Exactech Q2 Net Income up 23% to $3.7 Million. Diluted EPS $0.27 vs. $0.23. Worldwide Sales Up 10% to $60.6 Million. U.S. Sales Increased 13%
YTD Revenue Up 5% to $119.9M, Net Income $7.6M, EPS $0.56
GAINESVILLE, Fla.--(BUSINESS WIRE)-- Exactech, Inc. (NAS: EXAC) , a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, announced today sales of $60.6 million for the second quarter of 2013, a 10% increase over $55.2 million in the second quarter of 2012. Net income was $3.7 million, or $0.27 per diluted share, compared to $3.0 million, or $0.23 per diluted share, in the same quarter a year ago.
Second Quarter Segment Performance
Knee implant sales remained flat at $21.0 million
Extremity implant sales increased 36% to $16.3 million
Hip implant sales increased 3% to $10.6 million
Biologic and Spine sales increased 15% to $6.8 million
Other sales decreased 2% to $5.9 million
Six Months Highlights and Segment Performance
For the first six months of 2013 revenue was $119.9 million, an increase of 5% over $113.8 million for the comparable period last year. Net income for the first six months of 2013 increased 20% to $7.6 million, or $0.56 per diluted share compared to $6.3 million, or $0.48 per diluted share for the first six months of 2012. First six month product revenues were as follows:
Knee implant revenue decreased 2% to $41.5 million
Extremity implant revenue increased 28% to $32.0 million
Hip implant revenue decreased 1% to $21.0 million
Biologic and spine revenue increased 6% to $12.9 million
Other products revenue decreased 5% to $12.5 million
Exactech Chairman and CEO Dr. Bill Petty said, "This was a strong quarter for Exactech. We were pleased with our bottom line performance with a 23% gain in net income and welcomed operating margin expansion. Our overall revenue gain of 10% was led by 36% growth in our shoulder sales and a 15% rise in revenue in our biologic and spine category. We are especially pleased with the continued robust growth of the Equinoxe shoulder. This ongoing success is due to the clinical advantages of the system that provide improved patient outcomes. Surgeons recognize these advantages and appreciate the excellent educational programs that Exactech offers to improve their ability to use the system to its full potential. We believe we are poised for continued growth with this offering and renewed growth for our hip and knee systems as we continue to introduce new products in these lines and expand our distribution channels."
Exactech President David Petty said, "U.S. sales increased 13% to $39.9 million compared with $35.2 million in the second quarter a year ago. International sales increased 4% to $20.7 million. U.S. sales represented 66% of total sales and international sales were 34% of the total. For the first six months of 2013, U.S. sales rose 9% to $78.8 million compared with $72.0 million in 2012. International sales for the first six months of 2013 decreased 2% to $41.0 million and decreased to 34% of total sales from 37% of total sales for the first six months of 2012 due to relative weakness in some European markets. On a constant currency basis, international sales increased 7% and worldwide sales grew 11% for the second quarter."
Chief Financial Officer Jody Phillips said, "Our focus on operating margin expansion during 2013 continues to pay off as we have expanded our operating profit during the first six months of the year to 10.2% of sales from 9.2% of sales during the first six months of 2012. We achieved this despite the gross margin decrease to 68.5% during the quarter as compared to 68.8% for the second quarter of 2012 primarily as a result of the impact of the Medical Device Excise Tax. Total operating expenses for the second quarter increased 8% to $35.3 million and as a percentage of sales decreased to 58% from 59% for the second quarter of 2012. We continue to feel that we are on track with our 2013 financial performance plan."
Looking forward, Exactech narrowed its 2013 sales guidance to $237 - $241 million and its diluted EPS target to $1.05 - $1.09. For the third quarter ending September 30, 2013, the company said it anticipates sales of $54 - $56 million and diluted EPS of $0.20 - $0.22. 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.
The company has scheduled a conference call at 10:00 a.m. Eastern Time on Wednesday, July 24. The call will cover the company's first quarter results. CEO Bill Petty will open the conference call and a question-and-answer session will follow.
To participate in the call, dial 1-877-941-8416 any time after 9:50 a.m. Eastern on July 24th. International and local callers should dial 1-480-629-9808. A live webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm or http://public.viavid.com/index.php?id=105311.
This call will be archived for approximately 90 days.
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 http://www.exac.com. Copies of Exactech's press releases, SEC filings, current price quotes and other valuable information for investors may be found at http://www.exac.com and http://www.hawkassociates.com.
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.
EXACTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Trade receivables, net of allowances of $1,098 and $1,012
Prepaid expenses and other assets, net
Income taxes receivable
Deferred tax assets
Total current assets
PROPERTY AND EQUIPMENT:
Machinery and equipment
Furniture and fixtures
Projects in process
Total property and equipment
Net property and equipment
Deferred financing and deposits, net
Product licenses and designs, net
Patents and trademarks, net
Customer relationships, net
Total other assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Income taxes payable
Other current liabilities
Current portion of long-term debt
Total current liabilities
Deferred tax liabilities
Line of credit
Long-term debt, net of current portion
Other long-term liabilities
Total long-term liabilities
COMMITMENTS AND CONTINGENCIES
Additional paid-in capital
Accumulated other comprehensive loss, net of tax
Total shareholders' equity
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
EXACTECH, INC. AND SUBSIDIARIES
Three Month Periods
Six Month Periods
Ended June 30,
Ended June 30,
COST OF GOODS SOLD
Sales and marketing
General and administrative
Research and development
Depreciation and amortization
Total operating expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE):
Other income (loss)
Foreign currency exchange (loss) gain
Total other income (expenses)
INCOME BEFORE INCOME TAXES
PROVISION FOR INCOME TAXES
BASIC EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
SHARES - BASIC
SHARES - DILUTED
Jody Phillips, 352-377-1140
Chief Financial Officer
Julie Marshall or Frank Hawkins, 305-451-1888
KEYWORDS: United States North America Florida
The article Exactech Q2 Net Income up 23% to $3.7 Million. Diluted EPS $0.27 vs. $0.23. Worldwide Sales Up 10% to $60.6 Million. U.S. Sales Increased 13% originally appeared on Fool.com.
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