Wednesday, July 29, 2015

News: Exactech Q2 2015 Revenue $61.5 Million. Net Income $3.7 Million. Diluted EPS $0.26.

GAINESVILLE, Fla.--()--Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products for hip, knee, shoulder and spine, announced today revenue of $61.5 million for the second quarter of 2015, a 4% decrease from $63.9 million in the second quarter of 2014. Net income was $3.7 million, or $0.26 per diluted share, compared to $4.2 million, or $0.30 per diluted share, in the same quarter a year ago.
Image result for exactech
Second Quarter Segment Performance

The second quarter of 2015 continued to be impacted by a weakened Euro and Japanese Yen relative to the U.S. Dollar. The following are company revenue results, as well as adjusted revenue comparisons on a constant currency basis:
  • Extremity implant revenue increased 8% to $20.5 million, a 9% constant currency increase
  • Knee implant revenue decreased 10% to $19.0 million, a 4% constant currency decrease
  • Hip implant revenue decreased 2% to $10.9 million, a 1% constant currency increase
  • Biologic and Spine revenue decreased 9% to $5.9 million, a 4% constant currency decrease
  • Other revenue decreased 15% to $5.2 million, a 14% constant currency decrease
Six Months Highlights and Segment Performance
For the first six months of 2015, revenue was $122.9 million, a decrease of 3% over $127.2 million for the comparable period last year. Net income for the first six months of 2015 decreased 7% to $7.8 million, or $0.55 per diluted share compared to $8.4 million, or $0.60 per diluted share for the first six months of 2014. First six month product revenues were as follows:
  • Extremity implant revenue increased 7% to $41.6 million, a 9% constant currency increase
  • Knee implant revenue decreased 10% to $37.4 million, a 5% constant currency decrease
  • Hip implant revenue was relatively unchanged at $21.9 million, a 4% constant currency increase
  • Biologic and Spine revenue decreased 10% to $11.0 million, a 6% constant currency decrease
  • Other revenue decreased 13% to $11.0 million, an 11% constant currency decrease
Management Comment
Exactech CEO and President David Petty said, “The first half of 2015 posed difficult challenges. We faced strong currency headwinds, worked to optimize our inventory flow and supply service levels and executed some disruptive but necessary changes within our domestic sales channel. We also invested heavily in our pipeline of new products, several of which initially will be used in surgeries during the second half of the year. Partially because of improvements we have made to our sales force and also because of the initial availability of new revision systems in our hip, knee and shoulder product lines, we expect the second half will be considerably better. This should result in a satisfactory year’s performance, providing positive momentum as we head into 2016.”
“Worldwide sales for the first half of 2015 decreased 3% to $122.9 million and were flat on a constant currency basis. U.S. sales were down 2% to $82.5 million compared with $83.8 million in the first half a year ago. International sales decreased 7% to $40.3 million. U.S. sales for the second quarter of 2015 were down 2% to $41.3 million compared with $42.2 million in the second quarter a year ago. International sales decreased 7% to $20.2 million. On a constant currency basis, international sales increased 4% and worldwide sales were flat for the second quarter. U.S. sales represented 67% of total sales and international sales were 33% of the total,” Petty said.
Chief Financial Officer Jody Phillips said, “Gross margins decreased largely as expected to 68.6% for the second quarter of 2015 vs 69.4% in the second quarter of 2014 due to pricing and currency impacts. Total operating expenses for the quarter decreased 4% to $36.0 million and as a percentage of sales were 59%, the same as the second quarter of 2014. General and administrative expenses increased 2% in the second quarter at $5.8 million and sales and marketing expenses decreased 6% to $21.5 million primarily due to the currency impact of our direct operations in Europe. We continued to produce positive cash flows, which resulted in a $3.3 million improvement in our cash and net debt position during the second quarter.”
Looking forward, Exactech updated its 2015 revenue guidance to $246-$250 million and its diluted EPS target to $1.16–$1.20. For the third quarter ending September 30, 2015, the company said it anticipates revenues of $58.0-$60.0 million and diluted EPS of $0.23-$0.25. 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, July 29th at 10:00 a.m. Eastern Time. The call will cover Exactech’s second quarter 2015 results. Petty will open the conference call and a question-and-answer session will follow.
To participate in the call, dial 1-888-510-1785 any time after 9:50 a.m. Eastern on July 29th. International and local callers should dial 1-719-325-2455. A live webcast of the call will be available at or
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 Copies of Exactech’s press releases, SEC filings, current price quotes and other valuable information for investors may be found at and
An investment profile on Exactech may be found at To receive future releases in e-mail alerts, sign up at
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.
(in thousands)
  (unaudited) (audited)
June 30,December 31,
 2015 2014
Cash and cash equivalents$14,852$10,051
Trade receivables, net of allowances of $998 and $94652,75150,731
Prepaid expenses and other assets, net3,5752,436
Income taxes receivable9661,492
Inventories, current71,96472,827
Deferred tax assets 1,616 1,620
Total current assets145,724139,157
Machinery and equipment36,31835,434
Surgical instruments106,096101,142
Furniture and fixtures4,7454,556
Projects in process 862 1,166
Total property and equipment170,795165,021
Accumulated depreciation (91,781) (84,915)
Net property and equipment79,01480,106
Deferred financing and deposits, net610676
Non-current inventory16,40017,465
Product licenses and designs, net12,0318,641
Patents and trademarks, net1,5611,701
Customer relationships, net130203
Goodwill 19,016 13,091
Total other assets 49,748 41,777
TOTAL ASSETS$274,486$261,040
Accounts payable$13,271$13,615
Income taxes payable4146
Accrued expenses8,6619,194
Other current liabilities1,747250
Current portion of long-term debt 3,000 3,000
Total current liabilities26,68326,205
Deferred tax liabilities4,0262,794
Long-term debt, net of current portion18,75020,250
Other long-term liabilities 5,222 420
Total long-term liabilities 27,998 23,464
Total liabilities54,68149,669
Common stock141139
Additional paid-in capital79,56776,126
Accumulated other comprehensive loss, net of tax(11,179)(8,397)
Retained earnings 151,276 143,503
Total shareholders’ equity 219,805 211,371
(in thousands, except per share amounts)
Three Month PeriodsSix Month Periods
Ended June 30,Ended June 30,
 2015 2014 2015 2014
NET SALES$61,493$63,919$122,869$127,177
COST OF GOODS SOLD 19,334 19,565 37,976 38,199
Gross profit42,15944,35484,89388,978
Sales and marketing21,46422,88543,31446,598
General and administrative5,7765,66711,62311,452
Research and development4,6024,8649,1319,057
Depreciation and amortization 4,182 4,124 8,624 8,446
Total operating expenses36,02437,54072,69275,553
INCOME FROM OPERATIONS6,1356,81412,20113,425
Interest income2548
Other income (loss)37266550
Interest expense(275)(260)(577)(607)
Foreign currency exchange (loss) gain (557) (113) (759) 200
Total other income (expenses)(793)(342)(1,267)(349)
INCOME BEFORE INCOME TAXES5,3426,47210,93413,076
PROVISION FOR INCOME TAXES1,6812,3123,1614,718
NET INCOME$3,661$4,160$7,773$8,358
BASIC EARNINGS PER SHARE$0.26$0.30$0.56$0.61
DILUTED EARNINGS PER SHARE$0.26$0.30$0.55$0.60
SHARES - BASIC13,94713,69413,96513,646
SHARES - DILUTED14,16713,98614,20313,946


Exactech, Inc.
Jody Phillips, 352-377-1140
Executive Vice President of Finance & Chief Financial Officer
Hawk Associates
Julie Marshall or Frank Hawkins, 305-451-1888

Published at Business Wire

No comments:

Post a Comment