Financial – Page 12 – Selby Spine

WELLESLEY, Mass., Aug. 06, 2018 (GLOBE NEWSWIRE) — Due to the high demand for medical centers that can provide care for sports related injuries, along with a general need for patient implants, the global market for orthopedic technologies is growing, according to a new report from BCC Research.

In 2018, the global market for orthopedic technologies was valued at $44.7 billion. However, BCC Research estimates that it will be worth $56.2 billion by 2023, indicating a compound annual growth rate (CAGR) of 4.7%, according to the report Advanced Orthopedic Technologies, Implants and Regenerative Products.

Human bone products will lead the repair segment of the industry with a CAGR of 5.0%, followed by synthetic bone replacements at 4.5%.

Research Highlights

Spinal implants are anticipated to experience the highest CAGR, in terms of product, at 5.9%. In addition, these implants will reach a value of $7.0 billion by 2023.
The Asia-Pacific region will be valued at $13.2 billion by 2023, indicating the largest geographical CAGR of 5.3%.
In 2017, joint replacement, implants and regenerative products represented 59.3% of orthopedic technologies that were available on the market.

“Continuous technological innovation in the orthopedic implants industry is set to drive the market at an exponential rate,” the report notes. “The emergence of natural biomaterials-based orthopedic implants has revolutionized orthopedic implants as these have several advantages compared to synthetic biomaterials. These natural biomaterials are biocompatible, do not cause toxicity, and may also carry specific protein binding sites, or other biochemical signals that may assist in tissue healing or integration.”

About BCC Research

BCC Research is a publisher of market research reports that provide organizations with intelligence to drive smart business decisions. By partnering with industry experts worldwide, BCC Research provides unbiased measurements and assessments of global markets covering major industrial and technology sectors, including emerging markets. For more information about BCC Research, please visit bccresearch.com. Follow BCC Research on Twitter at @BCCResearch.

Editors/reporters requesting analyst interviews should contact Eric Surber at press@bccresearch.com.

August 06, 2018

LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix Medical Inc. (previously Orthofix International N.V.) (NASDAQ:OFIX) today reported its financial results for the second quarter ended June 30, 2018. Net sales were $111.5 million, diluted earnings per share from continuing operations was $0.05 and adjusted earnings per share from continuing operations was $0.42.

“During the second quarter, we made excellent progress on our operating and margin improvement goals despite the impact of unexpected currency headwinds and order timing on topline growth,” commented Brad Mason, Orthofix president and Chief Executive Officer. “Adjusted EBITDA performance in the period demonstrated our progress in driving efficiency to reduce operating expenses and achieve our stated goal of increasing Adjusted EBITDA margin in our organic business by at least 100 basis points this year and in each of the next two years. Operationally, we completed the acquisition and integration of Spinal Kinetics, realigned our business unit structure to help further accelerate long-term growth, positioned the company for the move of our corporate domicile from Curaçao to Delaware, that was completed July 31st, and significantly reduced inventories (excluding Spinal Kinetics) over prior year. We anticipate that these accomplishments will benefit Orthofix for many years to come.”

Corporate Realignment and Domestication to Delaware

In June, the Company realigned its four strategic business units around two pillars, Spine and Extremities. The distribution, branding and leadership of our bone growth therapy, spinal implants, biologics and Spinal Kinetics business units are being combined into one Orthofix Global Spine business to maximize opportunities from the acquisition of Spinal Kinetics and, in the long-term, better leverage the full spine portfolio to achieve both revenue acceleration and cost synergies.

On July 31, subsequent to shareholder approval, the Company’s corporate domicile was moved from Curaçao to Delaware. As a result of this transition, we are reducing our non-GAAP long-term effective tax rate from 35% to 29%, simplifying our operational structure and improving financial flexibility. Additionally, the name of the Company was changed from Orthofix International N.V. to Orthofix Medical Inc.

Financial Results Overview

The following table provides net sales by strategic business unit (“SBU”):


	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2018		2017		Change		Constant Currency Change
BioStim	$	48,211	$	47,174	2.2	%	2.2	%
Spine Fixation		23,880		21,360	11.8	%	11.3	%
Biologics		14,668		15,661	(6.3	%)	(6.3	%)
Extremity Fixation		24,788		24,747	0.2	%	(4.0	%)
Net sales	$	111,547	$	108,942	2.4	%	1.3	%

Gross margin increased 80 basis points compared to the prior year period primarily driven by continued improvement related to inventory management initiatives, partially offset by the addition of Spinal Kinetics acquisition-related inventory fair value adjustments. Non-GAAP net margin, an internal metric that the Company defines as gross profit less sales and marketing expenses, was $37.2 million compared to $35.3 million in the prior year period. As a percentage of net sales, non-GAAP net margin increased to 33.3% as compared to 32.4% in the prior year period, primarily due to the improvement in gross margin.

Net income from continuing operations was $0.9 million, or $0.05 per share, compared to $4.7 million, or $0.26 per share in the prior year period. Adjusted net income from continuing operations was $7.9 million, or $0.42 per share, compared to adjusted net income of $7.8 million, or $0.42 per share in the prior year period. Excluding the impact of the Spinal Kinetics operating loss in the period, adjusted net income was $8.5 million, or $0.45 per share, a 7.1% increase over prior year.

EBITDA was $6.8 million, compared to $14.0 million in the prior year period. Adjusted EBITDA was $22.0 million, or 19.7% of net sales, for the second quarter, compared to $20.5 million, or 18.8% of net sales, in the prior year period.

Liquidity

As of June 30, 2018, cash and cash equivalents were $45.7 million compared to $81.2 million as of December 31, 2017. As of June 30, 2018, the Company had no outstanding indebtedness and borrowing capacity of $125 million under its existing credit facility. Cash flow from operations was $13.0 million, an increase of $17.7 million, and free cash flow was 6.4 million, an increase of $19.6 million when compared to the same prior year period.

2018 Updated Outlook

For the year ending December 31, 2018, the Company expects the following results, assuming exchange rates are the same as those currently prevailing.


(Unaudited, U.S. Dollars, in millions, except per share data)	Low		High		Low				High

	Previous Full Year 2018 Outlook				Full Year 2018 Outlook
Net sales	$	458.0	$	464.0	$	450.0	(1	)	$	456.0	(1	)
Net income from continuing operations	$	24.8	$	27.1	$	18.3	(2	)	$	19.7	(2	)
Adjusted EBITDA	$	85.5	$	88.0	$	85.0	(3	)	$	87.0	(3	)
EPS from continuing operations	$	1.31	$	1.43	$	0.97	(4	)	$	1.04	(4	)
Adjusted EPS from continuing operations⁹	$	1.58	$	1.68	$	1.66	(5	)	$	1.72	(5	)

					3rd Quarter of 2018 Outlook
Net sales					$	110.0	(6	)	$	113.0	(6	)
EPS from continuing operations					$	0.18	(7	)	$	0.22	(7	)
Adjusted EPS from continuing operations⁹					$	0.35	(8	)	$	0.37	(8	)

¹ Represents a year-over-year increase of 3.7% to 5.1% on a reported basis
² Represents a year-over-year increase of 151.0% to 170.2%
³ Represents a year-over-year increase of 4.2% to 6.7%
⁴ Represents a year-over-year increase of 148.7% to 166.7%
⁵ Represents a year-over-year increase of 2.5% to 6.2%
⁶ Represents a year-over-year increase of 4.5% to 7.4% on a reported basis
⁷ Represents a year-over-year increase of 0.0% to 22.2%
⁸ Represents a year-over-year decrease of 16.7% to 11.9%

⁹Calculated using a non-GAAP tax rate of 35% for the first and second quarters of 2018 and 29% for the third and fourth quarters of 2018 to reflect the expected impact of changing the Company’s jurisdiction of organization from Curaçao to the State of Delaware

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company’s financial results for the second quarter of 2018. Interested parties may access the conference call by dialing (844) 809-1992 in the U.S. and (612) 979-9886 outside the U.S., and referencing the conference ID 5556977. A replay of the call will be available for two weeks by dialing (855) 859-2056 in the U.S. and (404) 537-3406 outside the U.S., and entering the conference ID 5556977. A webcast of the conference call may be accessed by going to the Company’s website at www.orthofix.com, by clicking on the Investors link and then the Events and Presentations page.

About Orthofix

Orthofix Medical Inc. is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients’ lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic extremities products are distributed in over seventy countries via the Company’s sales representatives and distributors. For more information, please visit www.orthofix.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to further update any such statement, or the risk factors described in Part I, Item 1A under the heading Risk Factors in our Form 10-K for the year ended December 31, 2017 and other SEC filings, to reflect new information, the occurrence of future events or circumstances or otherwise.


ORTHOFIX MEDICAL INC.
Condensed Consolidated Statements of Income

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Unaudited, U.S. Dollars, in thousands, except share and per share data)	2018			2017			2018			2017
Net sales	$	111,547		$	108,942		$	220,256		$	211,680
Cost of sales		22,835			23,177			46,982			45,758
Gross profit		88,712			85,765			173,274			165,922
Sales and marketing		51,529			50,471			101,797			99,003
General and administrative		22,268			20,409			41,752			38,691
Research and development		7,891			6,887			14,828			14,311
Operating income		7,024			7,998			14,897			13,917
Interest income (expense), net		(251	)		76			(434	)		121
Other income (expense), net		(4,752	)		585			(1,840	)		(3,763	)
Income before income taxes		2,021			8,659			12,623			10,275
Income tax expense		(1,088	)		(3,924	)		(6,461	)		(7,848	)
Net income from continuing operations		933			4,735			6,162			2,427
Discontinued operations
Loss from discontinued operations		—			(1,300	)		(3	)		(1,827	)
Income tax benefit (expense)		(8	)		418			(8	)		599
Net loss from discontinued operations		(8	)		(882	)		(11	)		(1,228	)
Net income	$	925		$	3,853		$	6,151		$	1,199
Net income per common share—basic
Net income from continuing operations	$	0.05		$	0.26		$	0.33		$	0.13
Net loss from discontinued operations		—			(0.05	)		—			(0.06	)
Net income per common share—basic	$	0.05		$	0.21		$	0.33		$	0.07
Net income per common share—diluted
Net income from continuing operations	$	0.05		$	0.26		$	0.32		$	0.13
Net loss from discontinued operations		–			(0.05	)		–			(0.06	)
Net income per common share—diluted	$	0.05		$	0.21		$	0.32		$	0.07
Weighted average number of common shares:
Basic		18,413,756			18,050,551			18,409,331			18,015,308
Diluted		18,835,560			18,343,038			18,811,356			18,288,050

READ THE REST HERE

August 06, 2018

SAN DIEGO–(BUSINESS WIRE)–DJO Global, Inc. (“DJO” or the “Company”), a leading global provider of medical technologies designed to get and keep people moving, today announced financial results for its public reporting subsidiary, DJO Finance LLC (“DJOFL”), for the second quarter ended June 30, 2018.

On January 1, 2018, DJO adopted Accounting Standards Update 2014-09, Revenue From Contracts with Customers, (ASC 606). As a result of the adoption, in the second quarter the Company reclassified $5.4 million of year-to-date costs from selling, general and administrative costs to net sales. The table below summarizes net sales and growth rates with, and without, the adoption of ASC 606.


$000’s	Q2 2018 Net Sales Overview
	Including ASC 606 Adoption				Excluding ASC 606 Adoption				Currency		Constant
	Revenue		Growth		Revenue		Growth		Impact		Currency
Surgical	$	53,918	7.9	%	$	53,918	7.9	%	0.0	%	7.9	%
International		86,953	9.3	%		86,953	9.3	%	5.8	%	3.5	%
Recovery Sciences		37,454	-3.4	%		37,454	-3.4	%	0.0	%	-3.4	%
Bracing and Vascular		126,512	0.1	%		131,942	4.4	%	0.0	%	4.4	%
Total DJO Global	$	304,837	3.4	%	$	310,267	5.3	%	1.6	%	3.7	%

Second Quarter Highlights

Net sales grew 5.3% to $310.3 million, or $304.8 million as reported with the adoption of ASC 606, compared to $294.7 million in the prior year period.
Operating income increased 296% to $35.8 million from $9.0 million in the prior year period.
Net loss attributable to DJOFL was $13.7 million, compared to a net loss of $34.4 million in the prior year period.
Adjusted EBITDA continued to expand, increasing 19.0% over the prior year quarter to $75.6 million.

Business Transformation

The previously announced business transformation continues to drive profitability, pushing Adjusted EBITDA margins up 280 basis points (excluding the impact of ASC 606 adoption) in the second quarter of 2018 compared to the prior year, and remains on track to deliver 7% to 10% annual cost reductions by end of 2018.
Including $24.8 million in future annual run-rate savings from transformation actions taken to date, Adjusted EBITDA for the twelve months ended June 30 was $312.6 million.

“We executed well in the second quarter, continuing to deliver sustainable value from our transformation efforts, accelerating new product introductions and overcoming market headwinds on elective procedures,” said Brady Shirley, DJO’s President and Chief Executive Officer. “I am encouraged by the momentum in our revenue growth and expanding margins, and continue to anticipate a stronger trajectory for the balance of our fiscal year.”

Mike Eklund, Chief Financial Officer and Chief Operating Officer of DJO, added, “We continue to work aggressively toward our profitability goals and are realizing the benefits, with Adjusted EBITDA for the quarter increasing 19%, or 3.6 times the growth in revenue, and margins improving about 280 basis points. Our team has worked hard on our transformation initiatives to improve operational efficiency, service levels and customer experience. This quarter’s financial metrics are continued indicators of our success.”

Sales Results

Net sales for DJOFL for the second quarter of 2018 were $310.3 million, an increase of 5.3% from the prior year period, or $304.8 million with the adoption of ASC 606. On a constant currency basis, sales increased 3.7%. For the six months ending June 30, 2018, net sales increased 3.4% to $602.9 million, or $597.5 million with the adoption of ASC 606. On a constant currency basis, net sales for the first half of 2018 increased 1.1% over net sales in the first half of 2017. The number of selling days in the quarter was the same as in the prior year period.

Net sales for DJO’s Surgical Implant segment grew 7.9% in the quarter to $53.9 million. The company’s shoulder implant product line was a key contributor with strong double-digit growth compared to the same quarter in the prior year. For the six months ending June 30, 2018, the Surgical Implant segment grew 8.0% over the prior year period to $107.5 million.

Net sales for DJO’s International segment grew 9.3% in the second quarter to $87.0 million, or 3.5% on a constant currency basis. The company’s sales growth in Germany, France and Australia were partially offset by market conditions in Canada and the United Kingdom. For the six months ending June 30, 2018, the International segment revenue was $175.6 million, an increase of 11.3%, or 2.8% on a constant currency basis.

Net sales for DJO’s Recovery Sciences segment were $37.5 million in the second quarter, a year-over-year decrease of 3.4%. Strong growth in the segment’s Regeneration CMF product line was offset by softness in the Chattanooga product line compared to the prior year period. For the six months ending June 30, 2018, the Recovery Sciences segment declined 5.1% to $73.3 million.

Net sales for DJO’s Bracing and Vascular segment grew 4.4% to $131.9 million in the second quarter, or $126.5 with the adoption of ASC 606. There was strong growth in the segment’s DonJoy product line, partially offset by weakness in the Dr. Comfort footwear product line. Strong demand for new products, strength in acute care and continued progress in transformation initiatives to improve service levels contributed to the results. For the six months ending June 30, 2018, Bracing and Vascular net sales were $246.4 million, a decline of 0.8% from the first half of 2017, or $241.0 million with the adoption of ASC 606.

Earnings Results

Operating income was $35.8 million in the quarter, an increase of 296% over the prior year period. For the six months ending June 30, 2018, operating income was $69.3 million, an increase of 341% over the prior year. Net loss attributable to DJOFL was $13.7 million in the quarter compared to $34.4 million in the prior year period. For the six months ended June 30, net loss was $31.3 million compared to $74.4 million in the six month ended July 1, 2017.

Adjusted EBITDA for the second quarter was $75.6 million, an increase of 19.0% from the prior year period, or 17.0% on the basis of constant currency. For the six months ended June 30, 2018, Adjusted EBITDA was $140.4 million, up 16.2% from the prior year, or 14.5% on a constant currency basis. Including projected future run-rate savings of $24.8 million from cost savings programs currently underway as permitted under our credit agreement and the indentures governing our outstanding notes, Adjusted EBITDA for the twelve months ended June 30, 2018 was $312.6 million.

Net cash provided by continuing operating activities was $9.0 million for the six months ended June 30, 2018 compared to $38.1 million for the six months ended July 1, 2017. The change in cash flow was primarily attributable to higher inventory balances to allow for the modernization and consolidation of distribution facilities as part of the Company’s transformation initiatives, and to the payment in 2018 of certain non-recurring costs accrued in 2017.

The Company defines Adjusted EBITDA as net (loss) income attributable to DJOFL plus net interest expense, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance under the Company’s secured term loan and revolving credit facilities (“Senior Secured Credit Facilities”) and the indentures governing its 8.125% second lien notes and its 10.75% third lien notes. A reconciliation between net loss attributable to DJOFL and Adjusted EBITDA is included in the attached financial tables.

Conference Call Information

DJO has scheduled a conference call to discuss this announcement beginning at 4:30 pm, Eastern Time Monday, August 6, 2018. Individuals interested in listening to the conference call may do so by dialing (866) 394-8509 (International callers please use (346) 265-0698), using the reservation code 22322226. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (855) 859-2056 and using the above reservation code. The live conference call and replay will be available via the Internet at www.DJOglobal.com.

About DJO Global

DJO Global is a leading global provider of medical technologies designed to get and keep people moving. The Company’s products address the continuum of patient care from injury prevention to rehabilitation, enabling people to regain or maintain their natural motion. Its products are used by orthopaedic surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. In addition, many of the Company’s medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment. The Company’s product lines include rigid and soft orthopaedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. The Company’s surgical division offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Global’s products are marketed under a portfolio of brands including Aircast®, Chattanooga, CMF™, Compex®, DonJoy®, ProCare®, DJO® Surgical, Dr. Comfort® and Exos^TM. For additional information on the Company, please visit www.DJOglobal.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements relate to, among other things, the Company’s expectations for improved liquidity, estimated cost reductions associated with the execution of its business transformation plans and improved efficiencies. The words “believe,” “will,” “should,” “expect,” “target,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based on the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions, many of which are beyond the Company’s ability to control or predict. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to the successful execution of the Company’s business transformation plans, including achievement of planned actions to improve liquidity, improvements in operational effectiveness, optimization of the Company’s procurement activities, improvements in manufacturing, distribution, sales and operations planning, and actions to improve the profitability of the mix of our product and customers. Other important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: business strategies relative to our Bracing and Vascular, Recovery Sciences, International and Surgical Implant segments; the continued growth of the markets the Company addresses and any impact on these markets from changes in global economic conditions; the impact of potential reductions in reimbursement levels and coverage by Medicare and other governmental and commercial payers; the Company’s highly leveraged financial position; the Company’s ability to successfully develop, license or acquire, and timely introduce and market new products or product enhancements; risks relating to the Company’s international operations; resources needed and risks involved in complying with government regulations and government investigations; the availability and sufficiency of insurance coverage for pending and future product liability claims; and the effects of healthcare reform, Medicare competitive bidding, managed care and buying groups on the prices of the Company’s products. These and other risk factors related to DJO are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 16, 2018. Many of the factors that will determine the outcome of the subject matter of this press release are beyond the Company’s ability to control or predict.


DJO FINANCE LLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)

	Three Months Ended						Six Months Ended
	June 30, 2018			July 1, 2017			June 30, 2018			July 1, 2017
Net sales	$	304,837		$	294,746		$	597,466		$	583,135
Operating expenses:
Cost of sales (exclusive of amortization of intangible assets of $6,635 and $13,293 for the three and six months ended June 30, 2018, respectively and $6,980 and $13,961 for the three and six months ended July 1, 2017, respectively)		126,443			124,885			246,379			244,454
Selling, general and administrative		117,626			135,739			232,942			269,901
Research and development		9,707			9,063			18,988			18,202
Amortization of intangible assets		15,289			16,016			29,888			34,861
		269,065			285,703			528,197			567,418
Operating income		35,772			9,043			69,269			15,717
Other (expense) income:
Interest expense, net		(45,779	)		(43,068	)		(89,701	)		(85,755	)
Other (expense) income, net		1,054			896			(487	)		1,184
		(44,725	)		(42,172	)		(90,188	)		(84,571	)
Loss before income taxes		(8,953	)		(33,129	)		(20,919	)		(68,854	)
Income tax provision		4,635			1,095			10,019			5,173
Net loss from continuing operations		(13,588	)		(34,224	)		(30,938	)		(74,027	)
Net income from discontinued operations		178			47			321			105
Net loss		(13,410	)		(34,177	)		(30,617	)		(73,922	)
Net income attributable to noncontrolling interests		(276	)		(206	)		(638	)		(430	)
Net loss attributable to DJO Finance LLC	$	(13,686	)	$	(34,383	)	$	(31,255	)	$	(74,352	)


DJO FINANCE LLC UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	June 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	26,789		$	31,985
Accounts receivable, net		179,611			190,324
Inventories, net		177,273			169,137
Prepaid expenses and other current assets		32,144			20,218
Current assets of discontinued operations		511			511
Total current assets		416,328			412,175
Property and equipment, net		137,496			133,522
Goodwill		878,963			864,112
Intangible assets, net		585,268			607,088
Other assets		5,242			5,128
Total assets	$	2,023,297		$	2,022,025
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable	$	105,144		$	98,331
Accrued interest		18,615			18,015
Current portion of debt obligations		26,022			15,936
Other current liabilities		116,071			126,360
Total current liabilities		265,852			258,642
Long-term debt obligations		2,414,519			2,398,184
Deferred tax liabilities, net		146,108			142,597
Other long-term liabilities		20,968			13,080
Total liabilities	$	2,847,447		$	2,812,503
Commitments and contingencies (Note 14)
Deficit:
DJO Finance LLC membership deficit:
Member capital		845,708			844,115
Accumulated deficit		(1,646,850	)		(1,615,536	)
Accumulated other comprehensive loss		(25,579	)		(21,072	)
Total membership deficit		(826,721	)		(792,493	)
Noncontrolling interests		2,571			2,015
Total deficit		(824,150	)		(790,478	)
Total liabilities and deficit	$	2,023,297		$	2,022,025


See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


DJO FINANCE LLC UNAUDITED SEGMENT INFORMATION (in thousands)

	Three Months Ended						Six Months Ended
	June 30, 2018			July 1, 2017			June 30, 2018			July 1, 2017
Net sales:
Bracing and Vascular	$	126,512		$	126,415		$	241,001		$	248,468
Recovery Sciences		37,454			38,774			73,347			77,277
Surgical Implant		53,918			49,991			107,537			99,583
International		86,953			79,566			175,581			157,807
	$	304,837		$	294,746		$	597,466		$	583,135
Operating income:
Bracing and Vascular	$	29,257		$	24,225		$	49,255		$	45,232
Recovery Sciences		9,656			10,709			18,249			19,616
Surgical Implant		11,166			10,062			22,930			18,202
International		19,436			13,509			38,849			27,119
Expenses not allocated to segments and eliminations		(33,743	)		(49,462	)		(60,014	)		(94,452	)
	$	35,772		$	9,043		$	69,269		$	15,717

DJO Finance LLC
Adjusted EBITDA

For the Six Months Ended June 30, 2018 and July 1, 2017
(unaudited)

Our Senior Secured Credit Facilities, consisting of a $1,055.0 million term loan facility (including a $20.0 million delayed draw term loan facility) and a $150.0 million asset-based revolving credit facility, under which $87.5 million was outstanding as of June 30, 2018, and the Indentures governing our $1,015.0 million of 8.125% second lien notes and $298.5 million of 10.75% third lien notes (collectively, the “notes”) represent significant components of our capital structure. Under our Senior Secured Credit Facilities, we are required to maintain a specified senior secured first lien leverage ratio, which is determined based on our Adjusted EBITDA. If we fail to comply with the senior secured first lien leverage ratio under our Senior Secured Credit Facilities, we would be in default. Upon the occurrence of an event of default under the Senior Secured Credit Facilities, the lenders could elect to declare all amounts outstanding under the Senior Secured Credit Facilities to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders under the Senior Secured Credit Facilities could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets as collateral under the Senior Secured Credit Facilities and under the notes. Any acceleration under the Senior Secured Credit Facilities would also result in a default under the Indentures governing the notes, which could lead to the note holders electing to declare the principal, premium, if any, and interest on the then outstanding notes immediately due and payable. In addition, under the Indentures governing the notes, our and our subsidiaries’ ability to engage in activities such as incurring additional indebtedness, making investments, refinancing subordinated indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on Adjusted EBITDA. Our ability to meet the covenants specified in the Senior Secured Credit Facilities and the Indentures governing those notes will depend on future events, some of which are beyond our control, and we cannot assure you that we will meet those covenants.

Adjusted EBITDA is defined as net income (loss) attributable to DJOFL plus interest expense, net, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance and other ratios under our Senior Secured Credit Facilities and the Indentures governing the notes. We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, certain financial covenants and other ratios in our Senior Secured Credit Facilities and the Indentures governing the notes. Adjusted EBITDA is a material component of these calculations.

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to DJOFL or other performance measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), or as an alternative to cash flow from operations as a measure of our liquidity. Adjusted EBITDA does not represent net income (loss) attributable to DJOFL or cash flow from operations as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In particular, the definition of Adjusted EBITDA under our Senior Secured Credit Facilities and the Indentures governing the notes allows us to add back certain non-cash, extraordinary, unusual or non-recurring charges that are deducted in calculating net income (loss) attributable to DJOFL. However, these are expenses that may recur, vary greatly and are difficult to predict. While Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.

The following table provides reconciliation between net income (loss) attributable to DJOFL and Adjusted EBITDA (in thousands):


													Twelve
													Months
	Three Months Ended						Six Months Ended						Ended
	June 30,			July 1,			June 30,			July 1,			June 30,
	2018			2017			2018			2017			2018
Net loss attributable to DJO Finance LLC	$	(13,686	)	$	(34,383	)	$	(31,255	)	$	(74,352	)	$	7,203
Income loss from discontinued operations, net		(178	)		(47	)		(321	)		(105	)		(525	)
Interest expense, net		45,779			43,068			89,701			85,755			178,184
Income tax provision (benefit)		4,635			1,095			10,019			5,173			(55,873	)
Depreciation and amortization		27,871			26,942			53,376			56,716			107,921
Non-cash charges (a)		524			537			749			1,108			4,742
Non-recurring and integration charges (b)		10,737			25,195			16,257			43,584			41,922
Other adjustment items (c)		(68	)		1,142			1,888			2,911			4,242
		75,614			63,549			140,414			120,790			287,816
Permitted pro forma adjustments applicable to the twelve-month period only – Note 1

Future cost savings														24,810
Adjusted EBITDA	$	75,614		$	63,549		$	140,414		$	120,790		$	312,626

________________________________________

Note 1 — Permitted pro forma adjustments include future cost savings from cost reduction actions related to our business transformation initiative, recognized as permitted under our credit agreement and the indentures governing our notes.

(a) Non-cash charges are comprised of the following (in thousands):


										Twelve
										Months
	Three Months Ended				Six Months Ended					Ended
	June 30,		July 1,		June 30,			July 1,		June 30,
	2018		2017		2018			2017		2018
Stock compensation expense	$	447	$	392	$	895		$	846	$	3,745
(Gain) loss on disposal of fixed assets and assets held for sale, net		77		145		(146	)		262		997
Total non-cash charges	$	524	$	537	$	749		$	1,108	$	4,742

(b) Non-recurring and integration charges are comprised of the following (in thousands):


											Twelve
											Months
	Three Months Ended					Six Months Ended					Ended
	June 30,		July 1,			June 30,		July 1,			June 30,
	2018		2017			2018		2017			2018
Restructuring and reorganization (1)	$	7,823	$	23,273		$	11,492	$	39,069		$	32,665
Acquisition related expenses and integration (2)		379		277			749		579			2,276
Executive transition		–		(49	)		–		(49	)		–
Litigation and regulatory costs and settlements, net		2,535		1,290			4,016		3,392			6,881
IT automation projects		–		404			–		593			100
Total non-recurring and integration charges	$	10,737	$	25,195		$	16,257	$	43,584		$	41,922

(1) Consist of costs related to the Company’s business transformation projects to improve the Company’s operational profitability and liquidity.
(2) Consists of direct acquisition costs and integration expenses related to acquired businesses and costs related to potential acquisitions.

(c) Other adjustment items before permitted pro forma adjustments are comprised of the following (in thousands):


												Twelve
												Months
	Three Months Ended						Six Months Ended					Ended
	June 30,			July 1,			June 30,		July 1,			June 30,
	2018			2017			2018		2017			2018
Blackstone monitoring fees	$	–		$	1,750		$	–	$	3,500		$	2,725
Non-controlling interests		276			206			638		430			1,007
Foreign currency transaction losses (gains) and other expense (income)		(1,054	)		–			487		–			(444	)
Franchise and other tax		710			–			763		–			954
Other (1)		–			(814	)		–		(1,019	)		–
Total other adjustment items	$	(68	)	$	1,142		$	1,888	$	2,911		$	4,242

(1) Other adjustments consist primarily of net realized and unrealized foreign currency translation gains and losses.

Contacts

DJO Investor/Media Contact:
DJO Global, Inc.
David Smith
SVP and Treasurer
760.734.3075
ir@djoglobal.com

August 07, 2018

RESEARCH TRIANGLE PARK, N.C.–(BUSINESS WIRE)–TransEnterix, Inc. (NYSE American:TRXC), a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery, today announced its operating and financial results for the second quarter 2018.

Recent Highlights

Total revenue of $6.4 million, including the sale of four Senhance Systems
Received FDA clearance for expanded indications for use for Senhance System
Filed FDA 510(k) submission for additional Senhance System Instruments including 3mm diameter instruments
Entered into financing agreement providing the company with up to $40 million in term loans

“Our performance during the second quarter was solid as we continued to drive system sales both in the U.S. and abroad, while simultaneously making significant progress towards our 2018 goals, including the expansion of Senhance’s indications for use and broadening our portfolio of instruments,” said Todd M. Pope, President and CEO at TransEnterix. “We look forward to leveraging the significant progress we made during the first half of the year to drive increased global adoption of our Senhance System.”

Commercial and Clinical Update

In the quarter ended June 30, 2018, the Company sold four Senhance Systems, with one sold in the U.S. and three sold in the EMEA (Europe, Middle East, and Africa) region.

On May 29, 2018, the Company received FDA 510(k) clearance for expanded indications of its Senhance System for laparoscopic inguinal hernia and laparoscopic cholecystectomy (gallbladder removal) surgery. There are approximately 760,000 inguinal hernia and 1.2 million laparoscopic cholecystectomy procedures performed annually in the U.S. With this clearance, Senhance System’s total addressable annual procedures in the U.S. has more than doubled to over three million.

On June 7, 2018, the Company announced that it had filed an FDA 510(k) submission for additional Senhance System instruments, including 3 millimeter diameter instruments.

Second Quarter Financial Highlights

For the three months ended June 30, 2018, the Company reported revenue of $6.4 million as compared to revenue of $1.6 million in the three months ended June 30, 2017. Revenue in the second quarter of 2018 included $4.7 million in system sales, $1.5 million in instruments and accessories, and $200 thousand in services.

For the three months ended June 30, 2018, total net operating expenses were $18.5 million, as compared to $13.1 million in the three months ended June 30, 2017.

For the three months ended June 30, 2018, net loss was $34.2 million, or $0.17 per share, as compared to a net loss of $14.7 million, or $0.11 per share, in the three months ended June 30, 2017.

For the three months ended June 30, 2018, adjusted net loss was $11.7 million, or $0.06 per share, as compared to an adjusted net loss of $11.2 million, or $0.08 per share in the three months ended June 30, 2017, after adjusting for expenses related to the sale of SurgiBot assets, loss on extinguishment of debt, and non-cash charges for amortization of intangible assets, change in fair value of contingent consideration, and change in fair value of warrant liabilities.

On May 23, 2018, the Company entered into a loan and security agreement providing the company with up to $40.0 million in term loans. The initial tranche of the term loan, $20 million, was received at closing. The Company will be eligible to draw on the second tranche of $10 million upon achievement of certain Senhance System revenue-related milestones for its 2018 fiscal year, and a third tranche of $10 million upon achievement of designated trailing six months GAAP net revenue from Senhance sales. On the date of closing, the Company repaid all amounts owed under their previous loan provider.

The Company had cash and restricted cash of approximately $98.5 million as of June 30, 2018. The Company now anticipates that it has sufficient cash to fund the business into 2020, exclusive of the $20 million in potential future debt tranches.

Conference Call

TransEnterix, Inc. will host a conference call on Tuesday, August 7, 2018 at 8:30 AM ET to discuss its second quarter 2018 operating and financial results. To listen to the conference call on your telephone, please dial (844) 804-5261 for domestic callers or (612) 979-9885 for international callers and reference conference ID 4388237 approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link http://ir.transenterix.com/events.cfm. The replay will be available on the Company’s website.

About TransEnterix

TransEnterix is a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery by addressing the clinical and economic challenges associated with current laparoscopic and robotic options in today’s value-based healthcare environment. The Company is focused on the commercialization of the Senhance™ Surgical System, which digitizes laparoscopic minimally invasive surgery. The system allows for robotic precision, haptic feedback, surgeon camera control via eye sensing and improved ergonomics while offering responsible economics. The Senhance Surgical System is available for sale in the US, the EU and select other countries. For more information, visit www.transenterix.com.

Non-GAAP Measures

The adjusted net loss and adjusted net loss per share presented in this press release are non-GAAP measures. The adjustments relate to the gain from sale `of SurgiBot assets, amortization of intangible assets, change in fair value of contingent consideration, change in fair value of warrant liabilities, and loss on extinguishment of debt. These financial measures are presented on a basis other than in accordance with U.S. generally accepted accounting principles (“Non-GAAP Measures”). In the tables that follow under “Reconciliation of Non-GAAP Measures,” we present adjusted net loss and adjusted net loss per share, reconciled to their comparable GAAP measures. These items are adjusted because they are not operational or because these charges are non-cash or non-recurring and management believes these adjustments are meaningful to understanding the Company’s performance during the periods presented. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.

Forward-Looking Statements

This press release includes statements relating to the 2018 second quarter results and plans for 2018 and beyond. These statements and other statements regarding our future plans and goals constitute “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, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations and include whether we have made significant progress towards our 2018 goals, including the expansion of Senhance’s indications for use and broadening our portfolio of instruments; whether we can leverage the significant progress from the first half of the year to drive increased global adoption of our Senhance System and whether the Company has sufficient cash to fund the business into 2020, exclusive of the $20 million in potential future debt tranches. For a discussion of the risks and uncertainties associated with TransEnterix’s business, please review our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 8, 2018 and our other filings we make with the SEC. You are cautioned not to place undue reliance on these forward looking statements, which are based on our expectations as of the date of this press release and speak only as of the origination date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

TransEnterix, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands except per share amounts)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenue	$	6,389		$	1,584		$	11,156		$	3,530
Cost of revenue		3,732			972			6,287			2,306
Gross profit		2,657			612			4,869			1,224
Operating Expenses (Income)
Research and development		5,281			5,070			10,546			11,925
Sales and marketing		6,046			3,749			12,016			7,472
General and administrative		3,627			2,719			6,303			5,768
Amortization of intangible assets		2,743			1,687			5,570			3,323
Change in fair value of contingent consideration		812			(774	)		1,439			453
Issuance costs for warrants		—			627			—			627
Gain from sale of SurgiBot assets, net		37			—			(11,959	)		—
Total Operating Expenses (Income)		18,546			13,078			23,915			29,568
Operating Loss		(15,889	)		(12,466	)		(19,046	)		(28,344	)
Other Income (Expense)
Change in fair value of warrant liabilities		(17,507	)		(2,326	)		(15,678	)		(2,326	)
Interest expense, net		(1,736	)		(622	)		(2,122	)		(956	)
Other income (expense)		1			(40	)		(57	)		(100	)
Total Other Income (Expense), net		(19,242	)		(2,988	)		(17,857	)		(3,382	)
Loss before income taxes	$	(35,131	)	$	(15,454	)	$	(36,903	)	$	(31,726	)
Income tax benefit		883			741			1,773			1,599
Net loss	$	(34,248	)	$	(14,713	)	$	(35,130	)	$	(30,127	)
Other comprehensive loss
Foreign currency translation (loss) gain		(4,398	)		5,430			(2,090	)		6,563
Comprehensive loss	$	(38,646	)	$	(9,283	)	$	(37,220	)	$	(23,564	)
Net loss per share – basic and diluted	$	(0.17	)	$	(0.11	)	$	(0.17	)	$	(0.24	)
Weighted average common shares outstanding – basic and diluted		204,504			132,386			202,214			127,052

TransEnterix, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)

	June 30,			December 31,
	2018			2017
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	97,743		$	91,217
Accounts receivable, net		2,210			1,536
Inventories		11,040			10,817
Interest receivable		104			80
Other current assets		7,243			9,344
Total Current Assets		118,340			112,994
Restricted cash		750			6,389
Property and equipment, net		6,676			6,670
Intellectual property, net		45,909			52,638
Goodwill		70,813			71,368
Other long term assets		259			192
Total Assets	$	242,747		$	250,251
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	4,108		$	3,771
Accrued expenses		10,270			10,974
Deferred revenue		1,083			1,088
Deferred gain from sale of SurgiBot assets		—			7,500
Contingent consideration – current portion		547			719
Notes payable – current portion, net of debt discount		—			4,788
Total Current Liabilities		16,008			28,840
Long Term Liabilities
Contingent consideration – less current portion		12,915			11,699
Notes payable – less current portion, net of debt discount		18,952			8,385
Warrant liabilities		22,708			14,090
Net deferred tax liabilities		6,446			8,389
Total Liabilities		77,029			71,403
Commitments and Contingencies
Stockholders’ Equity
Common stock $0.001 par value, 750,000,000 shares authorized at June 30, 2018 and December 31, 2017; 207,712,291 and 199,282,003 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		207			199
Additional paid-in capital		645,332			621,261
Accumulated deficit		(482,759	)		(447,640	)
Accumulated other comprehensive income		2,938			5,028
Total Stockholders’ Equity		165,718			178,848
Total Liabilities and Stockholders’ Equity	$	242,747		$	250,251

TransEnterix, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2018			2017
Operating Activities
Net loss	$	(35,130	)	$	(30,127	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Gain from sale of SurgiBot assets, net		(11,959	)		—
Depreciation		1,277			1,142
Amortization of intangible assets		5,570			3,323
Amortization of debt discount and debt issuance costs		495			43
Stock-based compensation		4,204			3,679
Deferred tax benefit		(1,799	)		(1,580	)
Loss on extinguishment of debt		1,400			308
Change in fair value of warrant liabilities		15,678			2,326
Change in fair value of contingent consideration		1,439			453
Changes in operating assets and liabilities:
Accounts receivable		(762	)		(487	)
Interest receivable		(24	)		39
Inventories		(1,560	)		(862	)
Other current and long term assets		1,905			(1,473	)
Accounts payable		404			(1,909	)
Accrued expenses		(359	)		(390	)
Deferred revenue		31			—
Net cash and cash equivalents used in operating activities		(19,190	)		(25,515	)
Investing Activities
Proceeds related to sale of SurgiBot assets, net		4,496			—
Purchase of property and equipment		(358	)		(1,397	)
Purchase of intellectual property		—			(398	)
Proceeds from sale of property and equipment		32			—
Net cash and cash equivalents provided by (used in) investing activities		4,170			(1,795	)
Financing Activities
Payment of notes payable		(15,305	)		(13,343	)
Proceeds from issuance of debt and warrants, net of issuance costs		18,870			13,196
Payment of contingent consideration		(395	)		—
Proceeds from issuance of common stock and warrants, net of issuance costs		2			29,193
Taxes paid related to net share settlement of vesting of restricted stock units		—			(168	)
Proceeds from issuance of common stock related to sale of SurgiBot assets		3,000			—
Proceeds from exercise of stock options and warrants		9,813			—
Net cash and cash equivalents provided by financing activities		15,985			28,878
Effect of exchange rate changes on cash and cash equivalents		(78	)		2
Net increase in cash, cash equivalents and restricted cash		887			1,570
Cash, cash equivalents and restricted cash, beginning of period		97,606			34,590
Cash, cash equivalents and restricted cash, end of period	$	98,493		$	36,160
Supplemental Disclosure for Cash Flow Information
Interest paid	$	599		$	368
Supplemental Schedule of Noncash Investing and Financing Activities
Transfer of inventories to property and equipment	$	1,055		$	—
Issuance of common stock as contingent consideration	$	—		$	5,227
Relative fair value of warrants issued with debt	$	—		$	300
Reclass of warrant liability to common stock and additional paid-in capital	$	7,060		$	—

TransEnterix, Inc.
Reconciliation of Non-GAAP Measures
Adjusted Net Loss and Net Loss per Share
(in thousands except per share amounts)
(Unaudited)


			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2018		2017		2018		2017
(Unaudited, U.S. Dollars, in thousands)
Net loss		$	(34,248)	$	(14,713)	$	(35,130)	$	(30,127)

Adjustments
	Gain from sale of SurgiBot assets, net		37		—		(11,959)		—
	Amortization of intangible assets		2,743		1,687		5,570		3,323
	Change in fair value of contingent consideration		812		(774)		1,439		453
	Change in fair value of warrant liabilities		17,507		2,326		15,678		2,326
	Loss on extinguishment of debt		1,400		308		1,400		308

Adjusted net loss		$	(11,749)	$	(11,166)	$	(23,002)	$	(23,717)



			Three Months Ended				Six Months Ended
			June 30,				June 30,
(Unaudited, per diluted share)			2018		2017		2018		2017
Net loss per share		$	(0.17)	$	(0.11)	$	(0.17)	$	(0.24)

Adjustments
	Gain from sale of SurgiBot assets		0.00		—		(0.06)		—
	Amortization of intangible assets		0.01		0.02		0.03		0.03
	Change in fair value of contingent consideration		0.00		(0.01)		0.00		0.00
	Change in fair value of warrant liabilities		0.09		0.02		0.08		0.02
	Loss on extinguishment of debt		0.01		0.00		0.01		0.00

Adjusted net loss per share		$	(0.06)	$	(0.08)	$	(0.11)	$	(0.19)

The non-GAAP financial measures for the three and six months ended June 30, 2018 and 2017 provide management with additional insight into its results of operations and are calculated using the following adjustments:

a) Gain from sale of SurgiBot assets relates to amounts received from Great Belief International Limited in excess of the carrying amount of the assets sold.

b) Intangible assets that are amortized consist of developed technology and purchased patent rights recorded at cost and amortized over 5 to 10 years.

c) Contingent consideration in connection with the acquisition of the Senhance System in 2015 is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.

d) The Company’s Series A and Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant. The warrant liability is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss.

e) In May 2018 in connection with its entrance into the Hercules Loan Agreement, the Company repaid its existing loan and security agreement with Innovatus Life Sciences Lending Fund I, LP. The Company recognized a loss of $1.4 million on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2018. In May 2017 in connection with its entrance into the Innovatus Loan Agreement, the Company repaid its then-existing credit facility with Silicon Valley Bank and Oxford Finance LLC. The Company recognized a loss of $308,000 on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2017.

Contacts

For TransEnterix, Inc.
Investors:
Mark Klausner, +1 443-213-0501
invest@transenterix.com
or
Media:
Joanna Rice, +1 951-751-1858
joanna@greymattermarketing.com

CAESAREA, Israel, Aug. 2, 2018 /PRNewswire/ — Mazor Robotics Ltd. (TASE: MZOR) (NASDAQGM: MZOR), a pioneer and a leader in the field of robotic guidance systems, reported revenue of $13.2 million for the second quarter ended June 30, 2018.

“Our efforts to accelerate the adoption of our technologies resulted in a significant increase in robotic guidance systems sold in the second quarter of 2018 compared to the year-ago period,” commented Ori Hadomi, Chief Executive Officer. “Our objective for 2018 is to achieve our prior outlook for modest revenue growth as compared to 2017. As we previously disclosed, 2018 is a transition year for the Company following the late 2017 move from direct sales of the Mazor X System to a distribution model with Medtronic. The expected larger unit volumes, offset by the transfer pricing, is designed to accelerate the adoption of our systems by extending our market reach and expanding our geographical presence. The faster growth of our installed base will also accelerate our recurring revenue business, which represented 48% of our Q2 revenues.

During the quarter, several globally recognized academic centers and hospitals adopted the Mazor X. With this continued trust by the market, we remain confident that together with our partner we will achieve our joint objective of placing hundreds of Mazor X systems into service over the next few years.

“Later this year, Mazor and Medtronic are anticipating a market-changing event with the introduction of the Mazor X Stealth Edition system integrating Medtronic’s legacy Stealth navigation system with the Mazor X platform. Given the binding purchase commitments received to date, and to ensure rapid system and upgrade delivery, we are implementing production capacity increases at our Israel facilities. We look forward to unveiling the Mazor X Stealth Edition at NASS in late September in Los Angeles.”

SECOND QUARTER 2018 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

Revenue for the three months ended June 30, 2018 was $13.2 million compared to $15.5 million in the year-ago second quarter. U.S. revenue was $11.8 million compared to $14.1 million in the year-ago second quarter. This decrease is mainly attributed to the lower pricing terms under the distribution agreement with Medtronic, compared to mostly direct sales in the year-ago second quarter offset by a higher number of systems sold. International revenue remained even at $1.4 million to the year-ago second quarter. Recurring revenue from kit sales, services and other was $6.3 million in the second quarter of 2018, similar to the year-ago second quarter.

The Company’s gross margin for the three months ended June 30, 2018 was 56.1% compared to 69.4% in the year-ago second quarter. This expected decrease is attributed mainly to the pricing terms with Medtronic, following the transition to the global distribution phase of the Medtronic partnership. Total operating expenses were $11.3 millioncompared to $14.6 million in the year-ago second quarter, mainly due to lower selling and marketing expenses, following the transition to the global distribution phase of the Medtronic partnership. Operating loss remained even at $3.9 million similar to the year-ago second quarter. Net loss for the second quarter of 2018 was $3.8 million, or $0.07 per share, compared to a net loss of $3.7 million, or $0.08 per share, for the year-ago second quarter.

Cash used in operating activities was $6.5 million compared to cash used in operating activities of $7.4 million in the year-ago second quarter, reflecting lower cash expenditures. As of June 30, 2018, cash, cash equivalents and investments totaled $108.1 million.

SECOND QUARTER 2018 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 $2.5 million with respect to amortization of intangible assets and to share-based payments recorded in the second quarter of 2018. On a non-GAAP basis, the net loss in the second quarter of 2018 was $1.4 million, or $0.03 per share, compared to $2.4 million, or $0.05 per share, for the year-ago second quarter.

SIX MONTHS ENDED JUNE 30, 2018 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

For the six months ended June 30, 2018, revenue increased 6% and totaled $28.7 million compared to $27.2 million for the six months ended June 30, 2017, due to higher recurring revenue, offset by a decrease in revenue from system sales. Gross margin for the six months ended June 30, 2018 was 57.3% compared with 67.3% in the six months ended June 30, 2017. This expected decrease is attributed mainly to the pricing terms with Medtronic following the transition to the global distribution phase of the Medtronic partnership. Total operating expenses were $21.8 million compared to $27.9 million in the year-ago first half, mainly due to lower selling and marketing expenses, following the transition to the global distribution phase of the Medtronic partnership. Operating loss was $5.3 million, compared to $9.6 million in the first six months of 2017.

Net loss for the six months ended June 30, 2018 was $5.1 million, or $0.10 per share, compared to a net loss of $8.9 million, or $0.19 per share, in the first six months of 2017.

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 2018 was $1.1 million, or $0.02 per share, compared to a net loss of $6.3 million, or $0.13 per share, in the first six months of 2017.

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss these results on Thursday, August 2, 2018, at 8:30 AM EDT (3:30 PMIDT). Investors within the United States interested in participating are invited to call 866-548-4713. Participants in Israelcan use the toll-free dial-in number 1809 212 833. All other international participants can use the dial-in number +1 323-794-2093

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 1-888-203-1112 and reference the Replay Access Code: 5587897. All international callers can dial +1 719-457-0820 using the same Replay Access Code. To access the webcast, please visit www.mazorrobotics.comand 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 profit (loss), net income (loss) and basic and diluted earnings (loss) per share that exclude the effects of 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 (loss) and earnings (loss) per share and to compare them to historical net income (loss) and earnings (loss) 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 the objective of placing hundreds of Mazor X systems into service over the next few years, the anticipated introduction of the Mazor X – Stealth Edition and anticipated customer demand, integration of Stealth navigation, increase in production capacity, 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 April 30, 2018 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.

Mazor Robotics Ltd.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(U.S. Dollars in thousands, except per share data)
(UNAUDITED)

	Six months period				Three months period
	ended June 30,				ended June 30,
	2018		2017		2018		2017
Revenue	$	28,745	$	27,174	$	13,238	$	15,455

Cost of revenue	$	12,272	$	8,875	$	5,807	$	4,726

Gross profit	$	16,473	$	18,299	$	7,431	$	10,729

Operating expenses:
Research and development, net	$	5,069	$	4,034	$	2,682	$	2,242
Selling and marketing	$	12,288	$	20,209	$	6,207	$	10,316
General and administrative	$	4,442	$	3,657	$	2,420	$	,2086
Total operating cost and expenses	$	21,799	$	27,900	$	11,309	$	14,644

Loss from operations	$	(5,326)	$	(9,601)	$	(3,878)	$	(3,915)

Financing income, net	$	209	$	443	$	37	$	232

Loss before taxes on income	$	(5,117)	$	(9,158)	$	(3,841)	$	(3,683)

Income tax expense (benefit)	$	1	$	(250)	$	–	$	(7)

Net loss	$	(5,118)	$	(8,908)	$	(3,841)	$	(3,676)

Net loss per share – Basic and diluted	$	(0.10)	$	(0.19)	$	(0.07)	$	(0.08)

Weighted average common shares outstanding – Basic and diluted		52,538		47,990		52,707		48,227

Mazor Robotics Ltd.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF
(U.S. Dollars in thousands)

	June 30,		December 31,
	2018		2017
	(Unaudited)		(Audited)
Current assets
Cash and cash equivalents	$	37,475	$	46,376
Short-term investments		66,796		56,708
Trade receivables		9,401		5,460
Other current assets		2,936		2,054
Inventory		7,130		7,864
Total current assets		123,738		118,462

Non-current assets
Long-term investments		3,832		5,171
Property and equipment, net		4,748		4,323
Intangible assets, net		1,760		1,925
Other non-current assets		893		1,115
Total non-current assets		11,233		12,534

Total assets	$	134,971	$	130,996

Current liabilities
Trade payables	$	2,934	$	3,474
Deferred revenue		6,492		3,471
Other current liabilities		7,432		9,874
Total current liabilities		16,858		16,819

Non-current liabilities
Employee benefits		454		414
Total non-current liabilities		454		414

Total liabilities		17,312		17,233

Equity
Share capital		138		136
Share premium		232,650		225,678
Amounts allocated to warrants		9,629		9,629
Capital reserve for share-based payments transactions		12,520		10,480
Foreign currency translation reserve		2,119		2,119
Accumulated loss		(139,397)		(134,279)
Total equity		117,659		113,763

Total liabilities and equity	$	134,971	$	130,996

Mazor Robotics Ltd.
CONSOLIDATED CASH FLOW STATEMENTS
(U.S. Dollars in thousands)
(UNAUDITED)

	Six months ended				Three months ended
	June 30,				June 30,
	2018		2017		2018		2017
Cash flows from operating activities:
Loss for the period	$	(5,118)	$	(8,908)	$	(3,841)	$	(3,676)
Adjustments:
Depreciation and amortization	$	879	$	714	$	458	$	372
Finance income, net	$	(107)	$	(119)	$	67	$	(69)
Share-based payments	$	3,903	$	2,422	$	2,368	$	1,221
Income tax expense (tax benefit)	$	(1)	$	(250)	$	–	$	(7)
	$	4,674	$	2,767	$	2,893	$	1,517

Change in inventory	$	684	$	(2,950)	$	824	$	(1,588)
Change in trade and other accounts receivable	$	(4,563)	$	1,260	$	(8,097)	$	(3,511)
Change in prepaid lease fees	$	8	$	(22)	$	3	$	(1)
Change in trade and other accounts payable	$	(3)	$	792	$	1,521	$	(311)
Change in employee benefits	$	40	$	136	$	(18)	$	58
	$	(3,834)	$	(784)	$	(5,767)	$	(5,353)

Interest received	$	495	$	183	$	214	$	111
Income tax paid	$	(34)	$	(15)	$	(6)	$	(15)
	$	461	$	168	$	208	$	96

Net cash used in operating activities	$	(3,817)	$	(6,757)	$	(6,507)	$	(7,416)

Cash flows from investing activities:
Proceeds from (investment in) short-term investments and deposits, net	$	(5,388)	$	10,435	$	(3,144)	$	1,478
Investment in long-term investments	$	(3,361)	$	(623)	$	(7)	$	(525)
Purchase of property and equipment	$	(1,077)	$	(1,313)	$	(589)	$	(504)
Net cash provided by (used in) investing activities	$	(9,826)	$	8,499	$	(3,740)	$	449

Cash flows from financing activities:
Proceeds from exercise of share options by employees	$	5,110	$	3,719	$	988	$	1,460
Net cash provided by financing activities	$	5,110	$	3,719	$	988	$	1,460

Net increase (decrease) in cash and cash equivalents	$	(8,533)	$	5,461	$	(9,259)	$	(5,507)
Cash and cash equivalents at the beginning of the period	$	46,376	$	14,954	$	47,003	$	25,896
Effect of exchange rate differences on balances of cash and cash equivalents	$	(368)	$	(68)	$	(269)	$	(42)
Cash and cash equivalents at the end of the period	$	37,475	$	20,347	$	37,475	$	20,347

Supplementary cash flows information:
Purchase of property and equipment in credit	$	(36)	$	(55)	$	(36)	$	(55)
Classification of inventory to fixed assets	$	50	$	300	$	–	$	164

Mazor Robotics Ltd.
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(U.S. Dollars in thousands, except per share data)
(UNAUDITED)

	Six months period				Three months period
	ended June 30,				ended June 30,
	2018		2017		2018		2017
GAAP gross profit	$	16,473	$	18,299	$	7,431	$	10,729
Amortization of intangible assets		165		165		83		83
Share-based payments		327		108		209		55
Non-GAAP gross profit	$	16,965	$	18,572	$	7,723	$	10,867
GAAP gross profit as percentage of revenues		57.3%		67.3%		56.1%		69.4%
Non-GAAP gross profit as percentage of revenues		59.0%		68.3%		58.3%		70.3%

GAAP operating expenses	$	21,799	$	27,900	$	11,309	$	14,644
Share-based payments:
Research and development	$	837	$	352	$	533	$	194
Selling and marketing	$	1,372	$	851	$	860	$	411
General and administrative	$	1,367	$	1,111	$	766	$	561
Non-GAAP operating expenses	$	18,223	$	25,586	$	9,150	$	13,478

GAAP operating loss	$	(5,326)	$	(9,601)	$	(3,878)	$	(3,915)
Non-GAAP operating loss	$	(1,258)	$	(7,014)	$	(1,427)	$	(2,611)

GAAP net loss	$	(5,118)	$	(8,908)	$	(3,841)	$	(3,676)
Share-based payments	$	3,903	$	2,422	$	2,368	$	1,221
Amortization of intangible assets	$	165	$	165	$	83	$	83
Non-GAAP net loss	$	(1,050)	$	(6,321)	$	(1,390)	$	(2,372)

GAAP basic and diluted loss per share	$	(0.10)	$	(0.19)	$	(0.07)	$	(0.08)

Non-GAAP basic and diluted loss per share	$	(0.02)	$	(0.13)	$	(0.03)	$	(0.05)

U.S. Contacts: EVC Group

Michael Polyviou/Doug Sherk – Investors

mpolyviou@evcgroup.com; dsherk@evcgroup.com

732.933.2754; 415.652.9100

SOURCE Mazor Robotics Ltd.

Related Links

http://www.mazorrobotics.com

CARLSBAD, Calif., Aug. 02, 2018 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc. (“ATEC” or the “Company”) (Nasdaq: ATEC), a provider of innovative spine surgery solutions with a mission to improve patient lives through the relentless pursuit of superior outcomes, today reported financial results for the second quarter ended June 30, 2018.

Second Quarter 2018 Financial Highlights

Total net revenue of $22.0 million; U.S. commercial revenue of $20.4 million, up 6% compared to the first quarter of 2018
U.S. commercial gross margin of 69.5%
Cash and cash equivalents of $44.9 million at June 30, 2018
Operating cash burn (excluding debt service and transaction-related costs) of $3.0 million

Second Quarter Organizational, Commercial, and Product Highlights

Continued transition of sales organization and increased contribution from dedicated distribution partners and agents to 57% of U.S. commercial revenue
Increased revenue attributable to newly converted surgeons, which more than doubled sequentially
Obtained FDA 510(k) clearance for IdentiTi porous titanium interbody implants; successfully completed first surgery in conjunction with alpha launch
Obtained two significant, favorable rulings in the patent litigation brought by NuVasive, Inc.
Made three key additions to ATEC leadership team: David Sponsel, Area Vice President, South Central United States; Emory Rooney, Vice President, Sales Channel Development; and Robert Judd, Vice President, Finance & Controller, who collectively bring decades of additional spine industry experience to ATEC

“Our second quarter results, and numerous leading indicators, drive our growing confidence in the bright future for ATEC,” said Pat Miles, Chairman and Chief Executive Officer. “While we continue to anticipate some short-term variability, we expect that our organic product development machine will accelerate growth. The spine market needs surgeon-driven, outcome-focused innovation, and we are absolutely committed to providing it. We are confident that we are building an organization that will create significant, long-term value.”

Comparison of Financial Results for the Second Quarter 2018 to First Quarter 2018

The following table compares key second quarter 2018 results to first quarter 2018 results.


							Change
	June 30, 2018			March 31, 2018			$			%
	(unaudited)			(unaudited)

U.S. commercial revenue	$	20,409		$	19,201		$	1,208		6	%
U.S. gross profit		14,178			13,432			746		6	%
U.S. gross margin		69.5	%		70.0	%

Operating Expenses
Research and development	$	2,009		$	1,786		$	223		12	%
Sales and marketing		10,673			10,060			613		6	%
General and administrative		7,815			6,442			1,373		21	%
Amortization of intangible assets		187			177			10		6	%
Transaction-related expenses		(62	)		1,542			(1,604	)	(104	%)
Gain on settlement		–			(6,168	)		6,168		(100	%)
Restructuring		193			398			(205	)	(52	%)
Total operating expenses	$	20,815		$	14,237		$	6,578		46	%

Operating loss	$	(6,545	)	$	(667	)	$	(5,878	)	881	%

Interest and other expense	$	(1,784	)	$	(1,645	)	$	(139	)	8	%

Loss from continuing operations	$	(7,064	)	$	(1,854	)	$	(5,210	)	281	%

Non-GAAP Adjusted EBITDA	$	(3,677	)	$	(2,390	)	$	(1,287	)	54	%

U.S. commercial revenue for the second quarter of 2018 was $20.4 million, compared to $19.2 million in the first quarter of 2018. Results reflect the continued transition of the Company’s distribution channel to more dedicated, scalable partners. Revenue growth generated by the expansion of the dedicated sales channel, coupled with new surgeon adoption, offset the revenue losses associated with the intentional reduction of non-strategic distributor relationships.

U.S. gross profit and gross margin for the second quarter of 2018 were $14.2 million and 69.5%, respectively, compared to $13.4 million and 70.0%, respectively, for the first quarter of 2018. U.S. gross margin stabilized as the Company continued to reduce product costs and optimize its supply chain.

Total operating expenses for the second quarter of 2018 were $20.8 million, compared to $14.2 million in the first quarter of 2018. The increase is primarily the result of a $6.2 million contract settlement gain recorded in the first quarter of 2018. On a non-GAAP basis (excluding restructuring charges, stock-based compensation, transaction-related expenses, and the contract settlement gain), total operating expenses in the second quarter increased to $19.5 million, compared to $17.9 million in the first quarter of 2018. The increase primarily reflects increased sales expenses, litigation support costs, and investments in product development.

Operating loss for the second quarter of 2018 was $6.5 million, compared to a loss of $0.7 million for the first quarter of 2018. The increase is primarily the result of the $6.2 million contract settlement gain recorded in the first quarter of 2018.

Non-GAAP Adjusted EBITDA for the second quarter of 2018 was $(3.7) million, compared to $(2.4) million in the first quarter of 2018. For more detailed information, please refer to the table, “Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures,” that follows.

Current and long-term debt includes $30.6 million in term debt and $8.2 million outstanding under the Company’s revolving credit facility at June 30, 2018. This compares to $31.5 million in term debt and $8.4 million outstanding under the Company’s revolving credit facility at March 31, 2018.

Cash and cash equivalents were $44.9 million at June 30, 2018, compared to $47.6 million reported at March 31, 2018.

Comparison of Financial Results for the Three and Six Months Ended June 30, 2018 and 2017

Revenue decreased on a year-over-year basis as a result of the continued transition of the Company’s distribution channel to more dedicated, scalable partners and the discontinuation of non-strategic distributor relationships. The year-over-year increase in operating expenses was attributable to litigation support costs, transaction-related expenses associated with the Company’s acquisition of SafeOp Surgical, Inc., and increased investment in product development initiatives as the Company expands its product pipeline. For additional information, please reference the following financial statement tables and the Company’s Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or before August 3, 2018.

2018 Financial Outlook

ATEC continues to anticipate total revenue in 2018 to approximate $95.0 million, with revenue growth expected to accelerate in the second half of the year.

Favorable Patent Litigation Rulings

ATEC obtained two significant, favorable rulings in the patent litigation brought by NuVasive, Inc.: the first dismissed NuVasive’s design patent counts, covering the implant and sequential dilators used in lateral surgery; the second denied NuVasive’s Motion for Preliminary Injunction, finding that NuVasive had not met its burden of proving either likelihood of success or irreparable harm. The latter ruling allows ATEC to continue to sell its lateral surgery offering while the lawsuit is pending.

Key Executive Additions

Mr. Sponsel has nearly 20 years’ sales experience, including 13 years in the spine industry. He spent a decade with Stryker Spine, before leaving to lead Medacta USA’s Spine Division. Mr. Rooney has accumulated over a decade of leadership in spine sales. He joins ATEC from Stryker Spine, where he most recently served as Vice President, Sales, Southeast. Mr. Judd brings nearly 15 years of accounting and strategic finance experience to ATEC. He joins ATEC following three years with NuVasive, Inc., where he served most recently as Vice President, Finance – Global Process Transformation, after holding finance and accounting leadership positions with Thermo Fisher Scientific, Life Technologies, Allergan, and KPMG.

Non-GAAP Information

To supplement the Company’s financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company reports certain non-GAAP financial measures such as Adjusted EBITDA. Adjusted EBITDA included in this press release is a non-GAAP financial measure that represents net income (loss), excluding the effects of interest, taxes, depreciation, amortization, stock-based compensation expenses, and other non-recurring income or expense items, such as sale of assets, settlement gains, impairments, restructuring expenses, severance expenses and transaction-related expenses. The Company believes that non-GAAP Adjusted EBITDA provides investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company. For completeness, management uses non-GAAP Adjusted EBITDA in conjunction with GAAP earnings and earnings per common share measures. The Company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Adjusted EBITDA should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

Investor Conference Call

ATEC will hold a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss second quarter 2018 results. The dial-in numbers are (877) 556-5251 for domestic callers and (720) 545-0036 for international callers. The conference ID number is 1956197. A live webcast of the conference call will also be available online from the investor relations page of the Company’s corporate website at www.atecspine.com.

A replay of the webcast will remain available on the Company’s website, www.atecspine.com, until the Company releases its third quarter 2018 financial results. In addition, a telephonic replay of the call will be available until November 2, 2018. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 1956197.

Inducement Awards Granted

As an inducement to accepting employment with the Company, and in accordance with applicable Nasdaq listing requirements, the Compensation Committee of the Board of Directors approved grants of inducement stock options to purchase, collectively, an aggregate of 115,000 shares of the Company’s common stock (“Options”) and approved the grants of, collectively, 115,000 restricted stock units (RSUs) to the three new employees noted above. The grants are dated as of May 29, June 18, and July 16, 2018 — the respective dates of employment of each new employee.

The RSUs will vest in equal annual installments on each of the first four anniversaries of the respective dates of employment set forth above. The Options, which have exercise prices of $3.86, $3.01 and $2.84 per share (based on the closing prices of the Company’s common stock on the respective effective dates of the grants), will vest 25 percent on the first anniversary of the grants and in equal monthly installments of 1/36th of the balance of the Options, provided the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs and Options will fully vest upon a change in control of ATEC.

ATEC is providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).

About Alphatec Holdings, Inc.

Alphatec Holdings, Inc., through its wholly owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company that designs, develops, and markets technology for the treatment of spinal disorders associated with disease and degeneration, congenital deformities, and trauma. The Company’s mission is to improve lives by providing innovative spine surgery solutions through the relentless pursuit of superior outcomes. The Company markets its products in the U.S. via independent sales agents and a direct sales force.

Additional information can be found at www.atecspine.com.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include the references to the Company’s strategy in significantly repositioning the ATEC brand and turning the Company into a growth organization. The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the uncertainty of success in developing new products or products currently in the Company’s pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community, including Battalion and Arsenal Deformity; failure to obtain FDA or other regulatory clearance or approval for new products, or unexpected or prolonged delays in the process; continuation of favorable third party reimbursement for procedures performed using the Company’s products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to successfully control its costs or achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other competing products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation in which the Company is a defendant; patent infringement claims; claims related to the Company’s intellectual property and the Company’s ability to meet its financial obligations under its credit agreements and the Orthotec settlement agreement. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. A further list and description of these and other factors, risks and uncertainties can be found in the Company’s most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange Commission. ATEC disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

Investor/Media Contact:

Tina Jacobsen
Investor Relations
tjacobsen@moreeffectiveir.com

Company Contact:

Jeff Black
Executive Vice President and Chief Financial Officer
Alphatec Holdings, Inc.
ir@atecspine.com

ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts – unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017


Revenues	$	22,042		$	24,379		$	43,349		$	52,357
Cost of revenues		7,772			8,631			15,509			19,830
Gross profit		14,270			15,748			27,840			32,527

Operating expenses:
Research and development		2,009			990			3,795			2,439
Sales and marketing		10,673			10,298			20,733			21,401
General and administrative		7,815			5,351			14,257			11,574
Amortization of intangible assets		187			172			364			344
Transaction-related expenses		(62	)		–			1,480			–
Gain on settlement		–			–			(6,168	)		–
Gain on sale of assets		–			(856	)		–			(856	)
Restructuring expenses		193			528			591			1,759
Total operating expenses		20,815			16,483			35,052			36,661
Operating loss		(6,545	)		(735	)		(7,212	)		(4,134	)
Other income (expense):
Interest expense, net		(1,709	)		(1,881	)		(3,416	)		(3,862	)
Other income, net		(75	)		2			(13	)		7
Total other expense, net		(1,784	)		(1,879	)		(3,429	)		(3,855	)
Loss from continuing operations before taxes		(8,329	)		(2,614	)		(10,641	)		(7,989	)
Income tax (benefit) provision		(1,265	)		15			(1,723	)		64
Loss from continuing operations		(7,064	)		(2,629	)		(8,918	)		(8,053	)
Loss from discontinued operations		(12	)		(68	)		(74	)		(159	)
Net loss	$	(7,076	)	$	(2,697	)	$	(8,992	)	$	(8,212	)

Net loss per share, basic and diluted:
Continuing operations	$	(0.21	)	$	(0.24	)	$	(0.32	)	$	(0.80	)
Discontinued operations		(0.00	)		(0.01	)		(0.00	)		(0.02	)
Net loss per share, basic and diluted	$	(0.21	)	$	(0.24	)	$	(0.33	)	$	(0.82	)
Shares used in calculating basic and diluted net loss per share
		34,030			11,047			27,656			10,033

Stock-based compensation included in:
Cost of revenue		11			11			33			14
Research and development		129			(20	)		13			291
Sales and marketing		193			151			304			224
General and administrative		815			269			1,417			690
	$	1,148		$	411		$	1,767		$	1,219


ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)


	June 30,		December 31,
	2018		2017
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	44,912	$	22,466
Accounts receivable, net		11,405		14,822
Inventories, net		28,177		27,292
Prepaid expenses and other current assets		1,778		1,767
Current assets of discontinued operations		251		131
Total current assets		86,523		66,478

Property and equipment, net		12,060		12,670
Goodwill		14,250		–
Intangibles, net		26,382		5,248
Other assets		225		208
Noncurrent assets of discontinued operations		55		56
Total assets	$	139,495	$	84,660

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	3,354	$	3,878
Accrued expenses		24,607		22,246
Current portion of long-term debt		6,682		3,306
Current liabilities of discontinued operations		385		312
Total current liabilities		35,028		29,742



Total long term liabilities		50,644		57,973
Redeemable preferred stock		23,603		23,603
Stockholders’ equity		30,220		(26,658	)
Total liabilities and stockholders’ deficit	$	139,495	$	84,660


ALPHATEC HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands – unaudited)



	Three Months Ended			Three Months Ended						Six Months Ended
	March 31,			June 30,						June 30,
	2018			2018			2017			2018			2017


Operating expenses		14,237			20,815			16,483			35,052			36,661
Adjustments:
Stock-based compensation		(597	)		(1,137	)		(400	)		(1,734	)		(1,205	)
Restructuring		(398	)		(193	)		(528	)		(591	)		(1,759	)
Transaction-related expenses		(1,542	)		62			–			(1,480	)		–
Gain on settlement		6,168			–			–			6,168			–
Gain on sale of assets								856						856
Non-GAAP operating expenses	$	17,868		$	19,547		$	16,411		$	37,415		$	34,553


	Three Months Ended			Three Months Ended						Six Months Ended
	March 31,			June 30,						June 30,
	2018			2018			2017			2018			2017

Operating loss, as reported	$	(667	)	$	(6,545	)	$	(735	)	$	(7,212	)	$	(4,134	)
Add back:
Depreciation		1,592			1,457			1,636			3,049			3,270
Amortization of intangible assets		294			132			234			426			468
Total EBITDA		1,219			(4,956	)		1,135			(3,737	)		(396	)

Add back significant items:
Stock-based compensation		619			1,148			411			1,767			1,219
Restructuring		398			193			528			591			1,759
Transaction-related expenses		1,542			(62	)		–			1,480			–
Gain on settlement		(6,168	)		–			–			(6,168	)		–
Gain on sale of assets								(856	)					(856	)

Adjusted EBITDA	$	(2,390	)	$	(3,677	)	$	1,218		$	(6,067	)	$	1,726


ALPHATEC HOLDINGS, INC.
RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT
(in thousands, except percentages – unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2018			2017			2018			2017

Revenues by source
U.S. commercial revenue	$	20,409		$	21,877		$	39,610		$	45,314
Other		1,633			2,502			3,739			7,043
Total revenues	$	22,042		$	24,379		$	43,349		$	52,357

Gross profit by source
U.S.	$	14,178		$	15,521		$	27,610		$	31,789
Other		92			227			230			738
Total gross profit	$	14,270		$	15,748		$	27,840		$	32,527

Gross profit margin by source
U.S.		69.5	%		70.9	%		69.7	%		70.2	%
Other		5.6	%		9.1	%		6.1	%		10.5	%
Total gross profit margin		64.7	%		64.6	%		64.2	%		62.1	%

Company Announcement

Earnings Releases and Operating Results

total-knee-replacement-123663788-5b01c724642dca0037c139a9-1.jpg

Sellbyville, Delaware, Aug. 02, 2018 (GLOBE NEWSWIRE) —

Global Total Knee Replacement Market is projected to cross USD 10 billion by 2024; according to a new research report by Global Market Insights, Inc. Total knee replacement market will witness a CAGR of 3.7% during the forecast period owing to expanding ageing population pool worldwide coupled with increasing prevalence of degenerative diseases. Geriatric population is more prone to suffer from degenerative diseases such as osteoporosis resulting in demand for total knee replacement procedures. As per International Osteoporosis Foundation estimates, 200 million women worldwide suffer from osteoporosis; therefore, the demand should only increase during the projection years.

Additionally, technological upgradation of implant material with evolution of customized replacement implants is augmenting market growth. The increased benefits of knee replacement surgery in restoration of normal functioning of knee has led to growth of younger population undergoing knee replacement surgeries. Presently, 3D printed surgical implants along with customized inserts, jigs devices are used in surgery to deliver better results escalating the industry growth. With increasing use of 3D technology, the knee replacement market will witness rapid growth over the forecast timeframe.

Request for a sample of this research report @ https://www.gminsights.com/request-sample/detail/2804

Although presence of numerous growth opportunities has influenced the industry growth positively, high costs associated with the surgical procedures has affected the same. However, steady development in reimbursement scenario and government initiatives have lowered the costs of knee replacement surgery proving beneficial for industry growth.

Partial knee replacement system market accounted for largest market share in 2016 and anticipated to grow at 3.4% CAGR over the projection years, owing to its advantages such as replacement of only damaged component of knee along with minimal erosion of healthy tissues.

Browse key industry insights spread across 120 pages with 106 market data tables & 9 figures & charts from the report, “Total Knee Replacement Market” in detail along with the table of contents:

https://www.gminsights.com/industry-analysis/total-knee-replacement-market

Tibial knee component market segment will be the fastest growing segment with expected growth of 4.0% CAGR by 2024. This component provides intraoperative flexibility to the replaced component proving to be beneficial in revision replacement surgery. Also, polyethylene tibial component is known to provide significant long-lasting clinical results with reduced probability of osteolysis; therefore, the demand for the same should rapidly rise in coming years.

Ambulatory surgical centers market segment is expected to experience a CAGR of over 5% during the forecast period owing to overall low costs associated with surgery in this facility. Timely procedures without long delay in ambulatory centers attract more patients, resulting in rapid expansion of the same. Moreover, personalized care offering by ambulatory healthcare facilities surges the segment growth.

U.S. knee replacement market valued at USD 3,294 in 2017 and will expand significantly with growth of than 3.8% from 2018-2024. The growing geriatric population base suffering from degenerative diseases such as osteoarthritis and availability of superior quality medical devices and components will favor market growth. Also, increase in the disposable income across the nation will positively affect market growth.

Germany knee replacement market will grow at a CAGR of 4.0% during the projection period, owing to increasing healthcare spending, technological advancement and high disposable income. Growing healthcare awareness will increase number of knee replacement surgeries favoring market growth.

Some of the major industry players operating in knee replacement market include Stryker, Smith & Nephew, Medacta, MicroPort Scientific, B. Barun, ConforMIS, DePuy Synthes, Corin, DJO Global and Zimmer Biomet. These manufacturing companies have focused their efforts on R&D that have helped them to evolve as major industry players.

Key industry players undertake certain strategic initiatives such as new product launch and collaborations to maintain their market position. For instance, Smith & Nephew launched GENESIS II total knee system that is the most preferred and comprehensive system improving surgical performance. Launching this product has rendered company with competitive advantage and improved the company’s market share.

Make an inquiry for purchasing this report @ https://www.gminsights.com/inquiry-before-buying/2804

Browse Related Reports:

Orthopedic Devices Market Size 2017 – 2024

Orthopedic Devices Market outlook was at over USD 39 billion in 2016 and is forecast to witness more than 3% CAGR from 2017 to 2024. The growing geriatric population base is highly susceptible for developing bone related diseases such as osteoporosis and osteoarthritis.
https://www.gminsights.com/industry-analysis/orthopedic-devices-market

Orthobiologics Market Size 2018 – 2024

Orthobiologics Market share is projected to experience significant growth from 2018 to 2024. Increasing number of orthopedic procedures owning to the rising geriatric population, accidents and obesity is driving the market growth.
https://www.gminsights.com/industry-analysis/orthobiologics-market

About Global Market Insights

Global Market Insights, Inc., headquartered in Delaware, U.S., is a global market research and consulting service provider; offering syndicated and custom research reports along with growth consulting services. Our business intelligence and industry research reports offer clients with penetrative insights and actionable market data specially designed and presented to aid strategic decision making. These exhaustive reports are designed via a proprietary research methodology and are available for key industries such as chemicals, advanced materials, technology, renewable energy and biotechnology.

Contact Us:
Arun Hegde
Corporate Sales, USA
Global Market Insights, Inc.
Phone: 1-302-846-7766
Toll Free: 1-888-689-0688
Email: sales@gminsights.com
Web: https://www.gminsights.com
Blog: http://healthcaremotives.com/

August 02, 2018

ALACHUA, Fla.–(BUSINESS WIRE)–RTI Surgical, Inc. (Nasdaq: RTIX), a global surgical implant company, reported operating results for the second quarter of 2018.

“Our team is sustaining the momentum generated over the past 18 months, as evidenced by our positive operational and financial performance this quarter,” said Camille Farhat, chief executive officer. “As anticipated in our previously issued guidance, our OEM franchise continues to contribute attractive growth, which we believe demonstrates the importance of the changes we implemented in 2017 and the value of our diverse portfolio. Our current operational excellence priorities, focused primarily on the cost of tissue processing, began to positively impact our cost of sales this quarter, providing significant margin and adjusted EBITDA improvements. Our efforts to date are encouraging and we believe that we remain well positioned to deliver on our commitments in 2018 and beyond.”

Farhat added, “As we enter the second half of the year, we continue to make significant strides in our strategic transformation. Following the recent owned agency transition announcement, we have further reduced the complexity of our operations through the reduction of vertical integration and increased focus on our strength in tissue processing. We believe we maintain strong partnerships with the organ procurement community that, in our opinion, ensure that we can continue to expand the number of patients served with our differentiated allograft products. With the implementation of our operational excellence initiatives well underway, we are starting to see the positive outcomes in our financial results, and I am proud of the ongoing efforts of many people across the Company. Also, we are encouraged by the progress demonstrated by the team managing the Zyga acquisition and integration, which exemplify our endeavors to accelerate growth. In light of this progress, I am focused on reinvigorating the R&D pipeline and pursuing attractive deals at logical valuations.”

Second Quarter 2018

RTI’s worldwide revenues for the second quarter of 2018 were $70.7 million, down slightly compared with $72.1 million during the same period for the prior year. Excluding a $3.7 million reduction from the sale of substantially all the assets of the cardiothoracic closure business completed in August 2017, our total revenues increased $2.2 million, or 3.3%. Gross profit for the second quarter of 2018 was $30.0 million, inclusive of a $6.8 million charge for the write-off of excess inventory related to decreased distributions of our map3® implant and the purchase accounting step-up of Zyga inventory. To partially offset the impact of the decreased distribution of map3® implant we signed a distribution agreement with Aziyo Biologics, Inc., to supplement our biologics portfolio with an alternative allograft stem cell product. Excluding the excess inventory charge and purchase accounting impact, our Adjusted Gross Profit for the second quarter of 2018 was $36.8 million or 52.1% of revenues, compared to $37.0 million, or 51.3% of revenues, in the second quarter of 2017.

During the second quarter of 2018, RTI incurred non-recurring pre-tax charges to support the ongoing strategic transformation of the business. The company incurred $4.5 million in asset impairment and abandonment charges related to decreased distribution of our map3® implant During the second quarter of 2017, the company incurred $3.4 million of non-recurring pre-tax charges.

Net loss applicable to common shares was $6.4 million, or $0.10 per fully diluted common share in the second quarter of 2018, compared to a net loss applicable to common shares of $2.6 million, or $0.04 per fully diluted common share in the second quarter of 2017. As outlined in the reconciliation tables that follow, excluding the impact of the various non-recurring charges, Adjusted Net Income applicable to common shares was $2.0 million, or $0.03 per fully diluted common share in the second quarter of 2018.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the second quarter of 2018 was $9.1 million, or 13% of revenues compared with $8.3 million, inclusive of $1.2 million of EBITDA related to the cardiovascular closure business, or 11% of revenues for the second quarter of 2017. The increase in Adjusted EBITDA is primarily driven by the reduction in operating expenses associated with efforts to reduce complexity and increase operational excellence implemented during 2017.

Fiscal 2018 Outlook

Based on our recent financial results and current business outlook, the Company is reiterating financial guidance for 2018, originally issued on January 5, 2018:

The Company expects full year revenues in the range of $280 million and $290 million.
The Company expects full year Adjusted EBITDA to be in the range of $32 million to $38 million.

The Company noted the following assumptions are included in its guidance:

Relatively stable market conditions and regulatory environment;
Positive revenue contribution from the acquisition of Zyga Technology – announced January 4, 2018;
Ongoing positive impact of efforts to reduce complexity and implement operational excellence; and
Continued demand of map3® cellular allogeneic bone graft or alternative allograft stem cell product.

Conference Call

RTI will host a conference call and audio webcast at 9:00 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419 (U.S.) or (760) 666-3754 (International). The webcast can be accessed through the investor section of RTI’s website at www.rtix.com. A replay of the conference call will be available on RTI’s website for one month following the call.

About RTI Surgical, Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, general surgery, spine, orthopedic and trauma procedures and are distributed in more than 40 countries. RTI has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements made in this communication about our positive operational and financial performance, the continued contribution of the OEM franchise to RTI’s growth, the impact of operational priorities on costs and their impact on RTI’s financial performance, RTI’s ability to meet its commitments, the implementation of RTI’s strategic initiatives, the reduction in complexity of RTI’s operations, RTI’s ability to maintain partnerships in the organ procurement community, RTI’s ability to expand the number of patients it is able to serve, the integration of Zyga’s operations, anticipated financial results, growth rates, new product introductions, and future operational improvements. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. The forward-looking statements are not guarantees of future performance and are based on certain assumptions including RTI’s ability to reduce inventory, manage expenses and accomplish its goals and strategies, the quality of the new product offerings from RTI, general economic conditions, as well as those within RTI’s industry, RTI’s ability to integrate acquisitions into existing operations, and numerous other factors and risks identified in the Company’s Form 10-K for the fiscal year ended December 31, 2017 and other filings with the Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company’s SEC filings may be obtained by contacting the company or the SEC or by visiting RTI’s website at www.rtix.com or the SEC’s website at www.sec.gov.


RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)


	Three months ended						Six months ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenues	$	70,685		$	72,120		$	140,575		$	142,059
Costs of processing and distribution		40,645			35,157			76,853			69,317
Gross profit		30,040			36,963			63,722			72,742

Expenses:
Marketing, general and administrative		29,266			29,496			57,655			59,167
Research and development		3,270			3,740			6,691			7,428
Severance and restructuring costs		–			3,400			884			7,803
Asset impairment and abandonments		4,515			–			4,644			–
Acquisition and integration expenses		–			–			800			–
Total operating expenses		37,051			36,636			70,674			74,398
Operating (loss) income		(7,011	)		327			(6,952	)		(1,656	)
Total other expense – net		(1,151	)		(990	)		(1,926	)		(1,789	)
Loss before income tax provision		(8,162	)		(663	)		(8,878	)		(3,445	)
Income tax benefit (provision)		2,702			(1,026	)		2,453			(116	)
Net loss		(5,460	)		(1,689	)		(6,425	)		(3,561	)
Convertible preferred dividend		(981	)		(924	)		(1,947	)		(1,834	)
Net loss applicable to common shares	$	(6,441	)	$	(2,613	)	$	(8,372	)	$	(5,395	)

Net loss per common share – basic	$	(0.10	)	$	(0.04	)	$	(0.13	)	$	(0.09	)
Net loss per common share – diluted	$	(0.10	)	$	(0.04	)	$	(0.13	)	$	(0.09	)
Weighted average shares outstanding – basic		63,405,708			58,935,786			63,400,737			58,715,791
Weighted average shares outstanding – diluted		63,405,708			58,935,786			63,400,737			58,715,791


RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Commons Shares to Adjusted EBITDA
(Unaudited, in thousands)


			Three Months						Six Months
			Ended June 30,						Ended June 30,
			2018			2017			2018			2017
Net loss applicable to common shares			$	(6,441	)	$	(2,613	)	$	(8,372	)	$	(5,395	)
	Interest expense, net			771			915			1,595			1,734
	(Benefit) provision for income taxes			(2,702	)		1,026			(2,453	)		116
	Depreciation			2,524			2,652			5,147			5,324
	Amortization of intangible assets			960			909			1,921			1,805
EBITDA				(4,888	)		2,889			(2,162	)		3,584
Reconciling items impacting EBITDA
	Preferred dividend			981			924			1,947			1,834
	Non-cash stock based compensation			1,290			974			2,570			1,808
	Foreign exchange gain			71			75			22			55
	Other reconciling items *
		Inventory write-off		6,559			–			7,582			–
		Inventory purchase price adjustment		250			–			456			–
		Severance and restructuring costs		–			3,400			884			7,470
		Loss on extinguishment of debt		309			–			309			–
		Asset impairment and abandonments		4,515			–			4,515			–
		Acquisition and integration expenses		–			–			800			–
Adjusted EBITDA			$	9,087		$	8,262		$	16,923		$	14,751
Adjusted EBITDA as a percent of revenues				13	%		11	%		12	%		10	%

*	See explanations in Use of Non-GAAP Financial Measures section later in this release.


RTI SURGICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Loss Applicable to Common Shares and Net Loss Per Diluted Share to
Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Share
(Unaudited, in thousands except per share data)

	Three Months Ended
	June 30, 2018						June 30, 2017
	Net						Net
	(Loss) Income			Amount			(Loss) Income			Amount
	Applicable to			Per Diluted			Applicable to			Per Diluted
	Common Shares			Share			Common Shares			Share
As reported	$	(6,441	)	$	(0.10	)	$	(2,613	)	$	(0.04	)
Severance and restructuring costs		–			–			3,400			0.06
Asset impairment and abandonments		4,515			0.07			–			–
Inventory purchase price adjustment		250			0.00			–			–
Loss on extinguishment of debt		309			0.00			–			–
Inventory obsolescence and reserve charge		6,559			0.10			–			–
Tax effect on adjustments		(3,161	)		(0.05	)		178			0.00
Adjusted *	$	2,031		$	0.03		$	965		$	0.02


	Six Months Ended
	June 30, 2018						June 30, 2017
	Net						Net
	(Loss) Income			Amount			(Loss) Income			Amount
	Applicable to			Per Diluted			Applicable to			Per Diluted
	Common Shares			Share			Common Shares			Share
As reported	$	(8,372	)	$	(0.13	)	$	(5,395	)	$	(0.09	)
Severance and restructuring costs		884			0.01			7,803			0.13
Asset impairment and abandonments		4,515			0.07			–			–
Inventory purchase price adjustment		456			0.01			–			–
Loss on extinguishment of debt		309			0.00			–			–
Inventory obsolescence and reserve charge		7,582			0.12			–			–
Acquisition and integration expenses		800			0.01			–			–
Tax effect on adjustments		(3,654	)		(0.06	)		(1,304	)		(0.02	)
Adjusted *	$	2,520		$	0.04		$	1,104		$	0.02



* See explanations in Use of Non-GAAP Financial Measures section later in this release.
Amount Per Diluted Share may not foot due to rounding.

Use of Non-GAAP Financial Measures

To supplement the Company’s unaudited condensed consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP financial measures that exclude certain amounts, including EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit. The calculation of the tax effect on the adjustments between GAAP net loss applicable to common shares and non-GAAP net income applicable to common shares is based upon our estimated annual GAAP tax rate, adjusted to account for items excluded from GAAP net loss applicable to common shares in calculating Adjusted Net Income Applicable to Common Shares-Diluted. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measures is included in the tables listed above.

The following is an explanation of the adjustments that management excluded as part of adjusted measures for the three and six months ended June 30, 2018 and 2017 as well as the reason for excluding the individual items:

Severance and restructuring costs – This adjustment represents costs relating to the reduction of our organizational structure. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Asset impairment and abandonments – This adjustment represents an asset impairment and abandonments related to decreased distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Acquisition and integration expenses – This adjustment represents charges relating to acquisition and integration expenses due to the purchase of Zyga. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory obsolescence and reserve charge – This adjustment represents charges relating to inventory obsolescence due to the rationalization of our international distribution infrastructure and an inventory reserve charge related to decreased distributions of our map3® implant. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Inventory purchase price adjustment – This adjustment represents the purchase price effects of acquired Zyga inventory that was sold during the six months ended June 30, 2018. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Loss on extinguishment of debt – This adjustment represents costs relating to refinancing our debt. Management removes the amount of these costs from our operating results to supplement a comparison to our past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted, and Adjusted Gross Profit should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting EBITDA, Adjusted EBITDA, Adjusted Net Income Applicable to Common Shares, Adjusted Net Income per Common Share – Diluted and Adjusted Gross Profit in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making. The Company further believes that providing this information better enables the Company’s investors to understand the Company’s overall core performance and to evaluate the methodology used by management to assess and measure such performance.


RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(Unaudited, in thousands)


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Revenues:	(In thousands)
Spine	$	18,934	$	19,419	$	38,197	$	39,757
Sports		14,190		14,453		27,625		29,129
OEM		31,170		27,983		61,290		53,125
International		6,391		6,592		13,463		13,224
Cardiothoracic		–		3,673		–		6,824
Total revenues	$	70,685	$	72,120	$	140,575	$	142,059


RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

	June 30,			December 31,
	2018			2017
Assets
Cash	$	14,246		$	22,381
Accounts receivable – net		45,576			35,081
Inventories – net		101,022			111,927
Prepaid and other assets		8,038			16,285
Total current assets		168,882			185,674

Property, plant and equipment – net		76,838			79,564
Goodwill		64,863			46,242
Other assets – net		36,910			34,426
Total assets	$	347,493		$	345,906

Liabilities and Stockholders’ Equity
Accounts payable	$	14,797		$	18,252
Accrued expenses and other current liabilities		28,934			30,478
Current portion of long-term obligations		–			4,268
Total current liabilities		43,731			52,998

Deferred revenue		3,155			3,741
Long-term liabilities		58,571			43,507
Total liabilities		105,457			100,246

Preferred stock		65,961			63,923

Stockholders’ equity:
Common stock and additional paid-in capital		425,544			425,132
Accumulated other comprehensive loss		(6,850	)		(6,329	)
Accumulated deficit		(242,619	)		(237,066	)
Total stockholders’ equity		176,075			181,737
Total liabilities and stockholders’ equity	$	347,493		$	345,906


RTI SURGICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)


	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2018			2017			2018			2017
Cash flows from operating activities:
Net loss	$	(5,460	)	$	(1,689	)	$	(6,425	)	$	(3,561	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization expense		3,484			3,561			7,068			7,129
Stock-based compensation		1,290			974			2,570			1,808
Amortization of deferred revenue		(1,218	)		(1,186	)		(2,435	)		(2,460	)
Other items to reconcile to net cash
(used in) provided by operating activities		12,731			(624	)		8,600			7,697
Net cash provided by operating activities		10,827			1,036			9,378			10,613
Cash flows from investing activities:
Purchases of property, plant and equipment		(1,738	)		(3,877	)		(3,856	)		(7,160	)
Patent and acquired intangible asset costs		(398	)		(1,526	)		(728	)		(1,845	)
Acquisition of Zyga Technology		–			–			(21,000	)		–
Net cash used in investing activities		(2,136	)		(5,403	)		(25,584	)		(9,005	)
Cash flows from financing activities:
Proceeds from long-term obligations		54,425			2,000			74,425			4,000
Payments on long-term obligations		(61,625	)		(3,125	)		(66,750	)		(7,375	)
Other financing activities		(991	)		1,467			403			1,433
Net cash (used in) provided by financing activities		(8,191	)		342			8,078			(1,942	)
Effect of exchange rate changes on cash and cash equivalents		(66	)		102			(7	)		160
Net increase (decrease) in cash and cash equivalents		434			(3,923	)		(8,135	)		(174	)
Cash and cash equivalents, beginning of period		13,812			17,598			22,381			13,849
Cash and cash equivalents, end of period	$	14,246		$	13,675		$	14,246		$	13,675

Contacts

RTI Surgical, Inc.
Media Contact:
Molly Poarch, +1-224-287-2661
mpoarch@rtix.com
or
Investor Contact:
Nathan Elwell, +1-847-530-0249
nelwell@lincolnchurchilladvisors.com

August 02, 2018

DUBLIN–(BUSINESS WIRE)–The “U.S. Ambulatory Surgical Centers Market Outlook 2024” report has been added to ResearchAndMarkets.com’s offering.

U.S. ambulatory surgery centers market size is currently valued at USD 25.8 Billion and is projected to surpass USD 31.4 Billion by 2024 at a healthy CAGR of 2.6% over the forecast period.

According to CDC, In 2015, 30.3 million people of all ages or 9.4% of the U.S. population is estimated to have diabetes. Diabetes is the major cause of numerous eye disorders such as diabetic retinopathy. This eye disorder leads to surgeries which is projected to flourish the growth of ambulatory surgery centers market.

U.S. ambulatory surgery centers is segmented on the basis of type, such as hospital-based ambulatory surgery centers and free-standing ambulatory surgery centers. Free-standing ambulatory surgery centers (72.7% share in 2016) occupies the largest market of ambulatory surgery centers in the U.S.

Single specialty centers segment is anticipated to reach at a valuation of USD 18.0 Billion by 2024 from USD 15.5 Billion in 2016, witnessing a CAGR of 2.0% over the forecast period. Moreover, single specialty centers segment is expected to achieve Y-o-Y growth rate of 2.6% in 2024 as compared to previous year.

In treatment segment, laceration treatment segment is expected to reach USD 10.7 Billion by the end of 2024 from USD 8.3 Billion in 2016. Further, this segment is anticipated to flourish at a CAGR of 3.4% over the forecast period. Further, laceration treatment segment is projected to achieve Y-o-Y growth rate of 4.0% in 2024 as compared to previous year. Moreover, laceration treatment segment stood at market share of 32.1% in 2016 and it is expected to contribute a market share of 34.2% by the end of 2024.

Companies Mentioned

HCA Holdings
Envision Healthcare
Tenet Healthcare
Surgery Partners
Surgical Care Affiliates
SurgCenter Development
Regent Surgical Health
Physicians Endoscopy
Ambulatory Surgical Centers of America
Covenant Surgical Partners

Key Topics Covered:

1. Executive Summary

2. Research Methodology

3. Risk Analysis

4. Market Dynamics & Its Impact Analysis

5. U.S. Market Segmentation Analysis

6. Porter’s Five Force Model Analysis

7. Competitive Landscape

For more information about this report visit https://www.researchandmarkets.com/research/tlvtf5/u_s_ambulatory?w=4

Contacts

ResearchAndMarkets.com
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
Related Topics: Other Healthcare Facilities

LEESBURG, Va., Aug. 01, 2018 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (the “Company” or “K2M”), a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance^™, today reported financial results for its second quarter ended June 30, 2018.

Second Quarter 2018 Financial Summary:

Total second quarter revenue of $73.6 million, up 12% year-over-year on a reported basis and 11.3% on a constant currency basis.
Domestic second quarter revenue of $54.3 million, up 7% year-over-year, comprised of:
- U.S. Complex Spine revenue of $21.8 million, up $1.5 million, or 7%, year-over-year.
- U.S. Minimally Invasive Surgery (MIS) revenue of $8.7 million, down $0.1 million, or 1%, year-over-year.
- U.S. Degenerative revenue of $23.8 million, up $2.2 million, or 10%, year-over-year.
International second quarter revenue of $19.3 million, up 29.1% year-over-year on a reported basis and 25.7% on a constant currency basis.
Net loss of $10.8 million for the second quarter, compared to a net loss of $9.1 million in the comparable quarter last year.
Adjusted EBITDA loss of $2.7 million for the second quarter, compared to Adjusted EBITDA of $0.6 million in the comparable quarter last year.

Second Quarter Product Introductions and Strategic Highlights:

On April 27, 2018, the Company executed an exclusive agency and services agreement to replace its then-existing exclusive distribution agreement with its partner in Spain and Portugal, Medcomtech, S.A., whereby K2M and Medcomtech extended their partnership through 2024. Pursuant to the agreement, K2M acquired Medcomtech’s spine customer contracts and relationships as well as its K2M product inventory and instrumentation in exchange for certain outstanding receivables from Medcomtech.
On April 30, 2018, the Company announced that it hosted more than 100 international spine surgeons from 10 countries for its annual Meeting of Minds™ in Chicago, IL, from April 20-21, 2018. Meeting of Minds, which is the largest of K2M’s comprehensive medical education programs, offers interactive discussions and case presentations on the latest issues in spine surgery, including the latest in cervical deformity correction.
On May 16, 2018, the Company announced the U.S. commercial launch of its MOJAVE™ PL 3D Expandable Interbody System. Designed with K2M’s Lamellar 3D Titanium Technology™, MOJAVE PL 3D incorporates a porous structure in conjunction with rough surfaces, with the goal of allowing for bony integration throughout its endplates. K2M was the first leading spine company to market a 3D-printed titanium interbody device and offers the most comprehensive portfolio of 3D-printed spinal devices on the market.
On May 30, 2018, the Company announced U.S. Food and Drug Administration (FDA) 510(k) clearance for BACS^® Patient-Specific devices. With the BACS Surgical Planner, surgeons can create pre-contoured rods, rails, and templates that match the surgeon’s preoperative plan. This is K2M’s fifth module within the BACS platform, and its first clearance for patient-specific devices.
On June 7, 2018, the Company surpassed its 100th product milestone with the announcement of FDA 510(k) clearance and commercial launch of its OZARK™ Cervical Plate Systems, which are designed for anterior screw fixation to the cervical spine (C2-T1) in patients with degenerative disease, deformity, tumor, or trauma. This milestone highlights the depth and breadth of K2M’s 3D spinal balance portfolio, its cervical solutions offering, and strengthens the Company’s commitment to improving surgical outcomes for people living with spinal disease.
On June 14, 2018, the Company announced the pricing of a private offering of $75.0 million aggregate principal amount of 3.00% Convertible Senior Notes due 2025.

“Our second quarter total revenue growth of approximately 12% year-over-year reflects strong trends in both the U.S. and international markets, and we have increased our fiscal year 2018 revenue guidance expectations accordingly,” said Chairman, President, and Chief Executive Officer, Eric Major. “Summer deformity season is off to a strong start and, similar to Q1, our revenue growth in the U.S. this quarter was fueled in part by our multiple new product launches and the expansion of our distribution network in 2017 and 2018.”

Mr. Major continued: “We delivered 7.5% growth in the United States over the first six months of 2018, driven by solid execution against our strategic goal of increasing market share by introducing new and innovative spinal implant solutions like our first-of-its-kind MOJAVE PL 3D Expandable Interbody System featuring Lamellar 3D Titanium Technology and our YUKON OCT Spinal System that can be used with the PALO ALTO Cervical Static Corpectomy Cage System. Building on the early commercial traction from recent new product introductions, we announced two important U.S. regulatory clearances this quarter, our BACS Patient-Specific devices and our OZARK Cervical Plate Systems, as we continue to enhance the foundation of growth in the future. To that end, we remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine surgery market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies.”

Second Quarter 2018 Financial Results

	Three Months Ended June 30,				Increase / Decrease
	2018		2017		$ Change		% Change	% Change
*($ in thousands)*							*(as reported)*	*(constant currency)*
United States	$	54,325	$	50,775	$	3,550	7.0%	7.0%
International	19,255		14,917		4,338		29.1%	25.7%
Total Revenue Revenue:	$	73,580	$	65,692	$	7,888	12.0%	11.3%

Total revenue for the second quarter of 2018 increased $7.9 million, or 12.0%, to $73.6 million, compared to $65.7 million for the second quarter of 2017. Total revenue increased 11.3% year-over-year on a constant currency basis. The increase in revenue was primarily driven by higher sales volume from domestic new surgeon users and newer product offerings, and increased set investments by our distribution partners in Australia and Japan.

Revenue in the United States increased $3.6 million, or 7.0% year-over-year, to $54.3 million, and international revenue increased $4.3 million, or 29.1% year-over-year, to $19.3 million. Second quarter 2018 international revenue increased 25.7% year-over-year on a constant currency basis. Foreign currency exchange positively impacted second quarter international revenue by $0.4 million, representing approximately 338 basis points of 2018 international growth year-over-year.

The following table represents domestic revenue by procedure category:

	Three Months Ended June 30,				Increase / Decrease
	2018		2017		$ Change			% Change
*($ in thousands)*
Complex Spine	$	21,829	$	20,342	$	1,487		7.3%
Minimally Invasive	8,685		8,785		(100		)	(1.1)%
Degenerative	23,811		21,648		2,163			10.0%
U.S. Revenue	$	54,325	$	50,775	$	3,550		7.0%

By procedure category, U.S. revenue in the Company’s complex spine, MIS and degenerative categories represented 40.2%, 16.0% and 43.8% of U.S. revenue, respectively, for the three months ended June 30, 2018.

Gross profit for the second quarter of 2018 increased 11.1% to $48.0 million, compared to $43.2 million for the second quarter of 2017. Gross margin was 65.2% for the second quarter of 2018, compared to 65.7% for the prior year period, primarily due to lower overall average selling prices during the quarter. Gross profit includes amortization expense on investments in surgical instruments of $4.1 million, or 5.5% of sales, for the three months ended June 30, 2018, compared to $3.6 million, or 5.5% of sales, for the comparable period last year.

Operating expenses for the second quarter of 2018 increased $7.1 million, or 13.7%, to $58.4 million, compared to $51.3 million for the second quarter of 2017. The increase in operating expenses was driven primarily by a $5.2 million increase in sales and marketing expenses, a $0.9 million increase in research and development expenses, and a $1.0 million increase in general and administrative expenses, compared to the comparable period last year.

Loss from operations for the second quarter of 2018 increased $2.2 million to $10.4 million, compared to a loss from operations of $8.2 million for the second quarter last year. Loss from operations included intangible amortization of $0.2 million for the three months ended June 30, 2018, compared to $2.4 million for the comparable period last year.

Total other expense, net for the second quarter of 2018 increased $2.1 million to $3.0 million, compared to $0.9 million last year. The increase in other expense, net, was primarily attributable to an unrealized loss of $1.0 million from foreign currency remeasurement on intercompany payable balances, compared to unrealized gain of $0.9 million in the second quarter last year. Other expense, net for the second quarer of 2018 also included $0.2 million in incremental interest expense related to the Company’s new convertible notes issued on June 18, 2018.

Net loss for the second quarter of 2018 was $10.8 million, or $0.25 per diluted share, compared to a loss of $9.1 million, or $0.21 per diluted share, for the second quarter of 2017.

Six-Months 2018 Financial Results

	Six Months Ended June 30,				Increase / Decrease
	2018		2017		$ Change		% Change	% Change
*($ in thousands)*							*(as reported)*	*(constant currency)*
United States	$	104,216	$	96,982	$	7,234	7.5%	7.5%
International	37,240		30,595		6,645		21.7%	17.2%
Total Revenue	$	141,456	$	127,577	$	13,879	10.9%	9.9%

For the six months ended June 30, 2018, total revenue increased $13.9 million, or 10.9%, to $141.5 million, compared to $127.6 million for the six months ended June 30, 2017. Total revenue increased 9.9% year-over-year on a constant currency basis. U.S. revenue increased $7.2 million, or 7.5%, to $104.2 million for the first six months of 2018, compared to $97.0 million last year. International revenue increased $6.6 million, or 21.7%, to $37.2 million for the first six months of 2018, compared to $30.6 million last year. International revenue increased 17.2% year-over-year on a constant currency basis.

The following represents domestic revenue by procedure category:

	Six Months Ended June 30,				Increase / Decrease
*($ in thousands)*	2018		2017		$ Change		% Change
Complex Spine	$	40,341	$	37,478	$	2,863	7.6	%
Minimally Invasive	17,061		16,657		404		2.4	%
Degenerative	46,814		42,847		3,967		9.3	%
U.S. Revenue	$	104,216	$	96,982	$	7,234	7.5	%

Sales in our complex spine, MIS and degenerative categories represented 38.7%, 16.4% and 44.9% of U.S. revenue, respectively, for the first six months of 2018.

As of June 30, 2018, cash and equivalents were $66.2 million as compared to $24.0 million as of December 31, 2017. Our outstanding long-term indebtedness consisted primarily of the carrying value of the Convertible Senior Notes maturing in 2036 and 2025 of $91.8 million and the capital lease obligation, net of current maturities, of $33.2 million. In addition, the Company also had working capital of $147.5 million and $49.0 million of unused borrowing capacity under its revolving credit facility, subject to covenant compliance and conditions of borrowing.

2018 Outlook

The Company is increasing total revenue expectations for fiscal year 2018 and now expects total revenue on a reported basis in the range of $288.0 million to $291.0 million, representing growth of 12% to 13% year-over-year, compared to total revenue of $258.0 million in fiscal year 2017. Its prior revenue guidance expectations were for total revenue on an as reported basis in a range of $283.0 million to $287.0 million, representing growth of 10% to 11% year-over-year.
- The Company continues to expect growth in its U.S. business of approximately 10% to 11% year-over-year in 2018.
- The Company now expects growth in its International business of approximately 17% to 19% year-over-year in 2018, compared to prior guidance expectations for growth of approximately 11% to 12% year-over-year.
- The Company continues to expect currency to have a positive impact on total revenue in 2018 of approximately $2 million.

The Company now expects total net loss of $38.2 million to $34.2 million, compared to net loss of $37.1 million in fiscal year 2017, updated to reflect the latest convertible note offering and other non-cash items.

The Company continues to expect an Adjusted EBITDA benefit in the range of $4.0 million to $8.0 million, compared to Adjusted EBITDA loss of $0.7 million in fiscal year 2017.

Conference Call

Management will host a conference call at 5:00 p.m. Eastern Time on August 1, 2018 to discuss the results of the second quarter, and to host a question and answer session. Those who would like to participate may dial 866-393-4306 (734-385-2616 for international callers) and provide access code 4666247 approximately 10 minutes prior to the start of the call. A live webcast of the call will also be provided on the investor relations section of the Company’s website at http://Investors.K2M.com/.

For those unable to participate, a replay of the call will be available for two weeks at 855-859-2056 (404-537-3406 for international callers); access code 4666247. The webcast will be archived on the investor relations section of the Company’s website.

About K2M Group Holdings, Inc.

K2M Group Holdings, Inc. is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. Since its inception, K2M has designed, developed, and commercialized innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most complicated spinal pathologies. K2M has leveraged these core competencies into Balance ACS, a platform of products, services, and research to help surgeons achieve three-dimensional spinal balance across the axial, coronal, and sagittal planes, with the goal of supporting the full continuum of care to facilitate quality patient outcomes. The Balance ACS platform, in combination with the Company’s technologies, techniques and leadership in the 3D-printing of spinal devices, enables K2M to compete favorably in the global spine surgery market. For more information, visit www.K2M.com and connect with us on Facebook, Twitter, Instagram, LinkedIn and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements that reflect current views with respect to, among other things, operations and financial performance. Forward-looking statements include all statements that are not historical facts such as our statements about our expected financial results and guidance and our expectations for future business prospects. In some cases, you can identify these forward-looking statements by the use of words such as, “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties including, among other things: our ability to achieve or sustain profitability in the future; our ability to demonstrate to spine surgeons and hospital customers the merits of our products and to retain their use of our products; pricing pressures and our ability to compete effectively generally; collaboration and consolidation in hospital purchasing; inadequate coverage and reimbursement for our products from third-party payers; lack of long-term clinical data supporting the safety and efficacy of our products; dependence on a limited number of third-party suppliers; our ability to maintain and expand our network of direct sales employees, independent sales agencies and international distributors and their level of sales or distribution activity with respect to our products; proliferation of physician-owned distributorships in the industry; decline in the sale of certain key products; loss of key personnel; our ability to enhance our product offerings through research and development; our ability to maintain adequate working relationships with healthcare professionals; our ability to manage expected growth; our ability to successfully acquire or invest in new or complementary businesses, products or technologies; our ability to educate surgeons on the safe and appropriate use of our products; costs associated with high levels of inventory; impairment of our goodwill and intangible assets; disruptions to our corporate headquarters and operations facilities or critical information technology systems or those of our suppliers, distributors or surgeon users; our ability to ship a sufficient number of our products to meet demand; our ability to strengthen our brand; fluctuations in insurance cost and availability; our ability to remediate the material weaknesses in our IT general controls; our ability to comply with extensive governmental regulation within the United States and foreign jurisdictions; our ability to maintain or obtain regulatory approvals and clearances within the United States and foreign jurisdictions; voluntary corrective actions by us or our distribution or other business partners or agency enforcement actions; recalls or serious safety issues with our products; enforcement actions by regulatory agencies for improper marketing or promotion; misuse or off-label use of our products; delays or failures in clinical trials and results of clinical trials; legal restrictions on our procurement, use, processing, manufacturing or distribution of allograft bone tissue; negative publicity concerning methods of tissue recovery and screening of donor tissue; costs and liabilities relating to environmental laws and regulations; our failure or the failure of our agents to comply with fraud and abuse laws; U.S. legislative or Food and Drug Administration regulatory reforms; adverse effects associated with the exit of the United Kingdom from the European Union; adverse effects of medical device tax provisions; potential tax changes in jurisdictions in which we conduct business; our ability to generate significant sales; potential fluctuations in sales volumes and our results of operations over the course of a fiscal year; uncertainty in future capital needs and availability of capital to meet our needs; our level of indebtedness and the availability of borrowings under our credit facility; restrictive covenants and the impact of other provisions in the indenture governing our convertible senior notes and our credit facility; worldwide economic instability; our ability to protect our intellectual property rights; patent litigation and product liability lawsuits; damages relating to trade secrets or non-competition or non-solicitation agreements; risks associated with operating internationally; fluctuations in foreign currency exchange rates; our ability to comply with the Foreign Corrupt Practices Act and similar laws; increased costs and additional regulations and requirements as a result of being a public company; our ability to implement and maintain effective internal control over financial reporting; potential volatility in our stock price; our lack of current plans to pay cash dividends; potential dilution by the future issuances of additional common stock in connection with our incentive plans, acquisitions or otherwise; anti-takeover provisions in our organizational documents and our ability to issue preferred stock without shareholder approval; potential limits on our ability to use our net operating loss carryforwards; and other risks and uncertainties, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and our filings with the SEC.

We operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Unless specifically stated otherwise, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make.

Investor Contact:
Westwicke Partners on behalf of K2M Group Holdings, Inc.
Mike Piccinino, CFA
443-213-0500
K2M@westwicke.com

K2M GROUP HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands, Except Share and Per Share Data)

	June 30,		December 31,
	2018		2017
ASSETS
Current assets:
Cash and cash equivalents	$	66,230	$	23,964
Accounts receivable, net	54,464		50,474
Inventory, net	80,112		71,424
Prepaid expenses and other current assets	6,175		7,842
Total current assets	206,981		153,704
Property, plant and equipment, net	47,194		49,200
Surgical instruments, net	29,281		26,250
Goodwill	121,814		121,814
Intangible assets, net	19,209		18,899
Other assets	4,102		3,260
Total assets	$	428,581	$	373,127

READ THE REST HERE

Search

3 days / 6 sessions
Current Issues in Spine

The Global Market for Orthopedic Technologies to Reach $56.2 Billion by 2023

Orthofix Reports Second Quarter 2018 Financial Results

DJO Global Announces Financial Results for Second Quarter 2018

Contacts

TransEnterix, Inc. Reports Operating and Financial Results for the Second Quarter 2018

Contacts

Mazor Robotics Reports Second Quarter and First Half 2018 Results

Related Links

Alphatec Reports Second Quarter 2018 Financial Results

More articles issued by Alphatec Holdings, Inc.

More articles related to:

Company Announcement

Earnings Releases and Operating Results

Total Knee Replacement Market worth over $10 billion by 2024: Global Market Insights, Inc.

RTI Surgical Announces Second Quarter 2018 Results

Contacts

U.S. Ambulatory Surgical Centers Market Analysis & Outlook to 2024, With an Expected CAGR of 2.6% – ResearchAndMarkets.com

Contacts

K2M Group Holdings, Inc. Reports Second Quarter 2018 Financial Results and Updates Fiscal Year 2018 Outlook

STAR Ankle Joint Replacements Last Long Term and Provide Relief for Patients

Medacta USA’s Spine Division Begins 2017 with Key Appointment, Significant Growth

Spinal Stabilization Technologies Announces Start of LOPAIN 2 Clinical Trial in South America for Lumbar Degenerative Disc Disease

$250K Pediatric Device Competition Now Accepting Proposals

First Single-Use Rigid Endoscope to be Demonstrated at AAOS