MiMedx Announces Record Results For First Quarter Of 2017

Friday, April 28, 2017 General News
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Company records 36% revenue growth, 261% increase in Net Income and 51% increase in Adjusted Net Income* over Q1 2016

MIMEDX GROUP, INC. AND SUBSIDIARIES

Non-GAAP Financial Measures and Reconciliation

In addition to our GAAP results, we provide certain Non-GAAP metrics including Adjusted EBITDA, Adjusted Gross Margin, Adjusted Net Income and Adjusted Diluted Net Income per share. We believe that the presentation of these measures provides important supplemental information to management and investors regarding our performance.   These measurements are not a substitute for GAAP measurements, although Company management uses these measurements as aids in monitoring the Company's on-going financial performance from quarter-to-quarter and year-to-year on a regular basis and for benchmarking against other medical technology companies. Adjusted EBITDA consists of GAAP Net Income excluding: (i) depreciation and amortization, (ii) interest income and expense, (iii) income taxes,  (iv) one time acquisition related costs, (v) the effect of purchase accounting due to acquisitions and (vi) share-based compensation expense.   Due to the impact of the acquisition of Stability in January 2016 and the release of the valuation allowance on the deferred tax asset on reported tax expense in 2015 on results, we have decided to provide additional adjusted non-GAAP measures to provide comparability of normal ongoing operating results. Beginning in 2016, we have reported Adjusted Gross Margin, Adjusted Net Income and Adjusted Diluted Net Income per Share to normalize results for comparison purposes.  Adjusted Gross Margin consists of GAAP gross margin excluding amortization of inventory fair value step-up. Adjusted Net Income and Adjusted Diluted Net Income per share consists of GAAP net income excluding: (i) one time acquisition related costs, (ii) amortization of inventory fair value step-up, (iii) amortization of intangible assets and (iv) share-based compensation. Reconciliations of GAAP net income to Adjusted EBITDA, GAAP Gross Margin to Adjusted Gross Margin and GAAP Net Income to Adjusted Net Income and Adjusted Diluted Net Income per Share for the three months ended March 31, 2017 and 2016 appear in the tables below (in thousands):

Three Months Ended March 31,

2017

2016

Net  Income (Per GAAP)

$         4,327

$        1,197

Add back:

  Income taxes

1,713

214

  One time costs incurred in connection with acquisition

713

  One time inventory costs incurred in connection with acquisition

75

734

  Other interest expense, net

145

56

  Depreciation expense

946

734

  Amortization of intangible assets

526

810

  Share-based compensation

4,671

4,615

Adjusted EBITDA

$       12,403

$        9,073

Reconciliation of "Adjusted Gross Margin" defined as Gross Margin before Amortization of inventory fair value step-up (in thousands):

Three Months Ended March 31,

2017

2016

Gross Margin (Per GAAP)

$             63,864

$          45,421

Non-GAAP Adjustments:

  One time inventory costs incurred in connection with acquisition

75

734

Gross Margin before Amortization of inventory fair value step-up

$             63,939

$          46,155

Adjusted Gross Margin

88.1%

86.5%

Reconciliation of "Adjusted Net Income" and "Adjusted Diluted Net Income" per share defined as Net Income less Amortization, One Time Costs and Share-Based Compensation (in thousands, except share and per share data):

Three Months Ended March 31,

2017

2016

Net income (Per GAAP)

$          4,327

$             1,197

Non-GAAP Adjustments:

  Tax rate normalization*

(355)

(350)

  One time costs incurred in connection with acquisition

713

  One time inventory costs incurred in connection with acquisition

75

734

  Amortization of intangible assets

526

810

  Share-based compensation

4,671

4,615

  Estimated income tax impact from adjustments

(1,805)

(2,777)

Adjusted Net Income

$          7,439

$             4,942

Adjusted Diluted Net Income per Share

$            0.07

$               0.04

Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities

113,730,591

112,039,860

* Assumes a normalized tax rate of 40% for 2016 and 34% for 2017.



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