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| 8-K - 8-K - EXACTECH INC | exac1q13form8-kearnings.htm |
EXHIBIT 99.1
Exactech Q1 Net Income up 17% to $3.8 Million. Diluted EPS $.29 vs. $.25. Worldwide Sales Up 1% to $59.3 Million. U.S. Sales Increased 6%.
Gainesville, Fla. - April 23, 2013 -- Exactech, Inc. (Nasdaq: EXAC), a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, announced today sales of $59.3 million for the first quarter of 2013, a 1% increase over $58.6 million in the first quarter of 2012. Net income was $3.8 million, or $0.29 per diluted share, compared to $3.3 million, or $0.25 per diluted share, in the same quarter a year ago.
First Quarter Segment Performance
• | Knee implant sales decreased 4% to $20.5 million |
• | Extremity implant sales increased 21% to $15.7 million |
• | Hip implant sales decreased 5% to $10.4 million |
• | Biologic and Spine sales decreased 2% to $6.1 million |
• | Other sales decreased 7% to $6.6 million |
Management Comment
Exactech Chairman and CEO Dr. Bill Petty said, “Our sales for the quarter were slightly below our expectations as we experienced weakness in our European sales and the impact of an unfavorable currency swing, partially reflecting a weaker Japanese yen. U.S. sales were somewhat stronger with the help of continuing healthy sales in our shoulder products. The currency movement as well as continued focus by our employees on managing our cost structure allowed us to decrease our operating expenses during the quarter and deliver a 17% increase in net income.
Exactech President David Petty said, “U.S. sales increased 6% to $39.0 million compared with $36.8 million in the first quarter a year ago. International sales decreased 7% to $20.3 million. U.S. sales represented 66% of total sales and international sales were 34% of the total. On a constant currency basis, international sales decreased 5% and worldwide sales grew 2% for the quarter.
Chief Financial Officer Jody Phillips said, “Gross margins remained flat at 69% for the first quarter from the first quarter a year ago due to higher growth in the U.S. market and continued cost reductions attributable to internal manufacturing. Total operating expenses for the quarter decreased 2% to $34.6 million and as a percentage of sales decreased to 58% from 60% for the first quarter of 2012. General and administrative expenses decreased 10% in the first quarter to $5.1 million from $5.6 million. R&D expenses decreased 6% to $3.9 million during the first quarter.
Looking forward, Exactech maintained its 2013 sales guidance at $236 - $242 million and its diluted EPS target of $1.03 - $1.09. For the second quarter ending June 30, 2013, the company said it anticipates
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sales of $57 - $59 million and diluted EPS of $0.24 - $0.26. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company's targets, not predictions of actual performance.
The financial statements are below.
Conference Call
The company has scheduled a conference call at 10:00 a.m. Eastern Time on Wednesday, April 24. The call will cover the company's first quarter results. CEO Bill Petty will open the conference call and a question-and-answer session will follow.
To participate in the call, dial 1-877-941-2068 any time after 9:50 a.m. Eastern on April 24th. International and local callers should dial 1-480-629-9712. A live webcast of the call will be available at http://www.hawkassociates.com/profile/exac.cfm or http://public.viavid.com/index.php?id=104163.
This call will be archived for approximately 90 days.
About Exactech
Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech's orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States, in addition to more than 30 markets in Europe, Latin America, Asia and the Pacific. Additional information about Exactech, Inc. can be found at http://www.exac.com. Copies of Exactech's press releases, SEC filings, current price quotes and other valuable information for investors may be found at http://www.exac.com and http://www.hawkassociates.com.
An investment profile on Exactech may be found at http://www.hawkassociates.com/profile/exac.cfm. To receive future releases in e-mail alerts, sign up at http://www.hawkassociates.com/about/alert.
This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent the company's expectations or beliefs concerning future events of the company's financial performance. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include the effect of competitive pricing, the company's dependence on the ability of third party manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company's products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.
Investor contacts Julie Marshall or Frank Hawkins
Jody Phillips Hawk Associates
Chief Financial Officer 305-451-1888
352-377-1140 E-mail: exactech@hawkassociates.com
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EXACTECH, INC. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands) | ||||||||||
(unaudited) | (audited) | |||||||||
March 31, | December 31, | |||||||||
2013 | 2012 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 4,402 | $ | 5,838 | ||||||
Accounts receivable, net of allowances of $1,123 and $1,012 | 50,641 | 48,073 | ||||||||
Prepaid expenses and other assets, net | 2,968 | 2,877 | ||||||||
Income taxes receivable | 516 | 502 | ||||||||
Inventories – current | 71,688 | 70,699 | ||||||||
Deferred tax assets – current | 2,324 | 2,229 | ||||||||
Total current assets | 132,539 | 130,218 | ||||||||
PROPERTY AND EQUIPMENT: | ||||||||||
Land | 2,208 | 2,211 | ||||||||
Machinery and equipment | 33,466 | 33,158 | ||||||||
Surgical instruments | 88,399 | 85,115 | ||||||||
Furniture and fixtures | 3,853 | 3,858 | ||||||||
Facilities | 18,000 | 18,033 | ||||||||
Projects in process | 1,249 | 643 | ||||||||
Total property and equipment | 147,175 | 143,018 | ||||||||
Accumulated depreciation | (65,194 | ) | (61,586 | ) | ||||||
Net property and equipment | 81,981 | 81,432 | ||||||||
OTHER ASSETS: | ||||||||||
Deferred financing and deposits, net | 829 | 866 | ||||||||
Non-current inventories | 7,615 | 5,410 | ||||||||
Product licenses and designs, net | 10,461 | 10,534 | ||||||||
Patents and trademarks, net | 2,143 | 2,217 | ||||||||
Customer relationships, net | 985 | 1,108 | ||||||||
Goodwill | 13,250 | 13,356 | ||||||||
Total other assets | 35,283 | 33,491 | ||||||||
TOTAL ASSETS | $ | 249,803 | $ | 245,141 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 20,307 | $ | 14,773 | ||||||
Income taxes payable | 1,155 | 2,188 | ||||||||
Accrued expenses and other liabilities | 8,137 | 11,726 | ||||||||
Other current liabilities | 250 | 250 | ||||||||
Current portion of long-term debt | 3,000 | 2,625 | ||||||||
Total current liabilities | 32,849 | 31,562 | ||||||||
LONG-TERM LIABILITIES: | ||||||||||
Deferred tax liabilities | 3,181 | 3,186 | ||||||||
Line of credit | 12,355 | 12,197 | ||||||||
Long-term debt, net of current portion | 25,500 | 26,250 | ||||||||
Other long-term liabilities | 980 | 1,049 | ||||||||
Total long-term liabilities | 42,016 | 42,682 | ||||||||
Total liabilities | 74,865 | 74,244 | ||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Common stock | 134 | 133 | ||||||||
Additional paid-in capital | 65,777 | 63,918 | ||||||||
Accumulated other comprehensive loss | (6,461 | ) | (4,797 | ) | ||||||
Retained earnings | 115,488 | 111,643 | ||||||||
Total shareholders’ equity | 174,938 | 170,897 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 249,803 | $ | 245,141 | ||||||
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EXACTECH, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||
(in thousands, except per share amounts) | |||||||
(Unaudited) | |||||||
Three Month Periods | |||||||
Ended March 31, | |||||||
2013 | 2012 | ||||||
NET SALES | $ | 59,301 | $ | 58,628 | |||
COST OF GOODS SOLD | 18,590 | 18,096 | |||||
Gross profit | 40,711 | 40,532 | |||||
OPERATING EXPENSES: | |||||||
Sales and marketing | 21,524 | 21,820 | |||||
General and administrative | 5,096 | 5,648 | |||||
Research and development | 3,850 | 4,104 | |||||
Depreciation and amortization | 4,175 | 3,792 | |||||
Total operating expenses | 34,645 | 35,364 | |||||
INCOME FROM OPERATIONS | 6,066 | 5,168 | |||||
OTHER INCOME (EXPENSE): | |||||||
Interest income | 1 | — | |||||
Other income (loss) | 29 | 17 | |||||
Interest expense | (283 | ) | (452 | ) | |||
Foreign currency gain (loss) | (462 | ) | 223 | ||||
Total other expenses | (715 | ) | (212 | ) | |||
INCOME BEFORE INCOME TAXES | 5,351 | 4,956 | |||||
PROVISION FOR INCOME TAXES | 1,506 | 1,671 | |||||
NET INCOME | $ | 3,845 | $ | 3,285 | |||
BASIC EARNINGS PER SHARE | $ | 0.29 | $ | 0.25 | |||
DILUTED EARNINGS PER SHARE | $ | 0.29 | $ | 0.25 | |||
SHARES - BASIC | 13,177 | 13,156 | |||||
SHARES - DILUTED | 13,344 | 13,259 | |||||
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