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Acquisitions Drive 40% Revenue Growth for ArthroCareArthroCare Corp. (Austin, TX) this month reported that its third-quarter revenues climbed to a record $53.6 million, up 40% from the year-ago period. The company, which manufactures surgical tools based on its patented Coblation technology, attributed more than half of this growth to its string of acquisitions, including the most recent purchase of Applied Therapeutics Inc. (Tampa, FL). Also during the quarter, ArthroCare settled its ongoing litigation with Smith & Nephew (London) by signing a worldwide supply agreement with Smith & Nephew’s endoscopy business. Under the agreement, ArthroCare will manufacture arthroscopy products for worldwide sale by Smith & Nephew. ArthroCare also has been granted a license for the worldwide sale of spine products. In addition to product sales from the supply agreement and royalties, ArthroCare received a one-time cash settlement and will receive a series of related milestone payments over the next 12 months.
“We are pleased to report a strong financial performance for the third quarter,” said Michael A. Baker, president and chief executive officer of ArthroCare. “We generated record revenue, strong cash flow, and grew earnings per share even more rapidly than sales. In addition, we completed a number of strategic initiatives — including the product supply agreement with Smith & Nephew and acquisition of Applied Therapeutics — which will further enhance our strategic position moving forward.” Year-to-date, ArthroCare reported net income of $15.2 million on revenue of $155 million, compared to net income of $8.3 million on revenue of $111.4 million in the year-ago period. The company’s largest business segment, sports medicine, produced year-over-year growth of 49% in the quarter and represented 67% of total product revenue. Sales revenues for ArthroCare’s spine division, representing 12% of product sales, were flat. Sales of the company’s ear, nose, and throat (ENT) division grew 49%. The ENT division’s growth was driven by ArthroCare’s tonsillectomy products, which were used in an estimated 30% of all tonsillectomies in the United States during the third quarter. The company expects its sales growth to continue with projected fourth-quarter revenue of between $55 million and $60 million. ArthroCare anticipates total revenue of between $255 million and $265 million in 2006. More information on ArthroCare, its technology, and its strategy for future growth can be found in the November/December 2005 issue of MX. This issue’s cover story features an interview with ArthroCare’s Baker. An expanded version of the interview can be found online at www.devicelink.com/mx.
© 2005 Canon Communications LLC | |
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