gmed-20190801x8k
false0001237831DE00012378312019-08-012019-08-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2019  

GLOBUS MEDICAL, INC.

(Exact name of registrant as specified in charter)

DELAWARE

 

001-35621

 

04-3744954

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2560 GENERAL ARMISTEAD AVENUE, AUDUBON, PA 19403

(Address of principal executive offices) (Zip Code)

(610) 930-1800

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of exchange on which registered

Class A Common Stock, par value $.001 per share

GMED

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition.

On August 1, 2019, we issued a press release reporting, among other things, our sales and operating results for the three and six-month period ended June 30, 2019. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, the information included in this Item 2.02, and the exhibits attached hereto, shall be deemed to be “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.

Description

 

 

99.1

Press Release dated August 1, 2019



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GLOBUS MEDICAL, INC.

 

 

(Registrant)

 

 

 

Dated:

August 1, 2019

/s/ DANIEL T. SCAVILLA

 

 

 

 

 

Daniel T. Scavilla

 

 

Executive Vice President,

 

 

Chief Financial Officer

 

 

Chief Commercial Officer

Exhibit 99.1 Earnings Release

Exhibit 99.1





Globus Medical Reports Second Quarter 2019 Results



AUDUBON, PA, August 1, 2019: Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal solutions company, today announced its financial results for the second quarter ended June 30, 2019.



·

Worldwide sales were $194.5 million, an increase of 12.2% as reported



·

Second quarter net income was $38.2 million



·

Diluted earnings per share (EPS) was $0.38 and non-GAAP diluted EPS was $0.41, a decrease of 6.7%



·

Non-GAAP adjusted EBITDA was 32.0% of sales



“Our strong second quarter results demonstrate solid momentum across all parts of our business," said Dave Demski, President and CEO. "Enabling Technologies contributed $12.0 million, down from last year’s $13.7 million, but up 67% over the first quarter; our International Spine business grew at 19.2%, on a constant currency basis; and our US Spine business continued to accelerate, growing at 11.7%."



Worldwide sales for the second quarter were $194.5 million, an increase of 12.2% over the second quarter of 2018 on an as-reported basis and 12.7% on a constant currency basis. Second quarter sales in the U.S., including robotics, increased by 10.0% as quarterly seasonality and longer sales cycles dampened robotic sales compared to the second quarter of 2018. International sales increased by 23.3% over the second quarter of 2018 on an as-reported basis and 26.7% on a constant currency basis.



During the second quarter, the Company acquired substantially all of the assets of StelKast, Inc., a privately held company that designs, manufactures and distributes orthopedic implants for knee and hip replacement. “The StelKast acquisition should serve as a platform to expand our products and services into the Total Joint Arthroplasty market,” said David Paul, Executive Chairman. “Globus Medical’s proven product development engine and history of innovation, when combined with our computer assisted technologies in Imaging, Navigation and Robotics, have the potential to improve clinical care for joint arthroplasty patients and create value for shareholders.”



Second quarter GAAP net income was $38.2 million, a decrease of 15.1% over the same period last year. Diluted EPS for the second quarter was $0.38, as compared to $0.44 for the second quarter 2018. Non-GAAP diluted EPS for the second quarter was $0.41, compared to $0.44 in the second quarter of 2018, a decrease of 6.7%.



The Company generated net cash provided by operating activities of $22.6 million and non-GAAP free cash flow of $7.9 million in the second quarter, and ended the quarter with cash, cash equivalents and marketable securities of $610.1 million. The Company remains debt free.



2019 Annual Guidance



The Company today increased guidance for full year 2019 sales from $770 million to $775 million to account for the StelKast acquisition and reiterated guidance for non-GAAP diluted earnings per share of $1.72.


 



Conference Call Information



Globus Medical will hold a teleconference to discuss its 2019 second quarter results with the investment community at 4:30 p.m. Eastern Time today. Globus invites all interested parties to join the call by dialing:

 

1-855-533-7141     United States Participants

1-720-545-0060     International Participants

There is no pass code for the teleconference.



For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at investors.globusmedical.com.



The call will be archived until Thursday, August 8, 2019. The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 646-9561.



About Globus Medical, Inc.



Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.



Non-GAAP Financial Measures

 

To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures.  For example, non-GAAP adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation, provisions for litigation, and acquisition related costs/licensing, and net gain from the sale of assets, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense.  Our management also uses non-GAAP adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.  Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized.  Acquisition related costs/licensing represents the change in fair value of business acquisition related contingent consideration; costs related to integrating recently acquired businesses including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one-time licensing fees. Net gain from sale of assets represents the gain on sale of assets and the offsetting impact of costs incurred through the sale.



In addition, for the period ended June 30, 2019 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP diluted earnings per share, which represent net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, net gain from the sale of assets and the tax effects of such adjustments.  We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs/licensing, net gain from the sale of assets and the tax effects of such adjustments, which we believe are not reflective of underlying business trends.  Additionally, for the periods ended June 30, 2019 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment.  We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions.  Furthermore, the non-GAAP measure of constant currency sales growth is calculated by translating current year sales at the same average exchange rates in effect during the applicable prior year period.  We believe constant currency sales growth provides insight to the comparative increase or decrease in period sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.



Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth are not calculated in conformity with U.S. GAAP.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.  These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results.  Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth may differ from that of other companies and therefore may not be comparable.  Additionally, we have recast prior periods for non-GAAP net income and non-GAAP diluted earnings per share.


 



Safe Harbor Statements



All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms.  These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends.  Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted.  These risks and uncertainties include, but are not limited to, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to successfully integrate the international operations acquired from Alphatec, both in general and on our anticipated timeline, our ability to transition Alphatec’s international customers to Globus products, our ability to realize the expected benefits to our results from the Alphatec acquisition, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks.  For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission.  These documents are available at www.sec.gov.  Moreover, we operate in an evolving environment.  New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements.  Forward-looking statements contained in this press release speak only as of the date of this press release.  We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.


 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands, except per share amounts)

 

2019

 

2018

 

2019

 

2018

Sales

 

$

194,539 

 

$

173,384 

 

$

377,486 

 

$

347,795 

Cost of goods sold

 

 

43,990 

 

 

37,637 

 

 

85,828 

 

 

75,607 

Gross profit

 

 

150,549 

 

 

135,747 

 

 

291,658 

 

 

272,188 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

15,746 

 

 

13,523 

 

 

30,069 

 

 

26,210 

Selling, general and administrative

 

 

88,379 

 

 

77,125 

 

 

174,163 

 

 

152,819 

Amortization of intangibles

 

 

3,449 

 

 

2,178 

 

 

6,792 

 

 

4,365 

Acquisition related costs

 

 

106 

 

 

782 

 

 

685 

 

 

1,021 

Total operating expenses

 

 

107,680 

 

 

93,608 

 

 

211,709 

 

 

184,415 



 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

42,869 

 

 

42,139 

 

 

79,949 

 

 

87,773 



 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

Interest income/(expense), net

 

 

4,417 

 

 

2,971 

 

 

8,576 

 

 

5,262 

Foreign currency transaction gain/(loss)

 

 

(210)

 

 

344 

 

 

(22)

 

 

339 

Other income/(expense)

 

 

17 

 

 

4,850 

 

 

241 

 

 

5,008 

Total other income/(expense), net

 

 

4,224 

 

 

8,165 

 

 

8,795 

 

 

10,609 



 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

47,093 

 

 

50,304 

 

 

88,744 

 

 

98,382 

Income tax provision

 

 

8,930 

 

 

5,327 

 

 

17,370 

 

 

13,866 



 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

38,163 

 

$

44,977 

 

$

71,374 

 

$

84,516 



 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39 

 

$

0.46 

 

$

0.72 

 

$

0.87 

Diluted

 

$

0.38 

 

$

0.44 

 

$

0.70 

 

$

0.84 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

99,023 

 

 

97,830 

 

 

98,875 

 

 

97,337 

Dilutive stock options

 

 

2,559 

 

 

3,680 

 

 

2,600 

 

 

3,668 

Diluted

 

 

101,582 

 

 

101,510 

 

 

101,475 

 

 

101,005 



 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive stock options excluded from weighted average calculation

 

 

5,021 

 

 

1,809 

 

 

4,854 

 

 

1,863 




 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)







 

 

 

 

 

 



 

 

 

 

 

 



 

June 30,

 

December 31,

(In thousands, except par value)

 

2019

 

2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

117,790 

 

$

139,747 

Short-term marketable securities

 

 

122,637 

 

 

199,937 

Accounts receivable, net of allowances of $5,410 and $4,226, respectively

 

 

144,681 

 

 

137,067 

Inventories

 

 

173,040 

 

 

131,254 

Prepaid expenses and other current assets

 

 

13,512 

 

 

15,387 

Income taxes receivable

 

 

12,273 

 

 

7,289 

Total current assets

 

 

583,933 

 

 

630,681 

Property and equipment, net of accumulated depreciation of $231,003 and $216,809, respectively

 

 

194,133 

 

 

171,873 

Long-term marketable securities

 

 

369,665 

 

 

263,117 

Intangible assets, net

 

 

85,465 

 

 

87,323 

Goodwill

 

 

129,901 

 

 

123,734 

Other assets

 

 

15,671 

 

 

10,364 

Deferred income taxes

 

 

11,978 

 

 

13,578 

Total assets

 

$

1,390,746 

 

$

1,300,670 



 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

23,745 

 

$

25,895 

Accrued expenses

 

 

50,607 

 

 

59,878 

Income taxes payable

 

 

431 

 

 

917 

Business acquisition liabilities

 

 

6,016 

 

 

6,830 

Deferred revenue

 

 

3,385 

 

 

2,598 

Total current liabilities

 

 

84,184 

 

 

96,118 

Business acquisition liabilities, net of current portion

 

 

3,288 

 

 

3,288 

Deferred income taxes

 

 

8,097 

 

 

8,114 

Other liabilities

 

 

7,651 

 

 

7,634 

Total liabilities

 

 

103,220 

 

 

115,154 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Class A common stock; $0.001 par value.  Authorized 500,000 shares; issued and outstanding 76,647 and 76,143 shares at June 30, 2019 and December 31, 2018, respectively

 

 

77 

 

 

76 

Class B common stock; $0.001 par value.  Authorized 275,000 shares; issued and outstanding 22,430 and 22,430 shares at June 30, 2019 and December 31, 2018, respectively

 

 

22 

 

 

22 

Additional paid-in capital

 

 

325,061 

 

 

299,869 

Accumulated other comprehensive loss

 

 

(1,728)

 

 

(7,172)

Retained earnings

 

 

964,094 

 

 

892,721 

Total equity

 

 

1,287,526 

 

 

1,185,516 

Total liabilities and equity

 

$

1,390,746 

 

$

1,300,670 




 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)





 

 

 

 

 

 



 

 

 

 

 

 



 

Six Months Ended



 

June 30,

(In thousands)

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

71,374 

 

$

84,516 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

25,113 

 

 

19,233 

Amortization of premium (discount) on marketable securities

 

 

(736)

 

 

1,477 

Write-down for excess and obsolete inventories

 

 

2,468 

 

 

5,406 

Stock-based compensation expense

 

 

12,749 

 

 

11,533 

Allowance for doubtful accounts

 

 

1,229 

 

 

312 

Change in fair value of business acquisition liabilities

 

 

579 

 

 

416 

Change in deferred income taxes

 

 

1,424 

 

 

1,429 

(Gain)/loss on disposal of assets, net

 

 

295 

 

 

(3,947)

(Increase)/decrease in:

 

 

 

 

 

 

Accounts receivable

 

 

(6,532)

 

 

(2,257)

Inventories

 

 

(28,094)

 

 

(11,120)

Prepaid expenses and other assets

 

 

(2,933)

 

 

(3,303)

Increase/(decrease) in:

 

 

 

 

 

 

Accounts payable

 

 

(901)

 

 

(5,751)

Accrued expenses and other liabilities

 

 

(8,744)

 

 

(2,104)

Income taxes payable/receivable

 

 

(5,491)

 

 

(10,276)

Net cash provided by operating activities

 

 

61,800 

 

 

85,564 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities

 

 

(210,606)

 

 

(309,223)

Maturities of marketable securities

 

 

161,568 

 

 

158,102 

Sales of marketable securities

 

 

25,490 

 

 

63,741 

Purchases of property and equipment

 

 

(42,895)

 

 

(27,167)

Proceeds from sale of assets

 

 

 —

 

 

3,000 

Acquisition of businesses, net of cash acquired and purchases of intangible and other assets

 

 

(24,135)

 

 

 —

Net cash used in investing activities

 

 

(90,578)

 

 

(111,547)

Cash flows from financing activities:

 

 

 

 

 

 

Payment of business acquisition liabilities

 

 

(5,633)

 

 

(5,950)

Proceeds from exercise of stock options

 

 

12,268 

 

 

33,131 

Net cash provided by financing activities

 

 

6,635 

 

 

27,181 

Effect of foreign exchange rate on cash

 

 

186 

 

 

(71)

Net increase in cash, cash equivalents, and restricted cash

 

 

(21,957)

 

 

1,127 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

139,747 

 

 

118,817 

Cash, cash equivalents, and restricted cash at end of period

 

$

117,790 

 

$

119,944 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Interest paid

 

 

 

 

 —

Income taxes paid

 

$

23,975 

 

$

22,667 






 

Supplemental Financial Information



Sales by Geographic Area:



 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

United States

 

$

159,989 

 

$

145,381 

 

$

307,527 

 

$

290,997 

International

 

 

34,550 

 

 

28,003 

 

 

69,959 

 

 

56,798 

Total Sales

 

$

194,539 

 

$

173,384 

 

$

377,486 

 

$

347,795 





Sales by Revenue Stream:







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

Musculoskeletal Solutions products

 

$

182,538 

 

$

159,644 

 

$

358,296 

 

$

321,333 

Enabling Technologies products

 

 

12,001 

 

 

13,740 

 

 

19,190 

 

 

26,462 

Total Sales

 

$

194,539 

 

$

173,384 

 

$

377,486 

 

$

347,795 



Liquidity and Capital Resources:





 

 

 

 

 

 



 

 

 

 

 

 



 

June 30,

 

December 31,

(In thousands)

 

2019

 

2018

Cash, cash equivalents, and restricted cash

 

$

117,790 

 

$

139,747 

Short-term marketable securities

 

 

122,637 

 

 

199,937 

Long-term marketable securities

 

 

369,665 

 

 

263,117 

Total cash, cash equivalents, restricted cash and marketable securities

 

$

610,092 

 

$

602,801 





The following tables reconcile GAAP to Non-GAAP financial measures.



Non-GAAP Adjusted EBITDA Reconciliation Table:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands, except percentages)

 

2019

 

2018

 

2019

 

2018

Net income

 

$

38,163 

 

$

44,977 

 

$

71,374 

 

$

84,516 

Interest income, net

 

 

(4,417)

 

 

(2,971)

 

 

(8,576)

 

 

(5,262)

Provision for income taxes

 

 

8,930 

 

 

5,327 

 

 

17,370 

 

 

13,866 

Depreciation and amortization

 

 

12,858 

 

 

9,757 

 

 

25,113 

 

 

19,233 

EBITDA

 

 

55,534 

 

 

57,090 

 

 

105,281 

 

 

112,353 

Stock-based compensation expense

 

 

6,297 

 

 

5,480 

 

 

12,749 

 

 

11,533 

Acquisition related costs/licensing

 

 

335 

 

 

1,285 

 

 

971 

 

 

1,677 

Net gain from sale of assets

 

 

 —

 

 

(4,357)

 

 

 —

 

 

(4,357)

Adjusted EBITDA

 

$

62,166 

 

$

59,498 

 

$

119,001 

 

$

121,206 



 

 

 

 

 

 

 

 

 

 

 

 

Net income as a percentage of sales

 

 

19.6% 

 

 

25.9% 

 

 

18.9% 

 

 

24.3% 

Adjusted EBITDA as a percentage of sales

 

 

32.0% 

 

 

34.3% 

 

 

31.5% 

 

 

34.8% 




 

Non-GAAP Net Income Reconciliation Table:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

Net income

 

$

38,163 

 

$

44,977 

 

$

71,374 

 

$

84,516 

Amortization of intangibles

 

 

3,449 

 

 

2,178 

 

 

6,792 

 

 

4,365 

Acquisition related costs/licensing

 

 

335 

 

 

1,285 

 

 

971 

 

 

1,677 

Net gain from sale of assets

 

 

 —

 

 

(4,357)

 

 

 —

 

 

(4,357)

Tax effect of adjusting items

 

 

(717)

 

 

95 

 

 

(1,524)

 

 

(238)

Non-GAAP net income

 

$

41,230 

 

$

44,178 

 

$

77,613 

 

$

85,963 





Non-GAAP Diluted Earnings Per Share Reconciliation Table:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

Diluted earnings per share, as reported

 

$

0.38 

 

$

0.44 

 

$

0.70 

 

$

0.84 

Amortization of intangibles

 

 

0.03 

 

 

0.02 

 

 

0.07 

 

 

0.04 

Acquisition related costs/licensing

 

 

 —

 

 

0.01 

 

 

0.01 

 

 

0.02 

Net gain from sale of assets

 

 

 —

 

 

(0.04)

 

 

 —

 

 

(0.04)

Tax effect of adjusting items

 

 

(0.01)

 

 

 —

 

 

(0.02)

 

 

 —

Non-GAAP diluted earnings per share

 

$

0.41 

 

$

0.44 

 

$

0.76 

 

$

0.85 





Non-GAAP Free Cash Flow Reconciliation Table:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

June 30,

 

June 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

Net cash provided by operating activities

 

$

22,597 

 

$

33,269 

 

$

61,800 

 

$

85,564 

Purchases of property and equipment

 

 

(14,740)

 

 

(14,793)

 

 

(42,895)

 

 

(27,167)

Free cash flow

 

$

7,857 

 

$

18,476 

 

$

18,905 

 

$

58,397 





Non-GAAP Sales on a Constant Currency Basis Comparative Table:





 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Reported

 

Currency
Impact on 

 

Constant
Currency



 

June 30,

 

Sales

 

Current

 

Sales

(In thousands, except percentages)

 

2019

 

2018

 

Growth

 

Period Sales  

 

Growth

United States

 

$

159,989 

 

$

145,381 

 

10.0%

 

$

 —

 

10.0%

International

 

 

34,550 

 

 

28,003 

 

23.3%

 

 

(945)

 

26.7%

Total Sales

 

$

194,539 

 

$

173,384 

 

12.2%

 

$

(945)

 

12.7%







 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

Six Months Ended

 

Reported

 

Currency
Impact on 

 

Constant
Currency



 

June 30,

 

Sales

 

Current

 

Sales

(In thousands, except percentages)

 

2019

 

2018

 

Growth

 

Period Sales  

 

Growth

United States

 

$

307,527 

 

$

290,997 

 

5.7%

 

$

 —

 

5.7%

International

 

 

69,959 

 

 

56,798 

 

23.2%

 

 

(2,371)

 

27.3%

Total Sales

 

$

377,486 

 

$

347,795 

 

8.5%

 

$

(2,371)

 

9.2%




 

Contact:

Brian Kearns

Senior Vice President, Business Development and Investor Relations

Phone: (610) 930-1800

Email:    investors@globusmedical.com

www.globusmedical.com