Exactech (EXAC), which develops and markets orthopedic implant devices, reported fourth-quarter fiscal 2011 adjusted (excluding one-time items) earnings per share of 23 cents, matching the Zacks Consensus Estimate and trailing the year-ago earnings of a quarter. The company stated adjusted earnings of 86 cents per share for fiscal 2010, missing both the Zacks Consensus Estimate of 90 cents as well as the year-ago earnings of $1.03.
Net income (as reported) rocketed roughly five and half fold year over year in the fourth quarter to $2.7 million (21 cents per share). Net income for the fourth quarters of fiscal 2010 and 2009 included $0.5 million and $3.6 million, respectively, in U.S. Department of Justice (“DOJ”)-related expenses.
Revenues were $51.8 million in the fourth quarter, up 7% year over year, beating the Zacks Consensus Estimate of $50 million. For fiscal 2010, sales rose 7% to $190.5 million, exceeding the Zacks Consensus Estimate of $189 million.
Domestic sales were $34.5 million while international revenues were $17.3 million in the fourth quarter, both up 7% year over year.
Segment-wise Revenue Analysis
With regard to the segment performance, knee, the largest segment, reported revenues of $20.6 million in the reported quarter, down 2% year over year. Extremities sales shot up 32% to $8.6 million. Hip implants gained 21% to $8.2 million while Biologic and Spine sales were $7.4 million, up 7%. Other revenues were flat at $7 million.
Gross margin was 68.8% in the reported quarter, an improvement from 60.9% in the year-ago quarter. Operating margin rose to 8.8% from 3.8% a year ago.
Balance Sheet
Cash and cash equivalents were $3.9 million at the end of the fourth quarter, up 36.2% year over year. The company had $37.6 million outstanding under its line of credit while long-term debt dropped 20.5% year over year to $4.2 million.
Outlook
Exactech forecasts first-quarter fiscal 2011 sales of between $50.5 million and $52.5 million and adjusted earnings per share in the range of 26 cents to 28 cents. For fiscal 2011, Exactech expects revenues between $202 million and $210 million and adjusted earnings per share in the range of $1.10 to $1.18.
During fiscal 2010, Exactech reached a settlement with the DOJ. Among other significant news, the company recently acquired multiple spinal product lines from VertiFlex Inc, which develops less intrusive spinal surgery technologies that help preserve motion. In first-quarter 2010, Exactech obtained 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market Equinoxe Platform Fracture Stem, its latest product for shoulder arthroplasty.
Gainesville-based Exactech develops and markets orthopedic implant devices. Its orthopedic products are utilized in the restoration of bones as well as joints that have degenerated due to disease. Exactech competes with the likes of Wright Medical Group (WMGI), Stryker Corp. (SYK), Johnson & Johnson (JNJ), and Zimmer Holdings (ZMH), some of whom are much larger in size with deep R&D pockets.
EXACTECH INC (EXAC): Free Stock Analysis Report
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STRYKER CORP (SYK): Free Stock Analysis Report
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ZIMMER HOLDINGS (ZMH): Free Stock Analysis Report
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