Medicrea is taking steps to weather the COVID-19 pandemic, the spinal surgery technology provider informed shareholders March 20.
Seven things to know:
1. Medicrea's daily sales have dropped "significantly" since March 12 as hospitals around the world postpone elective spinal surgeries to conserve resources for the COVID-19 outbreak. The sales decrease is in part because Medicrea sales representatives in all business divisions can no longer visit hospitals and clinics.
2. However, year-to-date, Medicrea's global sales increased more than 15 percent in the first quarter of 2020. The number of UNiD patient-specific surgeries were up 44 percent worldwide, and 60 percent in the U.S. market alone.
3. Medicrea plans to forgo almost all billings in the second quarter of 2020, in part by postponing orders and deliveries from its main suppliers until the third quarter. Its social and tax contributions are also postponed, as well as rent payments for certain offices in the coming months.
4. Medicrea's employees in France and Belgium — where elective surgery postponements have been in effect since March 12 and March 16, respectively — have been on partial unemployment since March 16, with government-sponsored salaries. This employment structure will likely remain in place for two to three months.
5. With a cash position of around $9.6 million — not including over $1 million in 2019 research tax credit it expects to collect soon — Medicrea is taking steps to "economize and consume its cash as slowly as possible." It is also reformatting its U.S. subsidiary to accommodate recent and forthcoming mandates.
6. The company has delayed the potential closing of a transaction until the second half of the year.
7. Medicrea expects to benefit from "a gradual resumption" of spine surgeries in the third quarter of 2020 and predicts that the outbreak will be fully contained by September 2020.