LDR Holding: Strong Q3, Mobi-C launch going according to plans
BUY, Fair Value USD23 (+9%)
LDR reported yesterday strong Q3 sales at USD27.2m, up 29.8% versus Q3 2012. Once again, this performance was driven by exclusive technology sales (84% of sales, up 36.7%) with continuing strong sales from the VerteBridge franchise, both in cervical and lumbar with the successful rollout of Avenue L. Both US (74% of sales) and International (26% of sales) were up 29.8% in Q3. Gross margin was up 200bps versus last year to 84.9% positively impacted by a higher contribution from exclusive technology as well as geographical mix. EBIT loss was roughly in line with last year at USD0.9m while net income was negatively impacted by non-cash expenses due to warrants leading to the IPO with a USD7m loss. Finally, management made some qualitative comments on the launch of Mobi-C which is going well and according to plan. Training of physicians is ongoing both in one and two levels with a solid attendance in major cities.
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