Orthopedic companies see mixed bag on Q4, FY2017 earnings

Orthopedic companies K2M (NSDQ:KTWO) and SeaSpine (NSDQ:SPNE) reported their fourth quarter and full year 2017 earnings, with K2M seeing a drop in share value while SeaSpine saw a mild rise.

Leesburg, Va.-based K2M posted losses of $8.8 million, or 20¢ per share, on sales of $67.8 million for the 3 months ended December 31, seeing losses shrink 29.8% while sales grew 9.7% compared with the same period last year.

Loss-per-share expectations were just below the 19¢ analyst’s consensus on Wall Street.

For the full year, K2M posted losses of $37.2 million, or 87¢ per share, on sales of $258 million, seeing losses shrink 10.8% while sales grew 9% compared with the previous fiscal year.

“Our financial results for calendar year 2017 reflect total revenue growth of approximately 9% year-over-year, above the high-end of our guidance range. We delivered approximately 9% growth in the United States in 2017-well above-market growth rates-driven by solid execution against our strategic goal of increasing market share by introducing new and innovative spinal implant solutions and expanding our distribution footprint. We have supplemented this organic growth activity with exciting product introductions in both the complex spine and degenerative categories. Looking out to 2018, we are excited about the opportunity of our first-of-its-kind Mojave PL 3D expandable interbody system featuring Lamellar 3D titanium technology and our Yukon OCT spinal system that can be used with the Palo Alto cervical static corpectomy cage system, the first and only static corpectomy cage in the world to receive a cervical 510(k) clearance. We also announced an important strategic collaboration with Brainlab, one of the world’s leading imaging and navigation companies, that we believe will represent additional implant sales opportunities in the second half of 2018. Our Brainlab collaboration will complement our recent launches of the BACS platform and the Everest minimally invasive XT spinal system. We remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies. We have introduced our 2018 guidance expectations for revenue growth of 9% to 10% with improved profitability,” K2M prez, chair & CEO Eric Major said in a press release.

K2M provided guidance for the 2018 fiscal year, expecting to see revenue between $280 million and $284 million representing growth of between 9% and 10% year-over-year.

Shares in K2M have fallen 8% so far today, at $19.05 as of 12:08 p.m. EST.

Carlsbad, Calif.-based SeaSpine posted losses of $7.5 million, or 56¢ per share, on sales of $34 million for the 3 months ended December 31, seeing losses shrink 23.1% while sales grew 4.5% compared with the same period during the previous year.

Losses-per-share were just behind analysts 55¢ consensus on The Street.

For the full year, SeaSpine posted losses of $32.1 million, or $2.58 per share, on sales of $131.8 million, seeing losses shrink 25.7% while sales grew 2.3% compared with the previous fiscal year.

“Our 2017 results are marked by several accomplishments underpinned by our commitment to delivering improved procedural spine solutions and clinical value through our expanding and innovative product portfolio. As we enter 2018, we are well positioned to continue upgrading our global distribution footprint while we execute on our strategy and deliver accelerated revenue growth and expanded gross margins,” SeaSpine prez & CEO Keith Valentine said in a press release.

SeaSpine released guidance for its 2018 financial year, expecting to see sales between $135 million and $139 million, reflecting growth of between 2.5% and 5.5% over 2017.

Shares in SeaSpine have risen 1.8% so far today, at $10.30 as of 12:08 p.m. EST.

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