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Product / Company Performance

RTI Surgical Reduces Guidance Due to Softer than Expected coflex Sales -

RTI Surgical reported 3Q19 orthopedic revenue of USD $65.7MM, +10.7% vs. 3Q18.

 

  • RTI Surgical downgraded 2019 full year guidance from a range of $325MM-$335MM to $305MM-$310MM
  • Sales of legacy spine products, such as the Fortilink interbody fusion device, slowed and were impacted by the loss of a key customer due to hospital consolidation (estimated impact of -$0.5MM in the quarter); RTI is focused on rapidly driving R&D efforts to refresh its legacy spine portfolio
  • Weather-related disruptions in Florida and Texas had a revenue impact of approximately $1MM in the quarter
  • The newly launched CervAlign ACP system is driving pull-through for Fortilink-C
  • Launched the Hybrid Performance System 2.0 for spinal fusion in Australia and Europe, while also submitting a 510(k) application to FDA for the Fortilink-A with TETRAfuse 3D technology; a 510(k) application for a navigation system for the Streamline MIS fixation system is expected soon
  • Continues to build out its commercial sales structure and drive adoption for Novel Therapies business that includes coflex Interlaminar Stabilization and SImmetry SI joint fusion devices; revenue contribution from coflex for the quarter was approximately $8.2MM
  • Revenue expectation for 2019 from the Paradigm acquisition is trending closer to $30MM than the previously projected $40MM to $45MM
  • ORTHOWORLD projects RTI Surgical full year 2019 orthopedic revenue of $266.6MM, +10.6% vs. 2018

 

ORTHOWORLD estimates segment sales and growth on an as-reported basis, as follows ($MM).

  3Q19 3Q18 $ Chg % Chg
Spine $28.5 $24.5 $4.0 16.4%
Orthobiologics $37.3 $34.9 $2.4 6.8%
Total $65.7 $59.4 $6.4 10.7%
  9Mo 19 9Mo 18 $ Chg % Chg
Spine $85.3 $70.5 $14.8 21.0%
Orthobiologics $112.1 $109.1 $3.0 2.7%
Total $197.4 $179.6 $17.7 9.9%

ORTHOWORLD estimates sales by geographic region as follows ($MM).

  3Q19 3Q18 $ Chg % Chg
US $59.3 $54.2 $5.1 9.4%
Ex-US $6.4 $5.1 $1.3 25.1%
Total $65.7 $59.4 $6.4 10.7%

Net earnings, inclusive of all revenue, are as follows.

  Amt % of Sales
Sales $76.1  
   Cost of Sales -$34.6 45.5%
   Selling and Admin -$37.1 48.7%
   R & D -$4.3 5.6%
   Other -$5.0 6.5%
Net Earnings -$4.9 -6.4%

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

 

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