Developer of orthopedic implant devices Exactech Inc. (EXAC) recently announced the 10th year anniversary of its Equinoxe Shoulder System, a product line in its shoulder business.

The Equinoxe platform was launched way back in the year 2004 and since then, the company has sold approximately 60,000 shoulder implants. The Equinoxe Shoulder System now offers several proprietary glenoid operations.

The system provides unparalleled glenoid solutions for surgeons and also allows considerable flexibility during the course of a surgery.

The shoulder business – which is the largest product category of Exactech – has been performing impressively well and is quite instrumental in driving revenues for the company. In the recently concluded quarter, revenues at the business increased an impressive 23% year over year to $18.6 million.

The compelling performance and the favorable numbers clearly reflect the advantageous position the business enjoys and the growing popularity of its product lines such as Equinoxe Shoulder System.

Meanwhile, Exactech’s shoulder segment also boasts a strong product pipeline. The company is planning to launch a resurfacing product along with introducing Exactech Guided Personalized Surgery (GPS), particularly designed for the shoulder.

However, on a negative note, the shoulder segment continues to be the prime focus of the company’s sales force which is largely affecting the other product divisions. This gets adequately reflected in the overall dismal third-quarter performance of the company.

Third-quarter earnings declined 8.7% year over year to 21 cents and also fell below the company’s guided range of 24–26 cents. Strength in the company’s Extremity implant business was partly offset by weak revenues at the fragile Knee implant segment primarily due to soft knee implant sales in both Europe and the U.S.

Exactech also trimmed its 2014 earnings and revenue guidance. The company now expects annual earnings in the range of $1.14–$1.16 per share, lower than the earlier projection of $1.19–$1.23. Annual revenues are projected in the band of $247–$249 million, lower than the previous projection of $249–$253 million.

A lackluster performance in the recently reported quarter places Exactech in a tight position compared to its competitors Stryker Corp. (SYK) and Zimmer Holdings, Inc. (ZMH) and Globus Medical (GMED).

Currently, Exactech carries a Zacks Rank #5 (Strong Sell).

Read the Full Research Report on EXAC
Read the Full Research Report on SYK
Read the Full Research Report on ZMH
Read the Full Research Report on GMED


Zacks Investment Research