ofix-8k_20200224.htm
false 0000884624 0000884624 2020-02-24 2020-02-24

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 24, 2020

 

 

ORTHOFIX MEDICAL INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

0-19961

 

98-1340767

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

 

 

 

3451 Plano Parkway

Lewisville, Texas

 

75056

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (214) 937-2000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, $0.10 par value per share

 

OFIX

 

Nasdaq Global Select Market

 

 

 


 

Item 2.02.

Results of Operations and Financial Condition.

On February 24, 2020, Orthofix Medical Inc. (the “Company”) issued a press release announcing, among other things, its financial results for the fiscal quarter and year ended December 31, 2019.  A copy of the press release is furnished herewith as Exhibit 99.1 and attached hereto.

The information furnished in this Item 2.02, including the exhibit furnished herewith as Exhibit 99.1, will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  This information will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or into another filing under the Exchange Act, unless that filing expressly incorporates by reference this Item 2.02 of this report.

 

Item 7.01

Regulation FD Disclosure.

The press release furnished in Exhibit 99.1 also provides an update on the Company’s business outlook, that is intended to be within the safe harbor provided by the Private Securities Litigation Reform Act of 1995 (the “Act”) as comprising forward looking statements within the meaning of the Act.

In addition, on February 24, 2020 the Company issued a press release announcing support for continued U.S. Food and Drug Administration Class III designation for bone growth stimulators to ensure patient safety and therapy efficacy. A copy of the press release is furnished herewith as Exhibit 99.2 and attached hereto.

The information furnished in this Item 7.01, including the exhibits furnished herewith as Exhibit 99.1 and Exhibit 99.2, will not be treated as “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into any filing under the Securities Act, or into another filing under the Exchange Act, unless that filing expressly incorporates by reference this Item 7.01 of this report.

 

 

Item 9.01.

Financial Statements and Exhibits.

(d)Exhibits

 

99.1

Press release, dated February 24, 2020.

99.2

Press release, dated February 24, 2020.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 


 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Orthofix Medical Inc.

 

 

By:

 

 

/s/ Kimberley A. Elting

 

 

 

Kimberley A. Elting

Chief Legal and Administrative Officer

 

 

 

Date: February 25, 2020

 

 

 

 

ofix-ex991_6.htm

Exhibit 99.1

Orthofix Reports Fourth Quarter and Fiscal Year 2019 Financial Results

 

Fourth Quarter Highlights

 

Net sales of $121.5 million, an increase of 0.3% compared to prior year period and 0.9% on a constant currency basis

 

Kevin Kenny, an experienced spine executive, joins as Global Spine President

 

FDA approval of next generation Bone Growth Therapy patient monitoring app STIM onTrack 2.1

 

Fiscal Year 2019 Highlights

 

Net sales of $460.0 million, an increase of 1.5% compared to prior year and 2.6% on a constant currency basis

 

M6-C artificial disc achieves $4.1 million in sales in the US

 

Successful transition to Jon Serbousek as CEO

LEWISVILLE, Texas — February 24, 2020 — Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2019.  For the fourth quarter of 2019, net sales were $121.5 million, earnings per share (“EPS”) was $0.60 and adjusted EPS was $0.51. For fiscal year 2019, net sales were $460.0 million, EPS was ($1.51) and adjusted EPS was $1.47.

 

“I joined Orthofix because I saw a significant opportunity. The last few months spent with this talented team and our external stakeholders has me even more excited about the future of this Company,” said Jon Serbousek, President and Chief Executive Officer. “We have well defined market and technology leadership positions in bone growth stimulation, cellular based allografts, extremity deformity correction, and artificial disc replacement. This combined with the solid infrastructure we have in place gives us the platform to scale in all of our businesses. We are already executing on our recently developed Strategic Plan, which we believe will accelerate our growth and maximize shareholder value.”  

Serbousek further commented, “During the fourth quarter, revenue from the M6 cervical disc in the U.S. outpaced our expectations, which highlights the significant opportunity we have with this technology. While some of our other product categories experienced some headwinds due to continued distraction, we believe we are putting the pieces in place to reposition Orthofix for accelerating topline growth.”

 

Financial Results Overview

Fourth Quarter

The following table provides net sales by major product category by reporting segment:

 

 

Three Months Ended December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

Change

 

 

Constant

Currency

Change

 

Bone Growth Therapies

 

$

50,953

 

 

$

52,819

 

 

 

(3.5

%)

 

 

(3.5

%)

Spinal Implants

 

 

25,468

 

 

 

24,969

 

 

 

2.0

%

 

 

2.3

%

Biologics

 

 

16,712

 

 

 

16,045

 

 

 

4.2

%

 

 

4.2

%

Global Spine

 

 

93,133

 

 

 

93,833

 

 

 

(0.7

%)

 

 

(0.7

%)

Global Extremities

 

 

28,361

 

 

 

27,245

 

 

 

4.1

%

 

 

6.4

%

Net sales

 

$

121,494

 

 

$

121,078

 

 

 

0.3

%

 

 

0.9

%

 

Gross profit decreased by $0.1 million to $95.3 million and gross margin decreased slightly to 78.4%, compared to 78.8% in the prior year period.

Net income was $11.7 million, or $0.60 per share, compared to net income of $8.9 million, or $0.46 per share in the prior year period. Adjusted net income was $9.9 million, or $0.51 per share, compared to adjusted net income of $10.7 million, or $0.56 per share in the prior year period.


 

EBITDA was $11.3 million, compared to $16.8 million in the prior year period. Adjusted EBITDA was $22.5 million, or 18.5% of net sales, compared to $24.4 million, or 20.2% of net sales, in the prior year period.

 

Fiscal Year 2019

The following table provides net sales by major product category by reporting segments:

 

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

Change

 

 

Constant

Currency

Change

 

Bone Growth Therapies

 

$

197,181

 

 

$

195,252

 

 

 

1.0

%

 

 

1.0

%

Spinal Implants

 

 

94,544

 

 

 

91,658

 

 

 

3.1

%

 

 

3.8

%

Biologics

 

 

65,496

 

 

 

59,684

 

 

 

9.7

%

 

 

9.7

%

Global Spine

 

 

357,221

 

 

 

346,594

 

 

 

3.1

%

 

 

3.2

%

Global Extremities

 

 

102,734

 

 

 

106,448

 

 

 

(3.5

%)

 

 

0.3

%

Net sales

 

$

459,955

 

 

$

453,042

 

 

 

1.5

%

 

 

2.6

%

Gross profit increased $2.9 million to $359.3 million, while gross margin decreased to 78.1%, compared to 78.7% in prior year.

Based on the initial success observed in our launch of the M6-C artificial cervical disc in the U.S. market, our long-term forecasts of net sales indicate a greater likelihood of achieving the potential revenue-based milestone payments associated with the Spinal Kinetics acquisition as compared to our original projections in 2018. As such, we recognized expenses during the year of $29.1 million associated with the remeasurement of these potential milestone payment liabilities.

Net loss was ($28.5) million, or ($1.51) per share, compared to net income of $13.8 million, or $0.72 per share, in the prior year. This decrease was primarily driven by the remeasurement of the potential Spinal Kinetics milestone payment liabilities discussed above. Adjusted net income was $28.4 million, or $1.47 per share, compared to adjusted net income of $34.4 million, or $1.81 per share, in the prior year.

EBITDA was ($2.2) million, compared to $42.4 million in the prior year, largely due to the remeasurement of the potential Spinal Kinetics milestone payment liabilities, losses on investment securities, and succession and transition charges. Adjusted EBITDA was $75.7 million, or 16.5% of net sales for the year, compared to $87.6 million, or 19.3% of net sales, in the prior year.

 

Liquidity

As of December 31, 2019, cash, cash equivalents, and restricted cash totaled $70.4 million compared to $72.2 million as of December 31, 2018. Cash flow from operations decreased $17.9 million to $32.0 million when compared to the prior year, while free cash flow decreased $23.2 million to $11.5 million.

As of December 31, 2019, the Company had no outstanding indebtedness and borrowing capacity of $300 million under its credit facility.

 

FitBone

As recently announced, we entered into an asset purchase agreement with Wittenstein SE, a privately-held German-based company, to acquire assets associated with the FITBONE® intramedullary lengthening system for limb lengthening of the femur and tibia bones. The addition of the FITBONE assets will further round out the Company’s limb reconstruction offerings, and will align with our strategy of investing in innovative products to drive growth within our core businesses. We expect the transaction to close at the end of March.

2


 

2020 Outlook

For the year ending December 31, 2020, the Company expects the following results, including the impact of any expected changes in foreign currency exchange rates.

 

 

 

2020 Outlook

(Unaudited, U.S. Dollars, in millions, except per share data)

 

Low

 

 

High

 

 

Full Year 2020

 

 

 

 

 

 

 

 

 

Net sales

 

$

467.0

 

1

$

477.0

 

1

Adjusted EBITDA

 

$

65.0

 

2

$

68.0

 

2

Adjusted EPS

 

$

1.00

 

3

$

1.10

 

3

First Quarter 2020

 

 

 

 

 

 

 

 

 

Net sales

 

$

106.0

 

4

$

109.0

 

4

Adjusted EBITDA

 

$

10.5

 

5

$

11.5

 

5

Adjusted EPS

 

$

0.09

 

6

$

0.12

 

6

 

1 Represents a year-over-year increase of 1.5% to 3.7% on a reported basis and 2.3% to 4.5% on a constant currency basis

2 Represents a year-over-year decrease of 14.2% to 10.2%

3 Represents a year-over-year decrease of 32.0% to 25.2%

4 Represents a year-over-year decrease of 2.9% to 0.1% on a reported basis and a decrease of 1.0% to an increase of 1.7% on a constant currency basis

5 Represents a year-over-year decrease of 33.0% to 26.6%

6 Represents a year-over-year decrease of 66.7% to 55.6%

 

The Company does not provide U.S. GAAP financial measures, other than net sales, on a forward-looking basis because the Company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses, accounting fair value adjustments, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with U.S. GAAP.

 

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company's financial results for the fourth quarter and fiscal year 2019. Interested parties may access the conference call by dialing (844) 809-1992 in the U.S. and (612) 979-9886 outside the U.S., and referencing the conference ID 8228975. A replay of the call will be available for two weeks by dialing (855) 859-2056 in the U.S. and (404) 537-3406 outside the U.S., and entering the conference ID 8228975. A webcast of the conference call may be accessed by going to the Company's website at www.orthofix.com, by clicking on the Investors link and then the Events and Presentations page.

About Orthofix

Orthofix Medical Inc. is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients' lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic extremities products are distributed in more than 70 countries via the Company's sales representatives and distributors. For more information, please visit www.orthofix.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to further update any such statement, or the risk factors described in Part I, Item 1A under the heading Risk Factors in our Form 10-K for the year ended December 31, 2019, to reflect new information, the occurrence of future events or circumstances or otherwise.

Company Contact

 

 

3


 

Orthofix Medical Inc.

 

 

Mark Quick

 

 

P: 214-937-2924

 

 

E: markquick@orthofix.com

 

 

 

4


 

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Operations

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

(U.S. Dollars, in thousands, except share and per  share data)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Net sales

 

$

121,494

 

 

$

121,078

 

 

$

459,955

 

 

$

453,042

 

Cost of sales

 

 

26,191

 

 

 

25,626

 

 

 

100,607

 

 

 

96,628

 

Gross profit

 

 

95,303

 

 

 

95,452

 

 

 

359,348

 

 

 

356,414

 

Sales and marketing

 

 

58,313

 

 

 

53,832

 

 

 

223,676

 

 

 

205,527

 

General and administrative

 

 

22,110

 

 

 

19,593

 

 

 

85,607

 

 

 

83,251

 

Research and development

 

 

8,446

 

 

 

8,792

 

 

 

34,637

 

 

 

33,218

 

Acquisition-related amortization and remeasurement

 

 

2,339

 

 

 

833

 

 

 

34,212

 

 

 

4,324

 

Operating income (loss)

 

 

4,095

 

 

 

12,402

 

 

 

(18,784

)

 

 

30,094

 

Interest expense, net

 

 

(508

)

 

 

(213

)

 

 

(122

)

 

 

(828

)

Other income (expense), net

 

 

643

 

 

 

(596

)

 

 

(8,143

)

 

 

(6,381

)

Income (loss) before income taxes

 

 

4,230

 

 

 

11,593

 

 

 

(27,049

)

 

 

22,885

 

Income tax benefit (expense)

 

 

7,456

 

 

 

(2,722

)

 

 

(1,413

)

 

 

(9,074

)

Net income (loss)

 

$

11,686

 

 

$

8,871

 

 

$

(28,462

)

 

$

13,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.61

 

 

$

0.47

 

 

$

(1.51

)

 

$

0.73

 

Diluted

 

 

0.60

 

 

 

0.46

 

 

 

(1.51

)

 

 

0.72

 

Weighted average number of common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,068,067

 

 

 

18,592,385

 

 

 

18,903,289

 

 

 

18,494,002

 

Diluted

 

 

19,315,836

 

 

 

19,052,853

 

 

 

18,903,289

 

 

 

18,911,610

 

5


 

 

Condensed Consolidated Balance Sheets

 

(U.S. Dollars, in thousands, except share data)

 

December 31,

2019

 

 

December 31,

2018

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

69,719

 

 

$

69,623

 

Restricted cash

 

 

684

 

 

 

2,566

 

Trade accounts receivable, net of allowances of $3,987 and $7,463, respectively

 

 

86,805

 

 

 

77,747

 

Inventories

 

 

82,397

 

 

 

76,847

 

Prepaid expenses and other current assets

 

 

20,948

 

 

 

17,856

 

Total current assets

 

 

260,553

 

 

 

244,639

 

Property, plant and equipment, net

 

 

62,727

 

 

 

42,835

 

Intangible assets, net

 

 

54,139

 

 

 

51,897

 

Goodwill

 

 

71,177

 

 

 

72,401

 

Deferred income taxes

 

 

35,117

 

 

 

33,228

 

Other long-term assets

 

 

11,907

 

 

 

21,641

 

Total assets

 

$

495,620

 

 

$

466,641

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Trade accounts payable

 

$

19,886

 

 

$

17,989

 

Current portion of finance lease liability

 

 

323

 

 

 

 

Other current liabilities

 

 

64,674

 

 

 

67,919

 

Total current liabilities

 

 

84,883

 

 

 

85,908

 

Long-term portion of finance lease liability

 

 

20,648

 

 

 

 

Other long-term liabilities

 

 

62,458

 

 

 

45,336

 

Total liabilities

 

 

167,989

 

 

 

131,244

 

Contingencies

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

Common shares $0.10 par value; 50,000,000 shares authorized; 19,022,619 and

   18,579,688 issued and outstanding as of December 31, 2019 and 2018, respectively

 

 

1,902

 

 

 

1,858

 

Additional paid-in capital

 

 

271,019

 

 

 

243,165

 

Retained earnings

 

 

57,749

 

 

 

87,078

 

Accumulated other comprehensive income (loss)

 

 

(3,039

)

 

 

3,296

 

Total shareholders’ equity

 

 

327,631

 

 

 

335,397

 

Total liabilities and shareholders’ equity

 

$

495,620

 

 

$

466,641

 

 

6


 

ORTHOFIX MEDICAL INC.
Non-GAAP Financial Measures

The following tables present reconciliations of operating income (loss), net income (loss), EPS, and net cash from operating activities, in each case calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to, as applicable, non-GAAP financial measures, referred to as "EBITDA," "Adjusted EBITDA," "Adjusted net income," "Adjusted EPS," and "Free cash flow" that exclude items specified in the tables. A more detailed explanation of the items excluded from these non-GAAP financial measures, as well as why management believes the non-GAAP financial measures are useful to them, is included following the reconciliations.  

 

EBITDA and Adjusted EBITDA

  

 

Three Months Ended December 31, 2019

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

14,257

 

 

$

1,823

 

 

$

(11,985

)

 

$

4,095

 

Other income (expense), net

 

 

476

 

 

 

270

 

 

 

(104

)

 

 

642

 

Depreciation and amortization

 

 

2,391

 

 

 

1,597

 

 

 

1,192

 

 

 

5,180

 

Amortization of acquired intangibles

 

 

1,339

 

 

 

 

 

 

 

 

 

1,339

 

EBITDA

 

$

18,463

 

 

$

3,690

 

 

$

(10,897

)

 

$

11,256

 

Share-based compensation

 

 

1,000

 

 

 

591

 

 

 

1,734

 

 

 

3,325

 

Foreign exchange impact

 

 

(438

)

 

 

(311

)

 

 

(4

)

 

 

(753

)

Strategic investments

 

 

17

 

 

 

 

 

 

454

 

 

 

471

 

Acquisition-related fair value adjustments

 

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

Loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

Legal judgments/settlements

 

 

1,515

 

 

 

468

 

 

 

6

 

 

 

1,989

 

Succession and transition charges

 

 

719

 

 

 

 

 

 

4,168

 

 

 

4,887

 

Medical Device Regulation

 

 

445

 

 

 

84

 

 

 

(175

)

 

 

354

 

Adjusted EBITDA

 

$

22,721

 

 

$

4,522

 

 

$

(4,714

)

 

$

22,529

 

 

 

 

 

Year Ended December 31, 2019

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

25,722

 

 

$

2,872

 

 

$

(47,378

)

 

$

(18,784

)

Other expense, net

 

 

(523

)

 

 

(951

)

 

 

(6,670

)

 

 

(8,144

)

Depreciation and amortization

 

 

9,257

 

 

 

5,575

 

 

 

4,795

 

 

 

19,627

 

Amortization of acquired intangibles

 

 

5,072

 

 

 

 

 

 

 

 

 

5,072

 

EBITDA

 

$

39,528

 

 

$

7,496

 

 

$

(49,253

)

 

$

(2,229

)

Share-based compensation

 

 

5,604

 

 

 

2,290

 

 

 

7,921

 

 

 

15,815

 

Foreign exchange impact

 

 

563

 

 

 

834

 

 

 

37

 

 

 

1,434

 

Strategic investments

 

 

1,420

 

 

 

 

 

 

8,065

 

 

 

9,485

 

Acquisition-related fair value adjustments

 

 

29,849

 

 

 

 

 

 

 

 

 

29,849

 

Loss on investment securities

 

 

 

 

 

 

 

 

6,534

 

 

 

6,534

 

Legal judgments/settlements

 

 

1,017

 

 

 

1,507

 

 

 

29

 

 

 

2,553

 

Succession and transition charges

 

 

1,608

 

 

 

 

 

 

9,719

 

 

 

11,327

 

Medical Device Regulation

 

 

712

 

 

 

234

 

 

 

7

 

 

 

953

 

Adjusted EBITDA

 

$

80,301

 

 

$

12,361

 

 

$

(16,941

)

 

$

75,721

 

 

 

 

7


 

 

 

Three Months Ended December 31, 2018

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

20,605

 

 

$

924

 

 

$

(9,127

)

 

$

12,402

 

Other expense, net

 

 

(164

)

 

 

(107

)

 

 

(325

)

 

 

(596

)

Depreciation and amortization

 

 

2,159

 

 

 

1,463

 

 

 

923

 

 

 

4,545

 

Amortization of acquired intangibles

 

 

453

 

 

 

 

 

 

 

 

 

453

 

EBITDA

 

$

23,053

 

 

$

2,280

 

 

$

(8,529

)

 

$

16,804

 

Share-based compensation

 

 

1,632

 

 

 

498

 

 

 

2,408

 

 

 

4,538

 

Foreign exchange impact

 

 

130

 

 

 

70

 

 

 

332

 

 

 

532

 

Strategic investments

 

 

348

 

 

 

 

 

 

793

 

 

 

1,141

 

Acquisition-related fair value adjustments

 

 

914

 

 

 

 

 

 

 

 

 

914

 

Loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

Legal judgments/settlements

 

 

266

 

 

 

172

 

 

 

(171

)

 

 

267

 

Succession and transition charges

 

 

214

 

 

 

 

 

 

 

 

 

214

 

Adjusted EBITDA

 

$

26,557

 

 

$

3,020

 

 

$

(5,167

)

 

$

24,410

 

 

 

 

 

Year Ended December 31, 2018

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

67,956

 

 

$

6,006

 

 

$

(43,868

)

 

$

30,094

 

Other expense, net

 

 

(924

)

 

 

(1,894

)

 

 

(3,563

)

 

 

(6,381

)

Depreciation and amortization

 

 

8,258

 

 

 

5,341

 

 

 

3,805

 

 

 

17,404

 

Amortization of acquired intangibles

 

 

1,255

 

 

 

 

 

 

 

 

 

1,255

 

EBITDA

 

$

76,545

 

 

$

9,453

 

 

$

(43,626

)

 

$

42,372

 

Share-based compensation

 

 

6,259

 

 

 

2,251

 

 

 

10,420

 

 

 

18,930

 

Foreign exchange impact

 

 

835

 

 

 

1,832

 

 

 

662

 

 

 

3,329

 

Strategic investments

 

 

1,963

 

 

 

 

 

 

10,848

 

 

 

12,811

 

Acquisition-related fair value adjustments

 

 

4,508

 

 

 

 

 

 

 

 

 

4,508

 

Loss on investment securities

 

 

 

 

 

 

 

 

3,050

 

 

 

3,050

 

Legal judgments/settlements

 

 

686

 

 

 

505

 

 

 

(31

)

 

 

1,160

 

Succession and transition charges

 

 

1,447

 

 

 

 

 

 

 

 

 

1,447

 

Adjusted EBITDA

 

$

92,243

 

 

$

14,041

 

 

$

(18,677

)

 

$

87,607

 

 

 

Adjusted Net Income

 

  

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income (loss)

 

$

11,686

 

 

$

8,871

 

 

$

(28,462

)

 

$

13,811

 

Foreign exchange impact

 

 

(753

)

 

 

532

 

 

 

1,434

 

 

 

3,329

 

Strategic investments

 

 

471

 

 

 

1,141

 

 

 

9,485

 

 

 

12,813

 

Acquisition-related fair value adjustments

 

 

1,000

 

 

 

914

 

 

 

29,849

 

 

 

4,508

 

Amortization of acquired intangibles

 

 

1,339

 

 

 

453

 

 

 

5,072

 

 

 

1,255

 

Interest and loss on investment securities

 

 

 

 

 

 

 

 

5,328

 

 

 

3,050

 

Legal judgments/settlements

 

 

1,989

 

 

 

267

 

 

 

2,553

 

 

 

1,160

 

Succession and transition charges

 

 

4,887

 

 

 

214

 

 

 

11,327

 

 

 

1,447

 

Medical Device Regulation

 

 

354

 

 

 

 

 

 

953

 

 

 

 

Long-term income tax rate adjustment

 

 

(11,106

)

 

 

(1,662

)

 

 

(9,104

)

 

 

(6,975

)

Adjusted net income

 

$

9,867

 

 

$

10,730

 

 

$

28,435

 

 

$

34,398

 

 

8


 

 

Adjusted EPS

 

  

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, per diluted share)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

EPS

 

$

0.60

 

 

$

0.46

 

 

$

(1.51

)

 

$

0.72

 

Foreign exchange impact

 

 

(0.04

)

 

 

0.03

 

 

 

0.07

 

 

 

0.17

 

Strategic investments

 

 

0.02

 

 

 

0.06

 

 

 

0.49

 

 

 

0.67

 

Acquisition-related fair value adjustments

 

 

0.05

 

 

 

0.05

 

 

 

1.58

 

 

 

0.24

 

Amortization of acquired intangibles

 

 

0.07

 

 

 

0.02

 

 

 

0.26

 

 

 

0.07

 

Interest and loss on investment securities

 

 

 

 

 

 

 

 

0.28

 

 

 

0.16

 

Legal judgments/settlements

 

 

0.10

 

 

 

0.01

 

 

 

0.13

 

 

 

0.06

 

Succession and transition charges

 

 

0.25

 

 

 

0.01

 

 

 

0.59

 

 

 

0.08

 

Medical Device Regulation

 

 

0.02

 

 

 

 

 

 

0.05

 

 

 

 

Long-term income tax rate adjustment

 

 

(0.56

)

 

 

(0.08

)

 

 

(0.47

)

 

 

(0.36

)

Adjusted EPS

 

$

0.51

 

 

$

0.56

 

 

$

1.47

 

 

$

1.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares (treasury stock method)

 

 

19,341,552

 

 

 

19,195,653