AUDUBON, PA, November 3, 2015: Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal implant manufacturer, today announced its financial results for the third quarter ended September 30, 2015.
- Worldwide sales increased 16.3% to $137.0 million, or 17.6% on a constant currency basis
- Third quarter net income increased 14.8% to $26.5 million, or 18.0% on a constant currency basis
- Fully diluted earnings per share (EPS) were $0.28
- Non-GAAP Adjusted EBITDA was 36.9% of sales
- Company increases 2015 guidance for sales to $539 million and EPS to $1.07
David Paul, Chairman and CEO said, “We are pleased to report third quarter sales of $137 million, a year-over-year increase of 16.3% as reported and 17.6% on a constant currency basis. Once again the Globus team achieved strong sales growth and market share gains while maintaining industry leading profitability, with quarterly net income of $26.5 million, or 14.8% higher than the same quarter last year. During the third quarter, we also launched 3 new products and made further progress on integrating our two most recent acquisitions. We remain confident in our long term growth prospects and our ability to sustain our industry leading profitability by the continued execution of our strategy of introducing innovative products, expanding our U.S. and international sales footprint, and controlling our expenses.”
Third quarter sales in the U.S. grew by 17.9% over the third quarter of 2014. International sales increased by 1.2% over the third quarter of 2014 on an as reported basis and 14.6% on a constant currency basis.
Third quarter net income was $26.5 million, an increase of 14.8%, or 18.0% on a constant currency basis. Fully diluted EPS for the third quarter was $0.28, as compared to $0.24 for the third quarter 2014.
Cash, cash equivalents and marketable securities ended the quarter at $300.1 million. The company remains debt free.
2015 Annual Guidance
The company today increased guidance for full year 2015 sales by $15 million to $539 million and earnings per share by $0.03 to $1.07. The increased sales guidance takes into account our expectations for $5.5 million unfavorable impact of foreign currency exchange.
Conference Call Information
Globus Medical will hold a teleconference to discuss its 2015 third quarter results with the investment community at 5:30 p.m. Eastern Time today. Globus invites all interested parties to join the call by dialing:
1-855-533-7141 United States Participants 1-720-545-0060 International Participants There is no pass code for the teleconference.
For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at investors.globusmedical.com.
If you are unable to participate during the live teleconference, the call will be archived until Tuesday, November 17, 2015. The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404- 537-3406 from outside the U.S. The passcode for the audio replay is 8132-2678.
About Globus Medical, Inc.
Globus Medical, Inc. is a leading musculoskeletal implant 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, 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, changes in the fair value of contingent consideration in connection with business acquisitions and other acquisition related costs, and provisions for litigation, 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. Our management also uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. In addition, for the periods ended September 30, 2015 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, respectively, before provisions for litigation, net of the tax effects of such provisions. We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operative performance from period to period as they remove the effects of litigation, which we believe are not reflective of underlying business trends. We also define the non-GAAP measure of Free Cash Flow as 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. Furthermore, we define the non-GAAP measure of sales and net income on a constant currency basis as the current and prior period sales and net income translated at
the same predetermined exchange rate. We believe that sales and net income on a constant currency basis provides insight to the comparative increase or decrease in period sales and net income, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.
Adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, Free Cash Flow and sales and net income on a constant currency basis 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 Adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, Free Cash Flow, and sales and net income on a constant currency basis may differ from that of other companies and therefore may not be comparable.