and product launch expenses. General and administrative expenses remained flat at $5.2 million and research and development expenses decreased 3% to $5.1 million during the third quarter though we expect those expenses to increase going forward.”

Looking forward, Exactech updated its 2016 revenue guidance to $256-$258 million and its diluted full year EPS target to $1.15–$1.17. This translates to anticipated revenues of $64.7-$66.7 million and diluted EPS of $0.31-$0.33 for the fourth quarter ending December 31, 2016. 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 on Tuesday, November 1st at 9:00 a.m. Eastern Time. The call will cover Exactech’s third quarter 2016 results. Mr. Petty will open the conference call and a question-and-answer session will follow.

To participate in the call, dial 1-877-440-5803 any time after 8:50 a.m. Eastern on November 1st. International and local callers should dial 1-719-325-4765. 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=121574. This call will be archived for approximately 90 days.

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.

Non-GAAP financial measures – 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.

EXACTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

		(unaudited)			(audited)
		September 30,			December 31,
		2016			2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	12,613		$	12,713
Trade receivables, net of allowances of $1,122 and $1,011		50,712			52,442
Prepaid expenses and other assets, net		3,615			2,552
Income taxes receivable		229			486
Inventories, current		77,566			71,429
Total current assets		144,735			139,622

PROPERTY AND EQUIPMENT:
Land		4,510			4,494
Machinery and equipment		39,968			37,008
Surgical instruments		134,426			123,533
Furniture and fixtures		4,665			4,655
Facilities		21,366			20,348
Projects in process		3,334			1,218
Total property and equipment		208,269			191,256
Accumulated depreciation		(102,046	)		(96,713	)
Net property and equipment		106,223			94,543

OTHER ASSETS:
Deferred financing and deposits, net		889			858
Deferred tax assets		1,204			—
Non-current inventory		12,341			8,995
Product licenses and designs, net		10,396			11,121
Patents and trademarks, net		1,228			1,426
Customer relationships, net		577			92
Goodwill		22,479			18,850
Total other assets		49,114			41,342
TOTAL ASSETS	$	300,072		$	275,507

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	14,111		$	13,932
Income taxes payable		2,046			603
Accrued expenses		11,112			9,498
Other current liabilities		3,172			792
Total current liabilities		30,441			24,825

LONG-TERM LIABILITIES:
Deferred tax liabilities		213			443
Long-term debt, net of current portion		20,000			16,000
Other long-term liabilities		5,607			5,850
Total long-term liabilities		25,820			22,293
Total liabilities		56,261			47,118

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:
Common stock		143			142
Additional paid-in capital		86,120			81,963
Treasury Stock		(3,042	)		—
Accumulated other comprehensive loss, net of tax		(9,633	)		(11,986	)
Retained earnings		170,223			158,270
Total shareholders’ equity		243,811			228,389

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	300,072		$	275,507

EXACTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)

	Three Month Periods						Nine Month Periods
	Ended September 30,						Ended September 30,
		2016			2015			2016			2015
NET SALES	$	59,919		$	56,237		$	191,341		$	179,106

COST OF GOODS SOLD		18,772			16,597			59,408			54,573
Gross profit		41,147			39,640			131,933			124,533

OPERATING EXPENSES:
Sales and marketing		21,684			20,587			68,838			63,901
General and administrative		5,186			5,180			16,740			16,803
Research and development		5,096			5,258			15,495			14,389
Depreciation and amortization		4,592			4,073			13,326			12,697
Total operating expenses		36,558			35,098			114,399			107,790

INCOME FROM OPERATIONS		4,589			4,542			17,534			16,743

OTHER INCOME (EXPENSE):
Interest income		29			3			35			7
Other income (loss)		43			26			115			91
Interest expense		(186	)		(283	)		(716	)		(860	)
Foreign currency exchange (loss) gain		73			(103	)		665			(862	)
Total other income (expenses)		(41	)		(357	)		99			(1,624	)

INCOME BEFORE INCOME TAXES		4,548			4,185			17,633			15,119

PROVISION FOR INCOME TAXES		1,383			1,307			5,680			4,468

NET INCOME	$	3,165		$	2,878		$	11,953		$	10,651


BASIC EARNINGS PER SHARE	$	0.22		$	0.20		$	0.85		$	0.76

DILUTED EARNINGS PER SHARE	$	0.22		$	0.20		$	0.84		$	0.75


SHARES – BASIC		14,123			14,058			14,108			13,996

SHARES – DILUTED		14,370			14,201			14,303			14,201

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
Media contact
Priscilla Bennett, 352-377-1140
Vice President, Corporate & Marketing Communication

Xtant Medical Announces Commencement of Subscription Period for Previously Announced Rights Offering

Posted On October 31, 2016 By OrthoSpineNews In Financial /

BELGRADE, Mont., Oct. 31, 2016 (GLOBE NEWSWIRE) — Xtant Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development, manufacturing and marketing of orthopedic products for domestic and international markets, announced today that it has commenced the subscription period for its previously announced rights offering of up to 15,000,000 units, each consisting of one share of common stock and one warrant to purchase one share of common stock. The rights offering will remain open until 5:00 PM Eastern Time on Monday, November 14, 2016, unless extended. Holders of rights will need to exercise their subscription rights prior to that date and time.

If exercising subscription rights through a broker, dealer, bank or other nominee, rights holders should promptly contact their nominee and submit subscription documents and payment for the units subscribed for in accordance with the instructions and within the time period provided by such nominee. The broker, dealer, bank or other nominee may establish a deadline before November 14, 2016 by which instructions to exercise subscription rights, along with the required subscription payment, must be received.

All holders of rights that wish to participate in the rights offering must deliver by mail or hand or overnight courier, a properly completed and signed subscription rights statement, together with payment of the subscription price for both basic subscription rights and any over-subscription privilege election, to the Subscription Agent, to be received before 5:00 PM Eastern Time on November 14, 2016. The Subscription Agent is:

Corporate Stock Transfer, Inc.
3200 Cherry Creek Drive South, Suite 430
Denver, Colorado 80209

Under the proposed rights offering, the Company has distributed two non-transferable subscription rights for each share of common stock held, or underlying convertible notes held, on the record date. Each subscription right entitles the holder to purchase one unit at the subscription price of $0.90 per unit. Each unit consists of one share of common stock and one warrant, with each warrant exercisable to purchase one share of common stock at an exercise price of $1.08 for five years from the date of issuance. After the one-year anniversary of issuance, the Company may redeem the warrants for $0.01 per warrant if the volume weighted average price of the Company’s common stock is greater than $2.70 for each of 10 consecutive trading days.

Holders who exercise their subscription rights in full will be entitled, if available, to subscribe for additional units that are not purchased by other shareholders or convertible note holders, on a pro rata basis and subject to ownership limitations.

Xtant Medical has engaged Maxim Group LLC as dealer-manager in the offering. The offering may only be made by means of a prospectus. Questions about the rights offering or requests for copies of the prospectus may be directed to:

Maxim Group LLC 405
Lexington Avenue
New York, NY 10174
Attention: Syndicate Department
Email: syndicate@maximgrp.com
Telephone: (212) 895-3745.

The Company’s registration statement on Form S-1 was declared effective by the U.S. Securities and Exchange Commission (SEC) on October 31, 2016. The prospectus relating to and describing the terms of the rights offering has been filed with the SEC as a part of the registration statement and is available on the SEC’s web site at http://www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or other 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 Xtant Medical Holdings

Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets class-leading regenerative medicine products and medical devices for domestic and international markets. Xtant products serve the specialized needs of orthopedic and neurological surgeons, including orthobiologics for the promotion of bone healing, implants and instrumentation for the treatment of spinal disease, tissue grafts for the treatment of orthopedic disorders, and biologics to promote healing following cranial, and foot and ankle surgeries. With core competencies in both biologic and non-biologic surgical technologies, Xtant can leverage its resources to successfully compete in global neurological and orthopedic surgery markets. For further information, please visit www.xtantmedical.com.

Important Cautions Regarding Forward-looking Statements

This press release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “continue,” “efforts,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “forecasts,” “strategy,” “will,” “goal,” “target,” “prospects,” “potential,” “optimistic,” “confident,” “likely,” “probable” or similar expressions or the negative thereof.

Statements of historical fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: our ability to integrate the acquisition of X-spine Systems, Inc. and any other business combinations or acquisitions successfully; our ability to remain listed on the NYSE MKT; our ability to obtain financing on reasonable terms; our ability to increase revenue; our ability to comply with the covenants in our credit facility; our ability to maintain sufficient liquidity to fund our operations; the ability of our sales force to achieve expected results; our ability to remain competitive; government regulations; our ability to innovate and develop new products; our ability to obtain donor cadavers for our products; our ability to engage and retain qualified technical personnel and members of our management team; the availability of our facilities; government and third-party coverage and reimbursement for our products; our ability to obtain regulatory approvals; our ability to successfully integrate recent and future business combinations or acquisitions; our ability to use our net operating loss carry-forwards to offset future taxable income; our ability to deduct all or a portion of the interest payments on the notes for U.S. federal income tax purposes; our ability to service our debt; product liability claims and other litigation to which we may be subjected; product recalls and defects; timing and results of clinical studies; our ability to obtain and protect our intellectual property and proprietary rights; infringement and ownership of intellectual property; our ability to remain accredited with the American Association of Tissue Banks; influence by our management; our ability to pay dividends; our ability to issue preferred stock; and other factors.

Additional risk factors are listed in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors.” You should carefully consider the trends, risks and uncertainties described in this document, the Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Investor Contact 
CG CAPITAL
Rich Cockrell 
877.889.1972
xtant@cg.capital

Company Contact 
Xtant Medical
Molly Mason 
mmason@xtantmedical.com

Stryker Cautious On Acquisitions, Confident On Robotic Surgery

Posted On October 31, 2016 By OrthoSpineNews In Financial /

October 31, 2016 – By Jof Enriquez

Despite this year’s acquisition spree, Stryker Corporation will remain financially disciplined in executing M&A deals, company executives told analysts during its third quarter earnings call recently.

Stryker reported $3 billion in cash and marketable securities for the quarter ending Sept. 30, 2016. Around 80 percent of that amount currently is held outside the United States. Stryker said it would like to repatriate that cash at some point, but to what purpose is still unclear.

“You know, we’ve said before about what our priorities are around capital allocation and that would mean M&A, that would mean dividends, and it may mean share buybacks. But commenting beyond that — I don’t think I can do that at this point of time,” Stryker CEO Kevin Lobo told analysts, according to a Seeking Alpha transcript.

Since February, Stryker has closed a string of notable deals: hospital supplies provider Sage Products ($2.78 billion), emergency medical services (EMS) equipment manufacturer Physio-Control ($1.3 billion), Synergetics’ neurology portfolio (undisclosed amount), orthopedic oncology firm Stanmore Implants ($52 million), meniscal repair company Ivy Sports Medicine (undisclosed amount), and endoscopic instrumentation maker Instratek (undisclosed amount).

Stryker executives said during the call that these acquisitions were designed to strengthen the company’s core businesses. They also touted the smooth integration of the Sage and Physio-Control portfolios and sales teams with Stryker’s, which indicates that their M&A strategy is indeed sound.

READ THE REST HERE

Zimmer Biomet Reports Third Quarter 2016 Financial Results

Posted On October 31, 2016 By OrthoSpineNews In Financial /

WARSAW, Ind., Oct. 31, 2016 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2016. The Company reported third quarter net sales of $1.83 billion, an increase of 4.0% compared to the third quarter of 2015. On an adjusted constant currency basis, revenue increased 3.5% over the prior year period, with the recently acquired LDR Holding Corporation contributing 190 basis points. Diluted earnings per share for the quarter were $0.78, an increase of 609.1% over the prior year period, and adjusted diluted earnings per share were $1.79, an increase of 9.1% over the prior year period.

“Zimmer Biomet’s third quarter performance was highlighted by further acceleration of our global S.E.T. category, as well as our continued strength in the Asia Pacific region,” said David Dvorak, President and CEO of Zimmer Biomet. “We believe that our comprehensive and expanding portfolio of musculoskeletal solutions positions us extremely well to address the evolving needs of customers in the dynamic healthcare environment in which they operate. Going forward, we will continue to focus on enhancements to our commercial and operational execution to more fully leverage our opportunities to improve the quality of life for patients and create value for our stockholders.”

Net earnings for the third quarter were $158.8 million, an increase of 612.5% over the prior year period, and $362.4 million on an adjusted basis, an increase of 7.1% over the prior year period. Operating cash flow for the third quarter was $352.6 million.

In addition, during the quarter, Zimmer Biomet announced several strategic acquisitions to broaden and complement the Company’s musculoskeletal offerings. In July, the Company completed the acquisition of a market leader in cervical disc replacement, LDR Holding Corporation. In August, Zimmer Biomet announced the acquisition of CD Diagnostics, a company focused on developing immunoassays and biomarker testing to inform musculoskeletal treatment decisions that improve patient outcomes. Earlier this month, the Company completed the acquisition of all outstanding shares of Medtech SA, developer of the ROSA® robotics platform for a range of minimally invasive brain, neurological and spinal procedures.

In the quarter, the Company paid $47.9 million in dividends and declared a third quarter dividend of $0.24 per share. The Company also repaid $200 million on its outstanding term loan during the quarter, and borrowed $750 million under a new term loan to repay borrowings under its revolving credit facility.

Guidance
The Company updated its full-year 2016 constant currency revenue and adjusted earnings per share guidance. The Company now estimates full-year revenue to be in a range of $7.630 billion to $7.650 billion, an increase of approximately 27% on a reported basis, or 2.4% to 2.7% on an adjusted pro forma basis, in each case as compared to the prior year. The Company now expects foreign currency translation to decrease revenue for the full year by approximately 0.3%, compared to its previous estimate of 0.5%. Revenue growth, excluding the contribution from LDR Holding Corporation, on a constant currency adjusted pro forma basis, is now expected to be in a range of 1.65% to 1.90% for the full year 2016. Previously, the Company estimated full-year revenue growth to be in a range of 2.5% to 3.0% on a similar basis.

Additionally, the Company now expects its full-year 2016 diluted earnings per share to be in a range of $1.50 to $1.60, and $7.90 to $7.95 on an adjusted basis. Previously, the Company estimated diluted earnings per share to be in a range of $1.50 to $1.75 on a reported basis, and $7.90 to $8.00 on an adjusted basis.

Conference Call
The Company will conduct its third quarter 2016 investor conference call today, October 31, 2016, 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 8873986. For a complete listing of international toll-free and local numbers, please visit http://investor.zimmerbiomet.com. A digital recording will be available 24 hours after the completion of the conference call, from November 1, 2016 to November 30, 2016. 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 8873986.

Sales Tables
The following sales tables provide results by geography and product category, as well as the percentage change compared to the prior year period on a reported basis, and for the quarterly period, on an adjusted constant currency basis.

NET SALES – THREE MONTHS ENDED SEPTEMBER 30, 2016
(in millions, unaudited)




						Adjusted
						Constant
			Net	Reported		Currency
			Sales	% Change		% Change
Geographic Results
	Americas		$ 1,176	3.7	%	3.7	%
	EMEA		369	(1.7)		0.9
	Asia Pacific		288	13.7		6.4
		Total	$ 1,833	4.0		3.5


Product Categories
	Knees
	Americas		$ 397	(0.9)		(0.9)
	EMEA		130	(2.8)		0.3
	Asia Pacific		104	7.2		2.6
		Total	631	(0.1)		(0.1)

	Hips
	Americas		239	(0.3)		(0.2)
	EMEA		112	(3.7)		(1.4)
	Asia Pacific		90	15.7		5.9
		Total	441	1.7		0.6

	S.E.T ⁽¹⁾		402	8.5		7.8

	Dental		96	(7.3)		(7.6)

	Spine & CMF		184	24.3		23.9

	Other		79	5.4		5.2

		Total	$ 1,833	4.0		3.5


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

NET SALES – NINE MONTHS ENDED SEPTEMBER 30, 2016
(in millions, unaudited)



			Net
			Sales	% Change
Geographic Results
	Americas		$ 3,534	43.8	%
	EMEA		1,286	33.4
	Asia Pacific		851	32.5
		Total	$ 5,671	39.5


Product Categories
	Knees
	Americas		$ 1,244	30.9
	EMEA		473	28.3
	Asia Pacific		315	27.8
		Total	2,032	29.8

	Hips
	Americas		733	35.9
	EMEA		388	21.4
	Asia Pacific		265	29.3
		Total	1,386	30.3

	S.E.T ⁽¹⁾		1,216	49.8

	Dental		322	46.4

	Spine & CMF		470	83.7

	Other		245	65.6

		Total	$ 5,671	39.5


⁽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.

Net earnings and diluted earnings per share for the three-month period ended September 30, 2016 and projected diluted earnings per share for the full-year 2016 are presented on a GAAP (reported) basis and an adjusted basis. Adjusted earnings and earnings per share measures exclude the effects of inventory step-up and other inventory and manufacturing related charges, certain claims, special items, intangible asset amortization, financing and other expenses/gains related to the Biomet merger and other acquisitions, the tax effects of 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 primarily include internal restructuring transactions that provide the Company access to offshore funds in a tax efficient manner and adjustments to deferred tax liabilities recognized as part of acquisition-related accounting.

Sales growth information for the three and nine month periods ended September 30, 2016 is presented on a GAAP (reported) basis and, for the three-month period, on an adjusted constant currency basis. Adjusted growth rates reflect the impact of the previously announced divesture remedies. Constant currency growth 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. Projected revenue growth information for the full-year 2016 is presented on a GAAP (reported) basis, an adjusted pro forma basis, an adjusted pro forma constant currency basis and an adjusted pro forma constant currency basis excluding the contribution from LDR Holding Corporation. Pro forma revenue growth refers to a comparison against revenue for the prior year that has been adjusted to reflect the inclusion of Biomet revenue on a GAAP basis. Adjusted pro forma revenue growth refers to a comparison against pro forma revenue for the prior year adjusted to reflect the impact of the previously announced divestiture remedies. Adjusted pro forma constant currency revenue growth excludes the effects of changes in foreign currency exchange rates in both years.

We use these non-GAAP financial measures internally to evaluate the performance of the business and believe they are useful measures that provide meaningful supplemental information to investors to consider when evaluating the performance of the Company. We believe 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 our incentive compensation programs.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release.

Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees” and “seeks” or the negative of such terms or other variations on such terms or comparable terminology. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: 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; Biomet’s compliance with its Deferred Prosecution Agreement, as extended; the outcome of government investigations; price and product competition; the success of our quality and operational excellence initiatives; 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; challenges relating to changes in and compliance with governmental laws and regulations, including regulations of the U.S. Food and Drug Administration (the “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; 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. Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, www.zimmerbiomet.com or on request from us. 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, except as may be set forth in our periodic reports. Readers of this communication are cautioned not to place undue reliance on these forward-looking statements, since, while management believes the assumptions on which the forward-looking statements are based are reasonable, 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 communication.


ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, except per share amounts, unaudited)

	2016	2015
Net Sales	$ 1,832.8	$ 1,762.2

Cost of products sold, excluding intangible asset amortization	479.3	552.1
Intangible asset amortization	164.3	122.6
Research and development	95.6	83.3
Selling, general and administrative	727.7	692.3
Special items	170.4	195.9
Operating expenses	1,637.3	1,646.2

Operating Profit	195.5	116.0

Other (expense) income, net	(1.1)	4.3
Interest income	0.6	2.3
Interest expense	(91.5)	(90.8)

Earnings before income taxes	103.5	31.8

(Benefit) provision for income taxes	(54.4)	9.6

Net Earnings	157.9	22.2

Less: Net Loss attributable to noncontrolling interest	(0.9)	–

Net Earnings of Zimmer Biomet Holdings, Inc.	$ 158.8	$ 22.2

Earnings Per Common Share
Basic	$ 0.79	$ 0.11
Diluted	$ 0.78	$ 0.11

Weighted Average Common Shares Outstanding
Basic	200.1	203.5
Diluted	202.9	205.7

Cash Dividends Declared Per Common Share	$ 0.24	$ 0.22


ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, except per share amounts, unaudited)

	2016	2015
Net Sales	$ 5,670.8	$ 4,064.2

Cost of products sold, excluding intangible asset amortization	1,760.0	1,131.3
Intangible asset amortization	424.7	176.0
Research and development	269.9	182.9
Selling, general and administrative	2,176.6	1,560.6
Certain claims	–	7.7
Special items	397.0	751.9
Operating expenses	5,028.2	3,810.4

Operating Profit	642.6	253.8

Other expense, net	(8.7)	(44.6)
Interest income	2.7	7.4
Interest expense	(267.8)	(196.6)

Earnings before income taxes	368.8	20.0

Provision for income taxes	133.9	0.5

Net Earnings	234.9	19.5

Less: Net Loss attributable to noncontrolling interest	(1.4)	(0.5)

Net Earnings of Zimmer Biomet Holdings, Inc.	$ 236.3	$ 20.0

Earnings Per Common Share
Basic	$ 1.18	$ 0.11
Diluted	$ 1.17	$ 0.11

Weighted Average Common Shares Outstanding
Basic	199.9	182.1
Diluted	202.3	184.7

Cash Dividends Declared Per Common Share	$ 0.72	$ 0.66

ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)

	September 30,	December 31,
	2016	2015
Assets
Current Assets:
Cash and cash equivalents	$ 475.3	$ 1,459.3
Short-term investments	13.4	164.6
Receivables, net	1,603.6	1,446.5
Inventories	2,070.0	2,254.1
Other current assets	535.8	529.2
Total current assets	4,698.1	5,853.7

Property, plant and equipment, net	2,080.8	2,062.6
Goodwill	10,770.1	9,934.2
Intangible assets, net	9,001.1	8,746.3
Other assets	486.4	563.8
Total Assets	$ 27,036.5	$ 27,160.6

Liabilities and Stockholders’ Equity

Current liabilities	$ 2,312.1	$ 1,617.9
Other long-term liabilities	3,972.0	4,155.9
Long-term debt	11,006.2	11,497.4
Stockholders’ equity	9,746.2	9,889.4
Total Liabilities and Stockholders’ Equity	$ 27,036.5	$ 27,160.6

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, unaudited)

		2016	2015

Cash flows provided by (used in) operating activities
	Net earnings	$ 234.9	$ 19.5
	Depreciation and amortization	787.3	428.1
	Share-based compensation	45.9	34.7
	Biomet merger consideration compensation expense	–	164.1
	Intangible asset impairment	28.0	–
	Income tax benefit from stock option exercises	26.8	77.7
	Excess income tax benefits from employee stock compensation plans	–	(10.3)
	Inventory step-up	300.9	137.1
	Gain on divestiture of assets	–	(8.9)
	Changes in operating assets and liabilities, net of acquired assets and liabilities
	Income taxes	(152.2)	29.9
	Receivables	(80.3)	29.4
	Inventories	44.2	(196.5)
	Accounts payable and accrued expenses	(76.0)	(293.8)
	Other assets and liabilities	(154.5)	(23.7)
	Net cash provided by operating activities	1,005.0	387.3

Cash flows provided by (used in) investing activities
	Additions to instruments	(251.3)	(186.0)
	Additions to other property, plant and equipment	(130.1)	(118.6)
	Purchases of investments	(1.4)	(179.0)
	Sales of investments	273.3	578.8
	Proceeds from divestiture of assets	–	57.9
	Biomet acquisition, net of acquired cash	–	(7,760.1)
	LDR acquisition, net of acquired cash	(1,021.1)	–
	Other business combination investments, net of acquired cash	(421.9)	–
	Other investing activities	7.8	(19.6)
	Net cash used in investing activities	(1,544.7)	(7,626.6)

Cash flows provided by (used in) financing activities
	Proceeds from senior notes	–	7,628.2
	Proceeds from term loan	750.0	3,000.0
	Redemption of senior notes	–	(2,740.0)
	Payments on term loan	(700.0)	(150.0)
	Net (payments) proceeds on other debt	(33.1)	0.8
	Dividends paid to stockholders	(140.3)	(112.3)
	Proceeds from employee stock compensation plans	113.5	77.0
	Restricted stock witholdings	(5.3)	(10.5)
	Excess income tax benefits from employee stock compensation plans	–	10.3
	Debt issuance costs	(3.4)	(58.4)
	Repurchase of common stock	(415.5)	–
	Net cash (used in) provided by financing activities	(434.1)	7,645.1

Effect of exchange rates on cash and cash equivalents		(10.2)	(22.2)
			–
	(Decrease) increase in cash and cash equivalents	(984.0)	383.6
Cash and cash equivalents, beginning of period		1,459.3	1,083.3
Cash and cash equivalents, end of period		$ 475.3	$ 1,466.9

ZIMMER BIOMET HOLDINGS, INC. NET SALES BY GEOGRAPHY FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015 (in millions, unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016	2015	% Inc / (Dec)		2016	2015	% Inc

Americas	$ 1,175.9	$ 1,133.5	3.7	%	$ 3,534.1	$ 2,458.2	43.8	%
EMEA	368.8	375.2	(1.7)		1,286.0	964.2	33.4
Asia Pacific	288.1	253.5	13.7		850.7	641.8	32.5
Total	$ 1,832.8	$ 1,762.2	4.0		$ 5,670.8	$ 4,064.2	39.5



ZIMMER BIOMET HOLDINGS, INC. NET SALES BY PRODUCT CATEGORY FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015 (in millions, unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016	2015	% Inc / (Dec)		2016	2015	% Inc

Knees	$ 631.3	$ 632.0	(0.1)	%	$ 2,031.5	$ 1,564.8	29.8	%
Hips	440.6	433.5	1.7		1,385.7	1,063.9	30.3
S.E.T	402.1	370.4	8.5		1,215.6	811.3	49.8
Dental	95.9	103.4	(7.3)		322.5	220.2	46.4
Spine & CMF	183.6	147.7	24.3		470.6	256.1	83.7
Other	79.3	75.2	5.4		244.9	147.9	65.6
Total	$ 1,832.8	$ 1,762.2	4.0		$ 5,670.8	$ 4,064.2	39.5

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED % CHANGE TO
ADJUSTED CONSTANT CURRENCY % CHANGE AND
% CHANGE EXCLUDING LDR HOLDING CORPORATION
(unaudited)


			For the Three Months Ended
			September 30, 2016

									Adjusted
							Foreign		Constant
					Divestiture		Exchange		Currency
			% Change		Impact		Impact		% Change
Geographic Results
	Americas		3.7	%	–	%	–	%	3.7	%
	EMEA		(1.7)		–		(2.6)		0.9
	Asia Pacific		13.7		(0.9)		8.2		6.4
		Total	4.0		(0.1)		0.6		3.5


Product Categories
		Knees
		Americas	(0.9)		–		–		(0.9)
		EMEA	(2.8)		–		(3.1)		0.3
		Asia Pacific	7.2		(1.9)		6.5		2.6
		Total	(0.1)		(0.3)		0.3		(0.1)

		Hips
		Americas	(0.3)		–		(0.1)		(0.2)
		EMEA	(3.7)		–		(2.3)		(1.4)
		Asia Pacific	15.7		–		9.8		5.9
		Total	1.7		–		1.1		0.6

		S.E.T	8.5		(0.1)		0.8		7.8

		Dental	(7.3)		–		0.3		(7.6)

		Spine & CMF	24.3		–		0.4		23.9
					–		–
		Other	5.4		–		0.2		5.2

		Total	4.0		(0.1)		0.6		3.5

	Impact of LDR Holding Corporation		(1.9)		–		–		(1.9)
		% Change excluding LDR Holding Corporation	2.1		(0.1)		0.6		1.6

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF NET EARNINGS AND ADJUSTED NET EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, unaudited)

	Three Months
	Ended September 30,
	2016	2015
Net Earnings of Zimmer Biomet Holdings, Inc.	$ 158.8	$ 22.2
Inventory step-up and other inventory
and manufacturing-related charges	22.8	132.6
Intangible asset amortization	164.3	122.6
Special items
Biomet merger-related	113.8	146.6
Other special items	56.6	49.3
Merger-related income in other (expense) income, net	(2.6)	(11.9)
Taxes on above items ⁽¹⁾	(111.6)	(129.2)
Other certain tax adjustments⁽²⁾	(39.7)	6.2
Adjusted Net Earnings	$ 362.4	$ 338.4

⁽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⁾Other certain tax adjustments primarily include a favorable adjustment to certain deferred tax liabilities recognized as part of acquisition-related accounting partially by internal restructuring transactions that provide the Company access to offshore funds in a tax efficient manner.


ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF NET EARNINGS AND ADJUSTED NET EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, unaudited)

	Nine Months
	Ended September 30,
	2016	2015
Net Earnings of Zimmer Biomet Holdings, Inc.	$ 236.3	$ 20.0
Inventory step-up and other inventory
and manufacturing-related charges	357.7	151.2
Certain claims	–	7.7
Intangible asset amortization	424.7	176.0
Special items
Biomet merger-related	313.5	563.0
Other special items	83.5	188.9
Merger-related (income) expense in other (expense) income, net	(1.1)	33.1
Interest expense on Biomet merger financing	–	70.0
Taxes on above items ⁽¹⁾	(297.0)	(363.6)
Biomet merger-related measurement period tax adjustments ⁽²⁾	52.7	–
Other certain tax adjustments⁽³⁾	6.4	35.9
Adjusted Net Earnings	$ 1,176.7	$ 882.2

⁽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⁾Other certain tax adjustments primarily include a favorable adjustment to certain deferred tax liabilities recognized as part of acquisition-related accounting offset by internal restructuring transactions that provide the Company access to offshore funds in a tax efficient manner.

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF DILUTED EPS AND ADJUSTED DILUTED EPS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(unaudited)

	Three Months
	Ended September 30,
	2016	2015
Diluted EPS	$ 0.78	$ 0.11
Inventory step-up and other inventory
and manufacturing-related charges	0.11	0.64
Intangible asset amortization	0.81	0.60
Special items
Biomet merger-related	0.56	0.71
Other special items	0.28	0.24
Merger-related income in other (expense) income, net	(0.01)	(0.06)
Taxes on above items ⁽¹⁾	(0.55)	(0.64)
Other certain tax adjustments⁽²⁾	(0.19)	0.04
Adjusted Diluted EPS	$ 1.79	$ 1.64

⁽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⁾Other certain tax adjustments primarily include a favorable adjustment to certain deferred tax liabilities recognized as part of acquisition-related accounting partially offset by internal restructuring transactions that provide the Company access to offshore funds in a tax efficient manner.



ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF DILUTED EPS AND ADJUSTED DILUTED EPS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(unaudited)

	Nine Months
	Ended September 30,
	2016	2015
Diluted EPS	$ 1.17	$ 0.11
Inventory step-up and other inventory
and manufacturing-related charges	1.77	0.82
Certain claims	–	0.04
Intangible asset amortization	2.10	0.95
Special items
Biomet merger-related	1.55	3.05
Other special items	0.41	1.02
Merger-related (income) expense in other (expense) income, net	(0.01)	0.18
Interest expense on Biomet merger financing	–	0.38
Taxes on above items ⁽¹⁾	(1.47)	(1.98)
Biomet merger-related measurement period tax adjustments ⁽²⁾	0.26	–
Other certain tax adjustments⁽³⁾	0.04	0.21
Adjusted Diluted EPS	$ 5.82	$ 4.78


⁽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⁾Other certain tax adjustments primarily include a favorable adjustment to certain deferred tax liabilities recognized as part of acquisition-related accounting partially offset by internal restructuring transactions that provide the Company access to offshore funds in a tax efficient manner.

ZIMMER BIOMET HOLDINGS, INC.
SUMMARY OF EXPENSES INCLUDED IN SPECIAL ITEMS
FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015
(in millions, unaudited)


			Three Months		Nine Months
			Ended September 30,		Ended September 30,
			2016	2015	2016	2015
Biomet-related
	Merger consideration compensation expense		$ –	$ –	$ –	$ 164.1
	Retention plans		–	–	–	73.0
	Consulting and professional fees		59.0	28.0	138.4	114.6
	Employee termination benefits		7.1	14.2	14.3	79.1
	Dedicated project personnel		21.9	36.8	64.8	45.9
	Relocated facilities		9.5	1.6	17.5	2.5
	Contract terminations		3.5	59.2	28.8	75.1
	Information technology integration		4.8	1.1	9.3	1.1
	Intangible asset impairment		–	–	28.0	–
	Other		8.0	5.7	12.4	7.6
		Total Biomet-related	113.8	146.6	313.5	563.0

Other
	Consulting and professional fees		14.6	30.2	30.3	109.5
	Employee termination benefits		3.2	1.1	3.2	1.9
	Dedicated project personnel		8.2	6.4	11.5	28.9
	Impairment/loss on disposal of assets		–	–	1.1	2.3
	LDR merger consideration compensation expense		24.1	–	24.1	–
	Relocated facilities		–	–	0.2	–
	Certain litigation matters		3.7	–	3.7	20.3
	Contract terminations		0.1	–	1.1	–
	Information technology integration		0.8	1.8	1.1	1.8
	Contingent consideration adjustments		–	0.1	–	2.4
	Accelerated software amortization		–	–	–	1.5
	Other		1.9	9.7	7.2	20.3
		Total Other	56.6	49.3	83.5	188.9
Special items			$ 170.4	$ 195.9	$ 397.0	$ 751.9

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF 2016 PROJECTED REVENUE % GROWTH TO
2016 PROJECTED ADJUSTED PRO FORMA % GROWTH AND
2016 PROJECTED CONSTANT CURRENCY ADJUSTED PRO FORMA % GROWTH
(unaudited)



Projected Year Ended December 31, 2016:	High		Low

Revenue % growth	27.00	%	27.00	%
Effect from product divestitures	(0.90)		(0.90)
Effect from full year of Biomet revenue	(23.40)		(23.70)
Adjusted pro forma % growth	2.70		2.40
Effect of LDR revenue	(1.10)		(1.10)
Foreign exchange impact	0.30		0.35
Constant currency adjusted pro forma % growth	1.90	%	1.65	%

ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF 2016 PROJECTED DILUTED EPS
AND PROJECTED ADJUSTED DILUTED EPS
(unaudited)



Projected Year Ended December 31, 2016:	High	Low

Diluted EPS	$ 1.60	$ 1.50
Inventory step-up and other inventory and manufacturing related
charges, intangible asset amortization, special items and other expense	7.90	8.00
Taxes on above items⁽¹⁾and other certain tax adjustments	(1.55)	(1.60)
Adjusted Diluted EPS	$ 7.95	$ 7.90


⁽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 were or are projected to be incurred.

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/zimmer-biomet-reports-third-quarter-2016-financial-results-300353898.html

SOURCE Zimmer Biomet Holdings, Inc.

News Provided by Acquire Media

Anika Reports Third Quarter 2016 Financial Results

Posted On October 28, 2016 By OrthoSpineNews In Financial /

October 26, 2016

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 third quarter ended September 30, 2016, along with business progress in the period.

“We continued to deliver solid financial results in the third quarter, while expanding globally and advancing our deep and differentiated pipeline to drive sustained growth,” said Charles H. Sherwood, Ph.D., President and Chief Executive Officer. “Last quarter, we had a productive meeting with the FDA regarding the CINGAL regulatory submission and continue to gain alignment on additional clinical and non-clinical work required to bring this important treatment to the U.S. Our confidence in the future success of CINGAL in the U.S. has been reaffirmed by how well CINGAL has been received by physicians in Canada and Europe, where we recently launched. We are well-positioned to achieve our operational and financial objectives for 2016 and to create significant near- and long-term value for patients and shareholders.”

Third Quarter Financial Results

Total revenue for the third quarter of 2016 increased 9% to $25.8 million, compared to $23.7 million for the third quarter of 2015.
Worldwide Orthobiologics revenue grew 10% year-over-year in the third quarter of 2016. MONOVISC revenue increased 33% year-over-year in the third quarter of 2016, and it was the Company’s main revenue growth driver during the period.
International Orthobiologics revenue grew 27% year-over-year in the first nine months of 2016 as a result of the Company’s global commercial expansion efforts. Domestically, we believe ORTHOVISC maintained its position as the leading multiple-injection product while MONOVISC continued to hold the number two position in the single-injection segment.
Total operating expenses for the third quarter of 2016 were $12.1 million, compared to $10.5 million for the third quarter of 2015, commensurate with the Company’s growth in revenue, increased commercial efforts, and active pipeline.
Net income for the third quarter of 2016 increased $0.6 million to $9.0 million, or $0.59 per diluted share, compared to $8.4 million, or $0.55 per diluted share, for the third quarter of 2015.

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

Meeting with the U.S. Food and Drug Administration (FDA) in late September about the New Drug Application (NDA) for CINGAL, during which the Company and FDA aligned on one additional Phase III clinical trial to supplement the strong stable of existing pivotal data.
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.
Showcasing data from four recent studies evaluating the clinical utility of our HA-based bioscaffold, HYALOFAST, at the 13^th World Congress of the International Cartilage Repair Society (ICRS).
Completing the Company’s $25 million accelerated share repurchase program, with a total of 531,067 shares repurchased by Anika.
Progressing with the consolidation of the Company’s global manufacturing operations at Anika’s Bedford, Mass. global headquarters.

Conference Call Information
Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights tomorrow, Thursday, October 27^th 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 second paragraph 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 the Company’s future growth and creation of value, and the Company’s ability and positioning to meet its 2016 financial and operational goals. 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 (SEC), 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 September 30,				For the Nine Months Ended September 30,
	2016		2015		2016		2015
Product revenue	$	25,783	$	23,676	$	74,636	$	62,089
Licensing, milestone and contract revenue		6		5		17		16
Total revenue		25,789		23,681		74,653		62,105

Operating expenses:
Cost of product revenue		4,998		5,176		16,488		14,764
Research & development		2,822		2,061		7,773		5,971
Selling, general & administrative		4,280		3,309		12,525		10,302
Total operating expenses		12,100		10,546		36,786		31,037
Income from operations		13,689		13,135		37,867		31,068
Interest income, net		93		34		214		82
Income before income taxes		13,782		13,169		38,081		31,150
Provision for income taxes		4,830		4,789		13,619		11,435
Net income	$	8,952	$	8,380	$	24,462	$	19,715

Basic net income per share:
Net income	$	0.61	$	0.56	$	1.66	$	1.32
Basic weighted average common shares outstanding		14,625		14,967		14,726		14,945
Diluted net income per share:
Net income	$	0.59	$	0.55	$	1.61	$	1.29
Diluted weighted average common shares outstanding		15,077		15,316		15,163		15,311

Anika Therapeutics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data and per share data)
(unaudited)

	September 30,			December 31,
ASSETS	2016			2015
Current assets:
Cash and cash equivalents	$	98,047		$	110,707
Investments		22,250			27,751
Accounts receivable, net of reserves of $224 and $167 at September 30, 2016 and December 31, 2015, respectively		21,833			21,652
Inventories		18,020			14,938
Prepaid expenses and other current assets		924			1,385
Total current assets		161,074			176,433
Property and equipment, net		51,058			40,108
Long-term deposits and other		69			69
Intangible assets, net		11,171			11,656
Goodwill		7,690			7,482
Total Assets	$	231,062		$	235,748

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,949		$	8,302
Accrued expenses and other current liabilities		5,423			4,778
Income taxes payable		217			4,198
Total current liabilities		7,589			17,278
Other long-term liabilities		2,556			781
Long-term deferred revenue		59			66
Deferred tax liability		6,315			6,775
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		–			–
Common stock, $.01 par value; 60,000,000 and 30,000,000 shares authorized, 14,623,225 and 15,036,808 shares issued and outstanding at September30, 2016 and December 31, 2015, respectively		146			150
Additional paid-in-capital		60,374			81,685
Accumulated other comprehensive loss		(6,101	)		(6,649	)
Retained earnings		160,124			135,662
Total stockholders’ equity		214,543			210,848
Total Liabilities and Stockholders’ Equity	$	231,062		$	235,748


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 September 30,								For the Nine Months Ended September 30,
	2016		%		2015		%		2016		%		2015		%
Orthobiologics	$	22,428	87	%	$	20,461	86	%	$	65,319	88	%	$	51,717	83	%
Surgical		1,173	5	%		1,413	6	%		3,924	5	%		4,450	7	%
Dermal		594	2	%		412	2	%		1,558	2	%		1,132	2	%
Other		1,588	6	%		1,390	6	%		3,835	5	%		4,790	8	%
Product Revenue	$	25,783	100	%	$	23,676	100	%	$	74,636	100	%	$	62,089	100	%

Product Gross Profit	$	20,785			$	18,500			$	58,148			$	47,325
Product Gross Margin		81%				78%				78%				76%

Product Revenue by Geographic Region
(in thousands, except percentages)
(unaudited)

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2016		%		2015		%		2016		%		2015		%
Geographic Location:
United States	$	21,126	82	%	$	19,239	82	%	$	61,032	82	%	$	51,048	82	%
Europe		2,703	10	%		1,977	8	%		8,240	11	%		6,294	10	%
Other		1,954	8	%		2,460	10	%		5,364	7	%		4,747	8	%
Product Revenue	$	25,783	100	%	$	23,676	100	%	$	74,636	100	%	$	62,089	100	%

Contacts

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

EOS imaging Reports 40% Revenue Growth for the Third Quarter of 2016

Posted On October 28, 2016 By OrthoSpineNews In Financial /

October 27, 2016

PARIS–(BUSINESS WIRE)–EOS imaging (Paris:EOSI) (Euronext, FR0011191766 – EOSI – Eligible for PEA-PME savings schemes in France), the pioneer in 2D/3D orthopaedic medical imaging, today announced its consolidated revenue for the third quarter and nine months ended September 30, 2016.


€ millions	Sept. 2016 9 months	Sept. 2015 9 months	% change
Equipment sales	16,93	12,29	+38%
As a % of total revenues	82%	82%
Sales of maintenance	3,18	2,04	+56%
As a % of total revenues	15%	14%
Sales of consumables and services	0,65	0,60	+8%
As a % of total revenues	3%	4%
Total revenues	20,75	14,93	+39%
Unaudited data

Marie Meynadier, Chief Executive Officer of EOS imaging, said, “We delivered another quarter of strong growth, building on our positive momentum in 2016 in all three of our key geographical markets and particularly in the important North American one. The combination of our low dose 2D/3D imaging technology and EOSapps continues to position EOS as a standard of care in the evaluation and treatment of musculoskeletal conditions. We expect adoption to increase as we execute our commercial plan and portfolio development and further enhance the value of our solutions for a growing number of medical teams and patients.”

Continued sharp increase in sales in the first nine months of 2016

EOS reported total revenue of €20.8 million for the nine months ended September 30, 2016 as compared to €14.9 million for the nine months ended September 30, 2015, an increase of 39%.

The Company sold 41 EOS® systems in the first nine months of 2016, as compared to 30 systems in the same period last year. Revenues from sales of equipment totalled €16.9 million, an increase of 38%.

Sales of maintenance contracts increased 56% to €3.18 million, reflecting the continued increase in the installed base of EOS systems under contract.

Sales of consumables and services were €0.65 million in the first nine months of 2016, an increase of 8%.

The strong growth in sales was driven by continued momentum in the United States

€ millions

Sept. 2016

9 months

Sept. 2015

9 months

% change

EMEA

7,27

6,12

+19%

North America

11,57

7,35

+57%

Asia-Pacific

1,92

1,47

+31%

Total revenues

20,75

14,93

+39%

Unaudited data

EOS reported continued sales momentum in North America in the first nine months of 2016, generating revenue of €11.6 million, an increase of 57% compared to the same period last year. Sales in North America represented 56% of total revenues for the first nine months of 2016.

Sales in the EMEA region were €7.27 million, an increase of 19%, and sales in the Asia-Pacific region were €1.92 million, an increase of 31%.

Third quarter of 2016: up 40% to €6.6 million

€ millions

∆ Q1

∆ Q2

∆ Q3

2016

2015

Sales of equipment

4,09

7,36

5,46

2.50

6.00

3.79

+64%

+23%

+44%

as a % of total revenues

77%

83%

75%

87%

80%

Sales of maintenance

0,99

1,23

0,96

0.63

0.69

0.72

+58%

+78%

+33%

as a % of total revenues

18%

14%

14%

19%

10%

15%

Sales of consumables and services

0,24

0,22

0,19

0.19

0.23

+27%

+16%

-18%

as a % of total revenues

5 %

Total revenues

5,33

8,82

6,60

3.32

6.88

4.74

+60%

+28%

+40%

Unaudited data

EOS imaging sold 13 EOS® systems in the first nine months of 2016 and generated revenues of €6.60 million, an increase of 40% as compared to the same period last year.

About EOS imaging

EOS imaging designs, develops, and markets EOS^®, an innovative medical imaging system dedicated to osteoarticular pathologies and orthopaedics, as well as associated solutions. The Company is authorized to market in 51 countries, including the United States (FDA), Japan, China and the European Union (EC). The Group posted 2015 revenues of €21.8 million and employs 122 people. The Group is based in Paris and has five subsidiaries in Besançon (France), Cambridge (Massachusetts), Montreal (Canada), Frankfurt (Germany) and Singapore.

EOS imaging has been chosen to be included in the new EnterNext© PEA-PME 150 index, composed of 150 French companies and listed on Euronext and Alternext markets in Paris.

EOS imaging is listed on Compartment C of Euronext Paris
ISIN: FR0011191766 – Ticker: EOSI

Contacts

EOS imaging
Anne Renevot, +33 (0)1 55 25 61 24
CFO
investors@eos-imaging.com
or
NewCap
Financial communication and investor relations
Valentine Brouchot, +33 (0)1 44 71 94 96
eosimaging@newcap.eu
or
Press relations
Annie-Florence Loyer, +33 (0)1 44 71 00 12/ +33 (6) 88 20 35 59
afloyer@newcap.fr
or
Daphné Boccara, +33 (0)1 44 71 94 93
dboccara@newcap.fr
or
The Ruth Group (US)
Press relations
Joanna Zimmerman, 646-536-7006
jzimmerman@theruthgroup.com

xsmithnephew.jpg.pagespeed.ic_.l1OkCoKFV0.jpg

Smith & Nephew Invests $55 Million in New Advanced Medical Technology Manufacturing Plant

Posted On October 28, 2016 By OrthoSpineNews In Financial /

26 October 2016

Smith & Nephew, the global medical equipment company, (NYSE:SNN; LSE:SN), inaugurated today its new manufacturing facility for sports medicine orthopedic devices in Coyol Free Zone, Alajuela, Costa Rica.

The new facility required an investment of USD $55 million and will add up to 250 new job positions to the 1,700 existing ones, with the British firm, based in London, employing a total of 1,950 employees in Costa Rica.

The President of the Republic, Luis Guillermo Solís, as well as relevant representatives of the company and the government, attended the event.

“The Government of Costa Rica is pleased to inaugurate the new plant of Smith & Nephew in Coyol, with a capacity to expand the operation by up to 250 new employees. This is the result of the effort of the country to reinforce the conditions to compete and the alliance we have with business and productive sectors. Costa Rica is a stable and growing economy, with low inflation rates, and one of the top ranking countries for competitiveness. The expansion of Smith and Nephew comes to reaffirm the operation and our country’s capacity to attract foreign investment”, stated Luis Guillermo Solis Rivera, President of the Republic.

Smith & Nephew is a leader in Sports Medicine, providing a broad array of innovative instruments and implants necessary to perform minimally invasive surgery of the joints. This includes the repair of soft tissue injuries and degenerative conditions of the knee, hip and shoulder.

“The manufacturing sector, especially the one of medical devices, is key to the process of diversification and consolidation of Costa Rica in global value chains (GVC), impacting positively on exports and investment and re investment indexes. Costa Rica has been working to be a counterpart capable of responding to the requirements, both in terms of talent and human skills, and in business climate and incentives. These conditions converge and enable a productive ecosystem that is moving away more and more from the manufacture and more into higher added value manufacturing activities, activities with more technological content, productive and business sophistication, as well as complex research, development and innovation activities. In this scenario where Smith & Nephew takes the decision to expand local operations, they are showing the commitment of the company with Costa Rica, as well as the potential of the country. From the main government, we will continue working to promote and maintain appropriate conditions for the development of the company in the country, efforts that I promise myself as representative of this sector and the Executive Branch”, said the Minister of Foreign Commerce, Alexander Mora.

Smith & Nephew’s position within the global Sports Medicine market was strengthened significantly in 2014, with the acquisition of ArthroCare Corporation. The transaction added highly complementary products to the existing portfolio, as well as manufacturing expertise in Costa Rica. The new Coyol facility replaces the previous site at Heredia.

The new manufacturing plant will support the global demand for Smith & Nephew’s COBLATION^◊ technology. COBLATION is an arthroscopic procedure that involves the creation and application of an energy field, which is used for the precise removal of soft tissue with minimal damage to untargeted tissue.

Jorge Sequeira, General Director of CINDE indicated, “Smith & Nephew is part of the growing Life Sciences sector that exported US$2.200 million in medical devices last year, and this year we expect exports to close at US $2.500 million. We are sure that Smith & Nephew will continue growing in the country, taking advantage of our enormous human talent to successfully develop their operation”.

“Sports Medicine is a fast growing market where unmet clinical needs lend room for procedural and technological innovation,” said Olivier Bohuon, Chief Executive Officer of Smith & Nephew. “We are proud to open this new facility in Costa Rica, which, alongside our established sites in the U.S., gives us the state-of-the-art manufacturing platform that will support our ambition to expand our pioneering Sports Medicine business.”

In this regard, Andrés Salazar, General Manager and Vice President of Operations for Smith & Nephew in Costa Rica said: “From the new manufacturing facility, Smith & Nephew will manufacture medical devices that will help improve the health of thousands of people around the world. We are very proud of this new phase that begins today, and excited by the prospects for the future.”

Smith & Nephew is looking to hire staff in manufacturing, engineering and supply chain. Interested candidates can send their resume to eduardo.ramos@smith-nephew.com.

Contacts

Media

Ignacio Solís
Milenio Comunicación
+(506)2291-0660 ext 109

Charles Reynolds
Smith & Nephew
+44 (0)1923 477314

Ben Atwell / Matthew Cole
FTI Communications
+44 (0) 20 3727 1000

Investor/Analyst

Ingeborg Oie
Smith & Nephew
+44 (0)20 7401 7646

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 over 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 corporate 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. Certain marks registered US Patent and Trademark Office.}

BONESUPPORT™ Raises $37 Million (SEK 327 million) to Drive Product Sales and Deliver Further Value From CERAMENT™ Injectable Drug Eluting Bioceramic Platform

Posted On October 27, 2016 By OrthoSpineNews In Financial /

LUND, Sweden, October 26, 2016 /PRNewswire/ —

BONESUPPORT AB, an emerging leader in innovative injectable bioceramic bone scaffolds to treat bone voids caused by trauma, infection, disease or related surgery, announces that it has raised $37 million (SEK 327 million) in a combination of equity and debt finance. These new funds will be used to deliver further value from its unique CERAMENT platform. The oversubscribed equity financing was led by Tellacq AB and was supported by the Company’s current major shareholders, including HealthCap, Lundbeckfond Ventures, Industrifonden, AP3 (The Third Swedish National Pension Fund) and Carl Westin. The debt finance was provided by Kreos Capital.

Dr. Håkan Björklund of Tellacq AB will be joining the BONESUPPORT Board as Chairman in conjunction with the fund raising, subject to shareholder approval. Dr. Björklund has a long and successful track record in the healthcare industry, including as the former CEO of Nycomed, which he grew from a small Scandinavian company into a global business before its acquisition by Takeda in 2011. He is currently chairman of the board of Swedish Orphan Biovitrum AB and an Industry Executive at Avista Capital Partners.

Richard Davies, CEO of BONESUPPORT said, “I am delighted that we have been able to complete this new financing to help us to execute our strategy to deliver the significant potential of our unique CERAMENT drug eluting osteoconductive/osteoinductive bioceramic platform. I am also pleased that the equity element reflects the significant progress that we have made during the course of 2016. With our sales on a strong growth trajectory, an increasing body of compelling clinical data and a drug eluting platform that will allow us to develop a pipeline of novel products to treat a broad range of bone diseases, BONESUPPORT can look to the future with great confidence.”

“We are delighted to welcome Håkan Björklund to the board at this exciting time for the company and look forward to benefiting from his extensive experience in the years ahead. I would also like to take this opportunity to thank the departing chairman Dr. Örn Stuge for his significant contribution to BONESUPPORT over many years” says Björn Odlander, Managing Partner at HealthCap and board member.

Håkan Björklund, said: “Our decision to invest in BONESUPPORT was driven by the important progress that has been made over recent years. The CERAMENT drug eluting platform offers multiple opportunities to generate significant value by providing much needed and cost-efficient treatment options for patients with a broad range of bone diseases. I look forward to working with the management team and the Board to deliver BONESUPPORT’s potential to become a global leader in the management and treatment of bone disease. ”

The new funds will be used to support the execution of BONESUPPORT’s strategy to deliver significant shareholder value, focused on:

Driving the sales of CERAMENT BVF, CERAMENT G and CERAMENT V in existing and new markets.
Generating further clinical data to highlight the compelling benefits that the current CERAMENT products deliver and to conduct the FORTIFY study to support a planned PMA filing in the US for CERAMENT G.
Building the Company’s product pipeline by capitalizing on the unique drug eluting properties of its injectable osteoconductive/osteoinductive bioceramic platform.

In the first half of 2016, BONESUPPORT’s overall sales have continued to grow rapidly driven by the European success of CERAMENT G and CERAMENT V, the first CE-marked injectable antibiotic eluting bone graft substitutes. These products are used for the management of problematic bone infections including osteomyelitis and prophylactically in patients who are at risk for developing infection. Sales of CERAMENT BVF have also shown good growth as the product has continued to gain traction in the US where it is marketed by BONESUPPORT’s partner Zimmer Biomet.

BONESUPPORT is also continuing to generate the clinical data needed to drive the adoption of its products. A recent paper in TheBone and Joint Journal^[1] provided follow up data from the first 100 patients in a prospective study evaluating CERAMENT G for dead space (void) management in patients with chronic osteomyelitis (bone infection) using a single stage surgical procedure. These data showed that this approach, augmented by the use of CERAMENT G, was highly effective, delivering a 96% prevention of infection recurrence rate, a 3.0% fracture rate and a total wound leakage rate of 6.0%. This represents a significant improvement in both the infection recurrence and fracture rates when compared to published results evaluating alternative bone graft substitutes that deliver antibiotics locally.

The Company has also recently received approval from the US Food and Drug Administration (FDA) to begin an IDE (Investigational Device Exemption) study with CERAMENT G. The FORTIFY study, a randomized multicenter controlled trial, which will evaluate the safety and efficacy of CERAMENT G as part of surgical repair of open diaphyseal tibial fractures. The first patient is expected to be recruited into this prophylactic study before the end of 2016.

BONESUPPORT will also use the funds to develop its product pipeline. The Company believes that the attractive properties of its CERAMENT platform will allow it to develop products that will deliver a broad range of drugs to the bone to manage indications including osteoporosis, cancer and pain.

References

McNally et al, The Bone and Joint Journal, 2016, Vol. 98-B, No. 9, p1289-96
Raina, D. et al. A Biphasic Calcium Sulfate Hydroxapatite Carrier Bone Morphogenic Protein -2 and Zoledronic Acid Generates Bone (2016) Nature Scientific Reports

Notes to Editor

About BONESUPPORT™

BONESUPPORT has developed CERAMENT as an innovative range of radiopaque injectable osteoconductive bioceramic products that have a proven ability to heal defects by remodeling to host bone in six to twelve months. Our products are effective in treating patients with fractures and bone voids caused by trauma, infection, disease or related surgery. Our lead product, CERAMENT BVF addresses important issues facing health care providers, such as avoiding hospital readmissions and revision surgery that result from failed bone healing and infection caused by residual bone voids. CERAMENT BVF is commercially available in the U.S., EU, SE Asia and the Middle East.

CERAMENT’s distinctive properties as a drug eluting material have been validated in clinical practice by CERAMENT G and CERAMENT V, the first CE-marked injectable antibiotic eluting bone graft substitutes. These products provide local sustained delivery of gentamicin and vancomycin, respectively. The local delivery feature enables an initial high concentration of antibiotics to the bone defect and then a longer sustainable dose above the minimal inhibitory concentration (MIC) to protect bone healing and promote bone remodeling.

CERAMENT G and V have demonstrated good results in patients with problematic bone infections including osteomyelitis. They are also used prophylactically in patients who are at risk for developing infection. CERAMENT G and CERAMENT V are available in the EU.

BONESUPPORT was founded in 1999 by Prof. Lars Lidgren, an internationally respected scientist who has been the President of various musculoskeletal societies. BONESUPPORT’s mission is to bring people with bone and joint diseases back to an active life. The Company is based in Lund, Sweden. http://www.bonesupport.com

BONESUPPORT™ is a registered trademark.

SOURCE BONESUPPORT

SI-BONE, Inc. Announces SelectHealth of Utah to Cover Minimally Invasive Sacroiliac Joint Fusion Exclusively Using the iFuse Implant System® as the Only Proven Technology

Posted On October 27, 2016 By OrthoSpineNews In Financial /

SAN JOSE, Calif., Oct. 27, 2016 /PRNewswire/ — SI-BONE, Inc., a medical device company that pioneered the use of the iFuse Implant System (“iFuse”), a minimally invasive surgical (MIS) device indicated for fusion for certain disorders of the sacroiliac (SI) joint, announced that SelectHealth, a health plan division of Intermountain Healthcare, a Utah-based not-for-profit healthcare system, will provide coverage specific for iFuse and exclusive of all other MIS SI joint fusion systems, beginning November 1, 2016. SelectHealth joins Geisinger Health System as the second commercial health plan in the United States to provide exclusive coverage for iFuse and a growing list of commercial payors to provide positive coverage policies for MIS SI joint fusion, including Blue Cross Blue Shield (BCBS) of Michigan, Priority Health of Michigan and BCBS of Nebraska.

Based on an extensive review of the published medical literature, the SelectHealth Medical Technology Assessment Committee determined that coverage of minimally invasive (MIS) SI joint fusion specific to iFuse was appropriate as the literature related to other MIS SI joint fusion systems was inadequate to determine safety and effectiveness. Use of all other technologies is considered experimental/investigational or unproven and therefore not covered.

The coverage decision was based on two systematic reviews of the literature and 27 primary studies that met inclusion criteria. The primary literature included outcomes from 7,589 patients who underwent SIJ fusion. The two systematic reviews included 34 studies, 18 of which reported on outcomes from MIS SIJ fusion and 16 that compared open to MIS fusion procedures. All of the 27 primary studies used only iFuse, with no studies identified for any other MIS SI joint fusion systems. iFuse is the only SI joint fusion device with an FDA cleared indication citing clinical studies that demonstrate improvements in pain, patient function and quality of life. Peer-reviewed published data supporting the use of iFuse includes two randomized controlled trials (RCTs) of iFuse vs non-operative care (INSITE and iMIA), long term results from a prospective single-arm multi center trial (SIFI) as well as data from over 40 additional publications.

“This latest exclusive positive coverage policy for iFuse by SelectHealth brings the exclusive coverage total to almost 4 million lives throughout Utah and parts of Pennsylvania and New Jersey and further demonstrates the importance of high quality published clinical evidence, establishing iFuse as the only proven option for MIS SI joint fusion,” said Jeffrey Dunn, President and CEO of SI-BONE. “We are committed to continuing to work with other payors and health plans across the US to ensure all patients who may benefit from this procedure have access to iFuse.”

About SI-BONE, Inc.
SI-BONE, Inc. (San Jose, California) is a leading sacroiliac joint medical device company dedicated to the development of tools and products for patients with low back complaints related to certain SI joint disorders. The company develops, manufactures and markets minimally invasive products for the SI joint. SI-BONE, Inc. received original 510(k) clearance in November 2008 from the Food and Drug Administration (FDA) to market its iFuse Implant System. The CE mark for European commercialization was obtained in November 2010. The iFuse Implant System is a minimally invasive surgical system that uses titanium implants with a porous surface to create an interference fit designed to help decrease joint motion and allow for bone ongrowth and ingrowth, supporting long-term fusion.

The iFuse Implant System is intended for sacroiliac fusion for conditions including sacroiliac joint dysfunction that is a direct result of sacroiliac joint disruption and degenerative sacroiliitis. This includes conditions whose symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than 6 months. Clinical studies have demonstrated that treatment with the iFuse Implant System improved pain, patient function, and quality of life. There are potential risks associated with the iFuse Implant System. It may not be appropriate for all patients and all patients may not benefit. For information about the risks, visit: www.si-bone.com/risks