MARIETTA, Ga., Oct. 27, 2016 /PRNewswire/ -- MiMedx Group, Inc. (NASDAQ: MDXG), the leading regenerative medicine company utilizing human amniotic tissue and patent-protected processes to develop and market advanced products and therapies for the Wound Care, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic, and Dental sectors of healthcare, announced today its results for the third quarter of 2016.
Third Quarter 2016 Highlights:
- Q3 2016 revenue of $64.4 Million is a 31% increase over Q3 2015 revenue
- Q3 2016 revenue exceeds $64.0 Million upper end of guidance
- Q3 2016 revenue beats analysts’ consensus estimates of $63.1 Million
- Revenue for nine months ended September 30, 2016 is a 29% increase over same 2015 period
- Adjusted Gross Margin* of 88.0%
- Adjusted EBITDA* of $11.4 million
- Adjusted Net Income* of $6.2 million
- Adjusted Diluted Net Income Per Share* of $0.06
- Wound Care revenue of $49.8 million
- Surgical, Sports Medicine and Orthopedics (SSO) Revenue of $14.6 million
- Current direct sales force grows to nearly 300 sales professionals
* See the accompanying tables for definitions of each Non-GAAP metric. Reconciliations of GAAP Net Income to Adjusted EBITDA, GAAP Gross Margin to Adjusted Gross Margin, and GAAP Net Income to Adjusted Net Income and Adjusted Diluted Net Income Per Share appear in the tables below. These non-GAAP measures include, but are not limited to, adjustments for non-cash charges associated with purchase accounting related to the Stability Biologics acquisition, normalization of tax expense, one-time non-recurring cash charges and share based compensation expense.
Third Quarter 2016 GAAP Results (includes purchase accounting and one-time non-recurring charges related to the acquisition of Stability Biologics)
- Gross margin of 87.6%
- Net Income of $3.3 million
- Diluted Net Income per share of $0.03
Results for Third Quarter and Nine Months Ended September 30, 2016
The Company recorded record revenue for the 2016 third quarter of $64.4 million, a $15.4 million or 31% increase over 2015 third quarter revenue of $49.0 million. The Company’s Adjusted Gross Margin for the third quarter of 2016 was 88.0%, compared to 89.8% in the third quarter of 2015. Adjusted EBITDA* for the third quarter of 2016 was $11.4 million, a $439,000 decrease as compared to Adjusted EBITDA* of $11.8 million for the third quarter of 2015. Adjusted Net Income for the third quarter of 2016 was $6.2 million, or $0.06 per diluted common share, a $348,000 decrease, as compared to Adjusted Net Income of $6.6 million, or $0.06 per diluted common share, in the third quarter of 2015.
For the nine months ended September 30, 2016, the Company recorded record revenue of $175.1 million, a $39.7 million or 29% increase over revenue of $135.4 million recorded in the same period of 2015. The Company’s Adjusted Gross Margin* for the nine months ended September 30, 2016, was 87.6%, compared to 88.8% Adjusted Gross Margin* in the same period of 2015. Adjusted EBITDA* for the nine months ended September 30, 2016, was $30.5 million, a $617,000 decrease as compared to Adjusted EBITDA* of $31.1 million for the nine months ended September 30, 2015. Adjusted Net Income for the nine months ended September 30, 2016, was $16.3 million, or $0.15 per diluted common share, a $1.0 million decrease as compared to Adjusted Net Income of $17.3 million, or $0.15 per diluted common share, in the same period of 2015.
Management Commentary on Results
Parker H. “Pete” Petit, Chairman and CEO stated, “We are very pleased with our third quarter results on both the top as well as bottom line. It is always gratifying to exceed our revenue guidance, and continue to add to our record of 20 consecutive quarters of sequential revenue growth. Equally as impressive is our record of meeting or exceeding our revenue guidance in 19 of the last 20 quarters. Our core advanced Wound Care revenue was the driver of our revenue performance, especially revenue from commercial accounts. Third quarter revenue is typically impacted by vacations of medical professionals, and we are pleased with our third quarter results in spite of that fact. We are very satisfied with the revenue trend we have seen in the last two quarters and are enthusiastic about the fourth quarter and beyond. With the trend we are experiencing, the robust growth we anticipate from AmnioFill and OrthoFlo Lyophilized, the two new product lines we launched during the third quarter, and the fact that many year-end patient deductibles are met during or before the fourth quarter, we are optimistic about our fourth quarter revenue.”
Bill Taylor, President and COO, said, “For the first nine months of 2016, we had very strong growth over the first nine months of 2015, with our Wound Care revenue growing 30% and our SSO revenue growing 28% as compared with the same period in 2015. We are especially pleased with the third quarter performance of our Wound Care team. Led by the growth from our commercial accounts, our third quarter 2016 Wound Care revenue grew 39% over the third quarter of 2015. All of our product lines showed solid progress and maturation within our new organizational structure that has separated the Wound Care and SSO sales teams into two distinct but highly coordinated organizations. We expect this new structure to demonstrate further positive improvements in our sales effectiveness as each team continues to mature as separate organizations.
“As we communicated previously, our recently launched new OrthoFlo Lyophilized and AmnioFill product lines fill different and various needs in both the wound care and surgical markets. To address physicians’ needs for a product to treat larger acute and chronic wounds encountered in the surgical setting, we launched AmnioFill and are offering the product in the multiple sizes necessary to address this need. OrthoFlo Lyophilized is designed to serve the Orthopedics and Sports Medicine sectors of healthcare, and this new product is adding to our portfolio of regenerative medicine solutions for this market sector. These new third quarter launches, along with EpiCord, our dehydrated human umbilical cord allograft that we launched earlier this year, add to the diversity of our product lines and the expansion of the markets in which we compete,” added Taylor.
“The third quarter of 2016 marked our 19th consecutive quarter of recording positive Adjusted EBITDA*. Our Adjusted Gross Margin for the third quarter was once again extremely strong at 88%. Management believes this is a critical measure of the potential of the business. We can make intermediate term investment decisions to expand our sales force, develop and introduce new products, initiate further clinical and scientific studies, and add infrastructure for future growth that may fluctuate our operating profits on a quarter-by-quarter basis. However, we believe the optimal gauge for the Company’s strength at this stage of our growth is our robust Adjusted Gross Margin,” noted Petit.
Taylor commented, “We continue to make investments in our international activities. Over the last two years, these investments have been substantive, and we are starting to see the results of these investments in certain foreign markets. Our recent presence at the World Union Wound Healing Societies (“WUWHS”) symposium in Italy drew an overwhelming amount of interest and enthusiasm from the attending physicians. Also, we continue to showcase our full line of products domestically at major conferences. We have conducted symposiums, podium presentations, education, and workshops, and independent physicians presented numerous poster abstracts reporting on the clinical and cost effective healing results of our EpiFix® and AmnioFix® dehydrated Human Amnion/Chorion Membrane (dHACM) allografts and our EpiCord dehydrated human umbilical cord allografts at the leading conferences attended by the thought leaders and most prominent physicians in our sector of healthcare. The reception among physicians for our products is enormous and their desire to utilize our allografts in their treatments of care is growing with every conference we attend.”
To read full press release, please click here.
