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Product / Company Performance

Amplitude Surgical Reports FY17-18 Revenue, +7.5% vs. FY16-17 -

Amplitude Surgical, a leading French player specializing in lower-limb orthopaedic devices, continued its growth trend with FY17-18 revenue of €100.3MM (~US $117.0MM), +7.5% vs. FY16-17. The company’s recent growth has brought it into our $100MM-$199MM revenue tier. Leadership reiterated a five-year goal of doubling sales by 2021.

Amplitude’s FY17-18 spans July 1, 2017 to June 30, 2018.

Investments in Personnel and Operations Supporting Growth

The company drove year-over-year growth by expanding market coverage in France through the integration of independent sales reps while continuing to develop international markets through subsidiaries and distributors. Amplitude Surgical has taken steps to broaden its portfolio by increasing their stake in high-precision manufacturer Sofab Orthopédie from 50% to 100% and constructing an ISO 5 clean room at their Valence, France site. Within the quarter, the company hired Muriel Benedetto Marmilloud to the newly-created position of Chief Operations Officer to oversee this period of growth and international expansion.

Per leadership, the NOVASTEP foot and ankle line has gained significant traction with growth of +50% in international markets, particularly the U.S. Early September marked the first implant of Amplitude Surgical’s ATOMIC knee prosthesis in the U.S., a high-potential market critical to the company’s five-year growth strategy. Leadership states that it has seen growing interest in Amplitude from surgeons and distributors in the U.S. market since the September ATOMIC implant. 

ORTHOWORLD estimates segment sales and growth on an as-reported basis using USD $MM and constant currency for the company’s July-June fiscal year, as follows. 

  FY17-18 FY17-16 $ Change % Change
Joint Reconstruction $114.7 $107.9 $6.8 6.3%
   Knees $62.4 $58.8 $3.6 6.1%
   Hips $45.4 $43.9 $1.5 3.4%
   Extremities $6.9 $5.2 $1.7 33.8%
Arthroscopy/Soft Tissue Repair* $1.3 n/a n/a n/a
Orthobiologics $1.0 $0.9 $0.0 1.7%
Total  $117.0 $108.8 $8.1 7.5%

For those tracking the industry on a calendar year, Amplitude Surgical’s first half performance, measuring the reporting period between January and June (their fiscal 3Q and 4Q), is as follows.

  1H 18 1H 17 $ Change % Change
Joint Reconstruction $63.0 $59.5 $3.6 6.0%
   Knees $34.6 $32.1 $2.4 7.6%
   Hips $24.6 $24.3 $0.3 1.2%
   Extremities $3.9 $3.1 $0.8 26.8%
Arthroscopy/Soft Tissue Repair* $1.3 n/a n/a n/a
Orthobiologics $0.6 $0.5 $0.0 6.6%
Total  $64.9 $60.0 $4.9 8.2%

*Amplitude entered the Arthroscopy/Soft Tissue Repair segment in December 2017.

FY17-18 Revenue by Geographic Region

Amplitude Surgical’s sales in France experienced high single-digit growth, despite a 3.5% price reduction imposed on all implants in August 2017 by the Health Ministry’s Economic Committee for Healthcare Products. An expanded salesforce in France through new subsidiary Amplitude Sud has allowed the company to capture market share, particularly in the eastern part of the country and the Paris area.
 
International sales continued a positive growth trend, reflecting the company’s strategic focus on high-potential markets. In October 2017 the company hired Mark Johnson, an industry veteran formerly with Zimmer Biomet, as Director of Sales with the aim to commercialize its knee and hip products to U.S. surgeons. With the first ATOMIC knee implant now complete in the U.S., further growth in that market can be expected.
 
ORTHOWORLD estimates fiscal year geographic sales and growth on an as-reported basis using USD $MM and constant currency, as follows.

Geographic Region FY17-18 FY16-17 $ Change % Change
France $75.4 $69.0 $6.4 9.2%
International $41.6 $39.9 $1.8 4.4%
   Subsidiaries $31.1 $30.2 $0.9 3.1%
   Distributors $10.5 $9.7 $0.8 8.7%
Total  $117.0 $108.8 $8.1 7.5%

Well-Positioned for Growth

At the close of the company’s fiscal year, Olivier Jallabert, Chairman and CEO, said, “The strengthening of our structures, following substantial industrial and commercial investments, supports our ambition of doubling our sales in five years thanks to, in particular, our ongoing development on the American market and the enrichment of our portfolio of innovative products.”

Investments in infrastructure, expansion of the salesforce and growing penetration in target markets has Amplitude Surgical well-positioned to keep pace with their five-year growth plan. Our estimates show projected 1Q18-19 revenue of €20.1MM (~US $23.2MM), +10% vs. 1Q17-18.

Net Earnings

Amplitude provides some earnings data for a July to June fiscal year. Cost of Goods remained at similar levels to FY16-17, as the benefits of industrial integration were offset by negative currency impact from the weaker Brazilian real as well as Australian and American dollars. The company expanded its personnel to support growth in target markets, increasing its workforce by 16% over the prior fiscal year. Even with those factors, Amplitude Surgical’s profitability increased by 140 basis points to 18% in the 2017-2018 fiscal year.

FY17-18 Amount ($MM) % Sales
Sales $117.0  
Cost of Goods -$28.7 24.5%
Administrative -$46.6 39.8%
Sales and Marketing -$12.8 10.9%
R & D -$7.9 6.8%
Net Earnings  $21.1 18.0%

Sources: Amplitude Surgical; ORTHOWORLD estimates
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
 

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