Exactech (EXAC:NASDAQ) Reports 15% Revenue Increase for 3Q:04 / Misses Analyst Consensus Estimates
BY JOHN CHOPACK, NOVEMBER 3, 2004
Exactech reported net revenues of $19.5 million for the 3Q:04 which was a 15% increase over the 3Q:03, but slightly below analyst expectations of $20 million. Earnings totaled $0.14 per diluted share which was a 20% increase from the 3Q:03 but missed analyst earnings expectations of $0.15.
Revenues from reconstructive knee products totaled $11.1 million and increased 17% over the 3Q:03 driven by strong Optetrak knee sales. The 17% growth in knee revenues was slightly below the 18% increase experienced in the 2Q:04. Knee revenues represented approximately 57% of net revenues.
Hip revenues totaled $3.8 million during the most recent quarter which was a 3% increase over the 3Q:03. Growth in hip revenues accelerated during the 3Q:04 from a decline of 3% in the 2Q:04. The Company is anticipating introducing some key hip products that should help drive growth in revenues. These include a Ceramic-on-Ceramic hip which has the potential of being launched in the early part of 2006.
Revenues from tissue services totaled $2.6 million which was an 11% increase over the 3Q:03, but slower than the 17% rate of growth seen in the 2Q:04. Other revenues, which was driven primarily by the recently introduced antibiotic impregnated hip and knee cement spacers used in two part revision procedures, drove a 53% increase in other revenues which totaled $2.0 million.
Exactech is optimistic about its upcoming product launches which are expected to occur over the next three quarters. The Company is currently investing heavily in R&D which is expected to total 7% of revenues in 2005. A significant portion of the R&D spending will be put towards the development of alternate bearing hip surfaces including ceramic-on-ceramic and diamond-on-diamond technology.
The Company is expecting revenues to total between $20-22 million which is an 8% and 19% increase over the 4Q:02, respectively. Management commented that earnings are expected to range between $0.16 and $0.18 per diluted share which is a 14% and 29% increase over the 4Q:03, respectively. The Company provided initial guidance for revenues to total $91 to $100 million and earnings to range between $0.66 and $0.72
