Exactech Q2 Revenue Up 11% to $26.6M. Net Income $2.1M or $0.18 EPS
Gainesville, FL, July 31, 2006 -- Exactech, Inc. (Nasdaq: EXAC) announced today that revenue for the second quarter of 2006 increased 11% to $26.6 million from $23.9 million in the second quarter of 2005. Diluted earnings per share for the quarter was $0.18 based on net income of $2.1 million, compared to diluted earnings per share of $0.16 on net income of $1.9 million for the second quarter of 2005.
Gainesville, FL, July 31, 2006 -- Exactech, Inc. (Nasdaq: EXAC) announced today that revenue for the second quarter of 2006 increased 11% to $26.6 million from $23.9 million in the second quarter of 2005. Diluted earnings per share for the quarter was $0.18 based on net income of $2.1 million, compared to diluted earnings per share of $0.16 on net income of $1.9 million for the second quarter of 2005.
For the first six months of 2006, revenue was $52.0 million, an increase of 12% over revenue of $46.5 million in the first six months of 2005. Net income for the first six months increased 21% to $3.7 million, or $0.31 per diluted share, compared to $3.0 million, or $0.27 per diluted share, in the first half of 2005.
Exactech Chairman and CEO Bill Petty said, “We saw welcome improvements in a number of areas during the quarter. Sales of knee products, our largest business segment, increased 4% to $14.4 million from $13.8 million in the same quarter of 2005. Hip product sales rose 13% to $4.6 million, compared with $4.1 million in the second quarter of 2005. We also had a solid 12% gain in revenues from tissue services to $3.0 million in the quarter compared to $2.6 million. The other products category includes our Equinoxe™ shoulder system and pre-formed antibiotic cement spacers. These have grown substantially compared to the second quarter of 2005, rounding out our line of product offerings for total joint repair for hips, knees and shoulders.”
Petty said, “U.S. sales grew 9% to $20.1 million from $18.4 million in the comparable quarter in 2005 while international sales were up 19% to $6.5 million from $5.4 million in the second quarter of 2005. Our international business remains consistently strong. We are making real progress on the domestic front in all product areas, including our hip and knee segments.”
Chief Financial Officer Jody Phillips said, “Gross margin percentage during the quarter declined from 67% last year to 66% as a result of the larger international sales mix and unfavorable production variances due to our inventory rationalization. Total operating expenses in the quarter increased 4% to $13.4 million. R&D expenses increased 7%, sales and marketing expenses increased 3% and general and administrative expenses decreased 6% during the quarter due to lower insurance expenses. Interest expenses had a meaningful impact on our earnings, but we were encouraged by the improvements in our balance sheet during the quarter with a reduction in our inventory and credit line levels.”
Looking forward, the company said its target for diluted earnings per share in the third quarter ending September 30, 2006 is in the range of $0.15 to $0.16 based on anticipated revenues of $22.5 million to $24.5 million. The company’s target range for 2006 revenue is $100 million to $106 million with diluted EPS of $0.60 to $0.66. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance.
The company has scheduled a conference call on Tuesday, Aug. 1 at 10 a.m. Eastern time. To participate, call (888) 802-2280 any time after 9:50 a.m. Eastern on Aug. 1. International and local callers should dial (913) 312-1266.
A live webcast of the call will be available at http://viavid.net/dce.aspx?sid=00003318 . The webcast will be available for one month. Viewers will need Windows Media Player or Real Player to listen to the broadcast. To download Media Player, go to http://www.microsoft.com/windows/windowsmedia/download .
The financial statements are below.
About Exactech
Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech’s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States and in more than 25 countries in Europe, Asia, Australia and Latin America.
An investment profile on Exactech may be found at http://www.hawkassociates.com/exactech/profile.php .
Additional information about Exactech, Inc. can be found at http://www.exac.com . An online virtual investor relations kit containing Exactech press releases, SEC filings, current price quotes, stock charts and other useful information for investors can be found on the Hawk Associates website, http://www.hawkassociates.com . Investors may contact Chief Financial Officer Jody Phillips at (352) 377-1140 or Julie Marshall or Frank Hawkins, Hawk Associates Inc., at (305) 451-1888, e-mail: info@hawkassociates.com.
This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which represent the company’s expectations or beliefs concerning future events of the company’s financial performance. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include the effect of competitive pricing, the company’s dependence on the ability of thirdparty manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company’s products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.
