U.S. Advanced Wound Therapeutics revenue grew 10%
SAN ANTONIO - Friday, July 31st 2015 [ME NewsWire]
(BUSINESS WIRE)-- Acelity L.P. Inc.:
Second Quarter Financial Highlights
Revenue of $461.6 million, up 0.5% from the prior-year period and 5.1% on a constant currency basis
Revenue from Advanced Wound Therapeutics (“AWT”) devices grew double digits in the U.S. led by double digit volume increases compared to the prior-year period
Loss from continuing operations improved to $17.6 million compared to $153.8 million in the prior-year period
Adjusted EBITDA from continuing operations1 of $172.9 million, grew 2.9% versus the prior-year period and 5.6% on a constant currency basis, achieving an Adjusted EBITDA margin of 37.5%
Operational Highlights
Acelity’s revolutionary V.A.C.® Therapy technology achieves another record level of seasonally adjusted worldwide rental volumes
Announced two innovative product offerings in Europe: TIELLE® Non Adhesive, intended to manage a range of exudate levels and increase the comfort and ease for a patient; and the REVOLVE™ System which offers fast, efficient and secure fat tissue processing in a range of reconstructive procedures
Joe Woody, President and Chief Executive Officer, commented, “We delivered a strong financial performance in the second quarter, reflecting the power of Acelity’s growing global scale, innovative product portfolio and robust sales and service infrastructure.
“On a consolidated basis, we delivered another consecutive quarter of year over year revenue growth. We have extended our leading position in North America and have also generated strong growth in emerging markets with double-digit increases across Latin America, China and India. In addition, we successfully introduced new products including Nanova™, TIELLE® and REVOLVE™ as well as negotiated future sales channels and distributors.
“Looking ahead, we believe we have the right strategies in place to ensure a resilient platform for sustainable growth. We continue to invest in innovation, further penetration within emerging markets, and development of markets served by our focus products in order to generate long-term value creation.”
Results of the second quarter and six months ended June 30, 2015
Acelity revenue for the second quarter of 2015 was $461.6 million, up from the prior-year period by 0.5% as reported and 5.1% on a constant currency basis.
AWT revenue was $354.2 million, up 1.9% as reported and 7.4% on a constant currency basis, compared to the prior-year period. Growth in AWT revenue was driven by increased NPWT volumes, continued strength in focus product growth led by sales of Prevena™, and sustained growth in our international markets resulting from increased global market penetration.
Regenerative Medicine revenue was $103.5 million, down 3.7% as reported and 2.3% on a constant currency basis, compared to the prior-year period. The decline was primarily due to lower volumes associated with U.S. hernia repair procedures, partially offset by strong growth in international markets.
Adjusted EBITDA from continuing operations for the second quarter of 2015 increased 2.9% to $172.9 million from $167.9 million in the prior-year period and increased 5.6% on a constant currency basis. The growth rate of Adjusted EBITDA from continuing operations was negatively impacted by 2.7% due to unfavorable movements in foreign exchange rates. Growth in Adjusted EBITDA was primarily attributable to strong revenue coupled with lower expenses resulting from our integration and business optimization efforts. Our loss from continuing operations for the second quarter of 2015 was $17.6 million, compared to $153.8 million in the prior-year period.
Acelity revenue for the six months ended June 30, 2015 was $905.7 million, up from the prior-year period by 0.4% as reported and 4.7% on a constant currency basis.
AWT revenue was $691.5 million, up 1.9% as reported and 7.1% on a constant currency basis, compared to the prior-year period. Growth in AWT revenue was fueled primarily by higher NPWT volumes during the first half of 2015, double-digit focus product growth, and growth in our international markets.
Regenerative Medicine revenue was $207.7 million, down 3.0% as reported and 1.7% on a constant currency basis, compared to the prior-year period. The decline was primarily due to lower volumes associated with U.S. hernia repair procedures, partially offset by growth in breast reconstruction and solid growth in international markets.
Adjusted EBITDA from continuing operations for the six months ended June 30, 2015 increased 5.2% to $338.7 million from $322.0 million in the prior-year period and increased 8.0% on a constant currency basis. The growth rate of Adjusted EBITDA from continuing operations was negatively impacted by 2.8% due to unfavorable movements in foreign exchange rates. Growth in Adjusted EBITDA was primarily attributable to solid revenue performance as well as expense savings associated with integration and business optimization efforts. Our loss from continuing operations for the six months ended June 30, 2015 was $22.2 million, compared to $200.9 million in the prior-year period.
Financial Position
Total cash at June 30, 2015 was $141.2 million. During the first six months of 2015, Acelity used cash of $5.3 million in operations, used cash of $39.0 million in investing activities and provided cash of $7.0 million from financing activities.
As of June 30, 2015, total long-term debt outstanding, net of discounts, was $4.837 billion and our Net Leverage Ratio2 was 6.3x.
Company Structure
Acelity is a non-operating holding company whose business is comprised of the operations of wholly-owned subsidiaries that commercialize our advanced wound therapeutics and regenerative medicine products. Our advanced wound therapeutics business is conducted by KCI and its subsidiaries, including Systagenix, and our regenerative medicine business is conducted by LifeCell. Acelity is controlled by investment funds advised by Apax Partners and controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board and certain other co-investors. Unless otherwise noted in this report, the terms “we,” “our” or “Company,” refer to Acelity and its subsidiaries, collectively.
Non-GAAP Financial Information
The following provides information regarding non-GAAP financial measures used in this earnings release:
To supplement our consolidated results presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we have disclosed non-GAAP financial measures of operating results that exclude or adjust certain items. A reconciliation of Adjusted EBITDA from continuing operations and Adjusted EBITDA to net loss is provided later in this earnings release. In addition, the Company presents certain of its financial results on a constant currency basis in addition to GAAP results. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. In this release, we calculate constant currency by calculating current-year results using prior-year foreign currency exchange rates.
Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of our business performance and are useful for period-over-period comparisons of the performance of our business. While management believes that these financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies. See "Reconciliation from GAAP to Non-GAAP" included within this release for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures.
1Adjusted EBITDA from continuing operations excludes the operations of our previously divested SPY ELITE® business and the impact of merger-related expenses, foreign currency gains or losses, business optimization expenses and other expenses specified in the reconciliation within this release.
2 The Net Leverage Ratio represents Net Debt divided by Consolidated EBITDA for the last twelve months. Net Debt consists of total indebtedness including capital leases and other financing obligations, less cash and cash equivalents up to the greater of$300.0 million or 40% of Consolidated EBITDA for the last twelve months. Consolidated EBITDA, as defined in our senior secured credit agreement, represents Adjusted EBITDA from continuing operations plus “run rate” cost savings.
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Contacts
Acelity L.P. Inc.
Investors
Caleb Moore, 210-255-6433
caleb.moore@acelity.com
or
Media
Cheston Turbyfill, 210-515-7757
cheston.turbyfill@acelity.com
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