YTD Revenue Up 8% to $113.8M, Net Income $6.3M, EPS $0.48
Exactech Q2 Revenue Up 7% to $55.2M, Net Income $3.0M, EPS $0.23 on Strong Hips, Shoulder Growth
<0> Exactech, Inc.Jody Phillips, 352-377-1140Chief Financial OfficerorHawk AssociatesJulie Marshall or Frank Hawkins, 305-451-1888 </0>
Exactech, Inc. (Nasdaq: EXAC), a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, announced today revenue of $55.2 million for the second quarter of 2012, a 7% increase over $51.7 million in the second quarter of 2011. Net income increased 11% to $3.0 million, or $0.23 per diluted share, compared to $2.7 million, or $0.21 per diluted share, in the same quarter a year ago.
For the first six months of 2012 revenue was $113.8 million, an increase of 8% over $105.1 million for the comparable period last year. Net income for the first six months of 2012 increased 11% to $6.3 million, or $0.48 per diluted share compared to $5.7 million, or $0.43 per diluted share for the first six months of 2011. First six month product revenues were as follows:
Exactech Chairman and CEO Bill Petty said, "Exactech continued to outperform our industry in an uncertain climate. Overall domestic and international sales were healthy despite some pockets of weakness. Sales in knees, our largest product segment, were up 1% for both the quarter and the first six months of 2012. Strong double-digit growth in our shoulder products and hip implants provided the bulk of our positive performance. Gains in our operating margin, which we had anticipated, corresponded with reductions in compliance costs. However, a one time tax charge related to the non-deductibility of a portion of our 2010 settlement with the DOJ that was clarified during the current IRS audit caused a $0.02 negative impact on our earnings per share for the quarter."
Exactech President David Petty said, "For the quarter, U.S. sales increased 8% to $35.2 million compared with $32.6 million in the second quarter of 2011 based on strong performance of our hip and extremities businesses. For the first six months of 2012, U.S. sales rose 7% to $72.0 million compared with $67.6 million in 2011. International sales grew 5% to $19.9 million reflecting sales strength in Asian and Latin American markets. International sales decreased to 36% of total sales from 37% of total sales for the second quarter of 2011 due to relative weakness in some European markets. For the first six months of the year, international sales increased 12% to $41.8 million from $37.5 million for the same period in 2011. As a percentage of sales, international sales in the first six months of 2012 increased to 37% from 36% in the first six months of the prior year."
Chief Financial Officer Jody Phillips said, "Gross margins increased to 68.8% for the second quarter of 2012 from 68.0% for the second quarter of 2011. Total operating expenses for the quarter were $32.7 million, an increase of 4% from $31.3 million in the second quarter of 2011. As a percentage of sales, second quarter operating expenses decreased to 59% from 61% for the second quarter of 2011. Sales and marketing expenses increased 4%, but decreased to 36% as a percentage of sales from 37% in the second quarter of 2011. General and administrative expenses decreased 19% in the second quarter to $4.7 million from $5.8 million, primarily due to the reduction in compliance costs. Research and development expenses increased 51% to $4.2 million from $2.7 million in the second quarter of 2011 primarily due to increased design and development activities. This increase reflected a return to our targeted level of R&D spending between 7-8% of sales."
Looking forward, Exactech updated its 2012 revenue guidance to $218 - $223 million and changed its diluted EPS target to $0.91 - $0.95. For the third quarter ending September 30, 2012, the company anticipates revenues of $49 - $51 million and diluted EPS of $0.17 - $0.19. 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 company has scheduled a conference call on . The call will cover the company's second quarter 2012 results. Dr. Petty will open the conference call and a question-and-answer session will follow.
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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 . Copies of Exactech's press releases, SEC filings, current price quotes and other valuable information for investors may be found at and .
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