Globus Medical Inc (GMED) has reported a 35.38 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $24.30 million, or $0.25 a share in the quarter, compared with $37.60 million, or $0.39 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $30.19 million, or $0.31 a share compared with $30.58 million or $0.32 a share, a year ago.
Revenue during the quarter grew 6.31 percent to $151.59 million from $142.59 million in the previous year period. Gross margin for the quarter contracted 122 basis points over the previous year period to 74.27 percent. Total expenses were 76.44 percent of quarterly revenues, up from 60.73 percent for the same period last year. That has resulted in a contraction of 1571 basis points in operating margin to 23.56 percent.
Operating income for the quarter was $35.72 million, compared with $56 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $57.18 million compared with $53.73 million in the prior year period. At the same time, adjusted EBITDA margin improved 3 basis points in the quarter to 37.72 percent from 37.68 percent in the last year period.
David Paul, chairman and chief executive officer said, “Fourth quarter sales were $151.6 million, a year-over-year increase of 6.3%. Despite our increased spending in support of our pending robotics and trauma launches, our adjusted EBITDA margins was an outstanding 37.7%. We also delivered EPS of $0.25 and non GAAP EPS of $0.31.
Globus Medical Inc projects revenue to be $625 million for financial year 2017. For financial year 2017, the company forecasts diluted earnings per share to be $1.27 on adjusted basis.
Operating cash flow improves significantly
Globus Medical Inc has generated cash of $171.89 million from operating activities during the year, up 40.95 percent or $49.94 million, when compared with the last year.
The company has spent $99.55 million cash to meet investing activities during the year as against cash outgo of $150.55 million in the last year.
Cash flow from financing activities was $2.04 million for the year, down 67.74 percent or $4.29 million, when compared with the last year.
Cash and cash equivalents stood at $132.64 million as on Dec. 31, 2016, up 120.51 percent or $72.49 million from $60.15 million on Dec. 31, 2015.
Working capital declines
Globus Medical Inc has witnessed a decline in the working capital over the last year. It stood at $433.87 million as at Dec. 31, 2016, down 6.11 percent or $28.23 million from $462.11 million on Dec. 31, 2015. Current ratio was at 6.43 as on Dec. 31, 2016, down from 6.59 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 141 days for the quarter from 145 days for the last year period. Days sales outstanding went up to 29 days for the quarter compared with 28 days for the same period last year.
Days inventory outstanding has decreased to 133 days for the quarter compared with 139 days for the previous year period. At the same time, days payable outstanding was almost stable at 21 days for the quarter, when compared with the previous year period.
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