BOSTON, Mar 08, 2010 (BUSINESS WIRE) -- Orthofix International N.V. (NASDAQ: OFIX) (the Company) announced today
it has sold the assets of its vascular business, including its AV-Impulse(R)
mechanical compression technology, to Covidien.
"This transaction represents another important step towards focusing
Orthofix on strategic market segments that represent long term growth
potential for the Company," said Orthofix's CEO Alan Milinazzo.
"Additionally, the proceeds from the sale of this business will allow us
to further deleverage our balance sheet."
As part of the sale, Orthofix has agreed to provide transitional
services to Covidien for a period of up to five months. Additionally,
under the terms of two Supply Agreements, Orthofix will provide Covidien
with 2-years' worth of Impads used in conjunction with the compression
therapy devices being sold, as well as with additional products relating
to this business for a 90 day period.
Impact on 2010 Financial Results
Orthofix expects the following financial impact as a result of the sale:
-
2010 GAAP EPS guidance increased to $2.24-$2.28
-
Revised 2010 revenue guidance = $568-576 million
-
Q1 lower by $2-$3 million
-
Net cash proceeds of up to $19 million will be used to reduce
outstanding long term debt by approximately 7%; expected reduction in
debt/EBITDA ratio* of 13%
-
Revised 2010 interest expense = $22-$24 million
-
Additional expected impact to GAAP EPS:
-
Q1 GAAP EPS = $0.80-$0.83
-
Includes net gain on sale of up to $0.42
-
Q2-Q4 impact to earnings from the sale of the business and the
repayment of debt is expected to be a total net reduction of
$0.14-$0.18
*as defined in the amended credit agreement
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,
including BREG, Inc. and via partnerships with other leading orthopedic
product companies. In addition, Orthofix is collaborates with leading
medical institutions such as the Musculoskeletal Transplant Foundation,
the Orthopedic Research and Education Foundation, and The University of
Medicine and Dentistry of New Jersey. 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 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 and quarterly reports on Form
10-Q), 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).
SOURCE: Orthofix International N.V.
Orthofix International N.V.
Dan Yarbrough, 617-912-2903
Vice President of Investor Relations
danyarbrough@orthofix.com
Copyright Business Wire 2010