LEWISVILLE, Texas--(BUSINESS WIRE)--
Orthofix International N.V. (NASDAQ:OFIX) (the Company) today announced
an internal reorganization designed to streamline operations within its
three Global Business Units: Spine, Orthopedics and Sports Medicine. The
Company expects to record a charge related to employee termination
benefits of approximately $4.0 million ($2.4 million net of tax, or
$0.13 per diluted share) in the fourth quarter of 2010 in connection
with the reorganization. The Company expects the reorganization to
result in annual savings of approximately $6 million to $7 million per
year beginning in 2011.
Settlement Ends Patent Infringement Suit
Orthofix also announced on behalf of itself and the Musculoskeletal
Transplant Foundation that they have executed a comprehensive settlement
agreement with NuVasive, Inc. and Osiris Therapeutics, Inc. concerning
the Trinity® Evolution™ tissue allograft. The
lawsuit was filed in April of this year in the United States District
Court for the District of New Jersey alleging that Trinity Evolution
infringes intellectual property owned by NuVasive and Osiris. As part of
the comprehensive settlement the parties entered into a license
agreement covering Trinity Evolution, the primary subject of which is
U.S. Patent No. 6,355,239. In connection with this settlement Orthofix
will record a charge of $2 million, ($1.2 million net of tax, or $0.07
per diluted share) in the fourth quarter of 2010. Additional specific
terms of the settlement, including initial and ongoing financial terms,
are confidential.
Q4 2010 Guidance
Orthofix has lowered its fourth quarter earnings expectations from $0.59
to $0.62 per share to $0.39 to $0.42 per share as a result of the fourth
quarter charges totaling $0.20 per share that the Company expects to
incur in connection with the reorganization and the legal settlement.
Additionally, the Company revised its fourth quarter and full year 2010
revenue expectations to a new range of $142 million to $144 million, and
$562.6 million to $564.6 million, respectively. The revision was
primarily due to a slower growth rate in the Company's spine stimulation
business.
"The global reorganization we announced today is another key step toward
the achievement of our plan to improve our operating profit margin, and
was facilitated in part by the recent consolidation of operations into
our new facility in Lewisville, TX. This initiative will result in
substantial annual savings after the initial fourth quarter charge,"
said President and CEO Alan Milinazzo. "Additionally, we are very
pleased to have come to what we believe is a mutually beneficial
resolution to the patent matter related to Trinity Evolution."
Conference Call
Orthofix will host a conference call on December 16th, 2010 at 8:30 AM
Eastern time to discuss the reorganization and legal settlement.
Interested parties may access the conference call by dialing (888)
267-2845 in the U.S., and (973) 413-6102 outside the U.S., and providing
the conference ID 87421. A replay of the call will be available for one
week by dialing (800) 332-6854 in the U.S., and (973) 528-0005 outside
the U.S., and entering the conference ID 87421.
About Orthofix
Orthofix International, N.V. is a global medical device company offering
a broad line of minimally invasive surgical and non-surgical products
for the spine, orthopedic, and sports medicine market sectors, that
address the lifelong bone-and-joint health needs of patients of all ages
- helping them achieve a more active and mobile lifestyle. Orthofix's
products are widely distributed around the world to orthopedic surgeons
and patients via Orthofix's sales representatives and its subsidiaries,
and via collaborations with other leading orthopedic product companies.
In addition, Orthofix is collaborating and investing in R&D activities
with leading medical institutions such as the Musculoskeletal Transplant
Foundation, the Orthopedic Research and Education Foundation, The
University of Medicine and Dentistry of New Jersey and the National
Osteoporosis Institute. For more information about Orthofix, please
visit www.orthofix.com.
FORWARD-LOOKING STATEMENTS
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 Orthofix and its subsidiaries and are based on
management's current expectations and estimates and involve risks and
uncertainties that could cause actual results or outcomes to differ
materially from those contemplated by the forward-looking statements.
Factors that could cause or contribute to such differences may include,
but are not limited to, risks relating to the expected sales of its
products, including recently launched products, unanticipated
expenditures, changing relationships with customers, suppliers,
strategic partners and lenders, changes to and the interpretation of
governmental regulations, ongoing litigation matters and governmental
investigations of our businesses which could result in civil or criminal
liability or findings of violations of law (as further described in the
"Legal Proceedings" sections of our annual report on Form 10-K,
quarterly reports on Form 10-Q, and our report on Form 8-K dated June
23, 2010), 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
industry, credit markets and the economy, corporate development and
market development activities, including acquisitions or divestitures,
unexpected costs or operating unit performance related to recent
acquisitions, and other factors described in our annual report on Form
10-K and other periodic reports filed by the Company with the Securities
and Exchange Commission (SEC).
Orthofix International N.V.
Dan Yarbrough, 617-912-2903
Vice
President of Investor Relations
danyarbrough@orthofix.com
Source: Orthofix International N.V.
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