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K2M posted 4Q17 revenue of US $67.8MM, +9.7% vs. 4Q16, and 2017 revenue of $258.1MM, +9.1% vs. 2016. This comes in over top of the range that was revised upward and announced in 3Q17.
ORTHOWORLD estimates for segment growth follow.
| 4Q17 | 4Q16 | $ Change | % Change | |
| Spine | $65.5 | $59.8 | $5.7 | 9.5% |
| Orthobiologics | $2.3 | $2.0 | $0.3 | 16.8% |
| Total | $67.8 | $61.8 | $6.0 | 9.7% |
| 2017 | 2016 | $ Change | % Change | |
| Spine | $249.3 | $229.1 | $20.2 | 8.8% |
| Orthobiologics | $8.8 | $7.6 | $1.2 | 16.1% |
| Total | $258.1 | $236.6 | $21.4 | 9.1% |
Leadership believes that K2M is taking share from larger competitors, and a review of their activity affirms that the company seeks to play in the segment in a variety of ways.
The late-4Q announcement of a global compatibility and co-marketing agreement with Brainlab is one example. The two will partner on future navigated K2M spinal systems for open and MIS procedures, which would also be compatible with Brainlab spinal navigation systems…of which there are >5,300 installed worldwide. Also, Brainlab has a robotic arm that can be attached to its current installed base, for which clearance may come in 2018.
Growth in 4Q and 2017 derived from product introductions, new U.S. surgeon users and an expanding distribution footprint. While all segments contributed to growth, Complex Spine was cited as strong in 4Q, growing +11.5% vs. 4Q16 and occupying half of U.S. growth for the quarter. Complex Spine grew on the adoption of new products.
IN 4Q, K2M grew domestic independent sales agencies to 109, up +9% from the count at the end of 3Q17. The direct sales team remained flat.
K2M racked up 11 FDA 510(k) product clearances in 2017 and seven CE Mark approvals. As noted by President and CEO Eric Major, “2017 may have been the most important year of product innovation in the history of this company.”
On the 3D product front, the company brought out second and third 3D-printed lines: CAPRI small corpectomy cages and the MOJAVE PL expandable interbody. The latter is slated for U.S. launch this year.
For 2018, the company expects growth to come from MOJAVE and the YUKON OCT spinal systems—the latter of which can be used with the PALO ALTO cervical static corpectomy cage acquired from Cardinal Spine during 4Q. The Brainlab pairing is expected to contribute sales opportunities in 2H18.
Leadership offered 2018 revenue guidance in a range from $280.0MM to $284.0MM, which our analyst friends deemed conservative.
Sources: K2M, Inc.; ORTHOWORLD estimates
K2M posted 4Q17 revenue of US $67.8MM, +9.7% vs. 4Q16, and 2017 revenue of $258.1MM, +9.1% vs. 2016. This comes in over top of the range that was revised upward and announced in 3Q17.
ORTHOWORLD estimates for segment growth follow.
Q17
Q16
$ Change
%...
K2M posted 4Q17 revenue of US $67.8MM, +9.7% vs. 4Q16, and 2017 revenue of $258.1MM, +9.1% vs. 2016. This comes in over top of the range that was revised upward and announced in 3Q17.
ORTHOWORLD estimates for segment growth follow.
| 4Q17 | 4Q16 | $ Change | % Change | |
| Spine | $65.5 | $59.8 | $5.7 | 9.5% |
| Orthobiologics | $2.3 | $2.0 | $0.3 | 16.8% |
| Total | $67.8 | $61.8 | $6.0 | 9.7% |
| 2017 | 2016 | $ Change | % Change | |
| Spine | $249.3 | $229.1 | $20.2 | 8.8% |
| Orthobiologics | $8.8 | $7.6 | $1.2 | 16.1% |
| Total | $258.1 | $236.6 | $21.4 | 9.1% |
Leadership believes that K2M is taking share from larger competitors, and a review of their activity affirms that the company seeks to play in the segment in a variety of ways.
The late-4Q announcement of a global compatibility and co-marketing agreement with Brainlab is one example. The two will partner on future navigated K2M spinal systems for open and MIS procedures, which would also be compatible with Brainlab spinal navigation systems…of which there are >5,300 installed worldwide. Also, Brainlab has a robotic arm that can be attached to its current installed base, for which clearance may come in 2018.
Growth in 4Q and 2017 derived from product introductions, new U.S. surgeon users and an expanding distribution footprint. While all segments contributed to growth, Complex Spine was cited as strong in 4Q, growing +11.5% vs. 4Q16 and occupying half of U.S. growth for the quarter. Complex Spine grew on the adoption of new products.
IN 4Q, K2M grew domestic independent sales agencies to 109, up +9% from the count at the end of 3Q17. The direct sales team remained flat.
K2M racked up 11 FDA 510(k) product clearances in 2017 and seven CE Mark approvals. As noted by President and CEO Eric Major, “2017 may have been the most important year of product innovation in the history of this company.”
On the 3D product front, the company brought out second and third 3D-printed lines: CAPRI small corpectomy cages and the MOJAVE PL expandable interbody. The latter is slated for U.S. launch this year.
For 2018, the company expects growth to come from MOJAVE and the YUKON OCT spinal systems—the latter of which can be used with the PALO ALTO cervical static corpectomy cage acquired from Cardinal Spine during 4Q. The Brainlab pairing is expected to contribute sales opportunities in 2H18.
Leadership offered 2018 revenue guidance in a range from $280.0MM to $284.0MM, which our analyst friends deemed conservative.
Sources: K2M, Inc.; ORTHOWORLD estimates
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JV
Julie Vetalice is ORTHOWORLD's Editorial Assistant. She has covered the orthopedic industry for over 20 years, having joined the company in 1999.
