Exactech Inc.

$EXAC - Nasdaq - Healthcare Equipment/Supplies
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Press Release $EXAC Exactech Inc.

0 COMMENTs 23 Apr
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Exactech Q1 Net Income up 17% to $3.8 Million; Diluted EPS $.29 vs. $.25; Worldwide Sales Up 1% to $59.3 Million; U.S. Sales Increased 6%

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 $59.3 million for the first quarter of 2013, a 1% increase over $58.6 million in the first quarter of 2012. Net income was $3.8 million, or $0.29 per diluted share, compared to $3.3 million, or $0.25 per diluted share, in the same quarter a year ago.

First Quarter Segment Performance

  • Knee implant sales decreased 4% to $20.5 million
  • Extremity implant sales increased 21% to $15.7 million
  • Hip implant sales decreased 5% to $10.4 million
  • Biologic and Spine sales decreased 2% to $6.1 million
  • Other sales decreased 7% to $6.6 million

Management Comment

Exactech Chairman and CEO Dr. Bill Petty said, “Our sales for the quarter were slightly below our expectations as we experienced weakness in our European sales and the impact of an unfavorable currency swing, partially reflecting a weaker Japanese yen. U.S. sales were somewhat stronger with the help of continuing healthy sales in our shoulder products. The currency movement as well as continued focus by our employees on managing our cost structure allowed us to decrease our operating expenses during the quarter and deliver a 17% increase in net income.

Exactech President David Petty said, “U.S. sales increased 6% to $39.0 million compared with $36.8 million in the first quarter a year ago. International sales decreased 7% to $20.3 million. U.S. sales represented 66% of total sales and international sales were 34% of the total. On a constant currency basis, international sales decreased 5% and worldwide sales grew 2% for the quarter.

Chief Financial Officer Jody Phillips said, “Gross margins remained flat at 69% for the first quarter from the first quarter a year ago due to higher growth in the U.S. market and continued cost reductions attributable to internal manufacturing. Total operating expenses for the quarter decreased 2% to $34.6 million and as a percentage of sales decreased to 58% from 60% for the first quarter of 2012. General and administrative expenses decreased 10% in the first quarter to $5.1 million from $5.6 million. R&D expenses decreased 6% to $3.9 million during the first quarter.

Looking forward, Exactech maintained its 2013 sales guidance at $236 - $242 million and its diluted EPS target of $1.03 – $1.09. For the second quarter ending June 30, 2013, the company said it anticipates sales of $57 - $59 million and diluted EPS of $0.24 - $0.26. 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, April 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 1-877-941-2068 any time after 9:50 a.m. Eastern on April 24th. International and local callers should dial 1-480-629-9712. 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=104163.

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 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.

 
EXACTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
  (unaudited)   (audited)
March 31, December 31,
  2013   2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,402 $ 5,838
Trade receivables, net of allowances of $1,123 and $1,012 50,641 48,073
Prepaid expenses and other assets, net 2,968 2,877
Income taxes receivable 516 502
Inventories, current 71,688 70,699
Deferred tax assets   2,324   2,229
Total current assets 132,539 130,218
 
PROPERTY AND EQUIPMENT:
Land 2,208 2,211
Machinery and equipment 33,466 33,158
Surgical instruments 88,399 85,115
Furniture and fixtures 3,853 3,858
Facilities 18,000 18,033
Projects in process   1,249   643
Total property and equipment 147,175 143,018
Accumulated depreciation   (65,194 )   (61,586 )
Net property and equipment 81,981 81,432
 
OTHER ASSETS:
Deferred financing and deposits, net 829 866
Non-current inventory 7,615 5,410
Product licenses and designs, net 10,461 10,534
Patents and trademarks, net 2,143 2,217
Customer relationships, net 985 1,108
Goodwill   13,250   13,356
Total other assets   35,283   33,491
TOTAL ASSETS $ 249,803 $ 245,141
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 20,307 $ 14,773
Income taxes payable 1,155 2,188
Accrued expenses 8,137 11,726
Other current liabilities 250 250
Current portion of long-term debt   3,000   2,625
Total current liabilities 32,849 31,562
 
LONG-TERM LIABILITIES:
Deferred tax liabilities 3,181 3,186
Line of credit 12,355 12,197
Long-term debt, net of current portion 25,500 26,250
Other long-term liabilities   980   1,049
Total long-term liabilities   42,016   42,682
Total liabilities 74,865 74,244
 
COMMITMENTS AND CONTINGENCIES
 
SHAREHOLDERS’ EQUITY:
Common stock 134 133
Additional paid-in capital 65,777 63,918
Accumulated other comprehensive loss, net of tax (6,461 ) (4,797 )
Retained earnings   115,488   111,643
Total shareholders’ equity   174,938   170,897
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 249,803 $ 245,141
 
 

EXACTECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
   
Three Month Periods
Ended March 31,
2013 2012
NET SALES $ 59,301 $ 58,628
 
COST OF GOODS SOLD   18,590   18,096
Gross profit 40,711 40,532
 
OPERATING EXPENSES:
Sales and marketing 21,524 21,820
General and administrative 5,096 5,648
Research and development 3,850 4,104
Depreciation and amortization   4,175   3,792
Total operating expenses 34,645 35,364
       
INCOME FROM OPERATIONS 6,066 5,168
 
OTHER INCOME (EXPENSE):
Interest income 1 -
Other income 29 17
Interest expense (283 ) (452 )
Foreign currency exchange gain (loss)   (462 )   223
Total other expenses (715 ) (212)
       
INCOME BEFORE INCOME TAXES 5,351 4,956
 
PROVISION FOR INCOME TAXES   1,506   1,671
NET INCOME $ 3,845 $ 3,285
 
BASIC EARNINGS PER SHARE $ 0.29 $ 0.25
 
DILUTED EARNINGS PER SHARE $ 0.29 $ 0.25
 
SHARES - BASIC 13,177 13,156
 
SHARES - DILUTED 13,344 13,259
 

For Exactech, Inc.
Investor contacts
Jody Phillips, 352-377-1140
Chief Financial Officer
or
Hawk Associates
Julie Marshall or Frank Hawkins, 305-451-1888
exactech@hawkassociates.com

Source: Exactech, Inc.

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