Company Address:
Exactech, Inc.
2320 NW 66th Ct.

Gainesville, Florida
32653
USA
 Phone:
(352) 377-1140
 Website:
www.exac.com
 Ticker:
EXAC
 Exchange:
Nasdaq
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2320 NW 66th Ct. • Gainesville • Florida • 32653 • USA • www.exac.com
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
Exactech Announces Preliminary 2011 Sales of $205.4 M; Q4 2011 Sales of $53.1 Million. International Sales Increase 24% for 2011. Full Results Feb 28 and Conference Call Feb 29
ALERT: Exactech will announce full results for the fourth quarter and year-end 2011 on Tuesday, February 28, 2012. The company will hold a conference call with CEO Dr. William Petty and key members of the management team on Wednesday, February 29 at 10:00 a.m. Eastern. The call will cover fourth quarter and 2011 full year results. To participate in the call, dial (877) 941-2068 any time after 9:50 a.m. Eastern on February 29. International and local callers should dial (480) 629-9712. A live webcast of the call can be accessed by clicking here.

Please click the red PDF button to see a printable Investment Profile for Exactech

Exactech is a pure play orthopaedic competitor that is gaining market share in the rapidly expanding global biomedical device industry. The company's products are used in the restoration of bones and joints that have deteriorated as a result of injury or disease such as arthritis.

Exactech develops, manufactures, markets, distributes and sells its orthopaedic implant devices, including knee, shoulder, and hip implant systems, related surgical instrumentation, spine products and biologic services to hospitals and physicians in the United States and internationally in over 30 countries.

Founded and led by an orthopaedic surgeon, the company has built its success on its customer-centric culture. Feedback from its surgeon customers has helped Exactech develop a pipeline of innovative products that improve patient outcomes.

Company Overview

2011 Q4 Segment Performance


• Knee implant revenue decreased 2% to $20.1 million
• Extremities implant revenue increased 29% to $11.0 million
• Hip implant revenues increased 13% to $9.3 million
• Biologic & spine segment revenues decreased 21% to $5.9 million
• Other revenue of $6.7 million were down 4%

Differentiators

FDA-CLEARED PRODUCTS AND SERVICES

It is estimated that there are nearly one million knee replacement procedures performed worldwide each year. To help meet this demand, Exactech continues to develop next generation knee systems that respond to the needs of the hospital and surgical community. Its Optetrak® differentiated knee implant products provide about 38% of the company's current revenue.

Representing nearly 21% of the company’s revenues, the Equinoxe® shoulder implant system is Exactech’s fastest growing product line.

Hip products account for about 17% of company revenues, and use industry-leading materials such as ceramic bearing surfaces and enhanced polyethylene for superior wear performance.

Exactech’s biologic and spine products together represent about 11% of revenue. The company began distribution of biologic tissue materials in 1998, and entered the spine market with an acquisition of a spine products company in early 2008. Exactech offers a variety of allograft tissue material for grafting and repairing bone defects, and a spine platform that provides a portfolio of spine products with the potential to expand domestically and internationally.

Surgeon input and clinician feedback is an important aspect in developing innovative new designs in implant technology. Recent News
Exactech Announces Preliminary 2011 Sales of $205.4 Million and 4th Quarter 2011 Sales of $53.1 Million
Exactech to Present to Investors at the 2012 Noble Financial Equity Conference on Jan 17
Exactech Initiates Multi-Center Clinical Trial for New Cartilage Regeneration Technology
Exactech Continues to Expand Spine Portfolio with Comprehensive Solution to Posterior Cervical Fusion
Exactech Announces Agreement with U.S. Attorney’s Office

    Risk Factors
  • Market acceptance of new products
  • Significant resources of larger competitors
  • New government taxes
  • Partial dependency on third-party manufacturers

The Outlook Revenue for the third quarter of 2011 was $47.3M, a 13% increase over $42.0 M in the third quarter of 2010. Net income decreased 12% to $1.3 M, or $0.10 per diluted share, compared to $1.5 M, or $0.11 per diluted share, in the same quarter a year ago. Net income for the third quarter, excluding HCP compliance expenses of $1.0 M related to the Department of Justice (DOJ) settlement, increased 19% to $1.9 M or $0.15 EPS.

For the first nine months of 2011 revenue was $152.3 M, an increase of 10% over $138.7 M for Q3 last year. Net income for the first nine months of 2011 decreased 10% to $7.0 M, or $0.53 per diluted share compared to $7.8 M, or $0.59 per diluted share for the first nine months of 2010. Net income for the nine months, excluding pre-tax HCP compliance expenses of $3.7 M, increased 13% to $9.4 M or $0.71 EPS.

The company continued to leverage recent investments in its OUS distribution channel. In the third quarter, international sales grew 56% to $15.8M and increased to 33% of total sales from 24% of total sales for the third quarter of 2010. For the first nine months of the year, international sales increased 29% to $53.3 M from $41.2 M for the same period of 2010. As a percentage of sales, international sales in the first nine months of 2011 increased to 35% from 30% in the first nine months of the prior year. For the quarter, U.S. sales were $31.5 M compared with $31.9 M in the third quarter of 2010. For the first nine months of 2011, U.S. sales rose 2% to $99.0 M compared with $97.5 M in 2010.

Net income for the third quarter was down 12% to $1.3 M from $1.5 M in the third quarter last year. Gross margins increased to 68.5% for the third quarter of 2011 from 67.4% for the third quarter of 2010, primarily due to the increase in international sales in direct markets.

Total operating expenses for the third quarter were $30.3 M, an increase of 20% from $25.2 M in Q3 of 2010. Total sales and marketing expenses were up 15%, and increased to 38% as a percentage of sales from 37% during 2010, as the company incorporated expenses from its Spanish subsidiary. G&A expenses rose 32% in the third quarter to $5.1 M from $3.9 M primarily due to the compliance costs. Research and development expenses increased 17% to $3.5 M from $3.0 M in Q3 of 2010.

Looking forward, Exactech issued its full year 2012 revenue guidance targeting the range of $215 - $223 million and GAAP diluted EPS of $0.88 - $0.96. For the first quarter 2012, the company targets revenue in the range of $54-$57 million and diluted GAAP EPS of $0.22 - $0.24. The foregoing statements regarding targets for 2012 are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance. Management
Chairman and Chief Executive Officer-
William Petty, M.D.

President and Director-
David W. Petty

CFO-
Joel C. Phillips, CPA

EVP of Research and Development, Director-
Gary J. Miller, Ph.D.

VP of Administration; Corporate Secretary-
Betty B. Petty

Senior Vice President, General Manager – Biologics Division-
Bruce Thompson

Director-
James G. Binch

Director-
Albert H Burstein, Ph.D.

Director-
R. Wynn Kearney, Jr. , M.D.

Director-
William B. Locander, Ph.D.

Director-
Richard C. Smith

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