Exactech Inc. (EXAC, Financial) filed Quarterly Report for the period ended 2009-06-30.
Exactech develops and markets orthopaedic implant devices related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech\'s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech Inc. has a market cap of $178.7 million; its shares were traded at around $14 with a P/E ratio of 14.8 and P/S ratio of 1.1. Exactech Inc. had an annual average earning growth of 12.2% over the past 5 years.
During the six months ended June 30, 2009, sales increased 4% to $86.6 million from $83.5 million in the comparable six months ended June 30, 2008, as we experienced some expansion in the market, which was partially offset by the effect of foreign currency fluctuations and the current economic downturn. Gross margins increased to 64.4% from 62.7% as a result of growth in our domestic sales with higher margins. Operating expenses increased 12% from the period ended June 30, 2008, and as a percentage
of sales, operating expenses increased to 55% during the first six months of 2009 as compared to 51% for the same period in 2008. This increase was partially due to $2.6 million in legal and other charges related to the DOJ, inquiry. We also incurred additional sales and marketing expenses and depreciation and amortization expenses as a result of our acquisitions during 2008. Net income for the six months ended June 30, 2009 decreased 13% and diluted earnings per share were $0.40 as compared to $0.47 last year. Net income was also affected by the DOJ inquiry, which had a net of tax impact of $1.6 million on net income and $0.12 effect on earnings per share. Excluding the impact of the DOJ inquiry costs, net income increased 3% to $6.7 million.
During the six months ended June 30, 2009, we acquired $8.0 million in property and equipment, including new production equipment, surgical instrumentation, and facility expansion. Cash flow from operations was $9.4 million for the six months ended June 30, 2009 as compared to a net cash flow from operations of $1.4 million during the six months ended June 30, 2008.
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Exactech develops and markets orthopaedic implant devices related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech\'s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech Inc. has a market cap of $178.7 million; its shares were traded at around $14 with a P/E ratio of 14.8 and P/S ratio of 1.1. Exactech Inc. had an annual average earning growth of 12.2% over the past 5 years.
Highlight of Business Operations:
During the quarter ended June 30, 2009, sales decreased 1% to $43.3 million from $43.7 million in the comparable quarter ended June 30, 2008, as we experienced the foreign currency effect of the weakened Euro and Pound Sterling (GBP) and the impact of the current economic downturn. Gross margins decreased to 62.3% from 62.6% as a result of variances associated with lower production volumes and inventory reductions. Operating expenses increased 4% from the quarter ended June 30, 2008, and as a percentage of sales, operating expenses increased to 52% during the second quarter of 2009 as compared to 50% for the same quarter in 2008. This increase was primarily due to $1.2 million in legal and other charges related to a Department of Justice, or DOJ, inquiry and higher research and development expenses. Net income for the quarter ended June 30, 2009 decreased 14% and diluted earnings per share were $0.20 as compared to $0.24 last year. Net income was also affected by the DOJ inquiry, which had a net of tax impact of $750,000 on net income and $0.06 effect on earnings per share. Excluding the impact of the DOJ inquiry costs, net income decreased 3% to $3.4 million.During the six months ended June 30, 2009, sales increased 4% to $86.6 million from $83.5 million in the comparable six months ended June 30, 2008, as we experienced some expansion in the market, which was partially offset by the effect of foreign currency fluctuations and the current economic downturn. Gross margins increased to 64.4% from 62.7% as a result of growth in our domestic sales with higher margins. Operating expenses increased 12% from the period ended June 30, 2008, and as a percentage
of sales, operating expenses increased to 55% during the first six months of 2009 as compared to 51% for the same period in 2008. This increase was partially due to $2.6 million in legal and other charges related to the DOJ, inquiry. We also incurred additional sales and marketing expenses and depreciation and amortization expenses as a result of our acquisitions during 2008. Net income for the six months ended June 30, 2009 decreased 13% and diluted earnings per share were $0.40 as compared to $0.47 last year. Net income was also affected by the DOJ inquiry, which had a net of tax impact of $1.6 million on net income and $0.12 effect on earnings per share. Excluding the impact of the DOJ inquiry costs, net income increased 3% to $6.7 million.
During the six months ended June 30, 2009, we acquired $8.0 million in property and equipment, including new production equipment, surgical instrumentation, and facility expansion. Cash flow from operations was $9.4 million for the six months ended June 30, 2009 as compared to a net cash flow from operations of $1.4 million during the six months ended June 30, 2008.
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