Net Income of $4.4 Million; Diluted EPS
$0.31 vs. $0.29
Exactech, Inc. (Nasdaq: EXAC), a developer and producer of bone
and joint restoration products for hip, knee, shoulder, spine and
biologic materials, today announced revenue of $65.3 million for
the first quarter of 2016, a 6% increase from $61.4 million in the
first quarter of 2015. On a constant currency basis, revenue was up
7%. 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.
First Quarter Segment Performance
The following are company revenue results, as well as adjusted
revenue comparisons on a constant currency basis:
- Extremity implant revenue increased 15%
to $24.2 million, a 15% constant currency increase
- Knee implant revenue increased 5% to
$19.4 million, a 6% constant currency increase
- Hip implant revenue increased 4% to
$11.3 million, a 5% constant currency increase
- Biologic and Spine revenue increased 5%
to $5.4 million, a 7% constant currency increase
- Other revenue decreased 13% to $5.0
million, a 12% constant currency decrease
Management Comment
Exactech CEO and President David Petty said, “Worldwide sales
increased 6% to $65.3 million. U.S. sales were up 8% to $44.6
million compared with $41.2 million in the first quarter a year
ago. International sales increased 3% to $20.7 million. U.S. sales
represented 68% of total sales and international sales were 32% 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.”
Chief Financial Officer Jody Phillips said, “Gross margins
decreased to 69% from 70% for the first quarter a year ago due to
continued pricing pressures. Total operating expenses for the
quarter increased 5% to $38.6 million; however, as a percentage of
sales decreased to 59%, compared to 60% for the first quarter of
2015. Sales and marketing expenses increased 7% to $23.3 million,
which included the integration of our recently acquired distributor
in Australia. General and administrative expenses increased 1% in
the first quarter to $5.9 million and research and development
expenses increased 12% to $5.1 million during the first quarter
reflecting ongoing significant investment in our new product
pipeline.
Looking forward, Exactech increased its 2016 revenue guidance to
$250-$257 million and its diluted EPS target to $1.14 – $1.19. For
the second quarter ending June 30, 2016, the company 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.
The financial statements are below.
Conference Call
The company will hold a conference call with CEO David
Petty and key members of the management team on Wednesday,
April 27th at 10:00 a.m. Eastern Time. The call will
cover Exactech’s first quarter 2016 results. Mr. Petty will open
the conference call and a question-and-answer session will
follow.
To participate in the call, dial 1-888-556-4997 any time
after 9:50 a.m. Eastern on April 27th. International and local
callers should dial 1-719-325-2464. A live webcast of
the call will be available at
http://www.hawkassociates.com/profile/exac.cfm or
http://public.viavid.com/index.php?id=119078. 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, Inc. can be found at
http://www.exac.com. Copies of Exactech’s press releases, SEC
filings, current price quotes and other valuable information for
investors may be found at http://www.exac.com and
http://www.hawkassociates.com.
An investment profile on Exactech may be found 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.
EXACTECH, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (in thousands)
(unaudited) (audited) March 31, December
31, 2016 2015 ASSETS CURRENT
ASSETS: Cash and cash equivalents $ 9,114 $ 12,713 Trade
receivables, net of allowances of $1,075 and $1,011 54,763 52,442
Prepaid expenses and other assets, net 4,105 2,552 Income taxes
receivable 389 486 Inventories, current 72,577 71,429
Total current assets 140,948 139,622 PROPERTY AND EQUIPMENT:
Land 4,515 4,494 Machinery and equipment 37,580 37,008 Surgical
instruments 132,149 123,533 Furniture and fixtures 4,685 4,655
Facilities 21,368 20,348 Projects in process 1,218
1,218 Total property and equipment 201,515 191,256 Accumulated
depreciation (100,584 ) (96,713 ) Net property and
equipment 100,931 94,543 OTHER ASSETS: Deferred financing
and deposits, net 879 858 Non-current inventory 12,359 8,995
Product licenses and designs, net 11,047 11,121 Patents and
trademarks, net 1,360 1,426 Customer relationships, net 644 92
Goodwill 22,561 18,850 Total other assets
48,850 41,342
TOTAL ASSETS $ 290,729 $ 275,507
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 17,129 $ 13,932 Income taxes payable 2,296 603
Accrued expenses 11,104 9,498 Other current liabilities
2,851 792 Total current liabilities 33,380 24,825
LONG-TERM LIABILITIES: Deferred tax liabilities 806 443 Long-term
debt, net of current portion 16,000 16,000 Other long-term
liabilities 6,255 5,850 Total long-term liabilities
23,061 22,293 Total liabilities 56,441 47,118
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Common
stock 143 142 Additional paid-in capital 83,929 81,963 Treasury
Stock (3,042 ) Accumulated other comprehensive loss, net of tax
(9,414 ) (11,986 ) Retained earnings 162,672 158,270
Total shareholders’ equity 234,288 228,389
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 290,729 $
275,507
EXACTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in
thousands, except per share amounts) (Unaudited)
Three Month Periods Ended March 31, 2016 2015 NET SALES $
65,298 $ 61,376 COST OF GOODS SOLD 20,368
18,642 Gross profit 44,930 42,734 OPERATING EXPENSES: Sales
and marketing 23,319 21,850 General and administrative 5,914 5,847
Research and development 5,070 4,529 Depreciation and amortization
4,324 4,442 Total operating expenses 38,627 36,668
INCOME FROM OPERATIONS 6,303 6,066
OTHER INCOME (EXPENSE): Interest income 4 2 Other income 40
28 Interest expense (262 ) (302 ) Foreign currency exchange (loss)
gain 494 (202 ) Total other expenses 276 (474 )
INCOME BEFORE INCOME TAXES 6,579 5,592
PROVISION FOR INCOME TAXES 2,177 1,480 NET
INCOME $ 4,402 $ 4,112 BASIC EARNINGS PER SHARE $ 0.31 $
0.30 DILUTED EARNINGS PER SHARE $ 0.31 $ 0.29 SHARES
- BASIC 14,057 13,916 SHARES - DILUTED 14,173 14,174
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version on businesswire.com: http://www.businesswire.com/news/home/20160426006821/en/
Exactech, Inc.Investor contactsJody Phillips,
352-377-1140Executive Vice President of Finance &Chief
Financial OfficerorHawk AssociatesJulie Marshall or Frank Hawkins,
305-451-1888EXAC@hawkassociates.comorMedia contactPriscilla
Bennett, 352-377-1140Vice President, Corporate & Marketing
Communication
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