August 01, 2017

 

August 01, 2017

August 1, 2017 – CAESAREA, Israel–(BUSINESS WIRE)–

Mazor Robotics Ltd. (TASE: MZOR; NASDAQGM: MZOR), a pioneer and a leader in the field of surgical guidance systems, reported record second quarter revenue of $15.5 million. As previously announced, the Company received purchase orders for 19 systems in the 2017 second quarter and ended the quarter with a backlog of 14 systems.

“Our Q2 performance is highlighted by record quarterly revenue and a year-over-year increase of 87%, which reflects the market’s excitement for Mazor X and the successful sales execution with our partner,” commented Ori Hadomi, Chief Executive Officer. “The market traction and recognition of the system’s benefits is generating robust demand for our surgical guidance systems, which strengthens our leadership position in the U.S. market. Our sales team is continuing to pursue these opportunities and during the first few weeks of the third quarter we have received purchase orders for six systems.”

SECOND QUARTER 2017 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

Revenue for the three months ended June 30, 2017 increased 87% to $15.5 million compared to $8.3 million in the year-ago second quarter. U.S. revenue increased 110% to $14.1 million compared to $6.7 million in the year-ago second quarter, as the Company recognized revenue from 14 Mazor X systems compared to 5 Renaissance systems in the 2016 second quarter. The Company ended the quarter with a backlog of 14 systems, which are expected to be shipped and recorded as revenues in the second half of 2017. International revenue was $1.4 million compared to $1.6 million in the year-ago second quarter. Recurring revenue from kit sales, services and others increased 50% to $6.3 million in the second quarter of 2017 compared to $4.2 million in the year-ago second quarter. The growth is attributed mainly to the increase of the installed base.

The Company’s gross margin for the three months ended June 30, 2017 was 69.4% compared to 76.9% in the year-ago second quarter. This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X compared to the Renaissance system and the inclusion of four Renaissance trade-ins to Mazor X. Total operating expenses were $14.6 million compared to $10.3 million in the year-ago second quarter primarily reflecting the Company’s increased investment in sales and marketing activities. Operating loss was $3.9 million compared to an operating loss of $4.0 million in the year-ago second quarter. Net loss for the second quarter of 2017 was $3.7 million, or $0.08 per share, compared to a net loss of $4.1 million, or $0.09 per share, for the year-ago second quarter.

Cash used in operating activities during the 2017 second quarter was $7.4 million compared to $0.6 million cash used in operating activities in the year-ago second quarter. The Increase in cash used in the period is due to increase of Accounts receivable and Inventory to support the growing installed base and backlog orders in the second quarter of 2017. As of June 30, 2017, cash, cash equivalents and investments totaled $57.4 million.

SECOND QUARTER 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

The tables below include reconciliation of the Company’s GAAP results to non-GAAP results. The reconciliation relates to non-cash expenses in the amount of $1.3 million with respect to amortization of intangible assets and to share-based expenses recorded in the second quarter of 2017. On a non-GAAP basis, the net loss in the second quarter of 2017 was $2.4 million, or $0.05 per share, compared to $3.9 million, or $0.09 per share, for the year-ago second quarter.

SIX MONTHS ENDED JUNE 30, 2017 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

For the six months ended June 30, 2017, revenue increased 85% and totaled $27.2 million compared to $14.7 million for the six months ended June 30, 2016, due to higher system sales and an increase in recurring revenue. Recurring revenue totaled $11.5 million, an increase of 44% compared to $8.0 million in the six months ended June 30, 2016. The growth in recurring revenue is attributed to the increase in the installed base and high utilization of the Company’s surgical guidance systems, both in the U.S. and globally. Gross margin for the six months ended June 30, 2017 was 67.3% compared with 75.7% in the six months ended June 30, 2016. This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X compared to the Renaissance system and the inclusion of six Renaissance trade-ins to Mazor X. Net loss for the six months ended June 30, 2017 was $8.9 million, or $0.19 per share, compared to a net loss of $9.2 million, or $0.21 per share, in the first six months of 2016.

SIX MONTHS ENDED JUNE 30, 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

On a non-GAAP basis, the net loss for the first six months of 2017 was $6.3 million, or $0.13 per share, compared to a net loss of $8.1 million, or $0.19 per share, in the first six months of 2016.

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss its second quarter financial results as well as recent corporate developments on August 1, 2017 at 8:30 AM EDT (3:30 PM IDT). Investors within the United States interested in participating are invited to call 888-539-3679. Participants in Israel can use the toll-free dial-in number 1-80-924-6042. All other international participants can use the dial-in number 719-325-2322. For all callers, refer to Conference ID 8824893.

A replay of the event will be available for two weeks following the conclusion of the call. To access the replay, callers in the United States can call 1-866-375-1919 and reference the Replay Access Code: 8824893. All international callers can dial +1-719-457-0820, using the same Replay Access Code. To access the webcast, please visit www.mazorrobotics.com and select ‘Investor Relations.’

Use of Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with generally accepted accounting principles in conformity with International Financial Reporting Standards (GAAP), this press release contains Non-GAAP financial measures for gross profit, operating expenses, operating loss, net loss and basic and diluted earnings per share that exclude the effects of capitalization of development costs, non-cash expense of amortization of intangible assets and share-based payments. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance that enhances management’s and investors’ ability to evaluate the Company’s net income and earnings per share and to compare them to historical net income and earnings per share.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when operating and evaluating the Company’s business internally and therefore decided to make these non-GAAP adjustments available to investors.

About Mazor

Mazor Robotics (TASE: MZOR; NASDAQGM: MZOR) believes in healing through innovation by developing and introducing revolutionary technologies and products aimed at redefining the gold standard of quality care. Mazor Robotics Guidance System enables surgeons to conduct spine and brain procedures in an accurate and secure manner. For more information, please visit www.MazorRobotics.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Any statements in this release about future expectations, plans or prospects for the Company, including without limitation, statements regarding robust demand for the Company’s products, third quarter purchase orders, the amount of and timing of recording of additional revenue from backlog, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions are forward-looking statements. These statements are only predictions based on Mazor’s current expectations and projections about future events. There are important factors that could cause Mazor’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include, but are not limited to, the impact of general economic conditions, competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results, and other factors indicated in Mazor’s filings with the Securities and Exchange Commission (SEC) including those discussed under the heading “Risk Factors” in Mazor’s annual report on Form 20-F filed with the SEC on May 1, 2017 and in subsequent filings with the SEC. For more details, refer to Mazor’s SEC filings. Mazor undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

By GlobeNewswire,  July 27, 2017

Kalamazoo, Michigan – July 27, 2017 – Stryker Corporation (NYSE:SYK) reported operating results for the second quarter of 2017:

Second Quarter Highlights

Net sales grew 6.1% to $3.0 billion (6.9% constant currency)

Orthopaedics	5.5	%	or	6.5% constant currency
MedSurg	6.2	%	or	6.8% constant currency
Neurotechnology and Spine	6.9	%	or	7.9% constant currency

Adjusted net earnings per diluted share⁽¹⁾ increased 10.1% to $1.53

Reported net earnings per diluted share increased 3.0% to $1.03

“Our growth momentum continued in the second quarter as we continue to drive share gains through new products and strong commercial execution,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “We are raising our full year guidance for both organic sales growth and EPS, which reflects our expectations for continued strong performance throughout the year.”

Sales Analysis

Consolidated net sales of $3.0 billion increased 6.1% in the quarter as reported and 6.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 0.2% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 8.2% from increased unit volume partially offset by 1.5% due to lower prices.

Orthopaedics net sales of $1.1 billion increased 5.5% in the quarter as reported and 6.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Excluding the 0.3% impact of acquisitions, net sales in the quarter increased 6.2% in constant currency, including 8.6% from increased unit volume partially offset by 2.4% due to lower prices.

MedSurg net sales of $1.3 billion increased 6.2% in the quarter as reported and 6.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%. Excluding the 0.1% impact of acquisitions, net sales in the quarter increased 6.7% in constant currency, including 7.1% from increased unit volume partially offset by 0.4% due to lower prices.

Neurotechnology and Spine net sales of $0.5 billion increased 6.9% in the quarter as reported and 7.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Net sales in the quarter increased 10.0% from increased unit volume partially offset by 2.1% due to lower prices.

Earnings Analysis

Reported net earnings of $391 million increased 2.9% in the quarter. Reported net earnings per diluted share of $1.03 increased 3.0% in the quarter. Reported net earnings include certain charges for the amortization of purchased intangible assets, Rejuvenate and ABG II and other recall matters, restructuring-related activities, legal matters and acquisition and integration related activities. The effect of each of these matters on reported net earnings and net earnings per diluted share appears in the reconciliation of actual results to adjusted results below. Excluding the impact of these charges increases gross profit margin in the quarter from 66.1% to 66.3% and increases operating income margin from 16.6% to 25.0%. Excluding the impact of the items described above, adjusted net earnings⁽²⁾ of $581 million increased 10.7% in the quarter. Adjusted net earnings per diluted share⁽¹⁾ of $1.53 increased 10.1% in the quarter.

2017 Outlook

We now expect 2017 organic net sales growth to be in the range of 6.5% to 7.0% and adjusted net earnings per diluted share⁽³⁾ to be in the range of $6.45 to $6.55. For the third quarter we expect adjusted net earnings per diluted share⁽³⁾ to be in the range of $1.50 to $1.55. If foreign currency exchange rates hold near current levels, we expect net sales in the third quarter and full year to be negatively impacted by approximately 0.5% and adjusted net earnings per diluted share to be negatively impacted by approximately $0.02 in the third quarter and $0.10 in the full year.

(1) A reconciliation of reported net earnings per diluted share to adjusted net earnings per diluted share, a non-GAAP financial measure, and other important information appears below.

(2) A reconciliation of reported net earnings to adjusted net earnings, a non-GAAP financial measure, and other important information appears below.

(3) A reconciliation of expected net earnings per diluted share to expected adjusted net earnings per diluted share for the third quarter and full year and other important information appears below.

Conference Call on Thursday, July 27, 2017

As previously announced, the Company will host a conference call on Thursday, July 27, 2017 at 4:30 p.m., Eastern Time, to discuss the Company’s operating results for the quarter ended June 30, 2017 and provide an operational update.

To participate in the conference call dial (844) 826-0610 (domestic) or (973) 453-3249 (international) and be prepared to provide conference ID number 26061645 to the operator.

A simultaneous webcast of the call will be accessible via the Company’s website at www.stryker.com. The call will be archived on the Investors page of this site.

A recording of the call will also be available from 8:00 p.m., Eastern Time, on Thursday, July 27, 2017, until 11:59 p.m., Eastern Time, on Thursday, August 3, 2017. To hear this recording, you may dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and enter conference ID number 26061645.

Caution Concerning Forward-Looking Statements

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities laws that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; potential supply disruptions; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Stryker is one of the world’s leading medical technology companies and, together with our customers, we are driven to make healthcare better. The Company offers a diverse array of innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes. Stryker is active in over 100 countries around the world. Please contact us for more information at www.stryker.com.

For investor inquiries please contact:

Katherine A. Owen, Stryker Corporation, 269-385-2600 or katherine.owen@stryker.com

For media inquiries please contact:

Yin Becker, Stryker Corporation, 269-385-2600 or yin.becker@stryker.com

 

STRYKER CORPORATION For the Three and Six Months June 30 (Unaudited – Millions of Dollars, Except Per Share Amounts) CONDENSED STATEMENTS OF EARNINGS
	Three Months											Six Months
	2017				2016				% Change			2017				2016				% Change
Net sales	$	3,012			$	2,840			6.1	%		$	5,967			$	5,335			11.8	%
Cost of sales	1,022				998				2.4			2,015				1,799				12.0
Gross profit	$	1,990			$	1,842			8.0	%		$	3,952			$	3,536			11.8	%
% of sales	66.1		%		64.9		%					66.2		%		66.3		%
Research, development and engineering expenses	192				183				4.9			384				342				12.3
Selling, general and administrative expenses	1,130				1,043				8.3			2,232				1,987				12.3
Recall charges	72				28				157.1			98				47				108.5
Amortization of intangible assets	95				88				8.0			183				141				29.8
Total operating expenses	$	1,489			$	1,342			11.0	%		$	2,897			$	2,517			15.1	%
Operating income	$	501			$	500			0.2	%		$	1,055			$	1,019			3.5	%
% of sales	16.6		%		17.6		%					17.7		%		19.1		%
Other income (expense), net	(57		)		(67		)		(14.9	)		(112		)		(105		)		6.7
Earnings before income taxes	$	444			$	433			2.5	%		$	943			$	914			3.2	%
Income taxes	53				53				–			108				132				(18.2	)
Net earnings	$	391			$	380			2.9	%		$	835			$	782			6.8	%
Net earnings per share of common stock:
Basic	$	1.04			$	1.02			2.0	%		$	2.23			$	2.09			6.7	%
Diluted	$	1.03			$	1.00			3.0	%		$	2.20			$	2.07			6.3	%
Weighted-average shares outstanding – in millions:
Basic	373.9				374.2							373.7				373.7
Diluted	379.8				378.5							379.6				378.0

 

CONDENSED BALANCE SHEETS
	June				December
	2017				2016
Assets
Cash and cash equivalents	$	3,649			$	3,316
Marketable securities	98				68
Accounts receivable, net	1,905				1,967
Inventories	2,279				2,030
Other current assets	547				480
Total current assets	$	8,478			$	7,861
Property, plant and equipment, net	1,758				1,569
Goodwill and other intangibles, net	9,853				9,864
Other noncurrent assets	1,203				1,141
Total assets	$	21,292			$	20,435
Liabilities and shareholders’ equity
Current liabilities	$	3,014			$	2,554
Accrued recall expenses	538				594
Other noncurrent liabilities	1,113				1,051
Long-term debt, excluding current maturities	6,592				6,686
Shareholders’ equity	10,035				9,550
Total liabilities and shareholders’ equity	$	21,292			$	20,435

 

CONDENSED STATEMENTS OF CASH FLOWS
	Six Months
	2017				2016
Operating activities
Net earnings	$	835			$	782
Depreciation	127				106
Amortization of intangible assets	183				141
Changes in operating assets and liabilities and other, net	(344		)		(274		)
Net cash provided by operating activities	$	801			$	755
Investing activities
Acquisitions, net of cash acquired	$	(38	)		$	(4,219	)
Change in marketable securities, net	(30		)		536
Purchases of property, plant and equipment	(270		)		(229		)
Net cash used in investing activities	$	(338	)		$	(3,912	)
Financing activities
Borrowings/repayments of debt, net	$	443			$	3,611
Dividends paid	(318		)		(284		)
Repurchases of common stock	(230		)		(13		)
Other financing	(72		)		(56		)
Net cash (used in) provided by financing activities	$	(177	)		$	3,258
Effect of exchange rate changes on cash and cash equivalents	47				10
Change in cash and cash equivalents	$	333			$	111

 

STRYKER CORPORATION For the Three and Six Months Ended June 30 (Unaudited – Millions of Dollars) CONDENSED SALES ANALYSIS
	Three Months											Six Months
							Percentage Change											Percentage Change
	2017			2016			As Reported		Constant Currency			2017			2016			As Reported		Constant Currency
Geographic:
United States	$	2,201		$	2,050		7.4	%	7.4	%		$	4,364		$	3,871		12.7	%	12.7	%
International	811			790			2.7		5.7			1,603			1,464			9.5		11.9
Total	$	3,012		$	2,840		6.1	%	6.9	%		$	5,967		$	5,335		11.8	%	12.5	%
Segment:
Orthopaedics	$	1,141		$	1,082		5.5	%	6.5	%		$	2,276		$	2,139		6.4	%	7.2	%
MedSurg	1,336			1,258			6.2		6.8			2,641			2,216			19.2		19.7
Neurotechnology and Spine	535			500			6.9		7.9			1,050			980			7.1		7.8
Total	$	3,012		$	2,840		6.1	%	6.9	%		$	5,967		$	5,335		11.8	%	12.5	%

 

SUPPLEMENTAL SALES GROWTH ANALYSIS
	Three Months
								Percentage Change
													United States			International
	2017			2016				As Reported		Constant Currency			As Reported			As Reported		Constant Currency
Orthopaedics:
Knees	$	389		$	370			5.0	%	5.9	%		7.0	%		0.1	%	3.0	%
Hips	322			323				(0.3	)	1.0			2.1			(4.3	)	(0.8	)
Trauma and Extremities	351			328				7.0		8.0			11.4			(0.5	)	2.4
Other	79			61				32.0		32.1			34.8			20.1		20.9
Total Orthopaedics	$	1,141		$	1,082			5.5	%	6.5	%		8.8	%		(1.0	)%	2.1	%
MedSurg:
Instruments	$	392		$	377			4.1	%	4.7	%		4.2	%		3.6	%	6.2	%
Endoscopy	406			357				13.9		14.3			15.5			8.4		10.2
Medical	474			465				1.6		2.4			2.3			(0.7	)	2.8
Sustainability	64			59				10.0		10.0			10.0			8.4		13.0
Total MedSurg	$	1,336		$	1,258			6.2	%	6.8	%		7.0	%		3.4	%	6.2	%
Neurotechnology and Spine:
Neurotechnology	$	352		$	312			12.8	%	13.9	%		10.3	%		17.3	%	20.4	%
Spine	183			188				(2.9	)	(2.1	)		(1.3	)		(7.7	)	(4.7	)
Total Neurotechnology and Spine	$	535		$	500			6.9	%	7.9	%		5.5	%		10.0	%	13.1	%
Total	$	3,012		$	2,840			6.1	%	6.9	%		7.4	%		2.7	%	5.7	%

 

	Six Months
								Percentage Change
													United States			International
	2017			2016				As Reported		Constant Currency			As Reported			As Reported		Constant Currency
Orthopaedics:
Knees	$	780		$	731			6.8	%	7.3	%		7.2	%		5.5	%	7.4	%
Hips	642			639				0.4		1.5			2.1			(2.2	)	0.6
Trauma and Extremities	703			655				7.3		8.1			10.7			1.5		4.0
Other	151			114				33.0		33.0			30.5			45.2		44.6
Total Orthopaedics	$	2,276		$	2,139			6.4	%	7.2	%		8.3	%		2.6	%	4.9	%
MedSurg:
Instruments	$	786		$	742			5.9	%	6.4	%		6.0	%		5.7	%	8.0	%
Endoscopy	779			685				13.8		14.0			15.0			9.4		10.7
Medical	949			672				41.2		42.3			38.9			49.8		55.2
Sustainability	127			117				8.8		8.8			8.7			27.0		28.2
Total MedSurg	$	2,641		$	2,216			19.2	%	19.7	%		18.9	%		20.3	%	22.9	%
Neurotechnology and Spine:
Neurotechnology	$	683		$	613			11.3	%	12.0	%		10.0	%		13.7	%	15.6	%
Spine	367			367				0.1		0.6			0.5			(1.3	)	1.1
Total Neurotechnology and Spine	$	1,050		$	980			7.1	%	7.8	%		6.1	%		9.4	%	11.5	%
Total	$	5,967		$	5,335			11.8	%	12.5	%		12.7	%		9.5	%	11.9	%

NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; cost of sales excluding specified items; adjusted selling, general and administrative expenses; adjusted operating income; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share. We believe that these non-GAAP measures provide meaningful information to assist shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates and acquisitions that affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current and prior year results at the same foreign currency exchange rate excluding the impact of acquisitions. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, operating income, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following reconciles the non-GAAP financial measures discussed above with the most directly comparable GAAP financial measures:

STRYKER CORPORATION For the Three Months and Six Months June 30 (Unaudited – Millions of Dollars, Except Per Share Amounts) Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2017	Gross Profit			Selling, General & Administrative Expenses			Amortization of Intangible Assets			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	1,990		$	1,130		$	95		$	501		$	391		11.8	%	$	1.03
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value	1			–			–			1			–			0.1		–
Other acquisition and integration related	–			(8		)	–			8			7			–		0.02
Amortization of purchased intangible assets	–			–			(95		)	95			63			3.7		0.16
Restructuring-related charges (b)	6			(39		)	–			45			41			(0.6	)	0.11
Rejuvenate and other recall matters (c)	–			–			–			72			54			1.3		0.14
Legal matters (d)	–			(30		)	–			30			25			–		0.07
Adjusted	$	1,997		$	1,053		$	–		$	752		$	581		16.3	%	$	1.53

 

Three Months 2016	Gross Profit			Selling, General & Administrative Expenses			Amortization of Intangible Assets			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	1,842		$	1,043		$	88		$	500		$	380		12.3	%	$	1.00
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value	35			–			–			35			22			1.6		0.06
Other acquisition and integration related	–			(31		)	–			31			21			1.0		0.06
Amortization of purchased intangible assets	–			–			(88		)	88			59			3.1		0.16
Restructuring-related charges (b)	2			(20		)	–			22			20			(0.4	)	0.05
Rejuvenate and other recall matters (c)	–			–			–			28			23			–		0.06
Adjusted	$	1,879		$	992		$	–		$	704		$	525		17.6	%	$	1.39

 

Six Months 2017	Gross Profit			Selling, General & Administrative Expenses			Amortization of Intangible Assets			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	3,952		$	2,232		$	183		$	1,055		$	835		11.4	%	$	2.20
Acquisition and integration related charges: (a)
Other acquisition and integration related	–			(18		)	–			18			14			0.2		0.04
Amortization of purchased intangible assets	–			–			(183		)	183			124			3.1		0.32
Restructuring-related charges (b)	11			(72		)	–			83			68			0.2		0.18
Rejuvenate and other recall matters (c)	–			–			–			98			75			0.9		0.20
Legal matters (d)	–			(30		)	–			30			25			–		0.07
Adjusted	$	3,963		$	2,112		$	–		$	1,467		$	1,141		15.8	%	$	3.01

 

Six Months 2016	Gross Profit			Selling, General & Administrative Expenses			Amortization of Intangible Assets			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	3,536		$	1,987		$	141		$	1,019		$	782		14.5	%	$	2.07
Acquisition and integration related charges: (a)
Inventory stepped-up to fair value	35			–			–			35			22			0.7		0.06
Other acquisition and integration related	–			(36		)	–			36			25			0.5		0.07
Amortization of purchased intangible assets	–			–			(141		)	141			98			2.0		0.26
Restructuring-related charges (b)	5			(37		)	–			42			34			0.1		0.09
Rejuvenate and other recall matters (c)	–			–			–			47			39			–		0.10
Legal matters (d)	–			12			–			(12		)	(7		)	(0.3	)	(0.02		)
Adjusted	$	3,576		$	1,926		$	–		$	1,308		$	993		17.5	%	$	2.63

 

(a)	Charges represent certain acquisition and integration related costs associated with acquisitions.
(b)	Charges represent the cost associated with certain restructuring-related charges associated with workforce reductions and other restructuring-related activities.
(c)	Charges represent changes in our best estimate of the minimum end of the range of probable loss to resolve the Rejuvenate recall and other recall matters.
(d)	Amount represents gains or losses associated with legal settlements.

 

STRYKER CORPORATION For the Three Months September 30, 2017 and Full Year December 31, 2017 Reconciliation of Expected Net Earnings Per Diluted Share to Expected Adjusted Net Earnings per Diluted Share
	Three Months							Full Year
	Low			High				Low			High
Expected – Reported	$	1.15		$	1.28			$	5.05		$	5.25
Acquisition and integration related charges	0.05			0.02				0.13			0.08
Amortization of purchased intangible assets	0.15			0.15				0.65			0.65
Restructuring-related charges	0.15			0.10				0.35			0.30
Rejuvenate and other recall matters	–			–				0.20			0.20
Legal matters	–			–				0.07			0.07
Expected – Adjusted	$	1.50		$	1.55			$	6.45		$	6.55

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Stryker Corporation via Globenewswire

Spineway, specialist in surgical implants and instruments for treating disorders of the spinal column (spine), announces that it is setting up an issue of Tranche Warrants for Notes with Warrants to finance the acceleration of its development.

Legal framework

In accordance with the delegation of power granted to the Board of Directors and approved by the Ordinary and Extraordinary General Meeting of Spineway (the “Company“) shareholders held on June 19, 2017, Spineway’s Board of Directors approved – on July 20, 2017 – the plan for an issue of 200 warrants (the “Tranche Warrants“), the exercise of which gives access to the issue of 200 notes redeemable in cash and/or convertible into new and/or existing shares (the “Notes“) with warrants to subscribe shares (the “Warrants“), representing  a bond issue in the amount of €2M in favor of the YA II PN, LTD investment fund (the “Investor“), a fund managed by the US management company Yorkville Advisors, and empowered the CEO to decide to launch this transaction, approve its final terms and conditions, and issue the Tranche Warrants.

Pursuant to an issuance agreement entered into today between the Investor and Spineway, the Investor has agreed to subscribe – during a period of 36 months as from the date of issue of the Tranche Warrants – up to 200 Notes with Warrants, representing a total par value of €2M, in several successive tranches (each referred to as a “Tranche“), which investor is not, however, intended to remain as Spineway capital in the long term.

This issuance is subject to the transfer of the Spineway shares to the “Public Offering” compartment of Euronext Growth and obtaining prior approval from the Autorité des Marchés Financiers of the prospectus to be prepared by the Company by December 31, 2017, at the latest. Therefore, if this condition precedent is met, the issuance of the Tranche Warrants and subscription for the first Tranche should take place by the end of 2017.

Purpose of the transaction

The purpose of the issuance of these Notes with Warrants is to provide Spineway with the financial means necessary to carry out its international-development plan and launch new innovative products. It could result in a capital investment of approximately €3.96M: €1.96M corresponding to the subscription of all the Notes and €2M corresponding to the exercise of all the Warrants.

Stéphane Le Roux, CEO of the Spineway Group, commented on this potential €3.96M in additional financial resources: “We are thrilled about this agreement with Yorkville Advisors that will allow us to diversify the financing we have to support our growth. The issuance of a first tranche of €1M by the end of the year will allow us to finance our development in new areas, such as in the USA, and accelerate the launch of our new products.”

Characteristics of the Tranche Warrants, Notes and Warrants

The main characteristics of the Tranche Warrants, Notes and Warrants (the detailed terms and conditions of which are available on the Company’s website) are as follows:

• Main characteristics of the Tranche Warrants

The Tranche Warrants require their bearer, at the Company’s request⁽¹⁾ (a “Request“) or on the Investor’s initiative⁽²⁾, to subscribe Notes with Warrants attached, i.e., one Note per Tranche Warrant exercised, at a price set at 98% of the par value of a Note. The Company can therefore request the exercise of the Tranche Warrants in order to allow the issuance of Notes in several tranches. Each exercise date of each Tranche Warrant is a “Tranche Warrant Exercise Date.”

The Tranche Warrants are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

• Main characteristics of the Notes

The Notes shall be issued in several Tranches. The aggregate principal amount of the first Tranche will be equal to €1M. The aggregate principal amount of each of the following Tranches shall, in principle, be equal to €0.5M, unless otherwise mutually agreed by the Investor and the Company.

The Notes have a par value of €10,000 each and are subscribed at 98% of par.

The Notes have a maturity of 12 months from their date of issuance. Upon maturity or an event of default⁽³⁾, the Notes that have not been converted shall be redeemed by the Company at par (plus accrued interest, if any). The Notes do not bear interest (except in the event of default).

At its discretion, the Investor may convert all or any of its Notes into new and/or existing shares (a “Conversion“). Upon a Conversion, the Investor shall determine the number of Notes to be converted and the corresponding aggregate principal amount and interest (if any) so converted (the “Conversion Amount“). The number of shares to be issued to the Investor upon each Conversion will be equal to the Conversion Amount divided by 92% of the Market Price (as defined below) on the Conversion Date.

Upon a Conversion, the Company shall have the right at its sole discretion to remit to the Investor: (1) the corresponding new and/or existing shares (as described above), (2) the value in cash or (3) an amount in cash and new and/or existing shares.

If the Company chooses to remit a cash amount, such amount shall be equal to:

M = (Vn / P) * C

“M”: cash amount payable to the Note bearer;
“Pv”: bond claim that the Note represents (par value of a Note, plus accrued interest, if any);
“P”: 92% of Market Price;
“C”: daily volume weighted average price of the Company’s share on the Conversion Date.

The market price (the “Market Price“) shall be the lowest daily volume weighted average price of the Company’s share over the ten (10) consecutive trading days immediately preceding the applicable date (the “Pricing Period“). By way of exception, in the case of a Conversion, or upon exercise of Tranche Warrants on the Investor’s initiative, Pricing Period shall mean the trading days during which the Investor has not sold any share of the Company in the market among the ten (10) consecutive trading days immediately preceding the applicable date.

The Notes, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed.

• Main characteristics of the Warrants

Each Note shall be issued with a number of Warrants equal to the par value of a Note divided by the applicable strike price of the Warrants (the “Strike Price“). The Warrants shall immediately be detached from the Notes and each Warrant shall give its bearer the right to subscribe for one (1) new share in the Company, subject to possible adjustments.

The Strike Price of the Warrants attached to the Notes of the first Tranche shall be equal to 115% of the lower of (1) the Market Price on the issuance date of the Tranche Warrants (2) the Market Price on July 13, 2017, i.e., 3.2572 euros.

The Strike Price of the Warrants attached to the Notes of the subsequent Tranches shall be equal 115% of the Market Price on the date of the applicable Request (or Tranche Warrant Exercise Date in the case of an exercise of Tranche Warrants on the Investor’s initiative).

The Warrants shall be exercisable in new shares for a period of 5 years from their respective issuance dates.

The Warrants, which are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval, shall not be the subject of a request for admission to trading on Euronext Growth and therefore shall not be listed, unless the Company and the Investor agree otherwise.

For reference, based on the share’s closing price on July 27, 2017 (i.e., €3.66), the theoretical value of a Warrant would be between €0.78 and €1.69 depending on the volatility applied (between 30% and 60%). The theoretical value of a Warrant is obtained using the Black & Scholes formula based on the following hypotheses:

• maturity: 5 years;
• risk-free interest rate: 0%;
• dividend payout rate: 0%.

New shares resulting from the Conversion of Notes or the exercise of Warrants

The new shares issued upon conversion of the Notes and/or exercise of the Warrants shall be admitted to trading on Euronext Growth as from their issuance, will carry immediate and current dividend rights and will be fully assimilated to and fungible with the existing ordinary shares.

The Company shall update a summary table on its website showing the Tranche Warrants, Notes, Warrants and number of shares outstanding.

Theoretical impact of the issuance of the Notes with Warrants attached (based on the Company share’s closing price on July 27, 2017, i.e., €3.66)

For reference, assuming the Company decides to remit only new shares upon Conversion of the Notes, the impact of the issuance of the Notes with Warrants attached would be as follows:

• Impact of the issuance on the consolidated net assets per share (based on the shareholders’ equity as at December 31, 2016, and the number of shares making up the Company’s share capital as at July 27, 2017, i.e., 3,907,846 shares):

• Impact of the issuance on the investment of a shareholder currently holding 1% of the Company’s share capital (based on the number of shares making up the Company’s share capital as at July 27, 2017, i.e., 3,907,846 shares):

The Company specifies that, upon Conversion of the Notes, it shall have the right to remit a cash amount and/or existing shares instead of new shares in order to limit dilution for its shareholders.

(1) The following conditions must be met on the day of the Request and the day the Warrants are exercised:

• more than then (10) calendar days have passed since the conversion or the redemption in full of the Notes from the previous Tranches;
• no material adverse change shall have occurred;
• the closing price of the Company’s share is greater than or equal to €1.60;
• no event of default or event that could constitute an event of default that is not resolved shall have occurred;
• no impossibility for the holders of Notes to convert the Notes into shares shall have occurred in the previous 90 days;

no suspension of the listing of the Company’s shares (other than an intraday suspension by Euronext) shall have occurred in the previous 90 days;

• the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued.

(2) The following conditions must be met if a Tranche is issued on the Investor’s initiative:

• the Company will have a number of authorized and available shares equal to at least (i) 2 times the number of shares to be issued upon conversion of the Notes to be issued and outstanding (based on the conversion price applicable on the date of the Request) plus (ii) 1 time the number of shares to be issued upon exercise of the Warrants to be issued;
• the closing price of the Spineway share on the trading day prior to the Tranche Warrant Exercise Date is greater than or equal to €3.50. It is specified that if the closing price is between €3.50 (excluded) and €4.50 (included), the Investor may exercise up to 50 Tranche Warrants on its own initiative. If the closing price exceeds €4.50 (excluded), the Investor may exercise up to 100 Tranche Warrants on its own initiative.

(3) Events of default include, in particular, the suspension of the listing of the Company’s shares (other than a suspension of less than five (5) consecutive days at the Company’s request) and the Company’s failure to remit shares or cash owed to the Investor pursuant to the terms of the Issuance Agreement.

This press release is entered into in both English and French languages. In case of discrepancies, French language shall prevail.

SPINEWAY IS ELIGIBLE FOR THE PEA-PME (EQUITY SAVINGS PLAN FOR SMES)

Find out all about Spineway at www.spineway.com

Spineway designs, manufactures and markets innovative implants and surgical instruments for treating severe disorders of the spinal column.
Spineway has an international network of over 50 independent distributors and 90% of its turnover comes from exports.
Spineway, which is eligible for investment through FCPIs (French unit trusts specializing in innovation), received the OSEO Excellence award as well as the Deloitte Fast 50 award in 2011. Rhône Alpes INPI Patent Innovation Award (2013) – Talent INPI award (2015). 
ISIN code: FR0011398874 – Euronext Growth

Contacts:              

Attachments:

http://www.globenewswire.com/NewsRoom/AttachmentNg/d5916663-a95b-438c-b949-b93e46b9e13d