LEESBURG, Va., Aug. 01, 2017 (GLOBE NEWSWIRE) — K2M Group Holdings, Inc. (Nasdaq:KTWO) (the “Company” or “K2M”), a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance™, today reported financial results for its second fiscal quarter ended June 30, 2017.
Second Quarter 2017 Financial Summary:
Total Q2 revenue of $65.7 million, up 10.9% year-over-year. Total Q2 revenue increased 11.6% year-over-year on a constant currency basis.
Domestic Q2 revenue of $50.8 million, up 12.2% year-over-year, comprised of:
U.S. Complex Spine growth of 9.7% year-over-year
U.S. Minimally Invasive Surgery (MIS) growth of 25.4% year-over-year
U.S. Degenerative growth of 9.9% year-over-year.
International Q2 revenue of $14.9 million, up 6.6% year-over-year, or 9.3% on a constant currency basis.
Net loss of $9.1 million for the three months ended June 30, 2017, compared to a net loss of $11.1 million in the comparable period last year.
Adjusted EBITDA of $0.6 million for the three months ended June 30, 2017, compared to Adjusted EBITDA loss of $0.3 million in the comparable period last year.
Recent Product Introductions:
On May 25, 2017, the Company announced the launch of the MESA 2 Cricket™, an enhancement to the Company’s innovative MESA® 2 Deformity Spinal System. The MESA 2 Cricket provides surgeons the ability to efficiently complete challenging correction maneuvers in all three anatomical planes, with the goal of achieving three-dimensional balance in patients with complex spinal deformities.
On June 20, 2017, the Company announced the introduction of the SAHARA® AL Expandable Stabilization System, the Company’s first expandable offering within its interbody portfolio. SAHARA AL is the only lordotic expandable interbody device with integrated screw fixation on the market to help achieve spinal balance.
On June 22, 2017, the Company announced that its MOJAVETM PL 3D Expandable Interbody System received 510(k) clearance from the U.S. Food & Drug Administration (FDA). MOJAVE PL 3D is a first-to-market, 3D-printed, FDA-cleared expandable posterior-lumbar (PL) interbody system that features K2M’s Lamellar 3D Titanium Technology™.
On July 6, 2017, the Company announced that its NILE® Proximal Fixation Spinal System, a spinal system specifically designed for proximal construct augmentation, received 510(k) clearance from the FDA and a CE Mark. NILE Proximal Fixation addresses complex spinal deformity cases and consists of bands and connectors that may be used in conjunction with spinal rod constructs for attachment to the posterior vertebral structures at the proximal end of the construct.
Recent Strategic Highlights:
On April 6, 2017, K2M and LifeHealthcare Group Limited announced a new distribution agreement for K2M’s innovative spinal technologies in Australia and New Zealand (ANZ). The K2M/LifeHealthcare distribution partnership dates back to 2010 and has yielded strong growth and a significant spine market position in ANZ. Looking to build on this success, K2M and LifeHealthcare entered into a new five-year agreement with the shared goal of establishing a number one spine market position in ANZ.
On April 21, 2017, K2M received key product registrations in Japan from the Pharmaceuticals and Medical Devices Agency (PMDA), which are now under its control, including the MESA and EVEREST® product lines.
On May 1, 2017, the Company announced that they hosted more than 100 international spine surgeons from 22 countries for its annual Meeting of Minds™ in Lisbon, Portugal, from April 28-29, 2017. Meeting of Minds is a premier, world-class curriculum in the latest approaches and techniques for the operative treatment of spinal disorders. The Company also demonstrated its Balance ACS™ (or BACS™) platform, which applies three-dimensional solutions across the entire clinical care continuum to help drive quality outcomes in spine patients.
On May 3, 2017, the Company announced participation at the 2017 combined meeting of The European Pediatric Orthopaedic Society and The Pediatric Orthopaedic Society of North America (EPOSNA) from May 3-6 in Barcelona, Spain. The Company showcased the Balance ACS and Three-Dimensional Total Body Balance and hosted a clinical symposium in 3D spinal solutions.
On July 10, 2017, the Company announced the signing of a new, long-term, exclusive agreement with Mitsubishi Corporation subsidiary Japan Medicalnext Co., Ltd., a wholly-owned entity of MC Healthcare, Inc. and a prominent supplier of medical devices in Japan, for the distribution of K2M’s innovative spinal technologies. Pursuant to the agreement, Japan Medicalnext is the exclusive distributor of K2M’s spine products in Japan. The terms of the agreement include a long-term partnership of up to seven years. With more than 250 employees—including 50 orthopedic sales professionals—in seven offices located throughout the country, Japan Medicalnext has significant experience in medical device distribution, including the Japanese spinal surgery market.
“Our second quarter product launches and strategic accomplishments reflect continued progress toward our strategic goals of introducing innovative spine surgery technologies, expanding our selling presence and improving our selling productivity which, together, help K2M to increase our share of the global spine market,” said President and Chief Executive Officer, Eric Major. “Revenue growth in the second quarter was driven by double-digit growth in the U.S. and high single-digit constant currency growth outside the U.S. During the quarter, we also made progress toward achieving profitability, generating $0.6 million in Adjusted EBITDA, compared to an Adjusted EBITDA loss of $0.3 million last year. We have reaffirmed our full year financial outlook—including constant currency revenue growth of 12%-15% year-over-year and Adjusted EBITDA of $6 million to $10 million—and continue to expect improving results over the balance of 2017.”