K2M Group Holdings, Inc. Reports Preliminary Third Quarter Revenue Results and Updates Full Year 2017 Revenue Outlook
October 09 2017 - 7:11AM
K2M Group Holdings, Inc. (Nasdaq:KTWO) (the "Company" or "K2M"), a
global leader of complex spine and minimally invasive solutions
focused on achieving three-dimensional Total Body Balance™, today
announced preliminary revenue results for the third quarter ended
September 30, 2017.
Third Quarter Preliminary Revenue
Summary:
- Total Q3 revenue is expected to be approximately $62.7 million,
up approximately 6% year-over-year on both a GAAP and constant
currency basis° Domestic Q3 revenue is expected to be
approximately $48.5 million, up approximately 5%
year-over-year, comprised of: • U.S. Complex Spine
growth of approximately 3% year-over-year • U.S.
Minimally Invasive Surgery (MIS) growth of approximately 14%
year-over-year • U.S. Degenerative growth of
approximately 5% year-over-year° International Q3 revenue
of approximately $14.2 million, up approximately 6%
year-over-year, or 7% on a constant currency basis
“Our preliminary revenue results for the third quarter of 2017
reflect expected total revenue growth of approximately 6%
year-over-year on both a GAAP and constant currency basis,” said
President and Chief Executive Officer, Eric Major. “Our preliminary
third quarter revenue performance was driven by slower than planned
acceleration of new distribution in the U.S., disruption of account
activity and canceled procedures related to the hurricanes in
Texas, Florida and, to a lesser extent, Puerto Rico, in early
September. Third quarter deformity trends were strong in July
and August and we experienced strong headwinds in September. U.S.
sales growth in our degenerative procedure category continued to be
fueled by our new product introductions including our
industry-leading 3D-printed portfolio, offset partially by modestly
weaker procedure volumes as compared to last year.”
Major continued, “We have updated our fiscal year 2017 revenue
guidance to reflect the softer sales performance in the third
quarter and a full quarter impact of new distribution in the U.S.
during first nine months of the year. The updated fiscal year
revenue guidance range also reflects an estimated $2.0 million
impact in related disruptions from the hurricanes – the majority of
which was sustained in the third quarter. We remain confident in
our ability to drive above-market growth in the U.S., fueled by our
focus on introducing new and innovative spinal implant solutions to
help surgeons care for patients around the world who suffer from
debilitating spinal pathologies.”
2017 Outlook
The Company is updating its fiscal year 2017 revenue guidance.
The Company now expects:
- Total revenue on an as reported basis in the range of $255.0
million to $257.0 million, representing growth of 8% to 9%
year-over-year, compared to total revenue of $236.6 million in
fiscal year 2016. • Total revenue on a constant currency basis
is expected to increase 8% to 9% year-over-year in 2017.• The
Company now expects growth in its U.S. business of approximately 8%
to 9% year-over-year in 2017.• The Company now expects growth
in its International business of approximately 9% on a constant
currency basis in 2017.
The financial estimates presented above are preliminary and
remain subject to change based on management's final review of the
Company’s third quarter financial results. The Company intends to
report complete third quarter of fiscal 2017 financial results on
November 1, 2017. Details regarding the timing of the release of
those results, as well as details of a conference call and publicly
available webcast, will be announced in a subsequent press
release.
About K2M Group Holdings, Inc.
K2M Group Holdings, Inc. is a global medical device company
focused on designing, developing and commercializing innovative
complex spine and minimally invasive spine technologies and
techniques used by spine surgeons to treat some of the most
difficult and challenging spinal pathologies. K2M has leveraged
these core competencies to bring to market an increasing number of
products for patients suffering from degenerative spinal
conditions. These technologies and techniques, in combination with
a robust product pipeline, enable the Company in the global spinal
surgery market. Additional information is available online at
www.K2M.com.
Forward-Looking Statements
This press release contains forward-looking statements that
reflect current views with respect to, among other things,
operations and financial performance. Forward-looking
statements include all statements that are not historical facts
such as our statements about our expected financial results and
guidance and our expectations for future business prospects,
drivers and growth. In some cases, you can identify these
forward-looking statements by the use of words such as, "outlook,"
"guidance," "believes," "expects," "potential," "continues," "may,"
"will," "should," "could," "seeks," "predicts," "intends," "plans,"
"estimates," "anticipates" or the negative version of these words
or other comparable words. Such forward-looking statements
are subject to various risks and uncertainties including, among
other things: our ability to achieve or sustain profitability in
the future; our ability to demonstrate to spine surgeons the merits
of our products; pricing pressures and our ability to compete
effectively generally; collaboration and consolidation in hospital
purchasing; inadequate coverage and reimbursement for our products
from third-party payors; lack of long-term clinical data supporting
the safety and efficacy of our products; dependence on a limited
number of third-party suppliers; our ability to maintain and expand
our network of direct sales employees, independent sales agencies
and international distributors and their level of sales or
distribution activity with respect to our products; proliferation
of physician-owned distributorships in the industry; decline in the
sale of certain key products; loss of key personnel; our ability to
enhance our product offerings through research and development; our
ability to manage expected growth; our ability to successfully
acquire or invest in new or complementary businesses, products or
technologies; our ability to educate surgeons on the safe and
appropriate use of our products; costs associated with high levels
of inventory; impairment of our goodwill and intangible assets;
disruptions in our main facility or information technology systems;
our ability to ship a sufficient number of our products to meet
demand; our ability to strengthen our brand; fluctuations in
insurance cost and availability; our ability to comply with
extensive governmental regulation within the United States and
foreign jurisdictions; our ability to maintain or obtain
regulatory approvals and clearances within the United States and
foreign jurisdictions; voluntary corrective actions by us or our
distribution or other business partners or agency enforcement
actions; recalls or serious safety issues with our products;
enforcement actions by regulatory agencies for improper marketing
or promotion; misuse or off-label use of our products; delays or
failures in clinical trials and results of clinical trials; legal
restrictions on our procurement, use, processing, manufacturing or
distribution of allograft bone tissue; negative publicity
concerning methods of tissue recovery and screening of donor
tissue; costs and liabilities relating to environmental laws and
regulations; our failure or the failure of our agents to comply
with fraud and abuse laws; U.S. legislative or Food and Drug
Administration regulatory reforms; adverse effects of medical
device tax provisions; potential tax changes in jurisdictions in
which we conduct business; our ability to generate significant
sales; potential fluctuations in sales volumes and our results of
operations over the course of the year; uncertainty in future
capital needs and availability of capital to meet our needs; our
level of indebtedness and the availability of borrowings under our
credit facility; restrictive covenants and the impact of other
provisions in the indenture governing our convertible senior
notes and our credit facility; continuing worldwide economic
instability; our ability to protect our intellectual property
rights; patent litigation and product liability lawsuits; damages
relating to trade secrets or non-competition or non-solicitation
agreements; risks associated with operating internationally;
fluctuations in foreign currency exchange rates; our ability to
comply with the Foreign Corrupt Practices Act and similar laws; our
ability to implement and maintain effective internal control over
financial reporting; potential volatility in our stock due; our
lack of current plans to pay cash dividends; our ability to take
advantage of certain reduced disclosure requirements and exemptions
as a result of being an emerging growth company; increased costs
and additional regulations and requirements as a result of no
longer qualifying as an emerging growth company as of December 31,
2017; potential dilution by the future issuances of additional
common stock in connection with our incentive plans, acquisitions
or otherwise; anti-takeover provisions in our organizational
documents and our ability to issue preferred stock without
shareholder approval; potential limits on our ability to use our
net operating loss carryforwards; and other risks and
uncertainties, including those described under the section entitled
"Risk Factors" in our most recent Annual Report on Form 10-K filed
with the SEC and our Quarterly Report filed with the SEC on August
2, 2017, as such factors may be updated from time to time in our
periodic filings with the SEC, which are accessible on the SEC's
website at www.sec.gov. Accordingly, there are or will be
important factors that could cause actual outcomes or results to
differ materially from those indicated in these statements.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in this release and our filings with the SEC.
We operate in a very competitive and challenging
environment. New risks and uncertainties emerge from time to
time, and it is not possible for us to predict all risks and
uncertainties that could have an impact on the forward-looking
statements contained in this release. We cannot assure you
that the results, events and circumstances reflected in the
forward-looking statements will be achieved or occur, and actual
results, events or circumstances could differ materially from those
described in the forward-looking statements.
The forward-looking statements made in this press release relate
only to events as of the date on which the statements are
made. We undertake no obligation to publicly update or review
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by law. We may not actually achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you
should not place undue reliance on our forward-looking statements.
Unless specifically stated otherwise, our forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures, investments or
other strategic transactions we may make.
Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA
443-213-0500
K2M@westwicke.com
K2M GROUP HOLDINGS, INC. (NASDAQ:KTWO)
Historical Stock Chart
From Aug 2024 to Sep 2024
K2M GROUP HOLDINGS, INC. (NASDAQ:KTWO)
Historical Stock Chart
From Sep 2023 to Sep 2024