U.S. Advanced Wound Therapeutics revenue grew 11.0%
SAN ANTONIO. - Sunday, May 3rd 2015 [ME NewsWire]
(BUSINESS WIRE)-- Acelity L.P. Inc.:
Financial Highlights
Revenue of $444.1 million, up 0.3% from the prior-year period and 4.2% on a constant currency basis
Adjusted EBITDA from continuing operations1 of $165.8 million, grew 7.7% versus the prior-year period and 10.5% on a constant currency basis, achieving an Adjusted EBITDA margin of 37.3%
Loss from continuing operations improved to $4.5 million compared to $47.1 million in the prior-year period
Operational Highlights
Celebrated the 20th anniversary of Acelity’s revolutionary V.A.C.® Therapy technology with record level of seasonally adjusted units in use
Launched two innovative product offerings: Nanova™, an advanced wound dressing enhanced by NPWT, and the industry-first iOn Healing™ mobile application designed to provide wound care clinicians with a suite of tools to improve customer support and increase productivity
Won arbitration with Vital Needs (“VNI”); the arbitration panel found that KCI has no liability for any of the claims asserted by VNI
Successfully amended senior secured credit facility to provide enhanced financial flexibility
Joe Woody, President and Chief Executive Officer, commented, “twenty years ago, we introduced the revolutionary V.A.C.® Therapy System which transformed the wound care landscape. This innovative technology has become the treatment of choice around the world, supported by more published clinical evidence than any other form of NPWT on the market and has treated more than 9 million wounds worldwide.”
“Our strong performance in the first quarter was driven by our North American Advanced Wound Therapeutics devices business, which delivered double-digit growth and achieved the highest seasonally adjusted volumes in the history of the Company. We are well positioned to build on this successful expansion of our core market, adapt to new payment models in the U.S. and abroad, and reduce the total overall cost of care. These operational successes, coupled with our relentless focus on balancing cost control with execution, position the Company to drive long-term value creation as a leading, globally diversified healthcare company.”
Results of the first quarter ended March 31, 2015
Acelity revenue for the first quarter of 2015 was $444.1 million, up from the prior-year period by 0.3% as reported and 4.2% on a constant currency basis.
Advanced Wound Therapeutics (“AWT”) revenue was $337.3 million, up 2.0% as reported and 6.7% on a constant currency basis, compared to the prior-year period. Growth in AWT revenue was fueled primarily by increased NPWT volumes during the quarter, double-digit focus product growth led by sales of Prevena™, and strong growth in our international markets as we increased our market penetration globally.
Regenerative Medicine revenue was $104.2 million, down 2.3% as reported and 1.0% on a constant currency basis, compared to the prior-year period. The decline was primarily due to lower volumes associated with hernia repair procedures, partially offset by mid-single digit growth in breast reconstruction and strong growth in international markets.
Adjusted EBITDA from continuing operations for the first quarter of 2015 increased 7.7% to $165.8 million from $154.0 million in the prior-year period and increased 10.5% 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 attributable to strong revenue as well as expense savings associated with our integration and business optimization efforts. Our loss from continuing operations for the first quarter of 2015 was $4.5 million, compared to $47.1 million in the prior-year period.
Woody concluded, “Acelity is executing on a plan to achieve breakthrough performance in 2015, building off two consecutive quarters of revenue growth. We plan to reinvest in our business globally and expand our product portfolio through investments in innovation and complementary acquisitions to further accelerate growth and market penetration.”
Financial Position
Total cash at March 31, 2015 was $250.5 million. During the first quarter of 2015, Acelity generated cash of $102.3 million from operations, used cash of $15.0 million in investing activities and used cash of $13.2 million in financing activities. On March 10, 2015, we entered into Amendment No. 6 to our Senior Secured Credit Facility (“Amendment No. 6”). As a result of Amendment No. 6, the financial covenants were amended to remove the interest coverage ratio in its entirety and to set the total leverage ratio for any test period to be no greater than 8.25:1.00. In addition, Amendment No. 6 resulted in an increase to the nominal interest rates of each term loan under our senior secured credit facility by 50 basis points.
As of March 31, 2015, total long-term debt outstanding was $4.800 billion and our Net Leverage Ratio2 was 6.1x.
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
Within this document, we have presented 1) Adjusted EBITDA from continuing operations, as defined in our senior secured credit agreement and 2) supplemental revenue and EBITDA data to exclude the impact of foreign currency fluctuations on a non-GAAP basis.
These non-GAAP financial measures do not replace the presentation of our GAAP results. We have provided this supplemental non-GAAP information because it may provide meaningful information regarding our results on a basis that better facilitates an understanding of our results of operations which may not be otherwise apparent under GAAP. Management uses this non-GAAP financial information, along with GAAP information, for reviewing the operating results of its business segments and for analyzing potential future business trends. In addition, we believe some investors may use this information in a similar fashion. A reconciliation of certain GAAP selected financial information for the periods presented to the non-GAAP selected financial information provided is included herein.
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.
To view the report and tables please click here.
Contacts
Acelity
Investors:
Caleb Moore, 210-255-6433
caleb.moore@acelity.com
Media:
Cheston Turbyfill, 210-255-7757
cheston.turbyfill@acelity.com
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