Exactech’s Q1 Up 6 Percent From Last Year

Gainesville, Fla.-based Exactech Inc., a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, brought in revenue of $65.3 million for the first quarter of 2016, a 6 percent increase from $61.4 million in the first quarter of 2015. On a constant currency basis, revenue was up 7 percent. Net income was $4.4 million, or $0.31 per diluted share, compared to $4.1 million, or $0.29 per diluted share, in the same quarter a year ago.

• Extremity implant revenue increased 15 percent to $24.2 million, a 15 percent constant currency increase.
• Knee implant revenue increased 5 percent to $19.4 million, a 6 percent constant currency increase.
• Hip implant revenue increased 4 percent to $11.3 million, a 5 percent constant currency increase.
• Biologic and Spine revenue increased 5 percent to $5.4 million, a 7 percent constant currency increase.
• Other revenue decreased 13 percent to $5.0 million, a 12 percent constant currency decrease.

“U.S. sales were up 8 percent to $44.6 million compared with $41.2 million in the first quarter a year ago,” said Exactech CEO and President David Petty. “International sales increased 3 percent to $20.7 million. U.S. sales represented 68 percent of total sales and international sales were 32 percent of the total. During the quarter we continued to do surgeries with our new revision hip and revision knee systems which remain in pilot launch mode. We will ramp up availability of both of those systems during the second and third quarters. The proximal humeral reconstruction stem is in full launch. We also are seeing increased benefit from improvements we have made to the U.S. sales channel and expect that momentum to continue.”

“Gross margins decreased to 69 percent from 70 percent for the first quarter a year ago due to continued pricing pressures,” added Chief Financial Officer Jody Phillips. “Total operating expenses for the quarter increased 5 percent to $38.6 million; however, as a percentage of sales decreased to 59 percent, compared to 60 percent for the first quarter of 2015. Sales and marketing expenses increased 7 percent to $23.3 million, which included the integration of our recently acquired distributor in Australia. General and administrative expenses increased 1 percent in the first quarter to $5.9 million and research and development expenses increased 12 percent to $5.1 million during the first quarter reflecting ongoing significant investment in our new product pipeline.”

Exactech increased its 2016 revenue guidance to $250-$257 million and its diluted earnings per share (EPS) target to $1.14—$1.19. For the second quarter ending June 30, 2016, company officials said it anticipates revenues of $63-$65 and diluted EPS of $0.29-$0.31. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance.