Provides 2017 Net Sales Guidance
LEWISVILLE, Texas--(BUSINESS WIRE)--
Orthofix International N.V. (NASDAQ:OFIX), a diversified, global medical
device company, today announced preliminary unaudited fourth quarter
2016 net sales of approximately $109 million. These preliminary results
represent reported sales growth of 3.7% and constant currency sales
growth of 4.2% over the fourth quarter 2015. For the full year 2016,
preliminary unaudited net sales were approximately $410 million, an
increase of 3.4% on a reported basis and an increase of 4.0% on a
constant currency basis over the full year 2015.
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Three Months Ended December 31,
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(Unaudited, U.S. Dollars, in millions)
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2016
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2015
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|
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Reported
Change
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Constant
Currency
Change
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BioStim
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$
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48
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$
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45
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6
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%
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6
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%
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Biologics
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15
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16
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(5
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)%
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(5
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)%
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Extremity Fixation
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27
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24
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12
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%
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14
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%
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Spine Fixation
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19
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20
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(6
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)%
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(6
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)%
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Total net sales
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$
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109
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$
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105
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4
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%
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4
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%
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Year Ended December 31,
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(Unaudited, U.S. Dollars, in millions)
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2016
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2015
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Reported
Change
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Constant
Currency
Change
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BioStim
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$
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176
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$
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165
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7
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%
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7
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%
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Biologics
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58
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60
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(3
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)%
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(3
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)%
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Extremity Fixation
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103
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96
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7
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%
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10
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%
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Spine Fixation
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73
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75
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(4
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)%
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(4
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)%
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Total net sales
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$
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410
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$
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396
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3
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%
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4
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%
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"As we reflect on 2016, we are very proud of our many products and
services that helped improve tens of thousands of patients' lives," said
Brad Mason, President and Chief Executive Officer. "We are also proud of
our many accomplishments in 2016 that have positioned the Company for
the future, such as furthering our leadership position in our BioStim
business, expanding adjusted EBITDA margins, achieving double-digit
trailing twelve-month ROIC, completing the $75 million share repurchase
program, and investing in clinical and product development projects that
will drive future organic growth."
2017 Outlook
For the full year 2017, the Company expects to report net sales of $407
million to $411 million based on current foreign currency exchange
rates, which reflects reported growth of - 0.7% to + 0.2%. When
normalizing for the negative impact of foreign currency of approximately
$4.8 million and a loss of revenue of $5.3 million in 2017 due to
planned distribution restructuring in Brazil and Puerto Rico and the
wind down of a non-core business, the growth rate is expected to be 1.5%
to 2.5%. Additionally, the Company expects full year 2017 adjusted
EBITDA margins to be generally consistent with 2016.
Mason added, "While we expect to absorb a loss of revenue due to
strategic initiatives this year, we also expect to continue our momentum
in our BioStim business, return to growth in Biologics and Spine
Fixation during the year, significantly improve free cash flow and
execute on strategic opportunities that will drive ROIC and shareholder
value."
Upcoming Presentations / Conference Calls
As previously announced, the Company's President and Chief Executive
Officer, Brad Mason, will provide an investor presentation at 7:30 a.m.
Pacific Time on Thursday, January 12, 2017, at the J.P. Morgan
Healthcare Conference in San Francisco. A live audio webcast will be
available on the Company's website at www.orthofix.com
by clicking on the Investors tab and then clicking the link on the
Events and Presentations page.
The Company also expects to host a conference call in late February to
discuss final fourth quarter and full year 2016 earnings results and its
outlook for 2017.
Non-GAAP Measures
Orthofix believes that providing non-GAAP measures that exclude certain
items provides investors with greater transparency to the information
used by the Company's 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 Orthofix's business operations in order to facilitate comparisons to
its historical operating results and internally evaluate the
effectiveness of the Company's operating strategies. Disclosure of these
non-GAAP financial measures also facilitates comparisons
of Orthofix's underlying operating performance with other companies in
its industry that also supplement their GAAP results with 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 to the Company and can
have a material effect on cash flows. Similarly, certain non-cash
expenses, such as equity compensation expense, do not directly impact
cash flows, but are part of total compensation costs accounted for under
GAAP.
Constant Currency
Constant currency measures actual performance using foreign currency
rates from the comparable, prior-year period, to present actuals at
comparable rates. Constant currency can be presented for numerous GAAP
measures, but is most commonly used by management to compare revenues
without the impact of changes in foreign currencies. When disclosed,
constant currency measures are presented with the applicable GAAP
measure for comparability.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings from continuing operations before
net interest expense, income tax expense, depreciation, and
amortization, and excludes certain non-cash or non-recurring gains or
losses such as share-based compensation, foreign exchange impact,
strategic investments, restatements and related costs, infrastructure
investments, legal judgments, gain on sale of assets, charges related to
U.S. Government resolutions and succession charges.
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.
About Orthofix
Orthofix International N.V. is a diversified, global medical device
company focused on improving patients' lives by providing superior
reconstructive and regenerative orthopedic and spine solutions to
physicians worldwide. Headquartered in Lewisville, TX, the company has
four strategic business units that include BioStim, Biologics, Extremity
Fixation and Spine Fixation. Orthofix products are widely distributed
via the company's sales representatives, distributors and subsidiaries.
In addition, Orthofix is collaborating on research and development
activities with leading clinical organizations such as Brown University,
Sinai Hospital of Baltimore, Cleveland Clinic, Texas Scottish Rite
Hospital for Children and the Musculoskeletal Transplant Foundation. For
more information, 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, 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.
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; our ongoing settlement discussions with
the Division of Enforcement of the Securities and Exchange
Commission (the "SEC") related to investigations that arose out of our
prior accounting review and restatements of financial statements and our
review of allegations of improper payments involving our Brazil-based
subsidiary; 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; the resolution of
pending litigation matters (including our indemnification obligations
with respect to certain product liability claims against our former
sports medicine global business unit); our ongoing compliance
obligations under a corporate integrity agreement with the Office of
Inspector General of the Department of Health and Human Services (and
related terms of probation); 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 2015 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170110005470/en/
Orthofix International N.V.
Mark Quick, 214-937-2924
markquick@orthofix.com
or
Denise
Landry, 214-937-2529
deniselandry@orthofix.com
Source: Orthofix International N.V.
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