LDR Spine Boosts Sales by Double Digits for Q4 and Fiscal 2013

Austin, Texas-based LDR Holding Corp., which makes spine technology, reported gains for its 2013 fourth quarter and fiscal year (ended Dec. 31).

LDR’s revenue from exclusive technology products grew 32.9 percent to $27.5 million in the fourth quarter of 2013, while revenue from traditional fusion products increased 5.1 percent to $4.5 million. Revenue from sales of the company’s exclusive cervical products grew 31.8 percent in the fourth quarter of 2013, compared with the fourth quarter of 2012, due principally to the growth of Mobi-C. Additionally, revenue from LDR’s exclusive lumbar products in the fourth quarter increased 34.7 percent compared with the fourth quarter of 2012, in part due to U.S. Food and Drug Adminsitration (FDA) approval of the Avenue L Lateral lumbar fusion interbody device that was introduced in the United States in September 2012.

“We are pleased with our strong performance, especially the robust sales growth in our exclusive technology products,” said Christophe Lavigne, president and CEO of LDR Holding. “We are gratified by the strong interest among spine surgeons in education and training sessions for Mobi-C, the first and only cervical disc replacement device to receive FDA approval to treat both one-level and two-level cervical disc disease. In the sales area, the availability of Mobi-C and its superiority claim has been quite attractive to independent sales agencies which otherwise do not have access to cervical disc replacement devices. Mobi-C is clearly helping us to win over spine practices as new accounts to LDR.”

Gross profit for the fourth quarter of 2013 was $26.6 million and gross margin was 83.2 percent, compared to a gross profit of $20.9 million and a gross margin of 83.7 percent for the fourth quarter of 2012.

On a geographic basis, for the fourth quarter of 2013, LDR’s revenue in the United States increased 37.3 percent to $24.9 million, compared to $18.1 million in the fourth quarter of 2012, and represented 77.7 percent of total revenue. LDR’s international revenue increased 3.8 percent for the fourth of quarter 2013 to $7.1 million, representing 22.3 percent of total revenue.

Net loss for the fourth quarter of 2013 totaled $15.1 million, or 69 cents per share, which included $7.4 million in non-cash expense related to the beneficial conversion of promissory notes and $5.5 million in noncash accretion related to warrants and discounts on long-term debt, compared to a net loss of $2.4 million, or 52 cents per share, for the same quarter a year ago.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter of 2013 was $1 million compared to an adjusted EBITDA of $1.1 million for the fourth quarter of 2012.

For the full year, LDR’s total revenue was $111.6 million, an increase of 22.7 percent, compared to $90.9 million for the same period a year ago. For fiscal year 2013, revenue from LDR’s exclusive technology products grew 27.5 percent to $92.8 million, while revenue from traditional fusion products increased 3.7 percent to $18.8 million.

Gross profit for the year was $93.6 million and gross margin was 83.9 percent, compared to a gross profit of $76.1 million and a gross margin of 83.8 percent for the same period in 2012. Gross margin was favorably impacted by a higher mix of exclusive technology products and increased sales in the United States.

LDR’s revenue in the United States increased 27 percent to $82.3 million, compared to $64.8 million for the same period a year ago. International revenue increased 12.1 percent to $29.3 million, compared to $26.1 million for the same period a year ago.

For fiscal 2013, the company’s loss totaled $27.9 million, or $3.09 per diluted share, which included $7.4 million in non-cash expense related to the beneficial conversion of promissory notes, $6.9 million in non-cash accretion related to warrants and discounts on long-term debt and $5.6 million in non-cash expenses associated with the revaluation of warrants leading up to the initial public offering (IPO), compared to a net loss of $9.7 million, or $2.10 per diluted share, for the same period a year ago.

For the year, adjusted EBITDA was $3 million, compared to an adjusted EBITDA of $2.2 million for the same period a year ago.

“Our exclusive technology products uniquely meet surgeon and patient needs and represent a significant sales opportunity in today’s spine marketplace,” Lavigne added. “With the completion of our initial public offering last October, we have the resources to take full advantage of this opportunity through investments in surgeon training and education, our reimbursement and corporate organization, and our sales and marketing infrastructure. These investments will enhance LDR’s competitive position and growth profile.”

LDR’s stock climbed from its initial $15 pricing to a high of $31 a share in early February.