Second-Quarter Sales Climb 17.6 Percent at Globus Medical

Globus Medical Inc. pleased Wall Street analysts in the second quarter of 2015.

The Audubon, Pa.-based spinal product manufacturer grew sales 17.6 percent to $133.6 million, or 19.1 percent on a constant currency basis. Net income surged 16.5 percent to $24.1 million, and fully diluted earnings per share came to 25 cents.

“The Globus team achieved strong sales growth and market share gains while maintaining strong profitability,” Chairman/CEO David Paul said. “During the second quarter, we launched five new products and made further progress on integrating our two most recent acquisitions. We remain confident in our long term growth prospects and our ability to sustain our industry leading profitability by the continued execution of our strategy of introducing innovative products, expanding our U.S. and international sales footprint, and controlling our expenses.”

Gross profit rose 16 percent to $100.9 million, and operating income jumped 17.3 percent to $37 million. Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was 35 percent of sales.

U.S. sales grew by 19.5 percent for the quarter, driven by strong sales of several key products, including the Creo, Altera, Kinex, Signify and Rise-L brands, executives said during a conference call with analysts. International sales increased by 1.2 percent compared with the second quarter of 2014 on an as reported basis and 15.4 percent on a constant currency basis. “International had an additional headwind in Q2, with a government mandated price reduction in Belgium affective in April,” Senior Vice President and Chief Financial Officer Dan Scavilla noted. “This impact is reflected in our results and had a negative impact of approximately 250 basis points on the international sales growth versus Q2 2014.”

Innovative fusion sales increased in the three-month period ending June 30 to $71.6 million — of which, 8.7 percent was driven by Globus’ newest pedicle screw platform, Creo. Disruptive technology sales increased $62 million or 29.9 percent from Q2 2014, driven by continued strength in the company’s expandable technology and biologics portfolios.

Cash, cash equivalents and marketable securities ended the quarter at $281.2 million. The company remains debt free.

Based on its strong second-quarter showing, the company increased its full-year sales guidance by $10 million to $524 million and earnings per share by 2 cents to $1.04.

“We are executing well on our strategy to introduce a broad spectrum of innovative technology, grow ourselves footprint in the U.S. and abroad, and make focused tuck-in acquisitions,” President/Chief Operating Officer Dave Demski said. “This has enabled us for year-to-date constant currency growth of 18 percent, while maintaining our profitability and cash flow metrics.”