AUDUBON, Pa., Feb. 20, 2024 (GLOBE NEWSWIRE) — Globus Medical, Inc. (NYSE: GMED), a leading musculoskeletal technology company, today announced its financial results for the fourth quarter and year ended December 31, 2023.
Fourth Quarter 2023:
- Worldwide net sales were $616.5 million, an increase of 124.6%, or 123.8% on a constant currency basis
- GAAP net income for the quarter was $15.0 million
- GAAP diluted earnings per share (“EPS”) was $0.11 and non-GAAP diluted EPS was $0.60
- Non-GAAP adjusted EBITDA was $170.0 million, or 27.6% of net sales
Full Year 2023:
- Worldwide net sales were $1,568.5 million, an increase of 53.3% on an actual and constant currency basis
- GAAP net income for the year was $122.9 million
- GAAP diluted EPS was $1.07 and non-GAAP diluted EPS was $2.32
- Non-GAAP adjusted EBITDA was $464.1 million, or 29.6% of net sales
“I am pleased to report on the remarkable progress we’ve made at Globus Medical. Our merger with NuVasive has been a transformative milestone, where we pursue a vision of providing the best innovative technology and most dedicated level of customer service for our surgeons and their patients,” said Dan Scavilla, president and CEO. “The integration is progressing according to plan, underscoring our commitment to a seamless transition and operational efficiency. Looking ahead to 2024, the pipeline of product launches, especially in enabling technologies, aligns with our philosophy of anticipating and meeting evolving customer needs. We recognize the importance of staying ahead of the curve, a principle that guides our approach to innovation and client service. I believe the potential for Globus has never been greater, as we continue to redefine spine surgery with procedural solutions built around enabling technology.”
“Worldwide sales set a record for both fourth quarter and full year 2023, as we completed the merger with NuVasive on September 1, 2023,” said Keith Pfeil, COO-CFO. “Excluding the impacts of the NuVasive merger, legacy Globus fourth quarter revenue was $304.1 million, an increase of 10.8 percent over the prior year fourth quarter, and full year revenue was $1.154 billion, or 12.8 percent higher than the prior year. We remain focused on merger integration activities as they continue to proceed according to plan and we look forward to achieving milestones as we work to get back to a steady state of running the business. We remain well positioned to deliver on our commitments for the coming year.”
Worldwide net sales for the fourth quarter were $616.5 million, an as-reported increase of 124.6% over the fourth quarter of 2023, and an increase of 123.8% on a constant currency basis. U.S. net sales for the fourth quarter of 2023 increased by 111.1% compared to the fourth quarter of 2022. International net sales increased by 200.9% over the fourth quarter of 2023 on an as-reported basis, and an increase of 200.8% on a constant currency basis. Net Sales increases were driven by the addition of NuVasive, as well as increased volume of spine product sales and enabling technology volume.
Worldwide net sales for the full year of 2023 were $1,568.5 million, an increase of 53.3% as compared to the full year of 2022 on an actual and constant currency basis. U.S. net sales for the full year of 2023 increased by 46.8 % compared to the full year of 2022. International net sales increased by 91.3% over the full year of 2023 on an as-reported basis, and an increase of 92.3% on a constant currency basis.
GAAP net income for the fourth quarter was $15.0 million, a decrease of 70.0% over the same period in the prior year, driven primarily by the addition of NuVasive results and acquisition related costs incurred in the quarter since the closing date. Diluted EPS for the fourth quarter was $0.11, compared to $0.49 for the fourth quarter of 2022. Non-GAAP net income for the fourth quarter was $83.5 million, an increase of 38.9% over the same period in the prior year, driven primarily by contributions from the NuVasive merger. Non-GAAP diluted EPS for the fourth quarter of 2023 was $0.60, compared to $0.59 in the fourth quarter of 2022, an increase of 2.1% driven by higher Non-GAAP net income, partially offset by a higher diluted share count as a result of the stock-for-stock merger with NuVasive.
Net cash provided by operating activities was $258.9 million, and non-GAAP free cash flow was $178.9 million for the full year of 2023.
2024 Annual Guidance
The Company reaffirms its full year 2024 revenue guidance range of $2.450 billion to $2.475 billion and fully diluted non-GAAP earnings per share range between $2.68 to $2.70.
Conference Call Information
Globus Medical will hold a teleconference to discuss its 2023 fourth quarter and full year results with the investment community at 4:30 p.m. Eastern Time today.
Participants may access the conference call live via webcast on the Investors page of Globus Medical’s website at https://www.investors.globusmedical.com/news-events/events-webcasts.
To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. The audio archive will be available after the call on the Investor page of the Globus Medical website.
About Globus Medical, Inc.
Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.
Non-GAAP Financial Measures
To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures. For example, non-GAAP Adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation expense, provision for litigation, acquisition related costs/licensing and acquisition of in-process research and development, merger and acquisition related costs/licensing, certain foreign currency acquisition-related impacts, and gains and losses from strategic investments, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense. Our management also uses non-GAAP Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized. Acquisition related costs/licensing represents the change in fair value of business-acquisition-related contingent consideration; costs related to integrating recently acquired businesses, including but not limited to costs to exit or convert contractual obligations, severance, retention bonus, duplicative costs and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one-time licensing fees. Acquisition of in-process research and development represents the expensing of acquired assets with no alternative future use and related fees. We also adjusted for certain foreign currency impacts related to the acquisition costs and gains/losses on strategic investments within other assets as we believe these impacts are not a measure of our operating performance.
In addition, for the period ended December 31, 2023 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP Diluted Earnings Per Share, which represent net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, merger and acquisition related costs/licensing, certain foreign currency impacts, gains and losses from strategic investments, the impact of dilution attributable to the Convertible Notes, and the tax effects of all of the foregoing adjustments. We also present Non-GAAP gross profit, which excludes the impacts of any inventory acquisition-related costs within cost of goods sold. The tax effect adjustment represents the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments, unless the underlying item has a materially different tax treatment, in which case the estimated tax rate applicable to the adjustment is used. We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of the foregoing items, which we believe are not reflective of underlying business trends. Additionally, for the period ended December 31, 2023 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment. We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions. Furthermore, the non-GAAP measure of constant currency net sales growth is calculated by translating current year net sales at the same average exchange rates in effect during the applicable prior year period. We believe constant currency net sales growth provides insight to the comparative increase or decrease in period net sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.
Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit, free cash flow and constant currency net sales growth are not calculated in conformity with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP. These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results. Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit, free cash flow and constant currency net sales growth may differ from that of other companies and therefore may not be comparable.
Safe Harbor Statements
All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms. These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends. Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted. These risks and uncertainties include, but are not limited to, the risks and costs associated with the integration of the NuVasive business and Globus Medical, Inc.’s ability to successfully integrate and achieve anticipated synergies with the NuVasive business, health epidemics, pandemics and similar outbreaks, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks. For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the U.S. Securities and Exchange Commission. These documents are available at www.sec.gov. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof