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): February 27, 2013 

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:

 	 	
¨	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))	

 

Item 2.02. Results of Operations and Financial Condition.
On February 27, 2013 we issued a press release reporting, among other things, our sales and operating results for the three and twelve month periods ended December 31, 2012. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02 as is fully set forth herein.
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 8.01. Other Events
Our 2013 Annual Meeting of Stockholders (the “Annual Meeting”) will be held on Tuesday, June 4, 2013 at 6:00 p.m. Eastern Time at our principal executive offices located at Valley Forge Business Center, 2560 General Armistead Avenue, Audubon, Pennsylvania 19403.

Stockholder Proposal Deadlines
Because we did not hold an Annual Meeting of Stockholders in 2011 or 2012, we have set a new deadline for the receipt of any stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, for inclusion in our proxy materials for the Annual Meeting. Stockholder proposals submitted pursuant to Rule 14a-8 must be received by our Corporate Secretary no later than the close of business on April 15, 2013. We believe that receiving stockholder proposals by that date will provide us with a reasonable period of time for the review, consideration, and, if appropriate, inclusion of any such proposals before we begin to print and send our proxy materials to stockholders. Such proposals must also comply with the rules of the Securities and Exchange Commission regarding the inclusion of stockholder proposals in company-sponsored proxy materials and may be omitted if not in compliance with applicable requirements. 
In accordance with our Amended and Restated Bylaws, stockholder proposals made outside of Rule 14a-8 must also be received no later than the close of business on April 15, 2013. Such proposals must be delivered to our Corporate Secretary and must also comply with all other requirements set forth in our Amended and Restated Bylaws and other applicable laws and may be omitted if not in compliance with applicable requirements.
All submissions to our Corporate Secretary should be made to our principal executive offices at Valley Forge Business Center, 2560 General Armistead Avenue, Audubon, Pennsylvania 19403, Attn: Corporate Secretary.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description	
 	 	
99.1	Press Release dated February 27, 2013	

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:	February 27, 2013	/s/ RICHARD A. BARON	
 	 	 	
 	 	Richard A. Baron	
 	 	Senior Vice President	
 	 	Chief Financial Officer	

EXHIBIT LIST

Exhibit No.	Description	
 	 	
99.1	Press Release dated February 27, 2013	

Exhibit 99.1

Globus Medical Reports Full Year and Fourth Quarter 2012 Results
Record Revenue and Earnings

AUDUBON, PA, February 27, 2013: Globus Medical, Inc. (NYSE:GMED), a leading spinal implant manufacturer, today announced its financial results for the year and fourth quarter ended December 31, 2012.

Full Year 2012:
 	 	
•	Worldwide sales were $386.0 million, up 16.4% over 2011	
 	 	
•	Net income increased 21.5% to $73.8 million compared to $60.8 million in 2011	
 	 	
•	2012 earnings per fully diluted share increased 19.4% to $0.80 compared to $0.67 in 2011	
 	 	
•	Non-GAAP Adjusted EBITDA was 35.4% of sales, compared to 35.8% in 2011	

Fourth Quarter:
 	 	
•	Worldwide sales were $100.5 million, a 14.3% increase from the fourth quarter of 2011	
 	 	
•	Fourth quarter net income increased by 53.0% to $20.8 million compared to $13.6 million in 2011	
 	 	
•	Earnings per fully diluted share increased 46.7% in the fourth quarter of 2012 to $0.22 compared to $0.15 for the same quarter of 2011	
 	 	
•	Non-GAAP Adjusted EBITDA was 34.6% of sales, compared to 34.4% in the fourth quarter of 2011	

David Paul, Chairman and CEO, commented, “2012 was a tremendous year for Globus with industry leading revenue growth, continued strong profitability, the completion of a successful IPO, and the launch of 14 new products, including our first PMA approval with the SECURE ® -C device. Our product development engine continues to perform at a high level creating the solutions of tomorrow for patients with spinal disorders."

Dave Demski, President and COO, added, "We performed extremely well in the fourth quarter with record sales of $100.5 million and an increase in diluted EPS of 46.7% over fourth quarter 2011. We maintained the strong pace of our U.S. sales force recruitment. Outside the United States, we added new distribution territories, providing us with a sales presence in 24 countries. Late in the quarter, we purchased a 112,000 square foot building adjacent to our existing facility. With nearly 250,000 square feet of real estate, we have adequate space to support our future growth. In the fourth quarter we generated $17.2 million of cash flow and achieved 34.6% adjusted EBITDA despite our continuing investment in Algea Therapies. Excluding investments made in Algea Therapies, our adjusted EBITDA for the fourth quarter was 38.0%."

Cash and cash equivalents ended the year at $212.4 million, increasing by $69.7 million during year, which was inclusive of proceeds from the company ' s IPO, acquisitions, facility purchase, and product launch capital expenditures. The company remains debt free.

Conference Call Information
Globus Medical will hold a teleconference to discuss its performance with the investment community at 5:30 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 .

If you are unable to participate during the live teleconference, the call will be archived until Wednesday, March 13, 2013. 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 pass code for the audio replay is 1075-3353.

About Globus Medical, Inc.
Globus Medical, Inc. is a leading spinal implant manufacturer based in Audubon, Pennsylvania. The company was founded in 2003 by an experienced team of spine professionals with a shared vision to create products that enable spine surgeons to promote healing in patients with spinal disorders.

Non-GAAP Financial Measures

Adjusted EBITDA represents net income before interest (income)/expense, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation, changes in the fair value of contingent consideration in connection with business acquisitions and provision for litigation settlements. This financial measure is not calculated in conformity with accounting principles generally accepted in the United States of America (GAAP). We present Adjusted EBITDA because we believe it is a useful indicator of our operating performance. Our management uses Adjusted EBITDA principally as a measure of our operating performance and believes that Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We also believe Adjusted EBITDA is useful to our management and investors as a measure of comparative operating performance from period to period and among companies 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 (primarily interest expense), asset base (primarily depreciation and amortization) and items outside the control of our management (primarily income taxes and interest income and expense). Our management also uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.

Adjusted EBITDA should not be considered in isolation or as a substitute for a measure of our liquidity or operating performance prepared in accordance with GAAP, and is not indicative of net income (loss) from operations as determined under GAAP. Adjusted EBITDA and other non-GAAP financial measures have limitations that should be considered before using these measures to evaluate our liquidity or financial performance. Adjusted EBITDA does not include certain expenses that may be necessary to review our operating results and liquidity requirements. Our definition and calculation of Adjusted EBITDA may differ from that of other companies.

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 comply with changing laws and regulations that are 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 prospectus filed with the Securities and Exchange Commission on August 3, 2012, as amended, including the sections labeled “Risk Factors,” “Cautionary Note Concerning Forward-Looking Statements,” and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and in our periodic reports on file 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 its 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
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	Year Ended	
(In thousands, except per share amounts)	December 31,
2012	 	December 31,
2011	 	December 31,
2012	 	December 31,
2011	
Sales	$	100,536	
 	 	$	87,993	
 	 	$	385,994	
 	 	$	331,478	
 	
Cost of goods sold	19,557	
 	 	19,487	
 	 	75,199	
 	 	68,796	
 	
Gross profit	80,979	
 	 	68,506	
 	 	310,795	
 	 	262,682	

 Operating expenses:	 	 	 	 	 	 	 	
Research and development	7,228	
 	 	5,773	
 	 	27,926	
 	 	23,464	
 	
Selling, general and administrative	44,626	
 	 	37,857	
 	 	168,862	
 	 	140,386	
 	
Provision for litigation settlements	15	
 	 	1,164	
 	 	(786	)	 	1,470	
 	
Total operating expenses	51,869	
 	 	44,794	
 	 	196,002	
 	 	165,320	

Operating income	29,110	
 	 	23,712	
 	 	114,793	
 	 	97,362	
 	
Other expense, net	(16	)	 	(220	)	 	(140	)	 	(413	)	
Income before income taxes	29,094	
 	 	23,492	
 	 	114,653	
 	 	96,949	
 	
Income tax provision	8,327	
 	 	9,922	
 	 	40,822	
 	 	36,165	

Net income	$	20,767	
 	 	$	13,570	
 	 	$	73,831	
 	 	$	60,784	

Earnings per share:	 	 	 	 	 	 	 	
Basic	$	0.23	
 	 	$	0.15	
 	 	$	0.82	
 	 	$	0.69	
 	
Diluted	$	0.22	
 	 	$	0.15	
 	 	$	0.80	
 	 	$	0.67	
 	
Weighted average shares outstanding:	 	 	 	 	 	 	 	
Basic	91,177	
 	 	88,093	
 	 	89,608	
 	 	88,112	
 	
Diluted	93,456	
 	 	90,337	
 	 	92,208	
 	 	90,420	

GLOBUS MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)	December 31, 2012	 	December 31, 2011	
 	(unaudited)	 	 	
ASSETS	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	212,400	
 	 	$	142,668	
 	
Accounts receivable, net of allowances of $961 and $602, respectively	53,496	
 	 	46,727	
 	
Inventories	62,310	
 	 	47,369	
 	
Prepaid expenses and other current assets	3,020	
 	 	2,515	
 	
Income taxes receivable	5,105	
 	 	3,336	
 	
Deferred income taxes	23,779	
 	 	16,160	
 	
Total current assets	360,110	
 	 	258,775	
 	
Property and equipment, net	61,089	
 	 	52,394	
 	
Intangible assets, net	9,585	
 	 	7,433	
 	
Goodwill	15,372	
 	 	9,808	
 	
Other assets	977	
 	 	980	
 	
Total assets	$	447,133	
 	 	$	329,390	

LIABILITIES AND EQUITY	 	 	 	
Current liabilities:	 	 	 	
Accounts payable	$	9,991	
 	 	$	5,323	
 	
Accounts payable to related party	2,556	
 	 	1,178	
 	
Accrued expenses	25,003	
 	 	21,268	
 	
Income taxes payable	523	
 	 	302	
 	
Business acquisition liabilities, current	1,435	
 	 	1,200	
 	
Total current liabilities	39,508	
 	 	29,271	
 	
Business acquisition liabilities, net of current portion	9,909	
 	 	9,089	
 	
Deferred income taxes	7,714	
 	 	5,755	
 	
Other liabilities	3,500	
 	 	2,799	
 	
Total liabilities	60,631	
 	 	46,914	
 	
Commitments and contingencies	 	 	 	
Equity:	 	 	 	
Convertible preferred stock; $0.001 par value. Authorized 50,961 shares; issued and outstanding 0 and 50,961 shares at December 31, 2012 and 2011, respectively	—	
 	 	51	
 	
Common stock; $0.001 par value. Authorized 785,000 and 679,178 shares; issued and outstanding 91,270 and 72,529 shares at December 31, 2012 and 2011, respectively	91	
 	 	73	
 	
Additional paid-in capital	136,501	
 	 	106,708	
 	
Accumulated other comprehensive loss	(767	)	 	(1,202	)	
Retained earnings	250,677	
 	 	176,846	
 	
Total equity	386,502	
 	 	282,476	
 	
Total liabilities and equity	$	447,133	
 	 	$	329,390	

GLOBUS MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

 	 	 	 	 	 	 	 	
 	Year Ended	
(In thousands)	December 31,
2012	 	December 31,
2011	
 	(unaudited)	 	 	
Cash flows from operating activities:	 	 	 	
Net income	$	73,831	
 	 	$	60,784	
 	
Adjustments to reconcile net income to net cash provided by operating activities	 	 	 	
Depreciation and amortization	18,108	
 	 	16,949	
 	
Provision for excess and obsolete inventories	6,119	
 	 	10,487	
 	
Stock-based compensation	4,635	
 	 	3,286	
 	
Allowance for doubtful accounts	363	
 	 	105	
 	
Change in fair value of interest rate swap	—	
 	 	113	
 	
Change in fair value of contingent consideration	119	
 	 	(79	)	
Change in deferred income taxes	(6,079	)	 	2,057	
 	
(Increase) decrease in:	 	 	 	
Accounts receivable	(6,886	)	 	(4,672	)	
Inventories	(20,541	)	 	(15,280	)	
Prepaid expenses and other assets	(117	)	 	460	
 	
Increase (decrease) in:	 	 	 	
Accounts payable	3,048	
 	 	(1,355	)	
Accounts payable to related party	1,378	
 	 	(696	)	
Accrued expenses and other liabilities	4,089	
 	 	1,541	
 	
Income taxes payable/receivable	(1,548	)	 	2,710	
 	
Net cash provided by operating activities	76,519	
 	 	76,410	

Cash flows from investing activities:	 	 	 	
Purchases of property and equipment	(24,684	)	 	(22,487	)	
Acquisition of businesses	(6,031	)	 	(7,500	)	
Net cash used in investing activities	(30,715	)	 	(29,987	)	
 	 	 	 	
Cash flows from financing activities:	 	 	 	
Repayments of long-term debt	—	
 	 	(5,253	)	
Payment of business acquisition liabilities	(1,100	)	 	(400	)	
Net proceeds from initial public offering	20,960	
 	 	—	
 	
Net proceeds from issuance of common stock	1,504	
 	 	886	
 	
Purchase of common stock	—	
 	 	(10,021	)	
Excess tax benefit related to nonqualified stock options	2,661	
 	 	54	
 	
Net cash provided by/(used in) financing activities	24,025	
 	 	(14,734	)	
 	 	 	 	
Effect of foreign exchange rate on cash	(97	)	 	(722	)	
 	 	 	 	
Net increase in cash and cash equivalents	69,732	
 	 	30,967	
 	
Cash and cash equivalents, beginning of period	142,668	
 	 	111,701	
 	
Cash and cash equivalents, end of period	$	212,400	
 	 	$	142,668	

Supplemental disclosures of cash flow information:	 	 	 	
Interest paid	63	
 	 	167	
 	
Income taxes paid	$	44,875	
 	 	$	35,721	

The following is a reconciliation of Adjusted EBITDA (unaudited) to net income for the periods presented:

 	Three Months Ended	 	Year Ended	
(In thousands, except percentages)	December 31, 2012	 	December 31, 2011	 	December 31, 2012	 	December 31, 2011	
Net Income	$	20,767	
 	 	$	13,570	
 	 	$	73,831	
 	 	$	60,784	
 	
Interest (income)/expense, net	(5	)	 	(19	)	 	(80	)	 	33	
 	
Provision for income taxes	8,327	
 	 	9,922	
 	 	40,822	
 	 	36,165	
 	
Depreciation and amortization	4,608	
 	 	4,747	
 	 	18,108	
 	 	16,949	
 	
EBITDA	33,697	
 	 	28,220	
 	 	132,681	
 	 	113,931	
 	
Stock-based compensation	953	
 	 	1,135	
 	 	4,635	
 	 	3,286	
 	
Provision for legal settlements	15	
 	 	1,164	
 	 	(786	)	 	1,470	
 	
Change in fair value of contingent consideration	96	
 	 	(261	)	 	119	
 	 	(79	)	
Adjusted EBITDA	$	34,761	
 	 	$	30,258	
 	 	$	136,649	
 	 	$	118,608	
 	
Adjusted EBITDA as a percentage of sales	34.6	%	 	34.4	%	 	35.4	%	 	35.8	%	

Contact:
Ed Joyce
Director, Investor Relations
Phone: (610) 930-1800
Email:     investors@globusmedical.com
www.globusmedical.com