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Behind MiMedx Group’s Recent Financial Performance

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MiMedx’s financials

In 3Q17, MiMedx Group’s (MDXG) net sales rose to $84.6 million, compared with $64.4 million in 3Q16—a 31% YoY (year-over-year) rise. This increase came from ~$26 million in volume from market share gains and market expansion, but the rise was partially offset by a $7.3-million loss due to unfavorable product mix.

The cost of sales incurred by MiMedx increased from $7.9 million in 3Q16 to $9.5 million in 3Q17. R&D (research and development) expenses rose from $2.9 million in 3Q16 to $5.4 million in 3Q17. SG&A (selling, general, and administrative) expenses incurred by the company increased from $48.1 million in 3Q16 to $60.2 million in 3Q17.

As a result of its jump in revenues, MiMedx’s net income increased from $3.3 million in 3Q16 to $17.4 million in 3Q17. As a result, the net income per share of the company registered a stellar jump from $0.03 in 3Q16 to $0.15 in 3Q17.

For fiscal 2017, MiMedx group is expected to report EPS (earnings per share) of $0.32, while peers Atricure (ATRC), Globus Medical (GMED), and Inogen (INGN) are expected to report EPS of -$0.95, $1.28, and $1.22, respectively, for fiscal 2017.

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Cash flows

MiMedx Group generated $42 million from operating cash flows in the first nine months of fiscal 2017, compared with $9.1 million in the first nine months of fiscal 2016. This improvement was attributable to higher net income and an increase in accounts payable during the period.

Cash outflow in investing activities came to $4.1 million in the first three quarters of fiscal 2017, compared with $10.4 million in the first three quarters of fiscal 2016.

Meanwhile, MiMedx Group witnessed a higher outflow in financing activities, reaching $35.8 million in the first three quarters of fiscal 2017, compared with $8.8 million in the comparable period of fiscal 2016. This rise came on the back of an increase in share repurchases of $44 million during the period, compared with $10.3 million in the first three quarters of fiscal 2016.

Notably, MiMedx Group makes up about 0.20% of the iShares Core S&P Small-Cap ETF’s (IJR) total portfolio holdings.

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