Second-Quarter Sales Rise 3 percent at Globus Medical

Globus Medical Inc. enjoyed a prosperous spring.

The Audubon, Pa.-based musculoskeletal implant firm increased sales 2.9 percent to $137.5 million (3.1 percent on a constant currency basis) and grew net income 7.3 percent to $25.8 million, or 18.8 percent of sales. Diluted earnings per share (EPS) in the second quarter increased 6.9 percent to 27 cents, and non-GAAP diluted EPS rose 10.6 percent to 29 cents.

“The Globus team essentially grew sales along with the overall spine market this quarter but leveraged that top line growth into non-GAAP EPS of $0.29,” Chairman and CEO David Paul said.  “During the second quarter, we continued progress with product development, sales force expansion and made further progress 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.”

Non-GAAP adjusted EBITDA was 36.5 percent of sales. Second-quarter U.S. sales climbed 2.7 percent compared with the second quarter of 2015 and international sales swelled 5.7 percent on an as reported basis (8.1 percent on a constant currency basis).
 
The company generated net cash provided by operating activities of $23 million and non-GAAP free cash flow of $13 million in the second quarter (ended June 30). Cash, cash equivalents and marketable securities ended the quarter at $390.1 million. The company remains debt free.
 
Globus issued new guidance for full year 2016 sales of approximately $575 million including $10 million from the Alphatec International acquisition, and GAAP earnings per share of approximately $1.17. Guidance for non-GAAP diluted EPS, which excludes, among other things, acquisition-related items, remains unchanged at $1.20 per share. The company preliminarily projects 2017 full year sales of $640 million including $40 million from the acquisition.