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,
2018. The company anticipates fourth quarter 2018 sales of
approximately $195.5 million, an increase of 11.0% over the fourth
quarter 2017. Full year 2018 sales are expected to be approximately
$712.5 million, an increase of 12.0% over the prior year.
“Our fourth quarter and full year results are
indicative of strong momentum in several key strategic areas,” said
Dave Demski, CEO. “The fourth quarter marked the fifth consecutive
quarter of double digit organic revenue growth, which is
particularly outstanding considering the strong comparable quarter
last year. Emerging Technologies delivered $14.8 million, or 35%
growth, a significant accomplishment given the pent up demand
implicit in the fourth quarter of 2017 when we launched our robotic
system. The U.S. spinal implant business grew by over 9%
year-over-year, continuing the acceleration we saw in the third
quarter, driven by robotic implant pull through and strong
recruiting.”
“We are pleased with our fourth quarter and full
year performance,” said Dan Scavilla, CFO and Chief Commercial
Officer. “We delivered 12% revenue growth and maintained our
industry-leading profitability while investing significantly in
growing our Emerging Technologies business. While we are not
announcing fourth quarter or full year EPS or EBITDA at this time,
our performance in the quarter was consistent with our long history
of growing efficiently and profitably.”
The company established full year 2019 guidance
of $770 million in sales and fully diluted non-GAAP earnings per
share of $1.72. This EPS guidance assumes continued investment in
Emerging Technologies.
These preliminary results are unaudited and are
based on management’s initial analysis of operations for the
periods ended December 31, 2018, and are therefore subject to
change. The company expects to announce its fourth quarter and full
year 2018 financial and operating results on February 21st.
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 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, 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, 2018 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,
2018 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 liquidity 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 within the meaning of Item 10(e) of Regulation S-K.
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
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:Brian KearnsVice
President, Business Development and Investor RelationsPhone: (610)
930-1800Email: investors@globusmedical.comwww.globusmedical.com
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