Globus Medical, a manufacturer of musculoskeletal devices, grew revenue by 10% in the fourth quarter, pushing full-year sales across the $1 billion mark.
“We achieved record sales while maintaining industry-leading profitability,” CEO Dan Scavilla said in a call with investors. “We had a strong competitive recruiting year, surpassing the hiring levels in 2020 and 2021. This is usually a leading indicator of growth in the coming years.”
Shares in Audubon, Penn.-based Globus fell 1.7% to $59.13 when the results were released on Tuesday.
Globus’ $3.1B buyout in the spotlight
Globus’ planned $3.1 billion takeover of spine specialist NuVasive dominated the Q&A part of the analyst call. Investors responded negatively to the deal when it was announced earlier this month, sending shares in Globus down around 20%.
Analysts asked Scavilla about Globus’ “flexibility and willingness to close the deal,” raised concerns about staff turnover as a result of the takeover, questioned savings the combined firm could achieve, and asked about products that regulators may ask it to divest to close the deal. Globus shared little new information, as analysts at BTIG explained in a note to investors.
“[Globus] didn't provide much color on the merger, only to reiterate their rationale. We continue to view [the] merger as an overhang on [Globus] shares as there could be some regulatory review risk and increasing need to improve the transaction terms if [NuVasive] shareholders vote against the transaction. We're not certain whether [Globus] would walk away from the transaction or not but in speaking with mgmt. their final offer is what has already been provided,” the analysts wrote.
Globus is targeting net sales of $1.1 billion and non-GAAP diluted earnings per share of $2.30 in 2023. The sales and EPS targets represent growth of 7.5% and 11.7%, respectively, over last year. The forecast reflects what Globus leadership said was its “very bullish” outlook for its U.S. spine business and for opportunities to grow sales internationally.