Globus Medical Reports 68.6 Percent Increase in Q2 Sales

Globus Medical Inc. is reporting a profitable second quarter.

For the three-month period ended June 30, the company’s net sales jumped 68.6 percent to $251 million. Gross profit ballooned 90.4 percent to $187.1 million, and net income for the quarter was $41.5 million, or 16.6 percent of net sales, which is an increase of 299.4 percent as compared to the second quarter of 2020. 
 
“Revenue in the second quarter was a record $251 million, an increase of 69 percent over the second quarter of 2020, as we continue to capture market share,” said Dave Demski, president and CEO. “Our U.S. Spine business grew by almost 64 percent over the second quarter of 2020, and by 30 percent over the second quarter of 2019. Pull through from robotics; contributions from new product introductions; a resurgence in our biologics business; and competitive recruiting were all factors driving growth. Enabling Technologies revenue was $21 million, nearly four times the second quarter of 2020, marking our third consecutive quarter of strong year-over-year growth.”
 
U.S. net sales for the second quarter of 2021, including robotics, increased by 71.9 percent compared to the second quarter of 2020. International net sales for the second quarter of 2021 increased by 51 percent over the second quarter of 2020 as-reported and increased 47.1 percent on a constant currency basis. Musculoskeletal Solutions revenue rose 60.5 percent to $230.2 million, and Enabling Technologies proceeds grew more than three-fold to $20.7 million (from $5.4 million in Q2 2020). 

“International revenue for the second quarter was $35.9 million growing 3.9 percent compared to Q2 of 2019,” said Keith Pfeil, senior vice president and chief financial officer. “We experienced strong growth in most international markets, which was dampened by lower sales in Japan based on our previously discussed sales transition. As mentioned in Q1, we expect Japan to be a headwind as we progress through 2021. However, this will strengthen our position in Japan over the longer term.”

GAAP diluted EPS for the second quarter of 2021 was $0.40, compared to ($0.21) for the second quarter 2020. Non-GAAP diluted EPS for the second quarter of 2021 was $0.56, compared to $0.07 in the second quarter of 2020, an increase of 691.2 percent.
 
The company generated net cash from operating activities of $59.2 million and non-GAAP free cash flow of $50.8 million during the second quarter of 2021. Cash, cash equivalents and marketable securities were $914.2 million as of June 30. The company remains debt free.
 
The company increased guidance for full year 2021 net sales from $925 million to $950 million and non-GAAP diluted earnings per share of $1.89 to $2.00.

“The industry is experiencing a decline in case volume early in the third quarter as surgeons take extended vacations and regional shutdowns of elective procedures emerge due to the delta variant of COVID-19. We expect the impact from vacations to reverse in September and October once kids go back to school,” Pfeil said. “While it is hard to predict the impact of the recent increases in COVID cases, the spine market has shown great resilience in dealing with COVID-19, and Globus specifically, has been able to take market share through the previous outbreaks. While we expect the situation to be transitory, we do project a sequential decline in revenue in Q3 associated with the procedural slowdown. Our second-quarter results continued a strong start to 2021. Year to date, we’ve generated $478.4 million in revenue, 35.1 percent in adjusted EBITDA and $1.05 in non-GAAP diluted earnings per share. As we look ahead to the back half of the year, we are focused on our continued push to take implant share and drive the adaptation of our robotics technology while continuing to launch new and exciting products.”