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Globus Medical, Inc. (GMED)

NYSE - NYSE Delayed price. Currency in USD
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54.85-0.29 (-0.53%)
At close: 4:00PM EDT
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Previous close55.14
Open54.95
Bid54.85 x 1000
Ask54.82 x 800
Day's range54.22 - 55.32
52-week range33.41 - 60.15
Volume399,501
Avg. volume1,283,931
Market cap5.362B
Beta (5Y monthly)0.96
PE ratio (TTM)62.69
EPS (TTM)0.88
Earnings date04 Nov 2020 - 09 Nov 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend dateN/A
1y target est60.38
  • Globus Medical (GMED) Beats Q2 Earnings & Revenue Estimates
    Zacks

    Globus Medical (GMED) Beats Q2 Earnings & Revenue Estimates

    Globus Medical (GMED) witnesses dismal segmental and international performance in the second quarter owing to pandemic-led adversities.

  • Globus Medical (GMED) Q2 Earnings and Revenues Surpass Estimates
    Zacks

    Globus Medical (GMED) Q2 Earnings and Revenues Surpass Estimates

    Globus Medical (GMED) delivered earnings and revenue surprises of 163.64% and 49.27%, respectively, for the quarter ended June 2020. Do the numbers hold clues to what lies ahead for the stock?

  • GlobeNewswire

    Globus Medical Reports Second Quarter 2020 Results

    AUDUBON, Pa., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Globus Medical, Inc. (NYSE: GMED), a leading musculoskeletal solutions company, today announced its financial results for the second quarter ended June 30, 2020. * Worldwide sales were $148.9 million, a decrease of 23.4% as reported * Second quarter net loss was $20.8 million * Diluted earnings per share (EPS) was $(0.21) and non-GAAP diluted EPS was $0.07 * Non-GAAP adjusted EBITDA was 14.7% of sales“The Globus Team performed extremely well in the second quarter,” said Dave Demski, President and CEO.  “Our worldwide revenue was down 23% in the quarter, an exceptional result when compared to our peers within the industry.  Furthermore, we used the opportunity provided by the slowdown in procedures to strengthen ourselves for the future.  We critically evaluated all aspects of the business and trimmed back non-essential and less efficient areas; we continued to manufacture products at record levels, in anticipation of the bounce back we are already starting to see; we launched several new and innovative products; we continued to recruit competitive sales reps at record levels; and we are aggressively expanding our manufacturing capacity.” “We are highly encouraged by the rebound in spine procedures in the US,” said Demski. “The spine business in the US bottomed in mid-April, but rebounded to produce double digit growth in June, which has accelerated into the mid-teens growth in July.  Interest in robotic technology has remained high and we were able to close several deals in June and July.  We are excited about the second half of 2020: Globus is poised for robust growth if the recent trends continue; and, if we do experience further disruption, our lean organization structure and strong liquidity will position us to weather the storm effectively.”Worldwide sales for the second quarter were $148.9 million, a decrease of 23.4% over the second quarter of 2019 on an as-reported basis and 23.3% on a constant currency basis. Second quarter sales in the U.S., including robotics, decreased by 21.8% compared to the second quarter of 2019. International sales decreased by 31.2% over the second quarter of 2019 on an as-reported basis and 30.5% on a constant currency basis.Second quarter GAAP net loss was $20.8 million, a decrease of 154.6% over the same period last year. Diluted EPS for the second quarter was $(0.21), as compared to $0.38 for the second quarter 2019. Non-GAAP diluted EPS for the second quarter was $0.07, compared to $0.41 in the second quarter of 2019, a decrease of 82.9%.The Company generated net cash provided by operating activities of $23.1 million and non-GAAP free cash flow of 13.1 million in the second quarter, and ended the quarter with cash, cash equivalents and marketable securities of $636.2 million. The Company remains debt free.2020 Annual GuidanceOn April 16, 2020, due to the rapidly evolving environment and continued uncertainties resulting from the COVID-19 pandemic, Globus Medical withdrew previously announced full year 2020 guidance. At this time, Globus Medical cannot predict the specific extent, or duration, of the impact of COVID-19 on its financial and operating results. Conference Call InformationGlobus Medical will hold a teleconference to discuss its 2020 second quarter results with the investment community at 4:30 p.m. Eastern Time today. Globus invites all interested parties to join the call by dialing:1-855-533-7141     United States Participants 1-720-545-0060     International Participants There is no pass code for the teleconference.For interested parties who do not wish to ask questions, the teleconference will be webcast live and may be accessed through a link on the Globus Medical website at www.globusmedical.com/investors. The call will be archived until Wednesday, August 12, 2020. The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 724-7657.About Globus Medical, Inc.Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.Non-GAAP Financial MeasuresTo supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures. For example, non-GAAP Adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation expense, provision for litigation, acquisition related costs/licensing, acquisition of in-process research and development, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense. Our management also uses non-GAAP Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized. Acquisition related costs/licensing represents the change in fair value of business-acquisition-related contingent consideration; costs related to integrating recently acquired businesses, including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one-time licensing fees.  Acquisition of in-process research and development represents the expensing of acquired assets with no alternative future use and related fees.In addition, for the period ended June 30, 2020 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP Diluted Earnings Per Share, which represents net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, and the tax effects of all of the foregoing adjustments. The tax effect adjustment represents the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments, unless the underlying item has a materially different tax treatment, in which case the estimated tax rate applicable to the adjustment is used. We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, and the tax effects of all of the foregoing adjustments, which we believe are not reflective of underlying business trends. Additionally, for the period ended June 30, 2020 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment.  We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions.  Furthermore, the non-GAAP measure of constant currency sales growth is calculated by translating current year sales at the same average exchange rates in effect during the applicable prior year period.  We believe constant currency sales growth provides insight to the comparative increase or decrease in period sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth are not calculated in conformity with U.S. GAAP.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.  These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results.  Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency sales growth may differ from that of other companies and therefore may not be comparable.Safe Harbor StatementsAll statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms. These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends. Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted. These risks and uncertainties include, but are not limited to, health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks. For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission. These documents are available at www.sec.gov. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof. GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)                              Three Months Ended Six Months Ended   June 30, June 30, (In thousands, except per share amounts) 2020  2019  2020  2019  Sales $ 148,922  $ 194,539  $ 339,499  $ 377,486  Cost of goods sold   50,643    43,990    99,507    85,828  Gross profit   98,279    150,549    239,992    291,658                Operating expenses:             Research and development   39,455    15,746    54,857    30,069  Selling, general and administrative   80,019    88,379    173,558    174,163  Provision for litigation   197    —    197    —  Amortization of intangibles   4,115    3,449    7,891    6,792  Acquisition related costs   56    106    604    685  Total operating expenses   123,842    107,680    237,107    211,709                Operating income/(loss)   (25,563)   42,869    2,885    79,949                Other income, net             Interest income/(expense), net   3,590    4,417    7,914    8,576  Foreign currency transaction gain/(loss)   (168)   (210)   (636)   (22) Other income/(expense)   199    17    393    241  Total other income/(expense), net   3,621    4,224    7,671    8,795                Income/(loss) before income taxes   (21,942)   47,093    10,556    88,744  Income tax provision   (1,105)   8,930    5,444    17,370                Net income/(loss) $ (20,837) $ 38,163  $ 5,112  $ 71,374                Earnings per share:             Basic $ (0.21) $ 0.39  $ 0.05  $ 0.72  Diluted $ (0.21) $ 0.38  $ 0.05  $ 0.70  Weighted average shares outstanding:             Basic   97,509    99,023    98,572    98,875  Dilutive stock options   —    2,559    2,420    2,600  Diluted   97,509    101,582    100,992    101,475                Anti-dilutive stock options excluded from weighted average calculation   11,680    5,021    6,645    4,854  GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)                  June 30, December 31, (In thousands, except par value) 2020 2019  ASSETS       Current assets:       Cash, cash equivalents, and restricted cash $ 165,554 $ 195,724  Short-term marketable securities   151,181   115,763  Accounts receivable, net of allowances of $8,117 and $5,599, respectively   132,092   154,326  Inventories   224,457   196,314  Prepaid expenses and other current assets   19,625   17,243  Income taxes receivable   3,982   8,098  Total current assets   696,891   687,468  Property and equipment, net of accumulated depreciation of $257,885 and $243,732, respectively   211,902   199,841  Long-term marketable securities   319,483   409,514  Intangible assets, net   85,226   78,812  Goodwill   129,184   128,775  Other assets   21,070   21,741  Deferred income taxes   2,046   5,926  Total assets $ 1,465,802 $ 1,532,077          LIABILITIES AND EQUITY       Current liabilities:       Accounts payable $ 27,715 $ 24,614  Accrued expenses   69,243   63,283  Income taxes payable   1,990   1,057  Business acquisition liabilities   665   6,727  Deferred revenue   6,513   5,402  Payable to broker   -   10,320  Total current liabilities   106,126   111,403  Business acquisition liabilities, net of current portion   3,551   2,822  Deferred income taxes   5,046   6,023  Other liabilities   14,164   9,377  Total liabilities   128,887   129,625          Equity:       Class A common stock; $0.001 par value.  Authorized 500,000 shares; issued and outstanding 75,327 and 77,395 shares at June 30, 2020 and December 31, 2019, respectively   75   77  Class B common stock; $0.001 par value.  Authorized 275,000 shares; issued and outstanding 22,430 and 22,430 shares at June 30, 2020 and December 31, 2019, respectively   22   22  Additional paid-in capital   387,611   357,320  Accumulated other comprehensive income (loss)   1,298   (2,898) Retained earnings   947,909   1,047,931  Total equity   1,336,915   1,402,452  Total liabilities and equity $ 1,465,802 $ 1,532,077  GLOBUS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)                  Six Months Ended   June 30, (In thousands) 2020  2019  Cash flows from operating activities:       Net income $ 5,112  $ 71,374  Adjustments to reconcile net income to net cash provided by operating activities:       Acquired in-process research and development   24,418    —  Depreciation and amortization   29,669    25,113  Amortization of premium (discount) on marketable securities   104    (736) Write-down for excess and obsolete inventories   7,216    2,468  Stock-based compensation expense   14,118    12,749  Allowance for doubtful accounts   2,455    1,229  Change in fair value of business acquisition liabilities   463    579  Change in deferred income taxes   (1,127)   1,424  (Gain)/loss on disposal of assets, net   625    295  (Increase)/decrease in:       Accounts receivable   19,306    (6,532) Inventories   (34,371)   (28,094) Prepaid expenses and other assets   (2,875)   (2,933) Increase/(decrease) in:       Accounts payable   2,974    (901) Accrued expenses and other liabilities   (7,756)   (8,744) Income taxes payable/receivable   5,030    (5,491) Net cash provided by operating activities   65,361    61,800  Cash flows from investing activities:       Purchases of marketable securities   (57,418)   (210,606) Maturities of marketable securities   88,383    161,568  Sales of marketable securities   17,405    25,490  Purchases of property and equipment   (32,270)   (42,895) Acquisition of businesses, net of cash acquired and purchases of intangible and other assets   (21,991)   (24,135) Net cash used in investing activities   (5,891)   (90,578) Cash flows from financing activities:       Payment of business acquisition liabilities   (853)   (5,633) Proceeds from exercise of stock options   15,964    12,268  Repurchase of common stock   (104,669)   —  Net cash used in/provided by financing activities   (89,558)   6,635  Effect of foreign exchange rate on cash   (82)   186  Net increase/(decrease) in cash, cash equivalents, and restricted cash   (30,170)   (21,957) Cash, cash equivalents, and restricted cash at beginning of period   195,724    139,747  Cash, cash equivalents, and restricted cash at end of period $ 165,554  $ 117,790  Supplemental disclosures of cash flow information:       Interest paid   7    4  Income taxes paid $ 2,147  $ 23,975  Supplemental Financial InformationSales by Geographic Area:                           Three Months Ended Six Months Ended   June 30, June 30, (In thousands) 2020 2019 2020 2019 United States $ 125,154 $ 159,989 $ 283,601 $ 307,527 International   23,768   34,550   55,898   69,959 Total Sales $ 148,922 $ 194,539 $ 339,499 $ 377,486 Sales by Revenue Stream:                           Three Months Ended Six Months Ended   June 30, June 30, (In thousands) 2020 2019 2020 2019 Musculoskeletal Solutions products $ 143,480 $ 182,538 $ 326,022 $ 358,296 Enabling Technologies products   5,442   12,001   13,477   19,190 Total Sales $ 148,922 $ 194,539 $ 339,499 $ 377,486 Liquidity and Capital Resources:                  June 30, December 31, (In thousands) 2020 2019 Cash, cash equivalents, and restricted cash $ 165,554 $ 195,724 Short-term marketable securities   151,181   115,763 Long-term marketable securities   319,483   409,514 Total cash, cash equivalents, restricted cash and marketable securities $ 636,218 $ 721,001 The following tables reconcile GAAP to Non-GAAP financial measures.Non-GAAP Adjusted EBITDA Reconciliation Table:                              Three Months Ended Six Months Ended   June 30, June 30, (In thousands, except percentages) 2020  2019  2020  2019  Net income/(loss) $ (20,837) $ 38,163  $ 5,112  $ 71,374  Interest income/(expense), net   (3,590)   (4,417)   (7,914)   (8,576) Provision for income taxes   (1,105)   8,930    5,444    17,370  Depreciation and amortization   15,101    12,858    29,669    25,113  EBITDA   (10,431)   55,534    32,311    105,281  Stock-based compensation expense   7,311    6,297    14,118    12,749  Provision for litigation   197    —    197    —  Acquisition related costs/licensing   469    335    1,426    971  Acquisition of in-process research and development   24,418    —    24,418    —  Adjusted EBITDA $ 21,964  $ 62,166  $ 72,470  $ 119,001                Net income as a percentage of sales  -14.0%  19.6%  1.5%  18.9% Adjusted EBITDA as a percentage of sales  14.7%  32.0%  21.3%  31.5% Non-GAAP Net Income Reconciliation Table:                              Three Months Ended Six Months Ended   June 30, June 30, (In thousands) 2020  2019  2020  2019  Net income/(loss) $ (20,837) $ 38,163  $ 5,112  $ 71,374  Provision for litigation   197    —    197    —  Amortization of intangibles   4,115    3,449    7,891    6,792  Acquisition related costs/licensing   469    335    1,426    971  Acquisition of in-process research and development   24,418    —    24,418    —  Tax effect of adjusting items   (1,470)   (717)   (2,426)   (1,524) Non-GAAP net income $ 6,892  $ 41,230  $ 36,618  $ 77,613  Non-GAAP Diluted Earnings Per Share Reconciliation Table:                              Three Months Ended Six Months Ended   June 30, June 30, (Per share amounts) 2020  2019  2020  2019  Diluted earnings per share, as reported $ (0.21) $ 0.38  $ 0.05  $ 0.70  Provision for litigation   —    —    —    —  Amortization of intangibles   0.04    0.03    0.08    0.07  Acquisition related costs/licensing   —    —    0.01    0.01  Acquisition of in-process research and development   0.25    —    0.24    —  Tax effect of adjusting items   (0.02)   (0.01)   (0.02)   (0.02) Non-GAAP diluted earnings per share $ 0.07  $ 0.41  $ 0.36  $ 0.76  * Amounts might not add due to roundingNon-GAAP Free Cash Flow Reconciliation Table:                           Three Months Ended Six Months Ended   June 30, June 30, (In thousands) 2020  2019  2020  2019  Net cash provided by operating activities $ 23,068  $ 22,597  $ 65,361  $ 61,800  Purchases of property and equipment   (9,956)   (14,740)   (32,270)   (42,895) Free cash flow $ 13,112  $ 7,857  $ 33,091  $ 18,905  Non-GAAP Sales on a Constant Currency Basis Comparative Table:                                Three Months Ended Reported Currency Impact on  Constant Currency   June 30, Sales Current Sales (In thousands, except percentages) 2020 2019 Growth Period Sales  Growth United States $ 125,154 $ 159,989 -21.8% $ —  -21.8% International   23,768   34,550 -31.2%   (230) -30.5% Total Sales $ 148,922 $ 194,539 -23.4% $ (230) -23.3%                                 Six Months Ended Reported Currency Impact on  Constant Currency   June 30, Sales Current Sales (In thousands, except percentages) 2020 2019 Growth Period Sales  Growth United States $ 283,601 $ 307,527 -7.8% $ —  -7.8% International   55,898   69,959 -20.1%   (563) -19.3% Total Sales $ 339,499 $ 377,486 -10.1% $ (563) -9.9% Contact: Brian Kearns Senior Vice President, Business Development and Investor Relations Phone: (610) 930-1800 Email: investors@globusmedical.com www.globusmedical.com