Globus Medical (NYSE:GMED) shares gained some 7% today on strong 3rd-quarter results but surprised Wall Street with news of the pending resignation of CFO Richard Rubin.
Globus reported profits of $23.1 million, or 24¢ per share, on sales of $117.8 million for the 3 months ended Sept. 30, for profit growth of 13.5% on sales growth of $9.9%. Analysts were looking for EPS of 22¢ on sales of $113 million.
Baron, who will step down effective Nov. 3 but stay on through the transition to a new finance chief, was cagey about his plans during a conference call with analysts yesterday. He’s leaving to "pursue other interests," according to a press release.
"As far as my personal plans, I’m really sincerely of looking at those other interest that some CFOs could have and other opportunities as they come along," Baron said. "Other interests and opportunities. We’ve done a lot here in 3 years. [Investor relations director Ed Joyce] points out to me that this has been something that I’ve been doing over the course of my career, although I don’t really think of it that way. This is the 4th or 5th company that I’ve been with as a public CFO; most of those I took public. And with the results and how good we are right now, it seems like a really good time to transition off and make sure that it’s as seamless as possible. It’s as simple as looking to do something else, nothing more nothing less."
President & COO Dave Demski will assume Baron’s duties during the replacement search, which is already under way.
Baron said the acquisition of bone allograft maker Texas Transplant Technologies is expected to add $2 million to the top line during the 4th quarter. That prompted Globus to raise its sales outlook for 2014 to $462 million to $467 million, up from $460 million to $465 million. The company said it still expects to report adjusted EPS of 90¢ to 92¢.
"We are very pleased with our record sales in the 3rd quarter. This result can be attributed to consistent, steady execution of our growth strategy over the past several quarters, primarily the introduction of innovative technology and the expansion of our sales footprint, both in the U.S. and abroad," chairman & CEO David Paul said in prepared remarks. "EPS was also a record this quarter, as we continue to see operating leverage in all facets of the business, while maintaining our disciplined approach to spending. Lastly, we are excited by the potential of our recently announced acquisition of Transplant Technologies of Texas."
GMED shares were up 6.8% to $22.31 apiece as of about 12:45 p.m. Eastern today.
