K2M reported second quarter financial results, with revenue up 18.4 percent over the same period last year.
"We remain focused on increasing our share of the $2.6 billion global complex spine and minimally invasive markets and we believe the combination of product innovation, sales execution and continued expansion of our global distribution network will drive shareholder value creating going forward," said K2M CEO Eric Major in a company news release.
Here are 10 things to know from K2M's recent financial report at the three months end June 30, 2014:
1. Total revenue reached $47.5 million, up 18.4 percent over the same period last year.
2. Domestic revenue was up 11.6 percent over the same period last year, reaching $33.2 million. International revenue experienced a bigger growth — 38.1 percent — reaching $14.3 million.
3. The loss from operations during the second quarter was $12.8 million, up from $11 million reported in the second quarter of last year. The net loss attributable to stockholders was $9.6 million, compared with $9.5 million in 2013.
4. The company's cash and cash equivalents were $36.2 million in the second quarter, up significantly from the $7.4 million reported on Dec. 31, 2013. The company closed its IPO, raising net process of around $119 million. With IPO proceeds, the company added $36.5 million of cash to its balance sheet and repaid all outstanding amounts under its Revolving Credit Agreement.
5. Operating expenses increased 14.5 percent to $44.2 million in the second quarter over the same period last year, driven by increased sales volume resulting in higher sales commissions. Increased employee compensation costs due to international direct sales employees also contributed to the higher operating expenses.
6. The company's gross profit was up 13.5 percent to $31.5 million. Gross margin was down 287 basis points year-over-year to 66.2 percent. The decline was due to the United States and select international market pricing drops. Another factor is instrument set amortization increased $800,000 to $1.9 million for the three months end from increased instrument purchases to support the company's revenue growth.
7. In the second quarter, the company introduced the SERENGETI Minimally Invasive Retractor System in Japan and launched the CAYMAN Minimally Invasive Plate System in the United States, United Kingdom and Australia.
8. The company's complex spine business was up 5.7 percent to $13.8 million in the second quarter. Minimally invasive business revenue was up 10.3 percent to $4 million and the degenerative business jumped 18.5 percent to $11.9 million.
9. The company maintains full year 2014 revenue outlook at $180 million to $183 million, which would be a 14 percent to 16 percent year-over-year growth.
10. As of June 30, the company had no outstanding indebtedness.
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