K2M Group Holdings, Inc. (KTWO) saw its loss widen to $12.47 million, or $0.30 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $8.49 million, or $0.21 a share. Revenue during the quarter grew 13.96 percent to $61.79 million from $54.22 million in the previous year period. Gross margin for the quarter contracted 420 basis points over the previous year period to 62.08 percent. Operating margin for the quarter stood at negative 15.15 percent as compared to a negative 13.98 percent for the previous year period.
Operating loss for the quarter was $9.36 million, compared with an operating loss of $7.58 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.83 million compared with $1.29 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 1.34 percent for the quarter compared to 2.38 percent in the last year period.
"We reported constant currency revenue growth of 14.9% year-over-year in the fourth quarter, driven by U.S. constant currency revenue growth of 21.5% year-over-year," said president and chief executive officer, Eric Major. "We delivered approximately 17% growth in the U.S. in calendar year 2016 and we believe this strong performance reflects the Company’s success in executing our strategic plan to introduce differentiated spine technologies and expand our global distribution network. Our U.S. growth reflects the clearest indication yet of the increasing adoption of our innovative products by the spine surgeon community.. Outside the U.S., we successfully navigated challenging market disruptions with our distributors in Australia and Japan earlier in 2016, and look forward to building on our improving results during 2017 without the expectation of these headwinds. We continue to anticipate our ability to grow our U.S. revenue in the mid-teens in 2017 with improved profitability."
For financial year 2017, K2M Group Holdings, Inc. projects revenue to be in the range of $263 million to $270 million. The company expects net loss to be in the range of $34 million to $31 million.
Operating cash flow remains negative
K2M Group Holdings, Inc. has spent $13.30 million cash to meet operating activities during the year as against cash outgo of $18.31 million in the last year. The company has spent $24.41 million cash to meet investing activities during the year as against cash outgo of $14.28 million in the last year.
Cash flow from financing activities was $49.13 million for the year, down 12.62 percent or $7.09 million, when compared with the last year.
Cash and cash equivalents stood at $45.51 million as on Dec. 31, 2016, up 31.36 percent or $10.87 million from $34.65 million on Dec. 31, 2015.
Working capital increases
K2M Group Holdings, Inc. has recorded an increase in the working capital over the last year. It stood at $115.90 million as at Dec. 31, 2016, up 7.91 percent or $8.50 million from $107.41 million on Dec. 31, 2015. Current ratio was at 3.63 as on Dec. 31, 2016, up from 3.25 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 126 days for the quarter from 132 days for the last year period. Days sales outstanding went up to 35 days for the quarter compared with 33 days for the same period last year.
Days inventory outstanding has decreased to 122 days for the quarter compared with 156 days for the previous year period. At the same time, days payable outstanding went down to 30 days for the quarter from 57 for the same period last year.
Debt increases substantially
K2M Group Holdings, Inc. has witnessed an increase in total debt over the last one year. It stood at $72.80 million as on Dec. 31, 2016, up 111.48 percent or $38.38 million from $34.42 million on Dec. 31, 2015. Total debt was 18.98 percent of total assets as on Dec. 31, 2016, compared with 9.19 percent on Dec. 31, 2015. Debt to equity ratio was at 0.28 as on Dec. 31, 2016, up from 0.12 as on Dec. 31, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]