Exactech reported a 6 percent increase in second quarter revenue, which reached $63.9 million.
Here are five things to know about the company's financial report:
1. Net income was reported as $4.2 million, or $0.30 per diluted share, which is an increase from the $3.7 million reported in the same quarter last year. The company's six month revenue was up 6 percent over the same period last year, reaching $127.2 million. Net income was up 10 percent at the six-month mark.
Exactech President and CEO David Petty said the company's successful report "reflects our ability to differentiate ourselves and to compete effectively in a turbulent environment. This also underscores our ongoing success in providing a positive experience for our surgeon customers and hospitals."
2. The company's spine and biologic revenue decreased 5 percent to $6.5 million in the second quarter. The spine business grew, but biologics experienced a huge revenue decrease. Knee implant revenue was flat at $21 million, but both hip and extremity implant revenue increased. Extremity implant revenue recorded the biggest jump — 17 percent — to $19 million. The hip implant revenue increased a cool 6 percent to $11 million for the quarter.
Shoulder sales were a major driver of the company's gain, with a 17 percent increase. In the second half of the year, the company plans to launch the Alteon Tapered Wedge stem system for hips surgery.
3. United States sales were up 6 percent to $42.2 million during the second quarter. The international sales were also up 5 percent to $21.7 million. The United States sales represented 66 percent of total sales in the second quarter. For the six-months end, United States sales were also up 6 percent to $83.8 million and represented 66 percent of total sales.
In early July, Exactech Executive Vice President Gary J. Miller sold more than 12,000 shares of the company's stock; in June, Mr. Miller sold more than 16,000 shares. After both sales, he owned 21,606 shares of the company's stock, valued at $566,293 on July 7.
4. Gross margins increased to 69.4 percent, compared to 68.5 percent in the second quarter of 2013. However, total operating expenses were also up 6 percent to $37.5 million and increased to 59 percent of total sales. The operating profit increased 10 percent to $6.8 million, meaning the company is "delivering the operating margin level that we have been targeting," according to CFO Jody Phillips.
"Our balance sheet reflected the strong progress we are making in creating positive cash flow, which has enabled us to reduce debt down to very manageable levels and provides us with additional strength going forward."
5. Exactech updated its 2014 revenue guidance to reach between $249 million and $253 million. The company's diluted EPS target is now $1.19 to $1.23. The company anticipates third quarter revenue at $57.5 million to $59.5 million. In the second quarter, the company launched the Optetrak Logic Porous, a new porous technology for total knee arthroplasty.