Becker's Spine Review

30 DEVICES & IMPLANTS Stryker Reports 6.1% Q2 Growth, Installs 26 Mako Systems: 7 Things to Know By Laura Dyrda S tryker reported a 6.1 percent net sales growth for the second quarter of 2017, and raised full-year guidance due to strong performance. Here are seven things to know: 1. Stryker net sales reached $3 billion in the second quarter, a 6.1 per- cent increase over the same period last year. U.S. sales hit $2.2 billion, up 2.4 percent, while international sales were $811 million, a 2.7 per- cent growth over last year. 2. Orthopedics net sales hit $1.1 billion, up 5.5 percent over the same period last year. Here is the breakdown by segment: • Knee: $389 million, up 5 percent • Hip: $322 million, down 0.3 percent • Trauma and extremities: $351 million, up 7 percent • Other: $79 million, up 32 percent 3. Stryker's MedSurg net sales were $1.3 million. Here is the break- down by segment: • Instruments: $392 million, up 4.1 percent • Endoscopy: $406 million, up 13.9 percent • Sustainability: $64 million, up 10 percent 4. Neurotechnology and spine net sales were $500 million. Spine sales hit $183 million, a 2.9 percent decrease, and neurotechnology in- creased 13.9 percent to $352 million. "We have some challenges [in spine] … the market overall looks to be challenged certainly in this quarter," said Katherine A. Owen during Stryker's quarterly conference call, according to Seeking Alpha's transcript. "We've had some Stryker issues as we work through some of the supply challenges, but on the positive front, those do appear to be moderating for us. And we're also seeing really strong demand, but we are capacity constrained for our Tri- tanium products." e company has several projects in research and development, and as a result expects to see improvement long term. 5. Net earnings increased 2.9 percent to $291 million in the quarter. 6. Stryker now expects 2017 organic net sales growth between 6.5 per- cent and 7 percent. 7. In the second quarter, Stryker reported 26 Mako robots were in- stalled globally, a 5 percent increase over last year. ere were 20 new systems installed in the U.S., and the company expects to "largely complete all U.S. system upgrades during 2018." ere are more than 400 surgeons trained on the Mako system to date. n Mazor Robotics Sells 14 Mazor X Systems in Q2, Revenue Jumps 87% to $15.5M: 7 Things to Know By Laura Dyrda M azor Robotics reported an 87 percent increase in sec- ond quarter revenue. Here are seven things to know: 1. Revenue hit $15.5 million in the second quarter of 2017, driven by a 110 percent increase in U.S. revenue compared to the same period last year. The company sold 14 Mazor X systems during the quarter. 2. Mazor ended the quarter with a 14-system backlog and expects to ship those systems in the third quar- ter. Revenues from those 14 systems will be recorded during the second half of 2017. 3. Recurring revenue from kit sales, service and others increased 50 per- cent to $6.3 million in the quarter, driven by an increase in the number of systems installed around the world. International revenue dropped from $1.6 million last year to $1.4 million during the second quarter of 2017. 4. Net loss for the second quarter was $3.7 million, compared to a $4.1 mil- lion net loss over the same period last year. Mazor's gross margin was 69.4 percent, a decrease from last year due to the higher manufacturing costs of the Mazor X system when compared with the Renaissance system. 5. Mazor reported operating expens- es at $14.6 million, up from $10.3 million last year due to an increased investment in sales and marketing. Cash and operating activities during the quarter reached $7.4 million. 6. For the first half of 2017, revenue increased 85 percent over the same period last year. Recurring revenue jumped 44 percent for the first six months of the year. 7. Cash, cash equivalents and invest- ments as of June 30, 2017, were $57.4 million. n

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