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Product / Company Performance

Exactech Posts 3Q17 Revenue Growth -

Exactech (EXAC) posted 3Q17 revenue of US $61.4MM, +2.6% vs. 3Q16, and YTD revenue of $198.2MM, +3.6% vs. the prior year. Estimated segment sales and growth follow.

  3Q17  3Q16  $ Change  % Change 
 Joint Reconstruction $59.6  $56.2  $3.5  6.1% 
   Knee  $18.2  $18.6  -$0.4  -2.3% 
   Hip  $12.1  $12.4  -$0.3  -2.1% 
   Extremities  $29.4  $25.2  $4.1  16.5% 
 Spine $0.0  $2.0  -$2.0  -100.0% 
 Orthobiologics $1.8  $1.7  $0.0  2.5% 
 Total  $61.4  $59.9  $1.5  2.6% 


  9 Mo 17  9 Mo 16  $ Change  % Change 
 Joint Reconstruction $192.2  $179.1  $13.1  7.3% 
 Knee  $61.8  $61.9  -$0.1  -0.2%
 Hip  $37.7  $38.2  -$0.5  -1.3% 
 Extremities  $92.7  $79.0  $13.7  17.4% 
 Spine $0.3  $5.7  -$5.4  -95.1% 
 Orthobiologics $5.7  $6.5  -$0.8  -11.7% 
 Total  $198.2  $191.3  $7.0  3.6% 

After the quarter’s close, EXAC entered into a definitive merger agreement under which TPG Capital will acquire all outstanding shares of EXAC common stock. (TPG Capital was partial owner of Biomet before Biomet was purchased by Zimmer.)

Upon close of the transaction, which is expected in 1Q18, EXAC will be a privately-held company headquartered in Gainesville, Florida. The company was founded in 1985 by Bill Petty, an orthopaedic surgeon; his wife Betty, and biomedical engineer Gary Miller, Ph.D. It went public in 1997. Today, EXAC employs a staff of over 700, including sales reps, and distributes in 35+ countries.

During 3Q, positive early response was garnered from pilot launches of the Truliant knee, Alteon HA hip stem (both launched in 2Q17) and Vantage ankle (end of 2016), as well as the shoulder application for ExactechGPS, which received FDA 510(k) clearance in April 2017.

After the quarter closed, EXAC announced completion of the first revision knee with Truliant instrumentation. The primary and revision knees are slated for full U.S. launch next year.

For 2015, EXAC reported revenue of US $241.8MM, +1% vs. 2014, and for 2016, revenue grew +6.5% to $257.6MM. In 1Q17, the company divested spine product assets to ChoiceSpine and announced restructuring charges related to ex-U.S. operations, allowing for a focus on joint reconstruction in hip, knee and extremities. At 1H17, the company reported revenue at $136.8MM, +4.1% vs. 1H16.

The impact of hurricanes on U.S. revenue was $1.2MM within 3Q17. Facilities weren’t damaged, but surgeries were postponed, and Gainesville and Sarasota manufacturing and shipping facilities lost two days of operating capacity. Full-year guidance appears to be unchanged from the last figures available in 2Q17: a range of $267MM to $271MM.

Sources: Exactech, Inc.; ORTHOWORLD Inc. estimates

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