GAINESVILLE, Fla.--(BUSINESS WIRE)--Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, announced today revenue of $58.6 million for the first quarter of 2012, a 10% increase over $53.4 million in the first quarter of 2011. Net income was $3.3 million, or $0.25 per diluted share, compared to $3.0 million, or $0.22 per diluted share, in the same quarter a year ago.
First Quarter Segment Performance
- Knee implant revenue increased 1% to $21.5 million
- Extremity implant revenue increased 37% to $13.0 million
- Hip implant revenue increased 37% to $11.0 million
- Biologic and Spine revenue decreased 13% to $6.2 million
- Other revenue decreased 6% to $7.1 million
Exactech Chairman and CEO Bill Petty said, “This was an excellent quarter for Exactech. Knee implants, our largest product segment, were up 1% to $21.5 million for the first quarter of 2012 from $21.3 million a year ago. Our growth in the extremity and hip lines far outpaced the results of the industry. Extremity revenues, primarily our Equinoxe® shoulder products, rose 37% to $13.0 million from last year’s Q1 revenue of $9.4 million as we continued to gain share in this rapidly growing market segment. We were particularly pleased with the hip implant sales, which increased 37% to $11.0 million from $8.0 million in the first quarter of 2011. Much of this was attributable to success with our new hip stem products and growing sales in Asian and Latin American markets. Biologic-spine revenue decreased to $6.2 million compared with $7.0 million in the same quarter last year. Other product sales decreased 6% to $7.1 million from $7.5 million.”
Exactech President David Petty said, “International revenues once again helped drive our growth, increasing 19% to $21.9 million from $18.4 million in the first quarter of 2011 as international sales were over 37% of total revenue. Progress in sales in the U.S. also outpaced the industry with an increase of 5% to $36.8 million compared with $35.0 million in the first quarter of 2011. We continue to have a full pipeline of new products that we are developing to meet the market demands and we expect to continue to announce new products throughout the year.”
Chief Financial Officer Jody Phillips said, “Revenue and net income for the quarter were both ahead of our projections. The 11% increase in net income to $3.3 million was driven by revenue and gross margin increases as gross margins increased to 69.1% for the first quarter of 2012 from 68.7% for the first quarter of 2011 mainly due to favorable impacts of our direct operation transitions in international markets.
“Total operating expenses for the quarter were $35.4 million, an increase of 8% from $32.6 million in the comparable period. As a percentage of sales, operating expenses decreased to 60% from 61% for the first quarter a year ago. Total sales and marketing expenses were up 9%, and decreased to 37% as a percentage of sales from 38% in the same quarter a year ago. Research and development expenses increased 18% to $4.1 million versus $3.5 million in the first quarter of 2011. As a result, our operating profit increased 29% to $5.2 million.”
Looking forward, Exactech increased its 2012 revenue guidance to $217-$224 million and increased its diluted EPS target to $0.90 - $0.97. For the second quarter ending June 30, 2012, the company said it anticipates revenues of $54.0-57.0 million and diluted EPS of $0.22-$0.24. 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.
Conference Call
The company has scheduled a conference call at 10:00 a.m. Eastern Time on Wednesday, May 2. 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 1-877-941-1428 any time after 9:50 a.m. EDT on May 2. International and local callers should dial 1-480-629-9665. While in conference, if callers should require operator assistance, they can press the star followed by the zero button. This will call an operator to the line.
A live and archived webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm or at http://viavid.net/dce.aspx?sid=00009680
About Exactech
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.
An investment profile on Exactech may be found at http://www.hawkassociates.com/profile/exac.cfm. To receive future releases in e-mail alerts, sign up at http://www.hawkassociates.com/about/alert.
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.
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EXACTECH, INC. AND SUBSIDIARIES |
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| CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | (audited) | |||||||
| March 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 3,472 | $ | 4,663 | ||||
| Trade receivables, net of allowances of $3,429 and $3,186 | 53,866 | 45,856 | ||||||
| Prepaid expenses and other assets, net | 3,901 | 3,948 | ||||||
| Income taxes receivable | 155 | 171 | ||||||
| Inventories, current | 63,526 | 61,724 | ||||||
| Deferred tax assets | 2,782 | 2,869 | ||||||
| Total current assets | 127,702 | 119,231 | ||||||
| PROPERTY AND EQUIPMENT: | ||||||||
| Land | 2,212 | 2,209 | ||||||
| Machinery and equipment | 31,202 | 30,164 | ||||||
| Surgical instruments | 80,555 | 77,105 | ||||||
| Furniture and fixtures | 3,766 | 3,753 | ||||||
| Facilities | 17,964 | 17,930 | ||||||
| Projects in process | 1,917 | 2,141 | ||||||
| Total property and equipment | 137,616 | 133,302 | ||||||
| Accumulated depreciation | (59,277 | ) | (56,061 | ) | ||||
| Net property and equipment | 78,339 | 77,241 | ||||||
| OTHER ASSETS: | ||||||||
| Deferred financing and deposits, net | 1,504 | 1,016 | ||||||
| Non-current inventory | 7,265 | 7,334 | ||||||
| Product licenses and designs, net | 11,515 | 11,380 | ||||||
| Patents and trademarks, net | 1,518 | 1,589 | ||||||
| Customer relationships, net | 1,450 | 1,545 | ||||||
| Goodwill | 13,382 | 13,276 | ||||||
| Total other assets | 36,634 | 36,140 | ||||||
| TOTAL ASSETS | $ | 242,675 | $ | 232,612 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 16,699 | $ | 12,909 | ||||
| Income taxes payable | 1,570 | 4,210 | ||||||
| Accrued expenses | 9,793 | 8,957 | ||||||
| Other current liabilities | 250 | 344 | ||||||
| Current portion of long-term debt | 1,500 | 648 | ||||||
| Total current liabilities | 29,812 | 27,068 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Deferred tax liabilities | 3,867 | 3,520 | ||||||
| Line of credit | 19,509 | 42,410 | ||||||
| Long-term debt, net of current portion | 28,500 | 3,507 | ||||||
| Other long-term liabilities | 740 | 780 | ||||||
| Total long-term liabilities | 52,616 | 50,217 | ||||||
| Total liabilities | 82,428 | 77,285 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Common stock | 132 | 132 | ||||||
| Additional paid-in capital | 61,381 | 60,565 | ||||||
| Accumulated other comprehensive loss, net of tax | (3,453 | ) | (4,272 | ) | ||||
| Retained earnings | 102,187 | 98,902 | ||||||
| Total shareholders’ equity | 160,247 | 155,327 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 242,675 | $ | 232,612 | ||||
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EXACTECH, INC. AND SUBSIDIARIES |
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| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (in thousands, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Month Periods | ||||||||
| Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| NET SALES | $ | 58,628 | $ | 53,369 | ||||
| COST OF GOODS SOLD | 18,096 | 16,720 | ||||||
| Gross profit | 40,532 | 36,649 | ||||||
| OPERATING EXPENSES: | ||||||||
| Sales and marketing | 21,820 | 20,106 | ||||||
| General and administrative | 5,648 | 5,666 | ||||||
| Research and development | 4,104 | 3,466 | ||||||
| Depreciation and amortization | 3,792 | 3,409 | ||||||
| Total operating expenses | 35,364 | 32,647 | ||||||
| INCOME FROM OPERATIONS | 5,168 | 4,002 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | - | 1 | ||||||
| Other income | 17 | 23 | ||||||
| Interest expense | (452 | ) | (249 | ) | ||||
| Foreign currency exchange gain (loss) | 223 | 505 | ||||||
| Total other expenses | (212 | ) | 280 | |||||
| INCOME BEFORE INCOME TAXES | 4,956 | 4,282 | ||||||
| PROVISION FOR INCOME TAXES | 1,671 | 1,311 | ||||||
| NET INCOME | $ | 3,285 | $ | 2,971 | ||||
| BASIC EARNINGS PER SHARE | $ | 0.25 | $ | 0.23 | ||||
| DILUTED EARNINGS PER SHARE | $ | 0.25 | $ | 0.22 | ||||
| SHARES - BASIC | 13,156 | 13,034 | ||||||
| SHARES - DILUTED | 13,259 | 13,214 | ||||||