“While we work through these challenging and uncertain times as a global community, our first priority is the health and safety of all of our employees and their families, as well as all of our partners, surgeons, patients, and customers,” said
The Company recognizes the challenges being faced around the world as a result of COVID-19 and has quickly responded in recent weeks to help protect its communities while implementing business continuity plans intended to support customers and patients, and ensure continued financial strength of the Company:
- Providing products and solutions for ongoing procedures. While many elective procedures have been either canceled or delayed, many procedures for which
Orthofixoffers products continue to be performed, such as acute spine, limb preservation, and trauma cases. The Company has executed operationally to satisfy immediate and near-term product and procedure support, while also planning for the pent up demand that could lead to high procedure volumes later in the year.
- Leveraging virtual tools. During this period of limited face-to-face interactions,
Orthofixhas successfully implemented virtual service support to patients’ homes for fittings of our Bone Growth Therapies devices. The Company has also enabled remote learning initiatives for medical providers, hosting virtual surgeon training events including medical education for the M6-C™ artificial cervical disc that fulfills the FDA didactic training requirement. The Company intends to complete the hands-on M6-C training in the field when appropriate. Additional surgeon training events are being offered across multiple product areas of the business.
- Managing expenses.
Orthofixremains focused on prudently managing expenses during this period of uncertainty to ensure the highest levels of financial flexibility going forward. The Company is in the process of implementing temporary salary reductions for salaried U.S.employees on an escalating scale with the largest impact at the executive and Board of Directors level. The Company anticipates these reductions will be for at least an eight week period commencing in April. Accessing Capital. Orthofixintends to access $100 millionfrom its existing credit facility in April to ensure available cash to fund operations and strategic initiatives in the event of a more prolonged slowdown of elective procedures. This will constitute the only borrowing to date under the facility. Orthofixhas also applied for accelerated payments from the Medicare program as part of the CARES Act.
Serbousek further commented, “We believe these temporary cost reductions and the steps we are taking to further strengthen of our balance sheet will allow us to continue to execute on our strategic initiatives in the near term and be well positioned to provide our products to customers once elective surgery procedural volumes return to hospitals globally. I am proud of the team here at
Preliminary First Quarter Results
Preliminary unaudited revenue for the first quarter 2020 is expected to be in the range of
2020 Outlook Update
At this date, the Company cannot predict the specific extent, or duration, of the impact of the COVID-19 outbreak on its financial and operating results. As a result, the Company is withdrawing its previously announced first quarter and fiscal year 2020 guidance (provided on
The Company plans to provide additional information, to the extent practicable, during its first quarter earnings call planned for
Bone Growth Stimulator Classification Update
“We look forward to a rescheduled hearing, and we believe, along with the other manufacturers of BGS devices, that maintaining Class III status is in the best interest of patients, prescribing physicians and payors as it ensures the continued efficacy and safety of the therapy,” said
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. Factors that could cause or contribute to such differences may include, but are not limited to, risks relating to the effects of the COVID-19 pandemic on our business, including (i) surgeries that use our products being delayed or cancelled as a result of hospitals and surgery centers being closed or limited to life-threatening and/or essential procedures, (ii) portions of our global workforce being unable to work fully and/or effectively due to illness, quarantines, government actions (including "shelter in place" orders or advisories), facility closures or other reasons related to the pandemic, (iii) disruptions to our supply chain, (iv) volatility in global capital markets limiting our access to financing for potential acquisitions or working capital, (v) customers and payors being unable to satisfy contractual obligations to us, including the ability to make timely payment for purchases, (vi) general economic weakness in markets in which we operate affecting customer spending, and (vii) other unpredictable aspects of the pandemic.
This list of risks, uncertainties and other factors is not complete. We discuss some of these matters more fully, as well as certain risk factors that could affect our business, financial condition, results of operations, and prospects, in report we file from time-to-time with the