Media Contacts

    Wendy Crites Wacker, APR
    Vice President, Global Communications
    wwacker@rtix.com
    386.418.8888 Ext. 4220

    Erin Morton, APR, CPRC
    Manager, Corporate Communications & Family Services - RTI Donor Services
    emorton@rtix.com
    368.418.8888 Ext. 4218



News


RTI Surgical® Announces 2015 Fourth Quarter, Full Year Results, 2016 Financial Guidance

Robert Jordheim
Executive Vice President, Chief Financial Officer
rjordheim@rtix.com
386.418.8888

Wendy Crites Wacker, APR
Vice President, Global Communications
wwacker@rtix.com
386.418.8888

– Company Achieves Record Annual Revenues –
– Company Will Hold Conference Call at 8:30 a.m. ET –

ALACHUA, Fla. (Feb. 16, 2016) – RTI Surgical Inc. (RTI) (Nasdaq: RTIX), a global surgical implant company, reported operating results for the fourth quarter and full year of 2015 as follows:

Quarterly Highlights:

  • Achieved worldwide revenues of $76.1 million, a 7 percent increase over the fourth quarter of 2014 (8 percent on a constant currency basis).
  • Achieved adjusted net income per fully diluted share of $0.09 compared to adjusted net income per fully diluted share of $0.05 for the fourth quarter 2014.
  • Achieved revenues of $18.2 million in the orthofixation business, a 61 percent increase over the fourth quarter of 2014.
  • Achieved revenues of $11.1 million in the BGS and general orthopedic business, an 8 percent increase over the fourth quarter of 2014.
  • Achieved revenues of $6.6 million in the dental business, a 10 percent increase over the fourth quarter of 2014.
  • Achieved revenues of $5.5 million in the international business, an 11 percent increase on a constant currency basis over the fourth quarter of 2014.

2015 Full Year Highlights:

  • Achieved record worldwide revenues of $282.3 million, a 7 percent increase over the full year of 2014 (9 percent on a constant currency basis).
  • Achieved adjusted net income per fully diluted share of $0.23 compared to adjusted net income per fully diluted share of $0.11 for the full year 2014.
  • Achieved revenues of $55.6 million in the orthofixation business, a 50 percent increase over the full year of 2014.
  • Achieved revenues of $42.3 million in the BGS and general orthopedic business, a 15 percent increase over the full year of 2014.
  • Achieved revenues of $23.6 million in the dental business, a 14 percent increase over the full year of 2014.
  • Achieved revenues of $21.9 million in the international business, a 4 percent increase on a constant currency basis over the full year of 2014.
  • nanOss® 3D advanced bone graft substitute was awarded a 2015 Becker's Healthcare Spine Device Award. Becker's Healthcare recognized 25 spine devices throughout the industry for their contributions to advancing spine technology and patient care.

Fourth Quarter 2015

Worldwide revenues were $76.1 million for the fourth quarter of 2015 compared to revenues of $70.9 million for the fourth quarter of 2014. Domestic revenues were $70.6 million for the fourth quarter of 2015 compared to revenues of $65.4 million for the fourth quarter of 2014. International revenues were $5.5 million for the fourth quarter of 2015, which were comparable to the fourth quarter of 2014. On a constant currency basis, international revenues for the fourth quarter of 2015 increased 11 percent compared to the fourth quarter of 2014.

For the fourth quarter of 2015, the company reported net income applicable to common shares of $3.3 million and net income per fully diluted common share of $0.06, based on 58.5 million fully diluted shares outstanding, compared to net loss applicable to common shares of $136 thousand and net loss per fully diluted common share of $0.00 for the fourth quarter of 2014, based on 56.9 million fully diluted shares outstanding.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), as detailed in the reconciliation provided later in this release, was $14.1 million for the fourth quarter of 2015 (18 percent of fourth quarter 2015 revenues) compared to $10.2 million for the fourth quarter of 2014 (14 percent of fourth quarter 2014 revenues).

Full Year 2015

Worldwide revenues were $282.3 million for the full year of 2015 compared to revenues of $262.8 million for the full year of 2014. Domestic revenues were $260.4 million for the full year of 2015 compared to revenues of $238.9 million for the full year of 2014. International revenues were $21.9 million for the full year of 2015, compared to revenues of $23.9 million for the full year of 2014. On a constant currency basis, international revenues for the full year of 2015 increased 4 percent compared to the full year of 2014.

For the full year of 2015, the company reported net income applicable to common shares of $11.6 million and net income per fully diluted common share of $0.20, based on 58.6 million fully diluted shares outstanding, compared to net loss applicable to common shares of $417 thousand and net loss per fully diluted common share of $0.01 for the full year of 2014, based on 56.7 million fully diluted shares outstanding.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), as detailed in the reconciliation provided later in this release, was $46.3 million for the full year of 2015 (16 percent of full year 2015 revenues) compared to $34.0 million for the full year of 2014 (13 percent of full year 2014 revenues).

“At the beginning of the year we laid out a plan for growth based on our key value drivers of capturing market share in spine hardware, driving growth in our focused products, growing international revenue and controlling spending,” said Brian K. Hutchison, president and chief executive officer. “During 2015, we executed on all our value drivers and delivered strong annual growth of 7 percent. In addition, we more than doubled our adjusted net income per fully diluted common share from $0.11 for the full year 2014 to $0.23 for the full year 2015.”

Fiscal 2016 and First Quarter Outlook

The company expects full year revenues for 2016 to be between $280 million and $290 million, based on growth in its direct businesses offset by declines in its commercial business. The company expects full year revenue from its direct business to be between $156 million to $160 million, compared to $138.8 million for the full year 2015, and expects full year revenue from its commercial/other business to be between $124 million and $130 million, compared to $143.5 million for the full year 2015. Full year net income per fully diluted common share is expected to be in the range of $0.18 to $0.21, based on 59.8 million fully diluted common shares outstanding. During 2016, the company plans to spend an incremental amount of approximately $1.4 million, or $0.02 per fully diluted common share, in research and development expenses related to ongoing development of the company’s long-term xenograft tendon project.

For the first quarter of 2016, the company expects revenues to be between $65 million and $66 million and net income per fully diluted common share to be approximately $0.03, based on 59 million fully diluted shares outstanding.

“As a company, we are focused on driving growth in our direct business,” Hutchison said. “In order to provide clarity on our performance we are adjusting the way we report revenue. Specifically, we will break out our total direct business revenue into the following components: spine, sports/orthopedics, surgical specialties, cardiothoracic and international. In addition, we will consolidate our commercial business into a single revenue category. We believe this will provide better visibility into our direct businesses as well as correlate to identifiable end markets. For convenience, we are showing both the traditional revenue reporting and the new revenue reporting in this release. We have also posted a three year quarterly history of both the traditional and new revenue reporting on our website www.rtix.com.”

Conference Call

RTI will host a conference call and simultaneous audio webcast to discuss the fourth quarter and full year results at 8:30 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419. The webcast can be accessed through the investor section of RTI’s website at www.rtix.com. A replay of the conference call will be available on the RTI website following the call.

About RTI Surgical Inc.

RTI Surgical is a leading global surgical implant company providing surgeons with safe biologic, metal and synthetic implants. Committed to delivering a higher standard, RTI’s implants are used in sports medicine, general surgery, spine, orthopedic, trauma and cardiothoracic procedures and are distributed in nearly 50 countries. RTI is headquartered in Alachua, Fla., and has four manufacturing facilities throughout the U.S. and Europe. RTI is accredited in the U.S. by the American Association of Tissue Banks and is a member of AdvaMed. For more information, please visit www.rtix.com.

Forward Looking Statement

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management's beliefs and certain assumptions made by our management. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, except for historical information, any statements made in this communication about anticipated financial results, growth rates, new product introductions, future operational improvements and results or regulatory actions or approvals or changes to agreements with distributors also are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties, including the risks described in public filings with the U.S. Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company's SEC filings may be obtained by contacting the company or the SEC or by visiting RTI's website at www.rtix.com or the SEC's website at www.sec.gov.








Use of Non-GAAP Financial Measures

To supplement the Company’s condensed consolidated financial statements presented on a GAAP basis, the Company discloses adjusted EBITDA, a non-GAAP financial measure that excludes certain amounts. This non-GAAP financial measure is not in accordance with, or an alternative for, generally accepted accounting principles in the United States. A reconciliation of the non-GAAP financial measure to the corresponding GAAP measure is included in the table above.

The following is an explanation of the adjustment that management excluded as part of adjusted measures for the three and twelve month period ended December 31, 2015 and 2014 as well as the reason for excluding the individual items:

(1) 2015 Asset abandonments – This adjustment represents an abandonment of certain long-term assets at our German facility. Management removes the amount of these costs from our operating results to assist in assessing our operating performance in the year-to-date period and to supplement a comparison to our past operating performance.

(2) 2015 and 2014 Litigation and settlement charges – This adjustment represent charges relating to settlements of domestic and international distributor disputes. Management removes the amount of these costs from our operating results to assist in assessing our operating performance in the year-to-date period and to supplement a comparison to our past operating performance.

(3) 2015 and 2014 Severance charges – This adjustment represents charges relating to the termination of former employees. Management removes the amount of these costs from our operating results to assist in assessing our operating performance in the year-to-date period and to supplement a comparison to our past operating performance.

(4) 2015 and 2014 Severance charges – This adjustment represents charges relating to the termination of former employees. Management removes the amount of these costs from our operating results to assist in assessing our operating performance in the year-to-date period and to supplement a comparison to our past operating performance.

(5) 2014 Inventory purchase accounting adjustment – This adjustment represents the purchase price effects on the sale of inventory acquired in the Pioneer Surgical Technologies, Inc. acquisition in 2013, which have been included in costs of processing and distribution. Management removes the amount of these nonrecurring costs from the Company’s operating results to assist in assessing its operating performance in the periods affected and to supplement a comparison to the Company’s past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

Adjusted EBITDA should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting adjusted EBITDA in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making which excludes the inventory purchase accounting adjustment. The Company further believes that providing this information better enables the Company’s investors to understand the Company’s overall core performance and to evaluate the methodology used by management to assess and measure such performance.

Traditional revenue reporting:



New revenue reporting:






Find RTI's historical financials and new revenue reporting format here.


Media Contacts

    Wendy Crites Wacker, APR
    Vice President, Global Communications
    wwacker@rtix.com
    +1 386.418.8888 Ext. 4220

    Erin Morton, APR, CPRC
    Manager, Corporate Communications & Family Services - RTI Donor Services
    emorton@rtix.com
    386.418.8888 Ext. 4218