Business Wire05.08.17
It's been a profitable year thus far for Exactech Inc.
The company's first-quarter revenue rose 6 percent to $69.5 million compared with the first quarter of 2016, and 7 percent on a constant currency basis. Domestic revenue increased 7 percent to $47.7 million and international revenue increased 5 percent to $21.8 million in the first quarter (ended March 31). Diluted earnings per share was 32 cents based on net income of $4.6 million, compared to Q1 2016 net income of $4.4 million and diluted earnings per share of 31 cents.
“With three new revision systems now in full launch, we leveraged our sales channel and improvements in our supply chain to deliver a strong start to 2017. The features of our Optetrak Logic CC revision knee and Alteon Monobloc hip systems continue to attract new surgeons, improve patient outcomes and post growth in those segments," Exactech CEO and President David Petty said. "Our extremities business continued to accelerate, attracting record attendance at our global medical education programs. At the 10-year clinical milestone, our Equinoxe reverse platform shoulder system remains a core driver of customer satisfaction while new products like our humeral reconstruction prosthesis contribute to a robust new customer pipeline. The sales increase of 6 percent was above our expectations as domestic revenue increased, and excluding the impact of the divested U.S. spine assets during the quarter, domestic sales increased 11 percent. International revenue increased 5 percent to $21.8 million, and a 7 percent increase on a constant currency basis.”
First-Quarter Highlights:
“Gross margins increased to 70 percent from 69 percent for the first quarter a year ago due to strength in our U.S. extremities business," Chief Financial Officer Jody Phillips said. "Total operating expenses for the quarter increased 10 percent to $42.5 million primarily due to heavy investments we continue to make in our product development pipeline with research and development expenses increasing 23 percent during the quarter. Sales and marketing expenses increased 7 percent to $25.1 million due to variable selling expenses and investments in our medical education and training programs. Transition costs associated with divestiture of our spine assets were less than originally projected at a total of $0.5 million resulting in a 2 cents diluted EPS impact on the quarter and as a result we produced a net income increase of 4 percent to $4.6 million for the quarter."
Looking forward, Exactech updated its 2017 revenue guidance to $266 million to $272 million and increased diluted EPS target to $1.24-$1.30, including the impact of the first quarter 2 cents diluted earnings per share costs related to the spine business transition. On an adjusted basis, the diluted EPS target is $1.26-$1.32. For the second quarter of 2017, the company anticipates revenues of $66.5 million to $68.5 million and diluted EPS of 32 cents to 34 cents.
Based in Gainesville, Fla., Exactech develops and markets orthopedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopedic devices at its Gainesville facility. Exactech’s orthopedic 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.
The company's first-quarter revenue rose 6 percent to $69.5 million compared with the first quarter of 2016, and 7 percent on a constant currency basis. Domestic revenue increased 7 percent to $47.7 million and international revenue increased 5 percent to $21.8 million in the first quarter (ended March 31). Diluted earnings per share was 32 cents based on net income of $4.6 million, compared to Q1 2016 net income of $4.4 million and diluted earnings per share of 31 cents.
“With three new revision systems now in full launch, we leveraged our sales channel and improvements in our supply chain to deliver a strong start to 2017. The features of our Optetrak Logic CC revision knee and Alteon Monobloc hip systems continue to attract new surgeons, improve patient outcomes and post growth in those segments," Exactech CEO and President David Petty said. "Our extremities business continued to accelerate, attracting record attendance at our global medical education programs. At the 10-year clinical milestone, our Equinoxe reverse platform shoulder system remains a core driver of customer satisfaction while new products like our humeral reconstruction prosthesis contribute to a robust new customer pipeline. The sales increase of 6 percent was above our expectations as domestic revenue increased, and excluding the impact of the divested U.S. spine assets during the quarter, domestic sales increased 11 percent. International revenue increased 5 percent to $21.8 million, and a 7 percent increase on a constant currency basis.”
First-Quarter Highlights:
- Extremity revenues increased 21 percent to $30 million from $24.8 million, a 21 percent constant currency increase.
- Knee revenue climbed 1 percent to $20 million from $19.8 million, a 1 percent constant currency increase
- Hip revenue increased 6 percent to $12.1 million from $11.4 million, a 6 percent constant currency increase
- Other revenues decreased 20 percent to $7.3 million from $9.2 million, a 19 percent constant currency decrease. The Other segment includes an aggregation of the former Biologics and Spine segment.
“Gross margins increased to 70 percent from 69 percent for the first quarter a year ago due to strength in our U.S. extremities business," Chief Financial Officer Jody Phillips said. "Total operating expenses for the quarter increased 10 percent to $42.5 million primarily due to heavy investments we continue to make in our product development pipeline with research and development expenses increasing 23 percent during the quarter. Sales and marketing expenses increased 7 percent to $25.1 million due to variable selling expenses and investments in our medical education and training programs. Transition costs associated with divestiture of our spine assets were less than originally projected at a total of $0.5 million resulting in a 2 cents diluted EPS impact on the quarter and as a result we produced a net income increase of 4 percent to $4.6 million for the quarter."
Looking forward, Exactech updated its 2017 revenue guidance to $266 million to $272 million and increased diluted EPS target to $1.24-$1.30, including the impact of the first quarter 2 cents diluted earnings per share costs related to the spine business transition. On an adjusted basis, the diluted EPS target is $1.26-$1.32. For the second quarter of 2017, the company anticipates revenues of $66.5 million to $68.5 million and diluted EPS of 32 cents to 34 cents.
Based in Gainesville, Fla., Exactech develops and markets orthopedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopedic devices at its Gainesville facility. Exactech’s orthopedic 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.