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
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
Exactech Q1 Revenue $39.8 Mil., EPS $0.23. EXAC's 28% Organic Growth Outpaces Industry. Shoulder Product Sales Up 132%; Reports Initial Spine Product Revenues
Exactech develops, manufactures, markets, distributes and sells its orthopaedic implant devices, including knee, shoulder, and hip implant systems, related surgical instrumentation 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 and input from its surgeon customers have helped Exactech develop a pipeline of innovative products that improve patient outcomes.
The Market
Exactech participates in the $23 billion worldwide market for biomedical devices, targeting very large and growing market segments for hip ($4.4 B) and knee implants ($4.9 B) and the fastest growing segments, biologics and extremities. Most recently, with its acquisition of Altiva Corporation, Exactech entered the $4.8 billion spine market, which is growing in excess of 20% annually.
Cannacord Adams, 2007.
Differentiators
FDA-CLEARED PRODUCTS AND SERVICES
It is estimated 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 51% of the company's revenue.Hip products account for about 18% of company revenues, and use industry-leading materials such as ceramic bearing surfaces and enhanced polyethylene for superior wear performance. Surgeon input and clinician feedback is an important aspect in developing innovative new designs in hip implant technology.
EExactech’s biologic products represent 13% of revenue. The company began distribution of biologic tissue materials in 1998, and now offers a variety of allograft tissue material for grafting and repairing bone defects.
Exactech’s fastest growing product line is its Equinoxe® shoulder implant system, representing 8% of the company’s 2007 revenues. Using surgeon feedback, Exactech produced a reverse shoulder design with differentiating features to address competitive product limitations.
ANALYST COVERAGE
- James Sidoti, Sidoti & Company, LLC - (212) 453-7056
- Jeff Johnson, Robert W. Baird - (414) 765-7062
- Julie Hoggatt, Noble Financial. - jhoggatt@noblefinancialgroup.com
Recent News
Exactech Completes Previously Announced Sale of Common Stock
Exactech Announces Sale of Common Stock Resulting in $20.2 Million in Gross Proceeds
Exactech Q1 Revenue Increases 34% to $39.8 Million
Exactech Increases Q1 and FY’08 Financial Guidance
Exactech Closes France Medica Acquisition
- Market acceptance of new products
- Significant resources of larger competitors
- Market access to hospitals and surgeons
- Partial dependency on third-party manufacturers
The Outlook For the first quarter of 2008, Exactech reported revenue of $ 39.8 million for the first quarter of 2008, an increase of 34% compared to $29.6 million for the first quarter of 2007. Net income for the quarter was $2.8 million, or $0.23 per diluted share, a gain of 49% from the $1.9 million, or $0.16 per diluted share, in the same quarter a year ago. First quarter diluted earnings per share included a gain of $0.03 due to a forward currency call option and a loss of $0.01 per share due to Exactech’s minority investment in Altiva prior to the acquisition.
Since the beginning of 2008 Exactech has completed two acquisitions in synergistic businesses. Altiva Corporation, a developer, manufacturer and marketer of spinal implant devices and related products, contributed $2.0 million in revenue in the first quarter. Altiva expects to break even in the first half of 2008. The acquisition is expected to be neutral to Exactech’s 2008 earnings but accretive in 2009.
France Medica, a French importer and distributor of orthopaedic products and surgical supplies, was acquired at the beginning of the second quarter. Exactech expects France Medica’s revenue contribution to be $9 million for FY'08. The acquisition is expected to be neutral to earnings in 2008 and accretive in 2009.
2008 initiatives for Exactech include new product introductions, specifically in the hip, knee and shoulder segments, expansion of the sales organization domestically and internationally, continued development of internal manufacturing and supply chain capabilities, and enhanced operating leverage due to increased scale.
L ooking forward, Exactech continues to anticipate 30% to 36% revenue growth for the full year 2008, targeting a range of $162 million to $169 million and diluted EPS for the year 2008 in the range of $0.92 to $0.98. For Q2 ending June 30, 2008, the company targets revenue up 27% to 36% in the range of $40 million to $43 million and diluted EPS in the range of $0.22 to $0.24. 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.
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 and Human Resources, 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-
Paul
E.
Metts, CPA
