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Zimmer Biomet Acquires RespondWell® Telerehabilitation Platform for Zimmer Biomet Signature Solutions™

Posted On October 27, 2016 By OrthoSpineNews In Financial /  

(WARSAW, IN) October 27, 2016—Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced the acquisition of RespondWell®, an award-winning telerehabilitation technology designed to provide personalized, clinician-supervised post-surgical physical therapy in the comfort of a patient’s home. The acquisition strengthens the Company’s recently announced Zimmer Biomet Signature Solutions™ commercial offering by integrating a comprehensive, at-home telerehabilitation capability designed to enhance patient compliance with physical therapy and improve the quality of recovery.

“The new value-based reimbursement environment compels hospitals and providers to assume responsibility for patient outcomes well after discharge and through the critical rehabilitation period,” said David Nolan, Group President, Biologics, Extremities, Sports Medicine, Surgical, Trauma, Foot and Ankle and Office Based Technologies, Zimmer Biomet. “Integrating an innovative and comprehensive telerehabilitation program into our Zimmer Biomet Signature Solutions offering addresses the emerging need for healthcare providers to oversee and optimize post-surgical recovery outcomes in order to maximize value across the entire episode of care.”

“I believe RespondWell’s innovative telerehabilitation platform will help our clinical care team enhance the quality and outcomes of post-op patient care by providing an interactive and motivating physical therapy experience that encourages patient engagement and compliance to physical therapy in a convenient environment, the patient’s home,” said Ronald A. Navarro, M.D., Regional Coordinating Chief of Orthopedic Surgery, Kaiser Permanente.

Zimmer Biomet Signature Solutions is a strategically-curated suite of technologies and services designed to help hospitals and providers streamline delivery of care and succeed in today’s value-based reimbursement environment. The Zimmer Biomet Signature Solutions remote rehabilitation platform, known as Therapy@Home, features a personalized rehabilitation plan designed by a patient’s clinical care team, video-gaming-style exercise system with on-screen digital instructors to coach and encourage patients, and built-in reward features earned through increased patient participation and consistency. The system also allows the patient’s clinical care team to remotely monitor patient progress and activity and digitally communicate with the patient, potentially reducing the costs associated with follow-up visits and clinic-based rehabilitation programs. Zimmer Biomet is currently launching research partnerships for the Zimmer Biomet Signature Solutions suite at selected academic research institutions in the U.S., with a broader commercial release scheduled for 2017.

“Telerehabilitation represents the future of optimal and efficient post-surgical patient care, and we are excited to integrate our remote rehabilitation platform into the Zimmer Biomet Signature Solutions suite,” said Ted Spooner, Co-founder and CEO of RespondWell.

About Zimmer Biomet

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

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

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

 

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, but are not limited to, statements concerning Zimmer Biomet’s expectations, plans, prospects, and product and service offerings, including new product launches and potential clinical successes.  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.  For a list and description of some of such risks and uncertainties, see our periodic reports filed with the SEC.  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in Zimmer Biomet’s filings with the SEC.  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.  Accordingly, such forward-looking statements speak only as of the date made.  Readers of this news release 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 news release.

 

Media

Investors

Monica Kendrick

Robert J. Marshall Jr.

574-372-4989

574-371-8042

monica.kendrick@zimmerbiomet.com robert.marshall@zimmerbiomet.com

 

Barbara Goslee

574-371-9449

barb.goslee@zimmerbiomet.com

CONFIDENTIALITY NOTICE: This e-mail, along with any documents, files, or attachments, may contain information that is confidential, privileged, or otherwise exempt from disclosure. If you are not the intended recipient or person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, printing, distribution or use of any information contained in or attached to this e-mail is strictly prohibited. If you have received this e-mail in error, please immediately notify the sender and delete the original e-mail and its attachments without reading, printing, or saving in any manner. This e-mail message should not be interpreted to include a digital or electronic signature that can be used to authenticate an agreement, contract or other legal document, nor to reflect an intention to be bound to any legally-binding agreement or contract. Your cooperation is appreciated. Thank you.

 

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Life Spine® Achieves 32% Sales Growth and Announces Industry’s Largest Post-Packing Capabilities for Lateral Fusion

Posted On October 26, 2016 By OrthoSpineNews In Financial, Spine /  

October 26, 2016

HUNTLEY, Ill.–(BUSINESS WIRE)–Life Spine, a medical device company that designs, develops, manufactures and markets products for the surgical treatment of spinal disorders, announced today achievement of another astonishing growth milestone, with a sales growth rate of 32% in the third quarter of 2016, as compared to the same quarter in 2015.

Life Spine also announced today industry-leading post-packing capabilities with its e-LIF™ Expandable Lateral Interbody Fusion procedure, which includes the CENTRIC® Expandable Retractor System, the LONGBOW™ Expandable Lateral Interbody System, the SENTRY™ Lateral Plate System and the newly launched Graft Delivery Device. LONGBOW is the first lateral A/P expanding interbody, providing nearly double its width during in-situ expansion. LONGBOW reduces muscle retraction and potential nerve damage, and when LONGBOW is combined with the Graft Delivery Device, which seamlessly integrates with the LONGBOW in-situ, post-pack graft volumes of over 11cc can be delivered.

“We are excited to add another great product to our existing MIS thoracolumbar portfolio. The addition of the Graft Delivery Device has been very well received by surgeons, and the e-LIF procedure has the potential for increased fusion rates and improved patient outcomes,” said Mariusz Knap, Vice President of Marketing at Life Spine.

Life Spine will be displaying its entire product portfolio at the 31st North American Spine Society (NASS) Annual Meeting, taking place this week in Boston, and will be located at Booth #1031.

About Life Spine

Life Spine is dedicated to improving the quality of life for spinal patients by increasing procedural efficiency and efficacy through innovative design, uncompromising quality standards, and the most technologically advanced manufacturing platforms. Life Spine, which is privately held, is based in Huntley, Illinois. For more information, please visit http://www.lifespine.com.

Contacts

Life Spine
Mr. Omar Faruqi
Chief Financial Officer
ofaruqi@lifespine.com
847-884-6117

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RTI Surgical® Announces 2016 Third Quarter Results

Posted On October 26, 2016 By OrthoSpineNews In Financial /  

October 25, 2016

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical Inc. (RTI) (Nasdaq: RTIX), a global surgical implant company, reported operating results for the third quarter of 2016 as follows:

Quarterly Summary:

  • Achieved worldwide revenues of $66.5 million, comparable to third quarter of 2015.
  • Achieved worldwide direct revenues of $38.1 million, a 14 percent increase over the third quarter of 2015.
  • Achieved global commercial and other revenues of $28.5 million, a 14 percent decrease compared to the third quarter of 2015.
  • Expanded nanOss® Bioactive bone void filler into Australia and Europe with regulatory clearance from the Australian Therapeutic Goods Administration (TGA) for nanOss Bioactive bone void filler and CE Mark from BSI for nanOss Bioactive Loaded bone void filler and nanOss Bioactive 3D bone void filler in Europe.
  • Continued comprehensive strategic review of RTI’s business lines and operations and continued to pursue search for a new chief executive officer to succeed Brian K. Hutchison who announced his intent to retire on August 15, 2016.

Worldwide revenues were $66.5 million for the third quarter of 2016, which were comparable to revenues for the third quarter of 2015. Domestic revenues were $61 million for the third quarter of 2016, which were also comparable to revenues for the third quarter of 2015. International revenues were $5.6 million for the third quarter of 2016, a slight increase compared to revenues of $5.5 million for the third quarter of 2015. On a constant currency basis, international revenues for the third quarter of 2016 increased 2 percent compared to the third quarter of 2015. Direct revenues of $38.1 million increased 14 percent for the third quarter of 2016 compared to $33.2 million for the third quarter of 2015. Commercial and other revenues of $28.5 million decreased 14 percent for the third quarter of 2016 compared to $33.3 million for the third quarter of 2015.

“Our direct business continued to show strong performance in the third quarter, highlighted by our U.S. spine, cardiothoracic and surgical specialties businesses,” said Brian K. Hutchison, president and chief executive officer. “Our direct spine business has become one of the fastest-growing spine companies in the market according to published data, with growth driven by both hardware and biologics. Despite the strong performance in our domestic direct business, our commercial business continues to perform below expectations.”

For the third quarter of 2016, the company reported net loss applicable to common shares of $4.5 million and net loss per fully diluted common share of $0.08, based on 58.4 million fully diluted shares outstanding, compared to net income applicable to common shares of $2.7 million and net income per fully diluted common share of $0.05 for the third quarter of 2015, based on 58.9 million fully diluted shares outstanding. On an adjusted basis, excluding pre-tax other charges of $5.1 million, as detailed in the reconciliation provided later in this release, and a foreign net operating loss valuation reserve of $1.2 million, adjusted net income applicable to common shares was $0.0 million and adjusted net income per fully diluted common share was $0.00, based on 58.4 million fully diluted shares outstanding.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), as detailed in the reconciliation provided later in this release, was $8.1 million for the third quarter of 2016 (12 percent of third quarter 2016 revenues) compared to $10.7 million for the third quarter of 2015 (16 percent of third quarter 2015 revenues). The decline was principally a result of higher variable compensation and distributor commission expenses on direct revenue distributions and the development of our international direct sales network.

Fiscal 2016 Outlook

As previously announced, RTI continues to progress on its strategic business review and CEO search. RTI’s board of directors and management remain focused on achieving sustainable top- and bottom-line growth and identifying opportunities that can generate the most value for RTI’s customers, employees and shareholders.

Based on the outlook for the remainder of the year, the company now expects that full year revenue for 2016 will range from $268 million to $270 million, as compared to prior guidance of $274 million to $280 million. The company expects full year direct revenue to grow in the range of 13 percent to 15 percent as compared to the previous range of 16 percent to 17 percent. The reduced outlook is primarily due to delays associated with transition of an international distributor. The company expects full year commercial and other revenue to decline in the range of 21 percent to 23 percent as compared to the previous range of 18 percent to 21 percent. The reduced outlook is primarily due to continued softness in commercial orders.

As a result of the lower revenue guidance, the other charges, and the foreign net operating loss valuation, the company now expects that full year net loss per fully diluted common share for 2016 will range from $0.11 to $0.13 based on 58.3 million fully diluted shares outstanding, as compared to prior guidance of net income per fully diluted common share of $0.03 to $0.06. Excluding the other charges and foreign operating loss valuation reserve, adjusted full year 2016 net income per fully diluted common share is expected to range from $0.01 to $0.03, based on 58.3 million fully diluted common shares outstanding as compared to prior guidance of adjusted full year 2016 net income per fully diluted common share of $0.09 to $0.12, based on 58.5 million fully diluted common shares outstanding.

Conference Call

RTI will host a conference call and simultaneous audio webcast to discuss the third quarter results at 8:30 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419. The webcast can be accessed through the investor section of RTI’s website at www.rtix.com. A replay of the conference call will be available on the RTI website following the call.

About RTI Surgical Inc.

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

Forward Looking Statement

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

RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2016 2015 2016 2015
Revenues $ 66,547 $ 66,529 $ 201,518 $ 206,172
Costs of processing and distribution 32,273 31,296 97,270 96,737
Gross profit 34,274 35,233 104,248 109,435
Expenses:
Marketing, general and administrative 28,724 25,464 84,678 80,088
Research and development 3,789 3,793 12,034 11,492
Restructuring charges – – 1,107 –
Strategic review costs 650 – 650 –
CEO Retirement and transition costs 4,107 – 4,107 –
Contested proxy expenses – – 2,680 –
Severance costs 328 – 1,039 –
Total operating expenses 37,598 29,257 106,295 91,580
Operating (loss) income (3,324 ) 5,976 (2,047 ) 17,855
Total other expense – net (374 ) (405 ) (1,112 ) (986 )
(Loss) income before income tax provision (3,698 ) 5,571 (3,159 ) 16,869
Income tax benefit (provision) 92 (2,069 ) (338 ) (6,120 )
Net (loss) income (3,606 ) 3,502 (3,497 ) 10,749
Convertible preferred dividend (883 ) (832 ) (2,611 ) (2,460 )
Net (loss) income applicable to common shares $ (4,489 ) $ 2,670 $ (6,108 ) $ 8,289
Net (loss) income per common share – basic $ (0.08 ) $ 0.05 $ (0.10 ) $ 0.14
Net (loss) income per common share – diluted $ (0.08 ) $ 0.05 $ (0.10 ) $ 0.14
Weighted average shares outstanding – basic 58,353,110 57,701,810 58,173,580 57,492,606
Weighted average shares outstanding – diluted 58,353,110 58,922,423 58,173,580 58,591,303
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net (Loss) Income Applicable to Commons Shares to Adjusted EBITDA
(Unaudited, in thousands)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2016 2015 2016 2015
Net (loss) income $ (4,489 ) $ 2,670 $ (6,108 ) $ 8,289
Interest expense, net 307 336 1,053 978
(Benefit) provision for income taxes (92 ) 2,069 338 6,120
Depreciation 3,459 3,011 10,295 9,212
Amortization of intangible assets 934 1,100 2,792 3,245
EBITDA 119 9,186 8,370 27,844
Reconciling items for Adjusted EBITDA
Preferred dividend 883 832 2,611 2,460
Non-cash stock based compensation 1,975 662 3,075 1,915
Foreign exchange loss 67 69 59 8
Other reconciling items(1)
Restructuring charges – – 1,107 –
Strategic review costs 650 – 650 –
CEO Retirement and transition costs 4,107 – 4,107 –
Contested proxy expenses – – 2,680 –
Severance costs 328 – 1,039 –
Adjusted EBITDA $ 8,129 $ 10,749 $ 23,698 $ 32,227
Adjusted EBITDA as a percent of revenues 12 % 16 % 12 % 16 %
(1) See explanations in Use of Non-GAAP Financial Measures section later in this release.
RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net (Loss) Income Applicable to Common Shares and Net (Loss) Income Per Diluted Share to
Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Share
(Unaudited, in thousands, except per share data)
For the Three Months Ended
September 30, 2016 September 30, 2015
Net Net
Income Amount Income Amount
Applicable to per Diluted Applicable to per Diluted
Common Shares Share Common Shares Share
As reported $ (4,489 ) $ (0.08 ) $ 2,670 $ 0.05
Severance charges, net of tax effect (1) 202 $ 0.00 – –
Strategic review costs, net of tax effect (2) 401 $ 0.01 – –
CEO retirement and transition costs, net of tax effect (3) 2,709 $ 0.05 – –
European net operating loss valuation reserve 1,224 $ 0.02 – –
Adjusted $ 47 $ 0.00 $ 2,670 $ 0.05
For the Nine Months Ended
September 30, 2016 September 30, 2015
Net Net
Income Amount Income Amount
Applicable to per Diluted Applicable to per Diluted
Common Shares Share Common Shares Share
As reported $ (6,108 ) $ (0.10 ) $ 8,289 $ 0.14
Restructuring charges, net of tax effect (4) 1,050 0.02 – –
Contested proxy expenses, net of tax effect (5) 1,654 0.03 – –
Severance charges, net of tax effect (6) 641 0.01 – –
Strategic review costs , net of tax effect (2) 401 0.01 – –
CEO retirement and transition costs, net of tax effect (3) 2,709 0.05 – –
European net operating loss valuation reserve 1,224 0.02 – –
Adjusted $ 1,571 $ 0.03 $ 8,289 $ 0.14
Note: Amounts may not foot due to rounding.

Footnotes:

 2016
(1) Severance charges, net of tax effect, as follows:
Severance charges $ 328
Tax effect on Severance charges (126 )
Severance charges, net of tax effect $ 202
(2) Strategic review costs, net of tax effect, as follows:
Strategic review costs $ 650
Tax effect on Strategic review costs (249 )
Strategic review costs, net of tax effect $ 401
(3) CEO Retirement and transition costs, net of tax effect, as follows:
CEO Retirement and transition costs $ 4,107
Tax effect on CEO Retirement and transition costs (1,398 )
CEO retirement and transition costs, net of tax effect $ 2,709
(4) Restructuring charges, net of tax effect, as follows:
Restructuring charges $ 1,107
Tax effect on Restructuring charges (57 )
Restructuring charges, net of tax effect $ 1,050
(5) Contested proxy expenses, net of tax effect, as follows:
Contested proxy expenses $ 2,680
Tax effect on contested proxy expenses (1,026 )
Contested proxy expenses, net of tax effect $ 1,654
(6) Severance charges, net of tax effect, as follows:
Severance charges $ 1,039
Tax effect on Severance charges (398 )
Severance charges, net of tax effect $ 641

Fiscal 2016 Outlook

Full year net loss per fully diluted common share is expected to be in the range of $0.11 to $0.013, based on 58.4 million fully diluted shares outstanding. Excluding the contested proxy expenses, restructuring charges, severance charges, strategic review costs, CEO retirement and transition costs and foreign operating loss valuation reserve taken in 2016, full year net income per fully diluted common share is expected to be in the range of $0.01 to $0.03.

RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of GAAP Guidance Net Loss Per Common Share – Diluted to
Adjusted Non-GAAP Guidance Net Income Per Common Share – Diluted
(Unaudited)
Twelve Months Ended
December 31, 2016
$ Amount
per Common
Share – Diluted
GAAP Guidance net loss per common share – diluted $ (0.13) – (0.11)
Restructuring charges, net of tax effect (1) 0.02
Contested proxy expenses, net of tax effect (2) 0.03
Severance charges, net of tax effect (3) 0.01
Strategic review costs , net of tax effect (4) 0.01
CEO retirement and transition costs, net of tax effect (5) 0.05
European net operating loss valuation reserve 0.02
Adjusted non-GAAP guidance net income per common share – diluted $ 0.01 – 0.03

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited condensed consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP financial measures that exclude certain amounts, including non-GAAP net income applicable to common shares, adjusted. The calculation of the tax effect on the adjustments between GAAP net (loss) income applicable to common shares and non-GAAP net income applicable to common shares is based upon our estimated annual GAAP tax rate, adjusted to account for items excluded from GAAP net (loss) income applicable to common shares in calculating non-GAAP net income applicable to common shares. A reconciliation of the non-GAAP financial measure to the corresponding GAAP measure is included in the table above.

The following is an explanation of the adjustment that management excluded as part of adjusted measures for the three and nine month periods ended September 30, 2016 as well as the reason for excluding the individual items:

(1) Restructuring charges – This adjustment represents the closure of our French distribution and tissue procurement office. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

(2) Contested proxy expenses – This adjustment represent charges relating to contested proxy expenses. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

(3) Severance charges – This adjustment represents charges relating to the termination of former employees. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

(4) Strategic review costs – This adjustment represents charges relating to a comprehensive strategic review of the Company’s business lines and operations to leverage the Company’s expertise, technology and products and identify opportunities to increase stockholder value. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

(5) CEO Retirement and transition costs – This adjustment represents charges relating to the retirement of our Chief Executive Officer, Brian K. Hutchison, pursuant to the Executive Transition Agreement dated August 29, 2012. Management removes the amount of these expenses from our operating results to supplement a comparison to our past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

Adjusted EBITDA should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company utilizes certain financial measures that are not calculated based on GAAP. Certain of these financial measures are considered “non-GAAP” financial measures within the meaning of Item 10 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission (“SEC”). The Company believes that non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with the GAAP results, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting the Company’s business. These non-GAAP financial measures are also used by the Company’s management to evaluate financial results and to plan and forecast future periods. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by the Company may differ from the non-GAAP measures used by other companies, including the Company’s competitors.

RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(Unaudited, in thousands)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2016 2015 2016 2015
Revenues:
Spine $ 17,775 $ 13,674 $ 52,514 $ 42,375
Sports medicine and orthopedics 11,874 11,882 36,956 37,654
Surgical specialties 1,168 670 2,985 2,004
Cardiothoracic 2,893 2,225 8,332 6,403
International 4,352 4,793 15,532 13,938
Subtotal direct 38,062 33,244 116,319 102,374
Global commercial 25,297 30,182 75,396 93,061
Other revenues 3,188 3,103 9,803 10,737
Total revenues $ 66,547 $ 66,529 $ 201,518 $ 206,172
Domestic revenues 60,959 61,046 183,192 189,751
International revenues 5,588 5,483 18,326 16,421
Total revenues $ 66,547 $ 66,529 $ 201,518 $ 206,172
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 30, December 31,
2016 2015
Assets
Cash and cash equivalents $ 11,624 $ 12,614
Accounts receivable – net 38,512 47,243
Inventories – net 125,175 118,673
Prepaid and other current assets 7,512 13,184
Total current assets 182,823 191,714
Property, plant and equipment – net 89,856 84,992
Goodwill 54,887 54,887
Other assets – net 46,844 49,069
Total assets $ 374,410 $ 380,662
Liabilities and Stockholders’ Equity
Accounts payable $ 23,287 $ 20,446
Accrued expenses and other current liabilities 22,153 33,474
Current portion of long-term obligations 4,689 5,853
Total current liabilities 50,129 59,773
Deferred revenue 7,754 9,354
Long-term liabilities 79,115 73,856
Total liabilities 136,998 142,983
Preferred stock, including accrued dividends 59,073 56,323
Stockholders’ equity:
Common stock and additional paid-in capital 417,670 417,337
Accumulated other comprehensive loss (6,895 ) (7,042 )
Accumulated deficit (232,436 ) (228,939 )
Total stockholders’ equity 178,339 181,356
Total liabilities and stockholders’ equity $ 374,410 $ 380,662
RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2016 2015 2016 2015
Cash flows from operating activities:
Net (loss) income $ (3,606 ) $ 3,502 $ (3,497 ) $ 10,749
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation and amortization expense 4,393 4,111 13,087 12,457
Stock-based compensation 1,975 662 3,075 1,915
Amortization of deferred revenue (1,216 ) (1,160 ) (3,650 ) (5,065 )
Other items to reconcile to net cash
provided by operating activities (4,721 ) (11,409 ) 1,019 (17,633 )
Net cash (used in) provided by operating activities (3,175 ) (4,294 ) 10,034 2,423
Cash flows from investing activities:
Purchases of property, plant and equipment (3,371 ) (4,392 ) (12,774 ) (12,969 )
Patent and acquired intangible asset costs (804 ) (133 ) (2,195 ) (249 )
Net cash used in investing activities (4,175 ) (4,525 ) (14,969 ) (13,218 )
Cash flows from financing activities:
Proceeds from long-term obligations 8,000 6,750 15,000 6,750
Net proceeds (payments) from short-term obligations (662 ) 160 (1,511 ) 508
Payments on long-term obligations (1,125 ) (1,135 ) (9,424 ) (4,161 )
Other financing activities – 612 (94 ) 2,308
Net cash provided by financing activities 6,213 6,387 3,971 5,405
Effect of exchange rate changes on cash and cash equivalents 7 41 (26 ) (5 )
Net decrease in cash and cash equivalents (1,130 ) (2,391 ) (990 ) (5,395 )
Cash and cash equivalents, beginning of period 12,754 12,699 12,614 15,703
Cash and cash equivalents, end of period $ 11,624 $ 10,308 $ 11,624 $ 10,308

Contacts

RTI Surgical Inc.
Robert Jordheim
Executive Vice President,
Chief Financial Officer
rjordheim@rtix.com
or
Wendy Crites Wacker, APR, 386-418-8888
Vice President, Global Communications
wwacker@rtix.com

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NuVasive Reports Third Quarter 2016 Financial Results

Posted On October 25, 2016 By OrthoSpineNews In Financial /  

SAN DIEGO, CA–(Marketwired – October 25, 2016) – NuVasive, Inc. (NASDAQ: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended September 30, 2016.

Third Quarter 2016 Highlights

  • Revenue increased 19.5% to $239.6 million, or 18.9% on a constant currency basis
  • GAAP operating profit margin of 8.8%; Non-GAAP operating profit margin of 16.1%
  • GAAP diluted earnings per share of $0.07; Non-GAAP diluted earnings per share up 14.3% from prior year to $0.40

“Our results for the third quarter reflect continued strength in procedural volumes across the United States, as well as strong performances in our European and Australian markets,” said Gregory T. Lucier, NuVasive’s chairman and chief executive officer. “While our revenue results for the quarter were lower than our expectations due to capital and stocking orders in the United States that did not come through late in the quarter as planned, we believe this minor disruption is temporary. During the quarter, we continued to experience positive trends, including domestic procedural volumes in line with prior quarters and the conversion of surgeons at an increasingly faster pace, signaling stable market trends and competitive dynamics that favor our innovation and spine-only focused strategy.

“As anticipated, our results were also impacted by our dilator being off the market in Japan for a large portion of the quarter, which resulted in lower XLIF revenues. If XLIF procedures in Japan had been performed at their normal pace, the underlying revenue growth rate of our core business would have been in the mid-to-high single digits. We have resubmitted our dilator for approval with the Japanese Ministry of Health, and to be prudent, we have updated our financial guidance to reflect the removal of XLIF revenues in Japan for the fourth quarter.”

Lucier continued, “Our intense focus on operational excellence is paying off as we delivered profitability and earnings that were significantly higher than our internal expectations, while continuing to invest in a broader innovation agenda and our new manufacturing facility in Ohio to drive long-term shareholder value creation. Based on these dynamics, we are reiterating our full year 2016 financial guidance in line with prior expectations, with the exception of revenue.”

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

Third Quarter 2016 Results

NuVasive’s financial results for the third quarter 2016 are inclusive of results from Ellipse Technologies, Inc. Mega Surgical and Biotronic NeuroNetwork, as these previously disclosed acquisitions were completed earlier in the year. Ellipse Technologies now operates as the renamed division NuVasive Specialized Orthopedics (NSO). Biotronic NeuroNetwork now operates alongside the Company’s existing Impulse Monitoring business under the renamed division NuVasive Clinical Services (NCS).

NuVasive reported third quarter 2016 total revenue of $239.6 million, a 19.5% increase compared to $200.5 million for the third quarter 2015. On a constant currency basis, third quarter 2016 total revenue increased 18.9% compared to the same period last year.

For the third quarter 2016, GAAP and non-GAAP gross profit was $180.5 million and $182.9 million, respectively, while GAAP and non-GAAP gross margin was 75.3% and 76.3%, respectively. These results compared to GAAP and non-GAAP gross profit of $151.4 million and GAAP and non-GAAP gross margin of 75.5% for the third quarter 2015. Total GAAP and non-GAAP operating expenses were $159.3 million and $144.4 million, respectively, for the third quarter of 2016. These results compared to GAAP and non-GAAP operating expenses of $123.3 million and $118.7 million, respectively, for the third quarter 2015.

NuVasive reported a GAAP net income of $3.9 million, or $0.07 per diluted share, for the third quarter 2016 compared to $13.0 million, or $0.24 per diluted share, for the third quarter 2015.

On a non-GAAP basis, the Company reported net income of $21.1 million, or $0.40 per diluted share for the third quarter 2016 compared to $18.1 million, or $0.35 per diluted share, for the third quarter 2015.

Cash, cash equivalents and short and long-term marketable securities were approximately $204 million at September 30, 2016.

Updated Guidance for 2016

The Company reiterated full year 2016 financial guidance in line with prior expectations, with the exception of revenue. The Company expects full year 2016 revenue to be lower than prior expectations based on the Company’s third quarter 2016 revenue results and the Company’s revised forecast for fourth quarter 2016 revenue in Japan.

  • Revenue of approximately $952.0 million for 2016, which includes a $1 million benefit from currency or approximately 17.4% growth compared to revenue of $811.1 million for 2015; versus a prior expectation of $962.0 million for 2016;
  • Non-GAAP diluted earnings per share of approximately $1.64, an increase of approximately 25% and in line with the prior expectation of $1.64, compared to non-GAAP diluted earnings per share of $1.31 for 2015;
  • Non-GAAP operating profit margin of approximately 16.0%, an increase of 60 basis points compared to 15.4% for 2015; in line with the prior expectation of approximately 16.0% for 2016;
  • Adjusted EBITDA margin of approximately 25.4% for 2016; in line with the prior expectation of approximately 25.4% for 2016, compared to 25.2% for 2015; and
  • Non-GAAP effective tax expense rate of approximately 37%; in line with the prior expectation of approximately 37% for 2016.

Supplementary Financial Information

Reconciliation of Full Year EPS Guidance
2016 Guidance
2015
Actuals		 Prior 1,2 Current 1,3
GAAP net income per share $ 1.26 $ 0.84 $ 0.76
Impact of change to diluted share count 0.03 0.03 0.03
GAAP net income per share, adjusted to diluted Non-GAAP share count $ 1.30 $ 0.88 $ 0.79
Litigation liability gain (0.82 ) (0.83 ) (0.83 )
Business transition costs 4 0.27 0.20 0.26
Non-cash interest expense on convertible notes 0.31 0.38 0.38
Non-cash purchase accounting adjustments on acquisitions 5 – 0.28 0.28
Loss on repurchase of convertible notes – 0.34 0.34
Amortization of intangible assets 0.24 0.73 0.78
In-process research & development 0.02 – –
Tax effect of adjustments 6 (0.01 ) (0.34 ) (0.36 )
Non-GAAP earnings per share $ 1.31 $ 1.64 $ 1.64
GAAP Weighted shares outstanding – basic 48,687 50,004 50,050
GAAP Weighted shares outstanding – diluted 52,425 53,942 54,100
Non-GAAP Weighted shares outstanding – diluted 51,110 52,000 52,050
1 Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.
2 Effective tax expense rate of approximately 41% applied to GAAP earnings and approximately 37% applied to Non-GAAP earnings.
3 Effective tax expense rate of approximately 42% applied to GAAP earnings and approximately 37% applied to Non-GAAP earnings.
4 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
5 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.
6 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis.
Reconciliation of Non-GAAP Operating Margin %
2016 Guidance
(in thousands, except %) 2015 Actuals Prior 1 Current 1
Non-GAAP Gross Margin % [A] 76.0 % 76.4 % 76.4 %
Non-cash purchase accounting adjustments on acquisitions 2 0.0 % (1.5 %) (1.5 %)
GAAP Gross Margin [B] 76.0 % 74.9 % 74.8 %
GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C] 56.4 % 55.4 % 55.3 %
Non-GAAP Research & Development Expense [D] 4.3 % 5.1 % 5.1 %
In-process research & development 0.1 % 0.0 % 0.0 %
GAAP Research & Development Expense [E] 4.4 % 5.1 % 5.1 %
Litigation liability [F] (5.2 %) (4.5 %) (4.5 %)
Amortization of intangible assets [G] 1.5 % 4.0 % 4.3 %
Business transition costs [H] 3 1.7 % 1.2 % 1.5 %
Non-GAAP Operating Margin % [A – C – D] 15.4 % 16.0 % 16.0 %
GAAP Operating Margin % [B – C – E – F – G – H] 17.1 % 13.7 % 13.2 %
1 Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.
2 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.
3 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
Reconciliation of EBITDA %
2016 Guidance
(in thousands, except %) 2015
Actuals		 Prior 1 Current 1
Net Income / (Loss) 8.2% 4.7% 4.3%
Interest (income) / expense, net 3.4% 5.9% 6.0%
Provision for income taxes 5.8% 3.2% 3.1%
Depreciation and amortization 8.1% 10.5% 10.6%
EBITDA 25.5% 24.3% 24.1%
Non-cash stock based compensation 3.1% 2.9% 2.9%
Business transition costs 2 1.7% 1.1% 1.4%
Non-cash purchase accounting adjustments on acquisitions 3 0.0% 1.5% 1.5%
In-process research & development 0.1% 0.0% 0.0%
Litigation liability gain (5.2%) (4.5%) (4.5%)
Adjusted EBITDA 25.2% 25.4% 25.4%
1 Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.
2 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
3 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

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

Reconciliation of Non-GAAP Information

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

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

Reconciliation of Third Quarter 2016 Results
GAAP Net Income per Share to Non-GAAP Earnings per Share
(in thousands, except per share data) Adjustments Diluted Earnings
Per Share
GAAP net income $ 3,926 $ 0.07
Business transition costs 1 3,451
Non-cash interest expense on convertible notes 5,186
Non-cash purchase accounting adjustments on acquisitions 2 2,457
Amortization of intangible assets 11,115
Tax effect of adjustments 3 (5,010 )
Adjustments to GAAP net loss 17,199 0.33
Non-GAAP earnings $ 21,125 $ 0.40
GAAP weighted shares outstanding – diluted 55,782
Non-GAAP weighted shares outstanding – diluted 52,633
1 Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
2 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.
3 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from approximately 41% to 36%.
Reconciliation of Year To Date 2016 Results
GAAP Net Income per Share to Non-GAAP Earnings per Share
(in thousands, except per share data) Adjustments Diluted Earnings
Per Share
GAAP net income $ 30,771 $ 0.58
Litigation liability gain (43,310 )
Business transition costs 1 11,514
Non-cash interest expense on convertible notes 14,547
Non-cash purchase accounting adjustments on acquisitions 2 14,747
Loss on repurchases of convertible notes 17,444
Amortization of intangible assets 28,945
Tax effect of adjustments 3 (15,759 )
Adjustments to GAAP net income 28,128 0.54
Non-GAAP earnings $ 58,899 $ 1.14
GAAP weighted shares outstanding – diluted 53,498
Non-GAAP weighted shares outstanding – diluted 51,841
1 Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
2 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.
3 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from approximately 41% to 36%.
Reconciliation of Third Quarter and Nine Months 2016 Results
GAAP net income to Adjusted EBITDA
Three months ended Nine months ended
(in thousands, except per share data) September 30, 2016 September 30, 2016
GAAP net income $ 3,926 $ 30,771
Interest (income) / expense, net 1 10,789 46,508
Provision for income taxes 6,972 17,383
Depreciation and amortization 27,158 72,865
EBITDA $ 48,845 $ 167,527
Litigation liability gain — (43,310 )
Non-cash purchase accounting related charges 2 2,457 14,747
Business transition costs 3 3,451 11,514
Non-cash stock based compensation 7,288 19,645
Adjusted EBITDA $ 62,041 $ 170,123
As a percentage of revenue 25.9 % 24.6 %
1 Included in Interest (income) / expense, net for the nine months ended September 30, 2016 is loss on extinguishment of debt for $17.4 million.
2 Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.
3 Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.

Investor Conference Call

NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results of its financial performance for the third quarter 2016. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company’s website at www.nuvasive.com. After the live webcast, the call will remain available on NuVasive’s website through November 28, 2016. In addition, a telephone replay of the call will be available until November 2, 2016. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers. Please use pin number: 13646026.

About NuVasive

NuVasive, Inc. (NASDAQ: NUVA) is a world leader in minimally invasive, procedurally-integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes. NuVasive’s highly differentiated, procedurally-integrated solutions include access instruments, implantable hardware and software systems for surgical planning and reconciliation technology that centers on achieving the global alignment of the spine. With $811 million in revenues (2015), NuVasive has an approximate 2,200 person workforce in more than 40 countries around the world. For more information, please visit www.nuvasive.com.

NuVasive cautions you that statements included in this news release or made on the investor conference call referenced herein that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. In addition, this news release contains selected financial results from the third quarter 2016, as well as projections for 2016 financial guidance and longer-term financial performance goals. The Company’s projections for 2016 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which are subject to the risk of being inaccurate because of the preliminary nature of the forecasts, the risk of further adjustment, or unanticipated difficulty in selling products or generating expected profitability. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive’s revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; and those other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission. NuVasive’s public filings with the Securities and Exchange Commission are available atwww.sec.gov.com. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.

NuVasive, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended September 30, Nine Months Ended September 30,
2016 2015 2016 2015
(unaudited)
Revenue $ 239,649 $ 200,538 $ 690,963 $ 595,831
Cost of goods sold (excluding below amortization of intangible assets) 59,196 49,167 173,167 143,246
Gross profit 180,453 151,371 517,796 452,585
Operating expenses:
Sales, marketing and administrative 131,886 110,554 391,211 338,444
Research and development 12,516 9,189 35,016 27,227
Amortization of intangible assets 11,438 3,067 29,912 9,037
Litigation liability gain — (500 ) (43,310 ) (42,507 )
Business transition costs 3,451 950 11,514 10,845
Total operating expenses 159,291 123,260 424,343 343,046
Interest and other expense, net:
Interest income 190 362 924 1,125
Interest expense (10,979 ) (7,307 ) (29,988 ) (21,675 )
Loss on repurchases of convertible notes — — (17,444 ) —
Other income (loss), net 94 387 (102 ) 530
Total interest and other expense, net (10,695 ) (6,558 ) (46,610 ) (20,020 )
Income before income taxes 10,467 21,553 46,843 89,519
Income tax expense (6,972 ) (8,803 ) (17,383 ) (35,332 )
Consolidated net income $ 3,495 $ 12,750 $ 29,460 $ 54,187
Add back net loss attributable to non-controlling interests $ (431 ) $ (210 ) $ (1,311 ) $ (601 )
Net income attributable to NuVasive, Inc. $ 3,926 $ 12,960 $ 30,771 $ 54,788
Net income per share attributable to NuVasive, Inc.:
Basic $ 0.08 $ 0.26 $ 0.62 $ 1.13
Diluted $ 0.07 $ 0.24 $ 0.58 $ 1.05
Weighted average shares outstanding:
Basic 50,264 48,993 49,970 48,513
Diluted 55,782 53,199 53,498 52,202
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
September 30, 2016 December 31, 2015
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 203,818 $ 192,339
Short-term marketable securities — 165,423
Accounts receivable, net of allowances of $8,335 and $5,320, respectively 143,818 127,595
Inventory, net 212,784 168,140
Prepaid income taxes 46,904 40,540
Prepaid expenses and other current assets 9,573 8,790
Total current assets 616,897 702,827
Property and equipment, net 179,913 141,441
Long-term marketable securities — 112,332
Intangible assets, net 303,928 85,076
Goodwill 498,686 154,281
Deferred tax assets 4,633 83,691
Restricted cash and investments 7,420 5,615
Other assets 24,568 17,404
Total assets $ 1,636,045 $ 1,302,667
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 72,581 $ 60,985
Contingent consideration liabilities 45,005 —
Accrued payroll and related expenses 41,010 37,641
Income tax liabilities 828 990
Short-term senior convertible notes 120,975 —
Total current liabilities 280,399 99,616
Long term senior convertible notes 559,950 372,920
Deferred and income tax liabilities, non-current 26,239 8,602
Non-current litigation liabilities — 88,261
Other long-term liabilities 46,643 14,425
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding — —
Common stock, $0.001 par value; 120,000,000 shares authorized at September 30, 2016 and December 31, 2015, 55,096,226 and 52,616,471 issued and outstanding at September 30, 2016 and December 31, 2015, respectively 55 53
Additional paid-in capital 1,033,298 989,387
Accumulated other comprehensive loss (5,891 ) (12,112 )
Accumulated deficit (73,235 ) (104,006 )
Treasury stock at cost; 4,751,464 shares and 3,316,794 shares at September 30, 2016 and December 31, 2015, respectively (237,411 ) (161,788 )
Total NuVasive, Inc. stockholders’ equity 716,816 711,534
Non-controlling interests 5,998 7,309
Total equity $ 722,814 $ 718,843
Total liabilities and equity $ 1,636,045 $ 1,302,667
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
2016 2015
(unaudited)
Operating activities:
Consolidated net income $ 29,460 $ 54,187
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 73,765 49,006
Loss on repurchases of convertible notes 17,444 —
Amortization of non-cash interest 16,906 13,255
Stock-based compensation 19,645 20,570
Reserves on current assets 9,027 7,232
Other non-cash adjustments 11,369 13,127
Deferred income taxes 24,810 37,047
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable (3,038 ) 2,163
Inventory (22,423 ) (19,768 )
Prepaid expenses and other current assets (3,457 ) 2,512
Accounts payable and accrued liabilities 5,939 8,828
Accrued royalties (85 ) (46,999 )
Accrued payroll and related expenses (1,670 ) (5,080 )
Litigation liability (88,450 ) (35,333 )
Income taxes 6,778 (52,739 )
Net cash provided by operating activities 96,020 48,008
Investing activities:
Acquisition of Ellipse Technologies, net of cash acquired (380,080 ) —
Other acquisitions and investments (108,150 ) (1,357 )
Purchases of intangible assets (5,918 ) (28,589 )
Proceeds from sales of property and equipment 40
Purchases of property and equipment (73,882 ) (59,905 )
Purchases of marketable securities (128,956 ) (320,177 )
Proceeds from sales of marketable securities 407,032 272,666
Sales of restricted investments — 180,694
Purchases of restricted investments — (62,625 )
Net cash used in investing activities (289,954 ) (19,253 )
Financing activities:
Incremental tax benefits related to stock-based compensation awards — 15,185
Proceeds from the issuance of common stock 6,668 9,040
Payment of contingent consideration — (514 )
Purchase of treasury stock (24,441 ) (52,532 )
Proceeds from issuance of convertible debt, net of issuance costs 634,140 —
Proceeds from sale of warrants 44,850 —
Purchase of convertible note hedge (111,150 ) —
Repurchases of convertible notes (343,835 ) —
Proceeds from revolving line of credit 50,000 —
Repayments on revolving line of credit (50,000 ) —
Other financing activities (1,701 ) (131 )
Net cash provided by (used in) financing activities 204,531 (28,952 )
Effect of exchange rate changes on cash 882 (862 )
Increase (decrease) in cash and cash equivalents 11,479 (1,059 )
Cash and cash equivalents at beginning of period 192,339 142,387
Cash and cash equivalents at end of period $ 203,818 $ 141,328

CONTACT INFORMATION

  • Investor Contact:
    Suzanne Hatcher
    NuVasive, Inc.
    1-858-458-2240
    Email contact

    Media Contact:
    Michael Farrington
    NuVasive, Inc.
    1-858-909-1940
    Email contact

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Exactech Schedules Third Quarter 2016 Earnings Release and Conference Call

Posted On October 24, 2016 By OrthoSpineNews In Financial /  

October 24, 2016

GAINESVILLE, Fla.–(BUSINESS WIRE)–Exactech, Inc. (Nasdaq: EXAC), a developer and producer of bone and joint restoration products for extremities, hip, knee, and spine, will release its third quarter financial results after the market closes on Monday, October 31, 2016. A copy of the earnings release will be available at http://www.hawkassociates.com.

The company will hold a conference call with CEO David Petty and key members of the management team on Tuesday, November 1 at 9:00 a.m. Eastern Time. The call will cover Exactech’s third quarter results. 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 1. International and local callers should dial 1-719-325-4765. A live and archived webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm orhttp://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 can be found at http://www.exac.com.

A current investment profile on Exactech (Nasdaq: EXAC) is available online 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.

Contacts

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

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Orthofix International Schedules Third Quarter 2016 Earnings Release and Conference Call for October 31, 2016

Posted On October 21, 2016 By OrthoSpineNews In Financial /  

October 21, 2016

LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix International N.V. (NASDAQ:OFIX) (the “Company”), a diversified, global medical device company, today announced that it plans to release third quarter 2016 financial results after market close on Monday, October 31, 2016. Brad Mason, Chief Executive Officer, and Doug Rice, Chief Financial Officer, will host a conference call and webcast to review the Company’s results at 4:30 p.m. EDT the same day.

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.

Contacts

Orthofix International N.V.
Investor Contact:
Mark Quick, 214-937-2924
markquick@orthofix.com
or
Media Contact:
Denise Landry, 214-937-2529
deniselandry@orthofix.com

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Global Lumbar Spine Fusion Market 2016-2020: Key Vendors are DePuy Synthes, Medtronic, NuVasive, Stryker & Zimmer Biomet – Research and Markets

Posted On October 21, 2016 By OrthoSpineNews In Financial /  

October 21, 2016

DUBLIN–(BUSINESS WIRE)–Research and Markets has announced the addition of the “Global Lumbar Spine Fusion Market 2016-2020” report to their offering.

The global lumbar spine fusion market to grow at a CAGR of 4.9% during the period 2016-2020.

Spinal fusion surgery is performed in many forms, and all are designed to help limit the pain caused by joints through surgery depending on conditions such as degenerative disc disease (DDD), spondylosyndesis or spondylodesis, and other small problems caused in spine vertebrae. Spine surgery is mostly recommended by surgeons when they pinpoint the source of pain in the individual. To determine this, physicians use imaging tests such as computed tomography (CT), magnetic resonance imaging (MRI), and X-rays.

The report covers the present scenario and the growth prospects of the global lumbar spine fusion market for 2016-2020. To calculate the market size, we consider revenue generated from the sales of lumbar spine fusion devices to key customer segments such as hospitals and ambulatory surgical centers (ASCs). The report also includes a discussion of the key vendors operating in this market.

Key questions answered in this report

  • What will the market size be in 2020 and what will the growth rate be?
  • What are the key market trends?
  • What is driving this market?
  • What are the challenges to market growth?
  • Who are the key vendors in this market space?
  • What are the market opportunities and threats faced by the key vendors?
  • What are the strengths and weaknesses of the key vendors?

Key vendors

  • DePuy Synthes
  • Medtronic
  • NuVasive
  • Stryker
  • Zimmer Biomet

Other prominent vendors

  • Aesculap Implant Systems
  • Alliance Spine
  • Alphatech Spine
  • Amedica
  • AOI Medical
  • Apollo Spine
  • Cook Medical
  • Crosstrees Medical
  • K2M
  • LDR Holding
  • MEDICREA
  • NuTech Medical
  • Orthofix International
  • Paradigm Spine
  • RTI Surgical
  • Smith & Nephew
  • Trans1
  • Vexim
  • VTI
  • Zavation

Key Topics Covered:

Part 01: Executive summary

Part 02: Scope of the report

Part 03: Market research methodology

Part 04: Introduction

Part 05: Market landscape

Part 06: Market segmentation by product type

Part 07: Global lumbar spine implants and instrumentation market

Part 08: Global lumbar spine fusion biomaterials market

Part 09: Market segmentation by procedure

Part 10: Market segmentation by end-user

Part 11: Geographical segmentation

Part 12: Market drivers

Part 13: Impact of drivers

Part 14: Market challenges

Part 15: Impact of drivers and challenges

Part 16: Market trends

Part 17: Vendor landscape

Part 18: Key vendor analysis

Part 19: Appendix

For more information about this report visit http://www.researchandmarkets.com/research/d5lqqt/global_lumbar

Contacts

Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716
Related Topics: Surgical Procedures

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Zimmer Biomet Expands Foot and Ankle Portfolio Through Exclusive Global Distribution Agreement with Nextremity Solutions, Inc.

Posted On October 21, 2016 By OrthoSpineNews In Financial /  

WARSAW, Ind., Oct. 20, 2016 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH), a global leader in musculoskeletal healthcare, today announced an exclusive agreement with Nextremity Solutions, Inc. to globally distribute the company’s foot and ankle deformity correction products. The financial terms of the transaction were not disclosed.

“We’re excited to expand the clinical capabilities of our foot and ankle portfolio with Nextremity Solutions’ deformity correction products,” said Brad Quick, General Manager of Zimmer Biomet Foot and Ankle. “The agreement helps advance our commitment to provide customers with the broadest range of cutting-edge technologies and strengthens our position in the $2 billion foot and ankle market.”

Nextremity Solutions designs and manufactures the following procedure-ready, sterile implant systems for the correction of foot and ankle pathologies, which will be globally distributed by Zimmer Biomet:

  • Nextra® Hammertoe Correction System, the industry’s only adjustable two-piece hammertoe implant.
  • MSP™ Metatarsal Shortening System, an osteotomy guide and implant in one. The innovative design provides precision and stability for metatarsal shortening procedures.
  • Re+Line® Bunion Correction System, a unique, low profile tension-band compression plate designed for performing precise, repeatable bunion correction surgery.
  • ArcusTM Staple System, an arc-styled staple design that provides greater and more uniform compression than conventional staples[1].

“The agreement with Zimmer Biomet allows us to expand the reach and influence of our forefoot portfolio by leveraging the commercial capabilities of a global musculoskeletal healthcare leader,” said Rod K. Mayer, President and Chief Executive Officer of Nextremity Solutions, Inc. “Our partnership with Zimmer Biomet enables us to focus on our current strategy of working with our surgeon partners to deliver innovative solutions that help advance the standard of care in the foot and ankle market with speed, efficiency and excellence.”

About Zimmer Biomet

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

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

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

About Nextremity Solutions

Founded in 2010, Nextremity Solutions, Inc. is a privately held medical device company offering innovative solutions and approaches to foot and ankle surgical intervention. The Company’s procedure-ready, sterile implant systems for the correction of foot and ankle pathologies include uniquely precise, proprietary technology designed to achieve repeatable and superior clinical outcomes. Nextremity Solutions, Inc. continues to develop and introduce new, innovative products to the foot and ankle market. For more information, visit nextremitysolutions.com.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, but are not limited to, statements concerning Zimmer Biomet’s expectations, plans, prospects, and product and service offerings, including new product launches and potential clinical successes.  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.  For a list and description of some of such risks and uncertainties, see our periodic reports filed with the SEC.  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in Zimmer Biomet’s filings with the SEC.  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.  Accordingly, such forward-looking statements speak only as of the date made.  Readers of this news release 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 news release.

[1] Comparison of Compressive Force for Bone Staples, Lisa A. Ferra, Ph.D., OrthoKinetic Technologies LLC and OrthoKinetic Testing Technologies, Southport, NC. Laboratory studies are not necessarily indicative of clinical results.

345 E. Main St.
Warsaw, IN 46580
www.zimmerbiomet.com

Logo – http://photos.prnewswire.com/prnh/20150624/225371LOGO

 

SOURCE Zimmer Biomet Holdings, Inc.

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Global Trauma & Extremities Market Worth USD 15.9 Billion by 2024 – Analysis, Technologies & Forecasts Report 2016-2024 – Vendors: DePuy Synthes, Stryker, Zimmer Biomet – Research and Markets

Posted On October 20, 2016 By OrthoSpineNews In Financial /  

October 20, 2016

DUBLIN–(BUSINESS WIRE)–Research and Markets has announced the addition of the “Trauma And Extremities Market Analysis By Type And Segment Forecasts To 2024” report to their offering.

The global trauma and extremities market was valued at USD 8.0 billion in 2015 and is expected to reach a value of USD 15.9 billion by 2024. The expansion is attributed to the increasing geriatric population base along with the growing incidence rate of target diseases such as osteoporosis.

Introduction of new technologies in terms of material, technique, and the non-invasive nature of the employed material are augmenting the market growth. In July 2016, DePuy Synthes launched a new hand locking system used for deformities and fracture fixation. This device is designed to reduce soft tissue irritation and facilitate healing.

Moreover, companies are investing in new product development, which is anticipated to aid the future growth of the market. In 2015, Smith & Nephew invested USD 222 million on research and development, yielding a promising product pipeline for 2016. It has already launched a new product, SUTUREFIX, a suture anchor in February 2015. The product is expected to improve hip and shoulder repair by providing additional fixation points.

In 2015, North America dominated the market with a revenue share of more than 40%. The Affordable Care Act includes a separate grant for trauma care.

Companies Mentioned:

  • DePuy Synthes
  • Stryker
  • Zimmer Biomet
  • Smith & Nephew
  • Wright Medical Technology, Inc.
  • Advanced Orthopaedic Solutions
  • Integra LifeSciences Corporation
  • Acumed
  • Bioretec Ltd.
  • Cardinal Health

Report Structure:

1 Research Methodology

2 Executive Summary

3 Market Snapshot

4 Market Variables, Trends& Scope

5 Market Categorization 1: Type Estimates & Trend Analysis

6 Market Categorization 2: Regional Estimates & Trend Analysis, by Type

7 Competitive Landscape

For more information about this report visit http://www.researchandmarkets.com/research/3d2rtw/trauma_and

Contacts

Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716
Related Topics: Orthopedic Devices

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Johnson & Johnson Innovation Announces New Collaboration with Texas Medical Center to Spur Development of Breakthrough Medical Device Technologies

Posted On October 20, 2016 By OrthoSpineNews In Financial /  

HOUSTON, Oct. 18, 2016 /PRNewswire/ — Johnson & Johnson Innovation LLC (JJI) today announced the creation of the Center for Device Innovation at Texas Medical Center (CDI @ TMC), a broad, new collaboration between JJI and TMC that aims to accelerate end-to-end development of breakthrough medical devices. This expands on JJI’s collaboration with TMC established earlier this year with the opening of JLABS @ TMC, combining the resources of the world’s largest medical complex with the capabilities of the Johnson & Johnson Medical Devices Companies*, to advance the health and well-being of people around the globe.

William E. “Billy” Cohn, M.D., an internationally renowned cardiac surgeon and serial medical device entrepreneur will lead the CDI @ TMC. Dr. Cohn recently joined the Johnson & Johnson Medical Devices Companies from the Baylor College of Medicine and the Texas Heart Institute (THI), where he was the Director of THI’s Center for Technology and Innovation and the Cullen Cardiovascular Research Laboratory. In his role as Director of the CDI @ TMC, Dr. Cohn will work on cutting-edge internal research and development projects for the Johnson & Johnson Medical Devices Companies and with external entrepreneurs and innovators.

“By creating a nexus for innovation, where scientists and engineers of the Johnson & Johnson Family of Companies can collaborate with academicians, expert clinicians, and external entrepreneurs to leverage the unique size, scope, and capabilities of TMC’s member institutions, we are confident that we can dramatically enhance health care around the world,” said Paul Stoffels, Chief Scientific Officer of Johnson & Johnson.

The CDI @ TMC will include multiple components that will accelerate the development of new medical technologies from concept through commercialization, including a new medical device engineering studio housed at the TMC Innovation Institute. This state-of-the-art “maker space” will be home to R&D staff of the Johnson & Johnson Medical Devices Companies and will be used to accelerate both select internal projects and strategically aligned ventures of JJI partner companies. The facility will allow rapid prototyping and “fast failure” for early and mid-stage development. Through a series of collaborative agreements, the CDI @ TMC will also have broad access to the preclinical facilities of Baylor College of Medicine, Houston Methodist Research Institute, and THI that will permit the testing of novel devices for any organ system or disease-based application.

“We are eager for the opportunity to expand our collaboration with Johnson & Johnson Innovation,” said Robert C. Robbins, M.D., President and CEO, TMC. “Working together, we are creating a globally competitive innovation ecosystem here, and the new Center for Device Innovation @ TMC will enable us to expeditiously bring discovery and innovation to fruition, directly improving the health of patients.”

In addition to investing in a world-class innovation facility, JJI’s partnership is expanding innovation collaborations among several TMC member institutions. The alliance with Baylor College of Medicine will foster scientific discovery and promote the commercialization of medical devices using an open innovation model. The collaboration with Houston Methodist Research Institute will facilitate translational research activities in the anticipation of rapidly moving into human clinical trials. To this end, R&D staff and JJI partner companies will also have the use of the Methodist Institute for Technology, Innovation, and Education (MITIESM), a virtual hospital and hands-on clinical training facility, which develops strategies to optimize the introduction of novel device technologies into clinical practice. The relationship with Texas Heart Institute will deepen the scope of research currently devoted to surgical medical devices used to treat patients, helping to make more options commercially available. JJI will join forces with the TMC Clinical Trials Institute to develop and test new paradigms for accelerated medical device clinical trials. Lastly, the CDI @ TMC will have an affiliation with TMC Biodesign, a one-year innovation fellowship program, where Dr. Cohn will continue in his role as a faculty member.

* Comprising the surgery, orthopaedics, and cardiovascular businesses within Johnson & Johnson’s Medical Devices segment.         

About Johnson & Johnson Innovation LLC

Johnson & Johnson Innovation LLC focuses on accelerating all stages of innovation worldwide and forming collaborations between entrepreneurs and Johnson & Johnson’s global healthcare businesses. Johnson & Johnson Innovation LLC provides scientists, entrepreneurs and emerging companies with one-stop access to science and technology experts who can facilitate collaborations across the pharmaceutical, medical devices and consumer companies of Johnson & Johnson. Under the Johnson & Johnson Innovation umbrella of businesses, we connect with innovators through our regional Innovation Centers, JLABS, JLINX, Johnson & Johnson Innovation – JJDC, Inc. and our Business Development teams to create customized deals and novel collaborations that speed development of innovations to solve unmet needs for patients. For more information please visit: www.jnjinnovation.com.

Cautions Concerning Forward-Looking Statements

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 related to a new collaboration and product research and development. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson Innovation, LLC, the Johnson & Johnson Medical Devices Companies and/or Johnson & Johnson. Risks and uncertainties include, but are not limited to: the potential that the expected benefits and opportunities related to the collaboration may not be realized or may take longer to realize than expected; challenges inherent in new product research and development, including the uncertainty of clinical success and obtaining regulatory approvals; competition, including technological advances, new products and patents attained by competitors; uncertainty of commercial success for new products; the ability of the company to successfully execute strategic plans; impact of business combinations and divestitures; challenges to patents; changes in behavior and spending patterns or financial distress of purchasers of health care products and services; and global health care reforms and trends toward health care cost containment. A further list and description of these risks, uncertainties and other factors can be found in Johnson & Johnson’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016, including in Exhibit 99 thereto, and the company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov,www.jnj.com or on request from Johnson & Johnson. Johnson & Johnson Innovation, LLC, the Johnson & Johnson Medical Devices Companies and Johnson & Johnson do not undertake to update any forward-looking statement as a result of new information or future events or developments.

Media Contact
Ryan Flinn
Johnson & Johnson Innovation
+1 510-207-7616
rflinn1@its.jnj.com

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