Second Quarter 2015 Highlights:
- Achieved second consecutive quarter of year over year revenue growth
- Generated $2.3 million in EBITDA and $2.3 million in free cash flow, a 100% free cash flow conversion
- $4.2 million in cash and no debt as of July 4, 2015
- Narrowed 2015 Financial Guidance
NASHVILLE, Tenn., Aug. 6, 2015 (GLOBE NEWSWIRE) — Symmetry Surgical Inc. (Nasdaq:SSRG) announced today financial results for the second quarter ended July 4, 2015.
Thomas J. Sullivan, President and Chief Executive Officer of Symmetry Surgical, stated, “During the second quarter we continued to execute on our focused growth initiatives. Total revenue was up 4.9% over the prior year after adjusting for the loss of distribution rights to the New Wave Surgical product line. In the U.S., we delivered year-over-year and sequential growth. We were also pleased to achieve year-over-year growth in both our branded and alliance product categories, reflecting positive mix and volume trends across the business.”
Mr. Sullivan added, “We generated EBITDA of $2.3 million in the second quarter and free cash flow of $2.3 million, demonstrating the continued ability of our business to generate cash at a high percentage of EBITDA. Looking forward, the outlook for our business remains positive and we raised the lower end of the range of our revenue and EBITDA guidance for the year. With $4.2 million in cash and no debt as of July 4, 2015, we have adequate resources to support our targeted business development strategy and we remain focused on executing appropriate transactions.”
Financial Results
Revenue for the second quarter 2015 was $20.7 million, up 0.9% compared to $20.5 million in the second quarter 2014. This included $0.8 million of revenue related to the New Wave Surgical product line, which was acquired by a third party in the first quarter 2014 and no longer distributed by Symmetry Surgical after April 30, 2014. Excluding the impact of the loss of the New Wave Surgical product line, second quarter 2015 revenue was up 4.9% compared to the same period last year, with increased volume partially offset by low single digit price pressure related to increased revenues from product-specific promotions.
Revenue in the U.S. was $18.0 million, down (1.0%) compared to the second quarter 2014 and up 1.1% compared to first quarter 2015. Excluding the impact of revenue related to New Wave Surgical’s product line in the second quarter of 2014, revenue in the U.S. was up 3.4% compared to second quarter 2014. International revenue was $2.6 million, up 16.8% compared to second quarter 2014.
Revenue from Symmetry Surgical branded products was $18.7 million, up 4.5% compared to second quarter 2014. Revenue from Alliance products was $2.0 million, down (23.6%) compared to second quarter 2014. Excluding the impact of revenue related to New Wave Surgical’s product line in the second quarter of 2014, revenue from Alliance products was up 9.4% compared to second quarter 2014.
Gross profit for the second quarter 2015 was $9.8 million, compared to $9.8 million in the second quarter 2014. Gross margin percentage for the second quarter 2015 was 47.5%, compared to 48.1% in the same period last year. Second quarter 2014 gross profit and gross margin benefitted from a one-time supplier payment for the early termination of Symmetry Surgical’s distribution rights to the New Wave Surgical product line. Excluding the one-time payment from the second quarter 2014, the year-over-year improvement in gross margin percent was driven by improved product mix, lower product costs due to favorable exchange rates, tight cost controls, and volume leverage on higher sales, slightly offset by pricing pressure related to product-specific promotions.
Total operating expenses in the second quarter 2015 were $9.0 million, compared to $19.4 million in the second quarter 2014. Operating expenses in the second quarter 2014 included a $10.5 million non-cash asset impairment charge; excluding this charge, second quarter 2014 operating expenses were $8.9 million. Operating income for the second quarter 2015 was $0.8 million, compared to an operating loss of $(9.6) million in the second quarter 2014.
Net income for the second quarter 2015 was $0.3 million, or $0.04 per diluted share, compared to net loss of $(6.1) million, or $(0.64) per diluted share, in the second quarter 2014.
The weighted average number of diluted shares outstanding during the second quarter 2015 was 9,651,969. On December 5, 2014, Symmetry Medical distributed 9,586,845 shares of Symmetry Surgical common stock. For periods prior to the separation of Symmetry Surgical from Symmetry Medical, the weighted-average basic and diluted shares outstanding were based on the number of shares of Symmetry Surgical common stock outstanding on the distribution date.
EBITDA (which is defined below and excludes impairment charges) for the second quarter 2015 was $2.3 million compared to $2.4 million in the second quarter 2014. The Company generated free cash flow (also defined below) of $2.3 million in the second quarter 2015, compared to $4.5 million in the second quarter 2014. Free cash flow conversion for the second quarter was 100%.
Financial Guidance
The following forward-looking estimates regarding 2015 guidance reflect first half of 2015 performance and projections and assumes current market conditions and minimal impact of foreign currency rates on revenue and cost. Actual results may differ materially, and the Company refers you to forward-looking statements located at the end of the press release.
The Company is narrowing its 2015 financial guidance. For the full year 2015, the Company expects revenue to be in the range of $82 to $84 million, narrowed from $80 to $84 million previously. The Company expects full year 2015 EBITDA to be in the range of $8.5 to $9.5 million, narrowed from $8.0 to $9.5 million previously.
Conference Call
Symmetry Surgical will host a conference call to discuss the second quarter 2015 financial results at 8:00 a.m. ET, today. A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at www.symmetrysurgical.com. The dial-in numbers are (888) 771-4371 for domestic callers and (847) 585-4405 for international. The reservation number for both is 40171362. After the live webcast, the call will remain available on Symmetry Surgical’s website through November 6, 2015. In addition, a telephonic replay of the call will be available until August 13, 2015. The replay numbers are (888) 843-7419 for domestic callers and (630) 652-3042 for international callers. Please use reservation code 4017 1362#.
About Symmetry Surgical Inc.
Symmetry Surgical is dedicated to developing and delivering high-quality, innovative surgical instruments that meet clinicians’ needs and improve patients’ lives. Our team collaborates with healthcare providers around the world to provide medical devices that exceed our customers’ expectations and provide solutions for today’s needs and tomorrow’s growth. Our rich and diverse history creates one of the industry’s most comprehensive surgical instrument portfolios, which includes our well-known brands such as BOOKWALTER®, GREENBERG®, OLSEN®, SYMMETRY®, SHARP KERRISON™, FLASH PAK®, CLASSIC®, CLASSIC PLUS®, SECTO®, QUAD-LOCK®, RAPIDCLEAN®, MAGNAFREE®, MIDAS TOUCH®, MICROSECT®, ULTRA INSTRUMENTS®, MULTIPAK®, ACCESS SURGICAL INTERNATIONAL®, RILEY MEDICAL®, TRANSPAK®, OPTI-LENGTH®, THE ULTRA SYSTEM®, BOOKWALTER ROTILT®. Symmetry Surgical is headquartered in Nashville, TN. For more information, please visit www.symmetrysurgical.com.
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