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 sales of $55.7 million for the third quarter of 2013, a 9% increase over $51.3 million in the third quarter of 2012. Net income was $3.2 million, or $0.23 per diluted share, compared to $2.6 million, or $0.19 per diluted share, in the same quarter a year ago.
Third Quarter Segment Performance
- Knee implant sales increased 2% to $18.6 million
- Extremity implant sales increased 24% to $15.1 million
- Hip implant sales increased 6% to $9.8 million
- Biologic and Spine sales increased 1% to $6.0 million
- Other sales increased 8% to $6.1 million
Nine Months Highlights and Segment Performance
For the first nine months of 2013 revenue was $175.5 million, an increase of 6% over $165.1 million for the comparable period last year. Net income for the first nine months of 2013 increased 22% to $10.8 million, or $0.79 per diluted share compared to $8.9 million, or $0.67 per diluted share for the first nine months of 2012. First nine month product revenues were as follows:
- Knee implant revenue decreased 1% to $60.2 million
- Extremity implant revenue increased 27% to $47.1 million
- Hip implant revenue increased 1% to $30.8 million
- Biologic and spine revenue increased 5% to $18.9 million
- Other products revenue decreased 1% to $18.6 million
Management Comment
Exactech Chairman and CEO Dr. Bill Petty said, “We had a very successful quarter recording improvement in each of our operating segments. This resulted in a strong boost to net income and improved positive cash flow. Business strengthened pretty much across the board and we also benefited from a number of factors including a more favorable Euro exchange rate. New product lines are largely meeting our expectations and we continue to get welcomed favorable feedback from our surgeons and other customers. We also continue to benefit from strong cost controls supported in part by efficiencies from internal manufacturing operations.”
Exactech President David Petty said, “U.S. sales increased 11% to $39.1 million compared with $35.3 million in the third quarter a year ago and international sales increased 4% to $16.6 million. U.S. sales represented 70% of total sales and international sales were 30% of the total. For the first nine months of 2013, U.S. sales rose 10% to $117.9 million compared with $107.3 million in 2012. International sales for the first nine months of 2013 decreased 0.3% to $57.6 million and decreased to 33% of total sales from 35% of total sales for the first nine months of 2012 due to relative weakness in a few specific markets earlier in the year. On a constant currency basis, international sales increased 6% and worldwide sales grew 9% for the third quarter.”
Chief Financial Officer Jody Phillips said, “We continued to make financial progress during the third quarter of 2013 with the 25% increase in net income. Particularly encouraging was the gross margin improvement to 71% of sales, which was a function of higher than expected U.S. sales mix as well as lower costs due to our internal manufacturing operations. The 11% increase in operating expenses was largely in line with our expectations although we are projecting lower increases in operating expenses for the fourth quarter.”
Looking forward, Exactech narrowed its 2013 sales guidance of $237 – $239 million and increased its full year diluted EPS target to $1.09 – $1.11. For the fourth quarter ending December 31, 2013, the company said it anticipates sales of $61.5 – $63.5 million and diluted EPS of $0.30 – $0.32. 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, October 23. The call will cover the company’s third quarter results. CEO Bill Petty will open the conference call and a question-and-answer session will follow.
To participate in the call, dial 1-877-941-2068 any time after 9:50 a.m. Eastern on October 23rd. International and local callers should dial 1-480-629-9712. A live webcast of the call will be available at https://www.hawkassociates.com/profile/exac.cfm or https://public.viavid.com/index.php?id=106302.
This call will be archived for approximately 90 days.
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 https://www.exac.com. Copies of Exactech’s press releases, SEC filings, current price quotes and other valuable information for investors may be found at https://www.exac.com and https://www.hawkassociates.com.
An investment profile on Exactech may be found at https://www.hawkassociates.com/profile/exac.cfm. To receive future releases in e-mail alerts, sign up at https://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.
