The Leesburg, Va.-based orthopedics company posted losses of -$8.5 million, or -20¢ per share, on sales of $62.7 million for the three months ended Sept. 30, widening its losses by 7.0% on sales growth of 5.6% compared with Q3 2016.
The results topped Wall Street’s consensus outlook on earnings by a penny but missed The Street’s $66.0 million sales forecast.
“Our revenue results for the third quarter of 2017 reflect total revenue growth of 6% year-over-year on a GAAP basis and 5% on a constant-currency basis,” chairman, president & CEO Eric Major said in prepared remarks. “Although we continued to see growth, our third-quarter revenue performance was impacted by slower initial on-boarding of the new distribution team in the U.S., disruption of account activity and canceled procedures related to the hurricanes in Texas, Florida and Puerto Rico in early September. Third-quarter deformity trends were strong in July and August and we experienced strong headwinds in September. U.S. sales growth in our degenerative procedure category continued to be fueled by our new product introductions including our industry-leading 3D-printed portfolio, offset partially by modestly weaker procedure volumes as compared to last year.
“We have made significant progress in 2017 toward our goal of introducing new and innovative spinal implant solutions. We have supplemented this organic growth activity with exciting strategic acquisitions of intellectual property for expandable implants and a cervical vertebral body replacement device that is the first and only static corpectomy cage in the world to receive a cervical 510(k) clearance. We also announced an important strategic collaboration with Brainlab, one of the world’s leading imaging and navigation companies. We remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies,” Major said.
K2M said it still expects to report constant-currency sales growth of 8% to 9% this year, but cut its profit guidance to losses of -$37.0 million to -$35.0 million, compared with -$34.0 million to -$31.0 million previously.