Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal implant
manufacturer, today announced preliminary unaudited sales results
for the fourth quarter and full year ending December 31, 2016. The
company anticipates fourth quarter 2016 sales of approximately
$151.6 million, an increase of 6.3% as reported or 6.6% in constant
currency over the fourth quarter 2015. Full year 2016 estimated
sales are expected to be approximately $564.0 million, an increase
of 3.5% as reported or 3.8% in constant currency over the prior
year.
David Paul, Chairman and CEO, stated, “In 2016
we continued our focus on growing the business through developing
the sales force and launching innovative products. We had a strong
year of product development and are proud of our recent new product
launches including Quartex, a posterior cervical stabilization
system; and Independence MIS, a minimally invasive integrated
plate-spacer. In September, we doubled the size of our
International presence and entered the strategically important
spine market in Japan through our acquisition of Alphatec’s
International business. We also continued to invest significantly
in our Emerging Technologies platforms throughout the year for
sustained, long-term growth potential. We submitted several
trauma systems to FDA and announced CE Mark for our robotic
trajectory guidance and navigation system. Looking to 2017,
we are confident in our ability to continue to grow our business
faster than the overall spine market.”
The company established full year 2017 guidance
of $625 million in sales, including $5 million of currency
headwinds, and fully diluted earnings per share of $1.27.
These preliminary results are unaudited and are
based on management’s initial analysis of operations for the
periods ended December 31, 2016, and are therefore subject to
change. The company expects to announce its fourth quarter and full
year 2016 financial and operating results in late February.
About Globus Medical Globus Medical, Inc. is a
leading musculoskeletal implant company based in Audubon, PA.
The company was founded in 2003 by an experienced team of
professionals with a shared vision to create products that enable
surgeons to promote healing in patients with musculoskeletal
disorders.
Non-GAAP Financial MeasuresTo supplement our
financial statements prepared in accordance with U.S. generally
accepted accounting principles (“U.S. GAAP”), management uses
certain non-GAAP financial measures. For example, non-GAAP
adjusted EBITDA, which represents net income before interest
income, net and other non-operating expenses, provision for income
taxes, depreciation and amortization, stock-based compensation,
provisions for litigation, and acquisition related costs, is useful
as an additional measure of operating performance, and particularly
as a measure of comparative operating performance from period to
period, as it is reflective of changes in pricing decisions, cost
controls and other factors that affect operating performance, and
it removes the effect of our capital structure, asset base, income
taxes and interest income and expense. Our management also
uses non-GAAP adjusted EBITDA for planning purposes, including the
preparation of our annual operating budget and financial
projections. Provision for litigation represents costs
incurred for litigation settlements or unfavorable verdicts when
the loss is known or considered probable and the amount can be
reasonably estimated, or in the case of a favorable settlement,
when income is realized. Acquisition related costs represents the
change in fair value of business acquisition related contingent
consideration; costs related to integrating recently acquired
businesses including but not limited to costs to exit or convert
contractual obligations, severance, and information system
conversion; and specific costs related to the consummation of the
acquisition process such as banker fees, legal fees, and other
acquisition related professional fees.
In addition, for the period ended
December 31, 2016 and for other comparative periods, we are
presenting non-GAAP net income and non-GAAP diluted earnings per
share, which represents net income and diluted earnings per share
excluding the provision for litigation, amortization of
intangibles, acquisition related costs, and the tax effects of such
adjustments. We believe these non-GAAP measures are also
useful indicators of our operating performance, and particularly as
additional measures of comparative operating performance from
period to period as they remove the effects of litigation,
amortization of intangibles, acquisition related costs, and the tax
effects of such adjustments, which we believe are not reflective of
underlying business trends. Additionally, for the periods
ended December 31, 2016 and for other comparative periods, we
also define the non-GAAP measure of free cash flow as the net cash
provided by operating activities, adjusted for the impact of
restricted cash, less the cash impact of purchases of property and
equipment. We believe that this financial measure provides
meaningful information for evaluating our overall financial
performance for comparative periods as it facilitates an assessment
of funds available to satisfy current and future obligations and
fund acquisitions. Furthermore, the non-GAAP measure of
constant currency sales growth is calculated by translating current
year sales at the same average exchange rates in effect during the
applicable prior year period. We believe constant currency
sales growth provides insight to the comparative increase or
decrease in period sales, in dollar and percentage terms, excluding
the effects of fluctuations in foreign currency exchange rates.
Non-GAAP adjusted EBITDA, non-GAAP net income,
non-GAAP diluted earnings per share, free cash flow and constant
currency sales growth are not calculated in conformity with U.S.
GAAP. Non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation or as a
substitute for financial measures prepared in accordance with U.S.
GAAP. These measures do not include certain expenses that may
be necessary to evaluate our liquidity or operating results.
Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income,
non-GAAP diluted earnings per share, free cash flow and constant
currency sales growth may differ from that of other companies and
therefore may not be comparable. Additionally, we have recast
prior periods for non-GAAP net income and non-GAAP diluted earnings
per share.
Safe Harbor StatementsAll statements included
in this press release other than statements of historical fact are
forward-looking statements and may be identified by their use of
words such as “believe,” “may,” “might,” “could,” “will,” “aim,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan”
and other similar terms. These forward-looking statements are
based on our current assumptions, expectations and estimates of
future events and trends. Forward-looking statements are only
predictions and are subject to many risks, uncertainties and other
factors that may affect our businesses and operations and could
cause actual results to differ materially from those
predicted. These risks and uncertainties include, but are not
limited to, factors affecting our quarterly results, our ability to
manage our growth, our ability to sustain our profitability, demand
for our products, our ability to compete successfully (including
without limitation our ability to convince surgeons to use our
products and our ability to attract and retain sales and other
personnel), our ability to rapidly develop and introduce new
products, our ability to develop and execute on successful business
strategies, our ability to successfully integrate the international
operations acquired from Alphatec, both in general and on our
anticipated timeline, our ability to transition Alphatec’s
international customers to Globus Medical products, our ability to
realize the expected benefits to our results from the Alphatec
acquisition, our ability to comply with laws and regulations that
are or may become applicable to our businesses, our ability to
safeguard our intellectual property, our success in defending legal
proceedings brought against us, trends in the medical device
industry, general economic conditions, and other risks. For a
discussion of these and other risks, uncertainties and other
factors that could affect our results, you should refer to the
disclosure contained in our most recent annual report on Form 10-K
filed with the Securities and Exchange Commission, including the
sections labeled “Risk Factors” and “Cautionary Note Concerning
Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and
other filings with the Securities and Exchange Commission.
These documents are available at www.sec.gov. Moreover, we
operate in an evolving environment. New risk factors and
uncertainties emerge from time to time and it is not possible for
us to predict all risk factors and uncertainties, nor can we assess
the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on any forward-looking
statements. Forward-looking statements contained in this
press release speak only as of the date of this press
release. We undertake no obligation to update any
forward-looking statements as a result of new information, events
or circumstances or other factors arising or coming to our
attention after the date hereof.
Contact:
Daniel Scavilla
Senior Vice President, Chief Financial Officer
Phone: (610) 930-1800
Email: investors@globusmedical.com
www.globusmedical.com
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