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Globus Medical reported 1Q20 orthopedic revenue of USD $190.6 million, +4.2% vs. 1Q19. Competitive recruiting, robotics pull-through and new products drove strong U.S. sales. International sales, negatively impacted by COVID-19 and challenging quarterly comparisons, offset domestic gains. Robotics sales increased (+11.8%) against one of the weakest quarterly comparisons since the launch of ExcelsiusGPS. Globus leadership noted the disproportionate number of robotics sales that happen in the last two weeks of a given quarter and were therefore significantly impacted by COVID-19. The company estimates that COVID’s impact reduced 1Q total revenue by $20 million.
Globus’ sales bottomed out in the first week of April, falling -70% compared to the prior year. Since then, however, weekly volumes have increased steadily as states gradually restarted surgeries. As of early May, weekly volume for the company is roughly two-thirds of the company’s pre-COVID levels. Leadership sees 2Q as the market low-point, with incremental improvement in 3Q before sales return to normal by the end of the year. Globus believes that it is well-positioned to take market share during the recovery period as hospitals seek to reduce foot traffic by paring down vendor lists. The company expects this also to be a boon for its competitive rep hiring.
Globus exited the first quarter with $657 million in cash and marketable securities. The company’s cost-containment measures include the elimination of non-essential travel, cancellation of education events, hiring freezes of non-sales personnel and reduction of its temporary workforce. While profitability declined due to COVID’s impact on sales, free cash flow improved due to working capital improvements and lower capital expenditures.
- Globus still plans to submit its imaging system for FDA clearance in 3Q and expects FDA clearance for ExcelsiusGPS’s cranial module in that same timeframe
- The company remains on track to launch several new products during the year and expand the footprint of its sales organization
“Our conservative financial philosophy has positioned us well to ride out this difficult time without having to reduce our commitment to any longterm growth initiatives. In fact, given our strong liquidity position, we have taken the opportunity to repurchase over $100 million of our stock, and we are seriously evaluating several tuck-in acquisition opportunities.” – Dave Demski, Globus Medical President and CEO
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2.8 | |||
| Knees | $1.7 | |||
| Hips | $1.1 | |||
| Spine | $178.9 | $174.9 | $4.0 | 2.3% |
| Trauma | $1.3 | $0.5 | $0.8 | 150% |
| Orthobiologics | $7.7 | $7.6 | $0.1 | 1.4% |
| Total | $190.6 | $182.9 | $7.6 | 4.2% |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $158.4 | $147.5 | $10.9 | 7.4% |
| OUS | $32.1 | $35.4 | ($3.3) | (9.3%) |
| Total | $190.6 | $182.9 | $7.6 | 4.2% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $190.6 | |
| Cost of Sales | $48.9 | 25.6% |
| R & D | $15.4 | 8.1% |
| Selling and Admin | $93.5 | 49.1% |
| Other | $6.8 | 3.6% |
| Net Earnings | $25.9 | 13.6% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Globus Medical reported 1Q20 orthopedic revenue of USD $190.6 million, +4.2% vs. 1Q19. Competitive recruiting, robotics pull-through and new products drove strong U.S. sales. International sales, negatively impacted by COVID-19 and challenging quarterly comparisons, offset domestic gains. Robotics sales increased (+11.8%) against one of the...
Globus Medical reported 1Q20 orthopedic revenue of USD $190.6 million, +4.2% vs. 1Q19. Competitive recruiting, robotics pull-through and new products drove strong U.S. sales. International sales, negatively impacted by COVID-19 and challenging quarterly comparisons, offset domestic gains. Robotics sales increased (+11.8%) against one of the weakest quarterly comparisons since the launch of ExcelsiusGPS. Globus leadership noted the disproportionate number of robotics sales that happen in the last two weeks of a given quarter and were therefore significantly impacted by COVID-19. The company estimates that COVID’s impact reduced 1Q total revenue by $20 million.
Globus’ sales bottomed out in the first week of April, falling -70% compared to the prior year. Since then, however, weekly volumes have increased steadily as states gradually restarted surgeries. As of early May, weekly volume for the company is roughly two-thirds of the company’s pre-COVID levels. Leadership sees 2Q as the market low-point, with incremental improvement in 3Q before sales return to normal by the end of the year. Globus believes that it is well-positioned to take market share during the recovery period as hospitals seek to reduce foot traffic by paring down vendor lists. The company expects this also to be a boon for its competitive rep hiring.
Globus exited the first quarter with $657 million in cash and marketable securities. The company’s cost-containment measures include the elimination of non-essential travel, cancellation of education events, hiring freezes of non-sales personnel and reduction of its temporary workforce. While profitability declined due to COVID’s impact on sales, free cash flow improved due to working capital improvements and lower capital expenditures.
- Globus still plans to submit its imaging system for FDA clearance in 3Q and expects FDA clearance for ExcelsiusGPS’s cranial module in that same timeframe
- The company remains on track to launch several new products during the year and expand the footprint of its sales organization
“Our conservative financial philosophy has positioned us well to ride out this difficult time without having to reduce our commitment to any longterm growth initiatives. In fact, given our strong liquidity position, we have taken the opportunity to repurchase over $100 million of our stock, and we are seriously evaluating several tuck-in acquisition opportunities.” – Dave Demski, Globus Medical President and CEO
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement | $2.8 | |||
| Knees | $1.7 | |||
| Hips | $1.1 | |||
| Spine | $178.9 | $174.9 | $4.0 | 2.3% |
| Trauma | $1.3 | $0.5 | $0.8 | 150% |
| Orthobiologics | $7.7 | $7.6 | $0.1 | 1.4% |
| Total | $190.6 | $182.9 | $7.6 | 4.2% |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $158.4 | $147.5 | $10.9 | 7.4% |
| OUS | $32.1 | $35.4 | ($3.3) | (9.3%) |
| Total | $190.6 | $182.9 | $7.6 | 4.2% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $190.6 | |
| Cost of Sales | $48.9 | 25.6% |
| R & D | $15.4 | 8.1% |
| Selling and Admin | $93.5 | 49.1% |
| Other | $6.8 | 3.6% |
| Net Earnings | $25.9 | 13.6% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
