gmed-20240220x8k
false0001237831DE00012378312024-02-202024-02-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 20, 2024  

GLOBUS MEDICAL, INC.

(Exact name of registrant as specified in charter)

DELAWARE

 

001-35621

 

04-3744954

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2560 GENERAL ARMISTEAD AVENUE, AUDUBON, PA 19403

(Address of principal executive offices) (Zip Code)

(610) 930-1800

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of exchange on which registered

Class A Common Stock, par value $.001 per share

GMED

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition.

On February 20, 2024, we issued a press release reporting, among other things, our sales and operating results for the three- and twelve-month periods ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, the information included in this Item 2.02, and the exhibits attached hereto, shall be deemed to be “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.

Description

 

 

99.1

Press Release dated February 20, 2024

104

The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GLOBUS MEDICAL, INC.

 

 

(Registrant)

 

 

 

Dated:

February 20, 2024

/s/ KEITH PFEIL

 

 

 

 

 

Keith Pfeil

 

 

Chief Financial Officer and Chief Operating Officer

Chief Accounting Officer

Senior Vice President

 

 

(Principal Financial Officer)

Exhibit 991 Earnings Release

Exhibit 99.1





Globus Medical Reports Fourth Quarter and Full Year 2023 Results



AUDUBON, PA, February 20, 2024: Globus Medical, Inc. (NYSE: GMED), a leading musculoskeletal technology company, today announced its financial results for the fourth quarter and year ended December 31, 2023.



Fourth Quarter 2023:

·

Worldwide net sales were $616.5 million, an increase of 124.6%, or 123.8% on a constant currency basis

·

GAAP net income for the quarter was $15.0 million

·

GAAP diluted earnings per share (“EPS”) was $0.11 and non-GAAP diluted EPS was $0.60

·

Non-GAAP adjusted EBITDA was  $170.0 million, or 27.6% of net sales



Full Year 2023:

·

Worldwide net sales were $1,568.5 million, an increase of 53.3% on an actual and constant currency basis

·

GAAP net income for the year was $122.9 million

·

GAAP diluted EPS was $1.07 and non-GAAP diluted EPS was $2.32

·

Non-GAAP adjusted EBITDA was  $464.1 million, or 29.6% of net sales



I am pleased to report on the remarkable progress we’ve made at Globus Medical. Our merger with NuVasive has been a transformative milestone, where we pursue a vision of providing the best innovative technology and most dedicated level of customer service for our surgeons and their patients,” said Dan Scavilla, president and CEO. “The integration is progressing according to plan, underscoring our commitment to a  seamless transition and operational efficiency. Looking ahead to 2024, the pipeline of product launches, especially in enabling technologies, aligns with our philosophy of anticipating and meeting evolving customer needs. We recognize the importance of staying ahead of the curve, a principle that guides our approach to innovation and client service. I believe the potential for Globus has never been greater, as we continue to redefine spine surgery with procedural solutions built around enabling technology.”

 

Worldwide sales set a record for both fourth quarter and full year 2023, as we completed the merger with NuVasive on September 1, 2023,” said Keith Pfeil, COO-CFO. “Excluding the impacts of the NuVasive merger, legacy Globus fourth quarter revenue was $304.1 million, an increase of 10.8 percent over the prior year fourth quarter, and full year revenue was $1.154 billion, or 12.8 percent higher than the prior year. We remain focused on merger integration activities as they continue to proceed according to plan and we look forward to achieving milestones as we work to get back to a steady state of running the business. We remain well positioned to deliver on our commitments for the coming year.”



Worldwide net sales for the fourth quarter were $616.5 million, an as-reported increase of 124.6% over the fourth quarter of 2023, and an increase of 123.8% on a constant currency basisU.S. net sales for the fourth quarter of 2023 increased by 111.1% compared to the fourth quarter of 2022. International net sales increased by 200.9% over the fourth quarter of 2023 on an as-reported basis, and an increase of 200.8% on a constant currency basis. Net Sales increases were driven by the addition of NuVasive, as well as increased volume of spine product sales and enabling technology volume.



Worldwide net sales for the full year of 2023 were $1,568.5 million, an increase of 53.3% as compared to the full year of 2022 on an actual and constant currency basis.  U.S. net sales for the full year of 2023 increased by 46.8 % compared to the full year of 2022. International net sales increased by 91.3% over the full year of 2023 on an as-reported basis, and an increase of 92.3% on a constant currency basis. 



GAAP net income for the fourth quarter was $15.0 million, a decrease of 70.0% over the same period in the prior year, driven primarily by the addition of NuVasive results and acquisition related costs incurred in the quarter since the closing date. Diluted EPS for the fourth quarter was $0.11, compared to $0.49 for the fourth quarter of 2022. Non-GAAP net income for the fourth quarter was $83.5 million, an increase of 38.9% over the same period in the prior year, driven primarily by contributions from the NuVasive merger. Non-GAAP diluted EPS for the fourth quarter of 2023 was $0.60, compared to $0.59 in the fourth quarter of 2022,  an increase of 2.1% driven by higher Non-GAAP net income, partially offset by a  higher diluted share count as a result of the stock-for-stock merger with NuVasive.



Net cash provided by operating activities was $258.9 million, and non-GAAP free cash flow was $178.9 million for the full year of 2023.  



2024 Annual Guidance



The Company reaffirms its full year 2024 revenue guidance range of $2.450 billion to $2.475 billion and fully diluted non-GAAP earnings per share range between $2.68 to $2.70.


 

Conference Call Information



Globus Medical will hold a teleconference to discuss its 2023 fourth quarter and full year results with the investment community at 4:30 p.m. Eastern Time today.  



Participants may access the conference call live via webcast on the Investors page of Globus Medical’s website at https://www.investors.globusmedical.com/news-events/events-webcasts.



To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. The audio archive will be available after the call on the Investor page of the Globus Medical website.



About Globus Medical, Inc.



Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.


 

Non-GAAP Financial Measures 



To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures.  For example, non-GAAP Adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation expense, provision for litigation, acquisition related costs/licensing and acquisition of in-process research and development, merger and acquisition related costs/licensing, certain foreign currency acquisition-related impacts, and gains and losses from strategic investments, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense.  Our management also uses non-GAAP Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.  Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized.  Acquisition related costs/licensing represents the change in fair value of business-acquisition-related contingent consideration; costs related to integrating recently acquired businesses, including but not limited to costs to exit or convert contractual obligations, severance, retention bonus, duplicative costs and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one-time licensing fees.  Acquisition of in-process research and development represents the expensing of acquired assets with no alternative future use and related fees.  We also adjusted for certain foreign currency impacts related to the acquisition costs and gains/losses on strategic investments within other assets as we believe these impacts are not a measure of our operating performance.



In addition, for the period ended December 31, 2023 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP Diluted Earnings Per Share, which represent net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, merger and acquisition related costs/licensing, certain foreign currency impacts, gains and losses from strategic investments, the impact of dilution attributable to the Convertible Notes, and the tax effects of all of the foregoing adjustments. We also present Non-GAAP gross profit, which excludes the impacts of any inventory acquisition-related costs within cost of goods sold. The tax effect adjustment represents the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments, unless the underlying item has a materially different tax treatment, in which case the estimated tax rate applicable to the adjustment is used.  We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of the foregoing items, which we believe are not reflective of underlying business trends.  Additionally, for the period ended December 31, 2023 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment.  We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions. Furthermore, the non-GAAP measure of constant currency net sales growth is calculated by translating current year net sales at the same average exchange rates in effect during the applicable prior year period.  We believe constant currency net sales growth provides insight to the comparative increase or decrease in period net sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.



Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit, free cash flow and constant currency net sales growth are not calculated in conformity with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP. These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results. Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit, free cash flow and constant currency net sales growth may differ from that of other companies and therefore may not be comparable.




 

Safe Harbor Statements



All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms.  These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends.  Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted. These risks and uncertainties include, but are not limited to, the risks and costs associated with the integration of the NuVasive business and Globus Medical, Inc.’s ability to successfully integrate and achieve anticipated synergies with the NuVasive business,  health epidemics, pandemics and similar outbreaks, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks.  For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the U.S. Securities and Exchange Commission.  These documents are available at www.sec.gov. Moreover, we operate in an evolving environment.  New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements.  Forward-looking statements contained in this press release speak only as of the date of this press release.  We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.


 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands, except per share amounts)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Net sales

$

616,534 

 

$

274,498 

 

$

250,021 

 

$

1,568,476 

 

$

1,022,843 

 

$

958,102 

Cost of sales

 

265,486 

 

 

70,591 

 

 

61,796 

 

 

548,174 

 

 

263,725 

 

 

239,223 

Gross profit

 

351,048 

 

 

203,907 

 

 

188,225 

 

 

1,020,302 

 

 

759,118 

 

 

718,879 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

52,253 

 

 

19,507 

 

 

51,022 

 

 

124,010 

 

 

73,015 

 

 

97,346 

Selling, general and administrative

 

244,718 

 

 

118,075 

 

 

106,560 

 

 

643,410 

 

 

432,117 

 

 

408,149 

Provision for litigation, net

 

250 

 

 

 —

 

 

5,410 

 

 

434 

 

 

2,341 

 

 

5,921 

Amortization of intangibles

 

28,122 

 

 

4,506 

 

 

4,556 

 

 

51,032 

 

 

17,735 

 

 

18,526 

Acquisition-related costs

 

15,581 

 

 

7,791 

 

 

2,477 

 

 

68,274 

 

 

5,959 

 

 

16,984 

Total operating expenses

 

340,924 

 

 

149,879 

 

 

170,025 

 

 

887,160 

 

 

531,167 

 

 

546,926 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income/(loss)

 

10,124 

 

 

54,028 

 

 

18,200 

 

 

133,142 

 

 

227,951 

 

 

171,953 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income/(expense), net

 

(2,581)

 

 

5,315 

 

 

1,939 

 

 

20,130 

 

 

14,233 

 

 

9,297 

Foreign currency transaction gain/(loss)

 

19,908 

 

 

2,688 

 

 

(454)

 

 

14,259 

 

 

(1,020)

 

 

(1,423)

Other income/(expense)

 

(2,456)

 

 

85 

 

 

143 

 

 

(2,138)

 

 

1,855 

 

 

580 

Total other income/(expense), net

 

14,871 

 

 

8,088 

 

 

1,628 

 

 

32,251 

 

 

15,068 

 

 

8,454 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) before income taxes

 

24,995 

 

 

62,116 

 

 

19,828 

 

 

165,393 

 

 

243,019 

 

 

180,407 

Income tax provision

 

9,960 

 

 

12,051 

 

 

4,722 

 

 

42,520 

 

 

52,850 

 

 

31,216 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

$

15,035 

 

$

50,065 

 

$

15,106 

 

$

122,873 

 

$

190,169 

 

$

149,191 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income/(loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain/(loss) on marketable securities

 

8,893 

 

 

4,199 

 

 

(2,623)

 

 

13,231 

 

 

(14,040)

 

 

(6,054)

Foreign currency translation gain/(loss)

 

(18)

 

 

3,397 

 

 

(1,095)

 

 

1,207 

 

 

(3,818)

 

 

(4,673)

Total other comprehensive income/(loss), net of tax

 

8,875 

 

 

7,596 

 

 

(3,718)

 

 

14,438 

 

 

(17,858)

 

 

(10,727)

Comprehensive income/(loss)

$

23,910 

 

$

57,661 

 

$

11,388 

 

$

137,311 

 

$

172,311 

 

$

138,464 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.11 

 

$

0.50 

 

$

0.15 

 

$

1.09 

 

$

1.89 

 

$

1.48 

Diluted

$

0.11 

 

$

0.49 

 

$

0.14 

 

$

1.07 

 

$

1.85 

 

$

1.44 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

137,883 

 

 

99,967 

 

 

101,495 

 

 

113,087 

 

 

100,469 

 

 

100,734 

Diluted

 

139,021 

 

 

102,209 

 

 

104,192 

 

 

114,630 

 

 

102,643 

 

 

103,623 




 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)







 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,

 

December 31,

(In thousands, except share and per share values)

 

2023

 

2022

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

467,292 

 

$

150,466 

Short-term marketable securities

 

 

50,497 

 

 

295,592 

Accounts receivable, net of allowances of $8,934 and $4,724, respectively

 

 

503,235 

 

 

213,247 

Inventories

 

 

848,135 

 

 

298,981 

Prepaid expenses and other current assets

 

 

44,580 

 

 

20,997 

Income taxes receivable

 

 

1,635 

 

 

4,061 

Total current assets

 

 

1,915,374 

 

 

983,344 

Property and equipment, net of accumulated depreciation of $425,695 and $343,036, respectively

 

 

586,932 

 

 

243,729 

Operating lease right of use assets

 

 

59,931 

 

 

5,988 

Long-term marketable securities

 

 

75,428 

 

 

495,852 

Intangible assets, net

 

 

924,603 

 

 

63,574 

Goodwill

 

 

1,434,540 

 

 

197,471 

Other assets

 

 

78,590 

 

 

37,323 

Deferred income taxes

 

 

10,685 

 

 

48,845 

Total assets

 

$

5,086,083 

 

$

2,076,126 



 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

56,671 

 

$

36,101 

Accrued expenses

 

 

240,460 

 

 

92,169 

Operating lease liabilities

 

 

11,967 

 

 

2,536 

Income taxes payable

 

 

3,845 

 

 

990 

Business acquisition liabilities

 

 

61,035 

 

 

13,308 

Deferred revenue

 

 

18,369 

 

 

14,100 

Total current liabilities

 

 

392,347 

 

 

159,204 

Business acquisition liabilities, net of current portion

 

 

78,323 

 

 

54,950 

Operating lease liabilities

 

 

91,037 

 

 

3,475 

Senior convertible notes

 

 

417,400 

 

 

 —

Deferred income taxes and other tax liabilities

 

 

84,421 

 

 

1,779 

Other liabilities

 

 

24,596 

 

 

10,345 

Total liabilities

 

 

1,088,124 

 

 

229,753 



 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Class A common stock; $0.001 par value.  Authorized 500,000,000 shares; issued and outstanding 113,905,565 and 77,762,282 shares at December 31, 2023 and December 31, 2022, respectively

 

 

114 

 

 

78 

Class B common stock; $0.001 par value.  Authorized 275,000,000 shares; issued and outstanding 22,430,097 and 22,430,097 shares at December 31, 2023 and December 31, 2022, respectively

 

 

22 

 

 

22 

Additional paid-in capital

 

 

2,870,749 

 

 

630,952 

Accumulated other comprehensive income/(loss)

 

 

(10,192)

 

 

(24,630)

Retained earnings

 

 

1,137,266 

 

 

1,239,951 

Total equity

 

 

3,997,959 

 

 

1,846,373 

Total liabilities and equity

 

$

5,086,083 

 

$

2,076,126 




 

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Year Ended



 

December 31,

(In thousands)

 

2023

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

122,873 

 

$

190,169 

 

$

149,191 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Acquired in-process research and development

 

 

 —

 

 

150 

 

 

34,312 

Depreciation and amortization

 

 

144,733 

 

 

68,252 

 

 

69,867 

Amortization of premiums on marketable securities

 

 

793 

 

 

5,389 

 

 

2,781 

Provision for excess and obsolete inventory

 

 

10,959 

 

 

6,400 

 

 

6,143 

Amortization of inventory fair value step up

 

 

71,656 

 

 

 —

 

 

 —

Amortization of 2025 Note fair value step up

 

 

8,176 

 

 

 —

 

 

 —

Stock-based compensation expense

 

 

52,742 

 

 

32,810 

 

 

30,586 

Allowance for doubtful accounts

 

 

3,658 

 

 

(1)

 

 

1,200 

Change in fair value of business acquisition liabilities

 

 

17,434 

 

 

5,132 

 

 

16,807 

Change in deferred income taxes

 

 

(57,789)

 

 

(22,223)

 

 

(17,615)

(Gain)/loss on disposal of assets, net

 

 

1,541 

 

 

299 

 

 

464 

Payment of business acquisition related liabilities

 

 

(3,005)

 

 

(2,647)

 

 

(210)

Net (gain)/loss from foreign currency adjustment

 

 

(13,674)

 

 

 —

 

 

 —

(Increase) decrease in:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(49,914)

 

 

(50,843)

 

 

(25,895)

Inventories

 

 

(70,328)

 

 

(61,745)

 

 

(11,971)

Prepaid expenses and other assets

 

 

1,148 

 

 

(10,292)

 

 

(6,178)

Increase (decrease) in:

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

(14,223)

 

 

14,418 

 

 

3,684 

Accrued expenses and other liabilities

 

 

17,127 

 

 

6,087 

 

 

17,896 

Income taxes payable/receivable

 

 

(408)

 

 

(2,887)

 

 

5,212 

Net cash provided by/(used in) operating activities

 

 

243,499 

 

 

178,468 

 

 

276,274 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(100,643)

 

 

(419,534)

 

 

(622,359)

Maturities of marketable securities

 

 

240,190 

 

 

312,221 

 

 

227,908 

Sales of marketable securities

 

 

537,723 

 

 

102,433 

 

 

109,898 

Purchases of property and equipment

 

 

(78,274)

 

 

(74,047)

 

 

(56,898)

Acquisition of businesses, net of cash acquired and purchases of intangible and other assets

 

 

(296,028)

 

 

(31,435)

 

 

(34,488)

Net cash provided by/(used in) investing activities

 

 

302,968 

 

 

(110,362)

 

 

(375,939)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Payment of business acquisition-related liabilities

 

 

(8,039)

 

 

(7,185)

 

 

(9,349)

Net proceeds from exercise of stock options

 

 

12,397 

 

 

41,716 

 

 

63,496 

Payments related to tax withholdings for share-based compensation

 

 

(10,617)

 

 

 —

 

 

 —

Repurchase of common stock

 

 

(225,562)

 

 

(144,493)

 

 

 —

Net cash provided by/(used in) financing activities

 

 

(231,821)

 

 

(109,962)

 

 

54,147 

Effect of foreign exchange rates on cash

 

 

2,180 

 

 

(747)

 

 

(810)

Net increase/(decrease) in cash and cash equivalents

 

 

316,826 

 

 

(42,603)

 

 

(46,328)

Cash and cash equivalents at beginning of period

 

 

150,466 

 

 

193,069 

 

 

239,397 

Cash and cash equivalents at end of period

 

$

467,292 

 

$

150,466 

 

$

193,069 



 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

 

Income taxes paid, net

 

$

100,593 

 

$

77,823 

 

$

45,027 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Equity issued in conjunction with the NuVasive merger

 

$

2,153,883 

 

$

 —

 

 

 —

Accrued purchases of property and equipment

 

$

7,100 

 

$

7,423 

 

$

4,551 




 

Supplemental Financial Information



Net Sales by Product Category:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Year Ended



 

December 31,

 

December 31,

(In thousands)

 

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Musculoskeletal Solutions

 

$

583,820 

 

$

244,999 

 

$

224,624 

 

$

1,448,260 

 

$

926,703 

 

$

876,780 

Enabling Technologies

 

 

32,714 

 

 

29,499 

 

 

25,397 

 

 

120,216 

 

 

96,140 

 

 

81,322 

Total net sales

 

$

616,534 

 

$

274,498 

 

$

250,021 

 

$

1,568,476 

 

$

1,022,843 

 

$

958,102 





Liquidity and Capital Resources:





 

 

 

 

 

 



 

 

 

 

 

 



 

December 31,

 

December 31,

(In thousands)

 

2023

 

2022

Cash and cash equivalents

 

$

467,292 

 

$

150,466 

Short-term marketable securities

 

 

50,497 

 

 

295,592 

Long-term marketable securities

 

 

75,428 

 

 

495,852 

Total cash, cash equivalents and marketable securities

 

$

593,217 

 

$

941,910 





The following tables reconcile GAAP to Non-GAAP financial measures.



Non-GAAP Adjusted EBITDA Reconciliation Table:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands, except percentages)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Net income/(loss)

$

15,034 

 

$

50,065 

 

$

15,106 

 

$

122,873 

 

$

190,169 

 

$

149,191 

Interest (income)/expense, net

 

2,581 

 

 

(5,315)

 

 

(1,939)

 

 

(20,130)

 

 

(14,233)

 

 

(9,297)

Provision for income taxes

 

9,960 

 

 

12,051 

 

 

4,722 

 

 

42,520 

 

 

52,850 

 

 

31,216 

Depreciation and amortization

 

71,162 

 

 

16,911 

 

 

16,829 

 

 

144,733 

 

 

68,252 

 

 

69,867 

EBITDA

 

98,737 

 

 

73,712 

 

 

34,718 

 

 

289,996 

 

 

297,038 

 

 

240,977 

Stock-based compensation expense

 

11,577 

 

 

8,507 

 

 

7,805 

 

 

38,995 

 

 

32,810 

 

 

30,586 

Provision for litigation, net

 

250 

 

 

 —

 

 

5,410 

 

 

434 

 

 

2,341 

 

 

5,921 

Acquisition-related costs/licensing

 

76,431 

 

 

7,791 

 

 

2,934 

 

 

148,498 

 

 

6,854 

 

 

19,622 

Acquisition of in-process research and development

 

 —

 

 

150 

 

 

34,312 

 

 

 —

 

 

150 

 

 

34,312 

Net (gain) loss from strategic investments

 

(460)

 

 

 —

 

 

 —

 

 

(192)

 

 

 —

 

 

 —

Non-cash acquisition-related foreign currency impacts

 

(16,572)

 

 

 —

 

 

 —

 

 

(13,674)

 

 

 —

 

 

 —

Adjusted EBITDA

$

169,963 

 

$

90,160 

 

$

85,179 

 

$

464,057 

 

$

339,193 

 

$

331,418 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) as a percentage of net sales

 

2.4% 

 

 

18.2% 

 

 

6.0% 

 

 

7.8% 

 

 

18.6% 

 

 

15.6% 

Adjusted EBITDA as a percentage of net sales

 

27.6% 

 

 

32.8% 

 

 

34.1% 

 

 

29.6% 

 

 

33.2% 

 

 

34.6% 




 

Non-GAAP Net Income Reconciliation Table:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Net income/(loss)

$

15,034 

 

$

50,065 

 

$

15,106 

 

$

122,873 

 

$

190,169 

 

$

149,191 

Provision for litigation, net

 

250 

 

 

 —

 

 

5,410 

 

 

434 

 

 

2,341 

 

 

5,921 

Amortization of intangibles

 

28,123 

 

 

4,506 

 

 

4,556 

 

 

51,032 

 

 

17,735 

 

 

18,526 

Acquisition-related costs/licensing

 

76,431 

 

 

7,791 

 

 

2,934 

 

 

148,498 

 

 

6,854 

 

 

19,622 

Acquisition of in-process research and development

 

 —

 

 

150 

 

 

34,312 

 

 

 —

 

 

150 

 

 

34,312 

Non-cash acquisition-related foreign currency impacts

 

(16,572)

 

 

 —

 

 

 

 

(13,674)

 

 

 —

 

 

         —

Net gain/(loss) on strategic investments

 

(460)

 

 

 —

 

 

 

 

(192)

 

 

 —

 

 

 —

Tax effect of adjusting items

 

(19,310)

 

 

(2,415)

 

 

(11,245)

 

 

(42,570)

 

 

(5,695)

 

 

(16,151)

Non-GAAP net income/(loss)

$

83,496 

 

$

60,097 

 

$

51,073 

 

$

266,401 

 

$

211,554 

 

$

211,421 





Non-GAAP Gross Profit Reconciliation Table:









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Cost of sales

$

265,486 

 

$

70,591 

 

$

61,796 

 

$

548,174 

 

$

263,725 

 

$

239,223 

Acquisition related costs/licensing

 

(52,591)

 

 

 —

 

 

 —

 

 

(71,656)

 

 

 —

 

 

 —

Adjusted cost of sales

$

212,895 

 

$

70,591 

 

$

61,796 

 

$

476,518 

 

$

263,725 

 

$

239,223 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted gross profit

$

403,638 

 

$

203,907 

 

$

188,225 

 

$

1,091,958 

 

$

759,118 

 

$

718,879 

Adjusted gross profit as a percentage

 

65.5% 

 

 

74.3% 

 

 

75.3% 

 

 

69.6% 

 

 

74.2% 

 

 

75.0% 





Non-GAAP Diluted Earnings Per Share Reconciliation Table:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Diluted earnings per share, as reported

$

0.11 

 

$

0.49 

 

$

0.14 

 

$

1.07 

 

$

1.85 

 

$

1.44 

Provision for litigation, net

 

0.00 

 

 

 —

 

 

0.06 

 

 

 —

 

 

0.02 

 

 

0.06 

Amortization of intangibles

 

0.20 

 

 

0.04 

 

 

0.04 

 

 

0.45 

 

 

0.17 

 

 

0.18 

Acquisition-related costs/licensing

 

0.55 

 

 

0.08 

 

 

0.03 

 

 

1.30 

 

 

0.07 

 

 

0.19 

Acquisition of in-process research and development

 

 —

 

 

 —

 

 

0.33 

 

 

 —

 

 

 —

 

 

0.33 

Net (gain) loss from strategic investments

 

(0.00)

 

 

 —

 

 

 —

 

 

(0.00)

 

 

 —

 

 

 —

Non-cash acquisition-related foreign currency impacts

 

(0.12)

 

 

 —

 

 

 —

 

 

(0.12)

 

 

 —

 

 

 —

Tax effect of adjusting items

 

(0.14)

 

 

(0.02)

 

 

(0.11)

 

 

(0.37)

 

 

(0.06)

 

 

(0.16)

Non-GAAP diluted earnings per share

$

0.60 

 

$

0.59 

 

$

0.49 

 

$

2.32 

 

$

2.06 

 

$

2.04 



*amounts might not add due to rounding



Non-GAAP Free Cash Flow Reconciliation Table:







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 

Year Ended



December 31,

 

December 31,

(In thousands)

2023

 

2022

 

2021

 

2023

 

2022

 

2021

Net cash provided by operating activities

$

104,674 

 

$

63,975 

 

$

76,253 

 

$

243,499 

 

$

178,468 

 

$

276,274 

Purchases of property and equipment

 

(22,881)

 

 

(18,340)

 

 

(17,045)

 

 

(78,274)

 

 

(74,047)

 

 

(56,898)

Free cash flow

$

81,793 

 

$

45,635 

 

$

59,208 

 

$

165,225 

 

$

104,421 

 

$

219,376 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




 

Non-GAAP Net Sales on a Constant Currency Basis Comparative Table:







 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Reported

 

Currency
Impact on 

 

Constant
Currency



 

December 31,

 

Net Sales

 

Current

 

Net Sales

(In thousands, except percentages)

 

2023

 

2022

 

Growth

 

Period Net Sales  

 

Growth

United States

 

$

490,841 

 

$

233,232 

 

110.5%

 

$

 —

 

110.5%

International

 

 

125,693 

 

 

41,266 

 

204.6%

 

 

2,331 

 

198.9%

Total net sales

 

$

616,534 

 

$

274,498 

 

124.6%

 

$

2,331 

 

123.8%







 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

Year Ended

 

Reported

 

Currency
Impact on 

 

Constant
Currency



 

December 31,

 

Net Sales

 

Current

 

Net Sales

(In thousands, except percentages)

 

2023

 

2022

 

Growth

 

Period Net Sales  

 

Growth

United States

 

$

1,279,765 

 

$

871,939 

 

46.8%

 

$

 —

 

46.8%

International

 

 

288,711 

 

 

150,904 

 

91.3%

 

 

860 

 

90.8%

Total net sales

 

$

1,568,476 

 

$

1,022,843 

 

53.3%

 

$

860 

 

53.3%



Contact:

Brian Kearns

Senior Vice President, Business Development and Investor Relations

Phone: (610) 930-1800

Email: investors@globusmedical.com

www.globusmedical.com