Three Months Ended
|Total net sales||$||116.9||$||108.5||7.7||%||6.1||%|
|Total net sales||$||433.8||$||409.8||5.9||%||5.5||%|
As of December 31, 2017, cash and cash equivalents were approximately
"In 2017 our strategy was to accelerate our organic topline growth rate
while maintaining Adjusted EBITDA margins. This strategy proved very
effective and resulted in us far exceeding our growth expectations for
the year. Now as we look forward to 2018 and beyond, we are focused on
continuing our organic growth momentum, expanding margins and actively
pursuing value-accretive inorganic opportunities to further accelerate
"The keys to maintaining our organic sales momentum are, first and foremost, continuing our initiatives to further engage our legacy sales force and add new representation in under-served markets. The second key is to remain committed to investing in R&D and our rapid pace of new product introductions and value-added processes and services, such as our STIM onTrack™ mobile app and JuniOrtho™ pediatric care support tools. Lastly, we must educate physicians and payers through published, peer-reviewed research papers that demonstrate the safety, efficacy and cost-effectiveness of our products.
"While 2017 was a year to invest in accelerating our top-line growth rate, we can now return our focus to Adjusted EBITDA margin expansion. Our biggest opportunity is in gross margins, particularly around improving inventory and instrument set management in our Spine and Extremity Fixation businesses. We also expect to begin to realize the cost benefits of our restructuring initiatives as well as benefit from leveraging our fixed costs in SG&A.
"We are pleased with our positioning going into 2018 and optimistic about our ability to drive shareholder value for the foreseeable future."
For the full year 2018, the Company expects to report net sales of
This 2018 net sales guidance reflects the new required revenue
recognition standard that is required as of
The recent lowering of the
Upcoming Presentations / Conference Calls
As previously announced, the Company's President and Chief Executive
The Company also expects to host a conference call in late February to discuss final fourth quarter and full year 2017 financial results and further discuss our outlook for 2018.
Constant currency is a non-GAAP measure, which is calculated by using foreign currency rates from the comparable, prior-year period, to present net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze net sales without the impact of changes in foreign currency rates.
Adjusted EBITDA (earnings before interest income (expense), net; income
tax expense; and depreciation and amortization) is a non-GAAP financial
measure, which is calculated by adjusting EBITDA by certain items such
as share-based compensation, foreign exchange impact, strategic
Free Cash Flow
Free cash flow is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operating activities. Free cash flow is an important indicator of how much cash is generated or used by our normal business operations, including capital expenditures. Management uses free cash flow as a measure of progress on its capital efficiency and cash flow initiatives.
Usefulness and Limitations of Non-GAAP Financial Measures
Management uses non-GAAP measures to evaluate performance period-over-period, to analyze the underlying trends in our business, to assess performance relative to competitors and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP measures as the basis for assessing the ability of the underlying operations to generate cash. In addition, management uses these non-GAAP measures to further its understanding of the performance of our business units.
Material Limitations Associated with the Use of Non-GAAP Financial Measures
The non-GAAP measures used in this press release may have limitations as analytical tools, and should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are that they exclude items that reflect an economic cost and can have a material effect on cash flows. Similarly, certain non-cash expenses, such as share-based compensation, do not directly impact cash flows, but are part of total compensation costs accounted for under GAAP.
Compensation for Limitations Associated with Use of Non-GAAP Financial Measures
We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance. The GAAP results provide the ability to understand our performance based on a defined set of criteria. The non-GAAP measures reflect the underlying operating results of our businesses, which we believe is an important measure of our overall performance. We provide a detailed reconciliation of the non-GAAP financial measures to our most directly comparable GAAP measures, and encourage investors to review this reconciliation.
Usefulness of Non-GAAP Financial Measures to Investors
We believe that providing non-GAAP financial measures that exclude certain items provides investors with greater transparency to the information used by senior management in its financial and operational decision-making. Management believes it is important to provide investors with the same non-GAAP metrics it uses to supplement information regarding the performance and underlying trends of our business operations in order to facilitate comparisons to its historical operating results and internally evaluate the effectiveness of our operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of our underlying operating performance with other companies in the industry that also supplement their GAAP results with non-GAAP financial measures.
Orthofix International N.V. is a global medical device company focused on musculoskeletal healing products and value-added services. The Company's mission is to improve patients' lives by providing superior reconstruction and regenerative orthopedic and spine solutions to physicians worldwide. Headquartered in Lewisville, Texas, the Company has four strategic business units: BioStim, Extremity Fixation, Spine Fixation, and Biologics. Orthofix products are widely distributed via the Company's sales representatives and distributors. For more information, please visit www.orthofix.com.
This communication contains certain forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements, which may include, but are not limited to, statements
concerning the projections, financial condition, results of operations
and businesses of
The forward-looking statements in this release do not constitute guarantees or promises of future performance. Factors that could cause or contribute to such differences may include, but are not limited to, risks relating to: the expected sales of our products, including recently launched products; the geographic concentration of certain of our sales and accounts receivable in countries or territories that are facing severe fiscal challenges; unanticipated expenditures; changing relationships with customers, suppliers, strategic partners and lenders; changes to and the interpretation of governmental regulations; risks relating to the protection of intellectual property; changes to the reimbursement policies of third parties; the impact of competitive products; changes to the competitive environment; the acceptance of new products in the market; conditions of the orthopedic and spine industry; credit markets and the global economy; corporate development and market development activities, including acquisitions or divestitures; unexpected costs or operating unit performance related to recent or future acquisitions; and other risks described in the "Risk Factors" section of our 2016 Annual Report on Form 10-K, as well as in other reports that we file in the future. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information contained in this press release.
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