Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal
solutions company, today announced preliminary unaudited sales
results for the fourth quarter and full year ending
December 31, 2019. The company anticipates fourth quarter 2019
sales of approximately $211.0 million, an increase of 7.7% over the
fourth quarter 2018. Full year 2019 sales are expected to be
approximately $784.7 million, an increase of 10.1% over the prior
year.
“Our fourth quarter capped another outstanding
year for Globus Medical, as we delivered our third consecutive year
of double-digit growth, combined with industry leading
profitability” said Dave Demski, President and CEO. “The fourth
quarter also marked our third consecutive quarter of strong revenue
in Enabling Technologies, further demonstrating the superiority of
our technology and our competitiveness against much larger
companies. Musculoskeletal Solutions completed an outstanding year,
growing by almost 11%, exhibiting strength across all sectors of
our business, driven by record competitive recruiting and robust
implant pull through from robotics. Finally, we couldn’t be more
excited about 2020: as we exited 2019, our robotic pipeline has
never been stronger; competitive recruiting is accelerating; and we
anticipate several significant product introductions in both
Musculoskeletal Solutions and Enabling Technologies.”
“We are pleased with our fourth quarter and full
year performance,” said Keith Pfeil, CFO. “Our fourth quarter sales
will be approximately 7.7% higher than the prior year fourth
quarter. We expect Enabling Technologies to deliver approximately
$13.6 million in revenue in the fourth quarter and Musculoskeletal
Solutions to grow approximately 8.7% for the quarter. US growth is
expected to be approximately 8.1% for the quarter while
International growth is expected to be approximately 5.5%. We
anticipate delivering 10.1% full year revenue growth and
maintaining our industry-leading profitability in a period of
extensive investment within our Enabling Technologies
business.”
The company established full year 2020 guidance
of $850 million in sales and fully diluted non-GAAP earnings per
share of $1.82. “Our non-GAAP EPS guidance anticipates continued
investments in Enabling Technologies and Trauma,” said Mr. Pfeil.
“We expect our non-GAAP EPS to grow at approximately the same rate
as revenue in 2020, reflecting improving EBITDA margins offset by
higher non-cash expenses related to stock compensation and
depreciation.”
These preliminary results are unaudited and are
based on management’s initial analysis of operations for the
periods ended December 31, 2019, and are therefore subject to
change. The company expects to announce its fourth quarter and full
year 2019 financial and operating results on February 20th.
About Globus Medical, Inc.
Globus Medical, Inc. is a leading
musculoskeletal solutions 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 Measures
To 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, provision 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. 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. Our management also uses non-GAAP
adjusted EBITDA for planning purposes, including the preparation of
our annual operating budget and financial projections.
In addition, for the period ended
December 31, 2019 and for other comparative periods, we are
presenting non-GAAP net income and non-GAAP diluted earnings per
share, which represent 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. The tax impact of these non-GAAP adjustments is
calculated based on the consolidated effective tax rate on a GAAP
basis, applied to the non-GAAP adjustments, unless the underlying
item has a materially different tax treatment, in which case the
estimated tax rate applicable to the adjustment is used. 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, 2019 and for
other comparative periods, we also present the non-GAAP measure of
free cash flow, which represents 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.
Finally, we utilize the non-GAAP measure of constant currency sales
growth, which 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 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:Brian
KearnsSenior Vice President, Business Development and Investor
RelationsPhone: (610) 930-1800Email:
investors@globusmedical.comwww.globusmedical.com
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