After a delay, Globus Medical (NYSE:GMED) launched its ExcelsiusGPS robotic surgical system late last year. This new system made an immediate impact in the musculoskeletal-solutions company's fourth-quarter results. And Globus Medical stock has been on a nice run ever since.
The company announced its 2018 first-quarter results after the market closed on Wednesday. Did Globus Medical receive another robot-assisted boost? Here are the highlights from the company's update.
Globus Medical results: The raw numbers
|$174.4 million||$155.8 million||
Net income from continuing operations
|$39.5 million||$28.7 million||
Adjusted earnings per share (EPS)
What happened with Globus Medical this quarter?
Globus Medical's biggest revenue growth came from its emerging technology products, with the ExcelsiusGPS robotics and navigation system front and center. The company recorded $12.8 million in sales in the first quarter from emerging technology products compared to a big goose egg in the prior-year period.
The company's spine products generated more modest revenue growth. Sales of these products increased 3.7% year over year to $161.6 million.
Globus' GAAP net income soared in the first quarter because of several factors. The solid revenue increase definitely helped. The company's improvement in gross profit margin was another key growth driver. In addition, lower taxes resulting from U.S. corporate tax reform added nearly $5.2 million to Globus' bottom line.
Adjusted EPS also jumped, but not quite as much as Globus' GAAP earnings. One key reason why was that the company issued additional shares over the last 12 months.
Globus Medical ended the first quarter with a rock-solid balance sheet. The company has no debt, and it reported cash, cash equivalents, and marketable securities totaling $473.6 million as of March 31, 2018.
What management had to say
Globus Medical CEO Dave Demski stated:
We are pleased with our first quarter performance-not only the continued excitement among surgeons and hospitals about ExcelsiusGPS, but also the above market growth we achieved in the U.S. with our core spine business and the solid operational improvements we saw in several important International markets. I'm very proud of our team's ability to capitalize on our growth opportunities while maintaining fiscal discipline, as our bottom line grew as fast as our top line, even though we continue to invest heavily in imaging, navigation, and robotics as well as trauma.
Thanks to its strong first quarter, Globus Medical raised its full-year 2018 guidance. The company now expects full-year 2018 sales of $695 million, up from its previous forecast of $690 million. Globus projects non-GAAP fully diluted EPS of $1.52, a boost from the $1.50 adjusted EPS guidance provided in February.
ExcelsiusGPS could be the gift that keeps on giving for Globus. The new system has played a big role in the company's great performance for two quarters in a row now, and it's still early.
With its large cash stockpile, it wouldn't be surprising for Globus Medical to once again be on the hunt for an acquisition. The company made a couple of significant deals over the past two years, including the buyout of AlphaTec's international business and robotics developer KB Medical. Globus is in even better position to make acquisitions now.