Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial
results for the second quarter ended June 30, 2024 and increased
its full-year 2024 financial guidance.
Recent Highlights
- Second quarter 2024 net sales of $198.6 million, an increase
of 6% on a reported and constant currency basis compared to second
quarter 2023
- Bone Growth Therapies (BGT) net sales growth of 12% compared
to second quarter 2023, marking six consecutive quarters with
double-digit net sales increases
- U.S. Spine Fixation1 net sales growth of 12% compared to
second quarter 2023, driven by distribution expansion and further
penetration in existing accounts
- Global Orthopedics net sales growth of 5% on a reported
basis and 6% on a constant currency basis compared to second
quarter 2023
- Second quarter 2024 net loss of $(33.4) million; Non-GAAP
adjusted EBITDA of $16.6 million, an increase of $6.7 million, with
adjusted EBITDA margin expanding 310 basis points compared to
second quarter 2023
- Significant improvement in cash usage, paving the way for
earlier than expected positive free cash flow for the second half
of 2024
- Announced appointments of four new executive team members,
further strengthening the breadth and depth of the Company's
leadership team
- Increases full-year 2024 net sales guidance to $795 million
to $800 million from $790 million to $795 million; Raises full-year
2024 non-GAAP adjusted EBITDA guidance to $64 million to $69
million from $62 million to $67 million
Second quarter net sales were $198.6 million, an increase of 6%
on a reported and constant currency basis. Net loss was $(33.4)
million and earnings per share ("EPS") was $(0.88) on a reported
basis, representing an improvement of 18% when compared to the
prior year period. Non-GAAP adjusted EBITDA was $16.6 million for
the second quarter, representing adjusted EBITDA margin expansion
of 310 basis points over the prior year period.
“We delivered another strong quarter driven by successful
execution of our key growth priorities,” said Massimo Calafiore,
President and Chief Executive Officer. “Highlights in the quarter
included notable revenue growth across each of our business
segments where our performance was led primarily by strength in our
U.S. markets, including Bone Growth Therapies, which grew 12%, and
further highlights the benefit of cross-selling in our integrated
spine channel. In addition, we delivered growth of 12% in U.S.
Spine fixation, more than twice the market rate. Based on continued
positive momentum, the strength of our differentiated and expanding
product portfolio, which continues to win share, and our confidence
in sustainable growth trends, we are raising our full-year net
sales and adjusted EBITDA guidance. We also are on track to achieve
positive free cash flow for the second half of this year, much
earlier than we originally anticipated.”
1
Spine fixation is comprised of the
Company's Spinal Implants product category, excluding motion
preservation product offerings
Financial Results Overview
Second Quarter 2024 Net Sales and Financial Results
The following table provides net sales by major product category
by reporting segment:
Three Months Ended June
30,
(Unaudited, U.S. Dollars, in
millions)
2024
2023
Change
Constant Currency
Change
Bone Growth Therapies
$
59.1
$
52.7
12.3
%
12.3
%
Spinal Implants, Biologics and Enabling
Technologies
108.9
105.3
3.4
%
3.4
%
Global Spine
168.0
158.0
6.4
%
6.4
%
Global Orthopedics
30.6
29.0
5.3
%
6.3
%
Net sales
$
198.6
$
187.0
6.2
%
6.4
%
Gross margins were 67.8% for the quarter and were 71.3% on a
non-GAAP adjusted basis.
Net loss was $(33.4) million, or $(0.88) per share, compared to
net loss of $(39.4) million, or $(1.07) per share in the prior year
period. Non-GAAP adjusted EBITDA was $16.6 million, or 8.4% of net
sales, compared to non-GAAP adjusted EBITDA of $9.9 million, or
5.3% of net sales, in the prior year period.
Liquidity
Cash, cash equivalents, and restricted cash on June 30, 2024,
totaled $28.9 million compared to $29.5 million on March 31,
2024.
Business Outlook
The Company is increasing its 2024 full-year guidance as
follows:
- Net sales are expected to range between $795 million to $800
million, representing implied growth of 6.7% to 7.4% year-over-year
on a constant currency basis, an increase from the previous
guidance range of $790 million to $795 million. These expectations
are based on the current foreign currency exchange rates and do not
take into account any additional potential exchange rate changes
that may occur this year.
- Non-GAAP adjusted EBITDA is expected to range from $64 million
to $69 million, an increase from the previous guidance range of $62
million to $67 million.
- Company now expects to be free cash flow positive for the
second half of 2024.
Conference Call
Orthofix will host a conference call today at 8:30 AM Eastern
time to discuss the Company's financial results for the quarter
ended June 30, 2024. Interested parties may access the conference
call by dialing (888) 330-2508 in the U.S., and (240) 789-2735 in
all other locations, and referencing the access code 9556380. A
replay of the call will be available for three weeks by dialing
(800) 770-2030 in the U.S., and (647) 362-9199 in all other
locations, and entering the access code 9556380. A webcast of the
conference call may be accessed at ir.Orthofix.com.
About Orthofix
Orthofix is a leading global spine and orthopedics company with
a comprehensive portfolio of biologics, innovative spinal hardware,
bone growth therapies, specialized orthopedic solutions and a
leading surgical navigation system. Its products are distributed in
more than 60 countries worldwide. The Company is headquartered in
Lewisville, Texas and has primary offices in Carlsbad, CA, with a
focus on spine and biologics product innovation and surgeon
education, and Verona, Italy, with an emphasis on product
innovation, production, and medical education for orthopedics. The
combined company’s global R&D, commercial and manufacturing
footprint also includes facilities and offices in Irvine, CA,
Toronto, Canada, Sunnyvale, CA, Maidenhead, UK, Munich, Germany,
Paris, France, and São Paulo, Brazil. 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, 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. Forward-looking
statements in this communication include the Company's expectations
regarding net sales, adjusted EBITDA, and free cash flow for the
year ended December 31, 2024. Forward-looking statements are not
guarantees of our future performance, are based on our current
expectations and assumptions regarding our business, the economy
and other future conditions, and are subject to risks,
uncertainties and changes in circumstances that are difficult to
predict, including the risks described in Part I, Item 1A under the
heading Risk Factors in our Annual Report on Form 10-K for the year
ended December 31, 2023 (the “2023 Form 10-K”), and in Part II,
Item 1A under the heading Risk Factors in our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2024. Factors that could
cause future results to differ from those expressed by
forward-looking statements include, but are not limited to, (i) our
ability to maintain operations to support our customers and
patients in the near-term and to capitalize on future growth
opportunities, (ii) risks associated with acceptance of surgical
products and procedures by surgeons and hospitals, (iii)
development and acceptance of new products or product enhancements,
(iv) clinical and statistical verification of the benefits achieved
via the use of our products, (v) our ability to adequately manage
inventory, (vi) our ability to recruit and retain management and
key personnel, and (vii) the other risks and uncertainties more
fully described in our periodic filings with the Securities and
Exchange Commission (the “SEC”). As a result of these various
risks, our actual outcomes and results may differ materially from
those expressed in these forward-looking statements.
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 reports we file
from time-to-time with the SEC, which are available to read at
www.sec.gov. Any or all forward-looking statements that we make may
turn out to be wrong (due to inaccurate assumptions that we make or
otherwise), and 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 update, and expressly disclaim any duty to update,
our forward-looking statements, whether as a result of
circumstances or events that arise after the date hereof, new
information, or otherwise, except as required by law.
The Company is unable to provide expectations of GAAP income
(loss) before income taxes, the closest comparable GAAP measures to
adjusted EBITDA (which is a non-GAAP measure), on a forward-looking
basis because the Company is unable to predict without unreasonable
efforts the ultimate outcome of matters (including
acquisition-related expenses, accounting fair value adjustments,
and other such items) that will determine the quantitative amount
of the items excluded in calculating adjusted EBITDA, which items
are further described in the reconciliation tables and related
descriptions below. These items are uncertain, depend on various
factors, and could be material to the Company’s results computed in
accordance with GAAP.
ORTHOFIX MEDICAL INC.
Condensed Consolidated
Statements of Operations
Three Months Ended
Six Months Ended
June 30,
June 30,
(Unaudited, U.S. Dollars, in thousands,
except share and per share data)
2024
2023
2024
2023
Net sales
$
198,620
$
187,016
$
387,228
$
362,220
Cost of sales
63,871
67,465
125,237
132,340
Gross profit
134,749
119,551
261,991
229,880
Sales and marketing
100,224
99,249
200,267
193,040
General and administrative
33,994
34,177
65,642
82,988
Research and development
18,049
19,424
37,541
42,731
Acquisition-related amortization and
remeasurement
7,388
3,333
12,784
7,467
Operating loss
(24,906
)
(36,632
)
(54,243
)
(96,346
)
Interest expense, net
(4,943
)
(1,266
)
(9,501
)
(2,555
)
Other income (expense), net
(2,510
)
(20
)
(3,784
)
656
Loss before income taxes
(32,359
)
(37,918
)
(67,528
)
(98,245
)
Income tax expense
(1,084
)
(1,508
)
(1,935
)
(2,119
)
Net loss
$
(33,443
)
$
(39,426
)
$
(69,463
)
$
(100,364
)
Net loss per common share:
Basic
$
(0.88
)
$
(1.07
)
$
(1.84
)
$
(2.77
)
Diluted
(0.88
)
(1.07
)
(1.84
)
(2.77
)
Weighted average number of common shares
(in millions):
Basic
38.0
36.8
37.8
36.3
Diluted
38.0
36.8
37.8
36.3
ORTHOFIX MEDICAL INC.
Condensed Consolidated Balance
Sheets
(U.S. Dollars, in thousands, except par
value data)
June 30, 2024
December 31, 2023
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
26,366
$
33,107
Restricted Cash
2,500
4,650
Accounts receivable, net of allowances of
$8,368 and $7,130, respectively
125,361
128,098
Inventories
210,040
222,166
Prepaid expenses and other current
assets
21,798
32,422
Total current assets
386,065
420,443
Property, plant, and equipment, net
154,111
159,060
Intangible assets, net
108,310
117,490
Goodwill
194,934
194,934
Other long-term assets
38,578
33,388
Total assets
$
881,998
$
925,315
Liabilities and shareholders’
equity
Current liabilities
Accounts payable
$
50,362
$
58,357
Current portion of long-term debt
4,688
1,250
Current portion of finance lease
liability
734
708
Other current liabilities
100,183
104,908
Total current liabilities
155,967
165,223
Long-term debt
113,315
93,107
Long-term portion of finance lease
liability
18,160
18,532
Other long-term liabilities
48,552
49,723
Total liabilities
335,994
326,585
Contingencies
Shareholders’ equity
Common shares $0.10 par value; 100,000
shares authorized; 38,039 and 37,165 issued and outstanding as of
June 30, 2024, and December 31, 2023, respectively
3,804
3,717
Additional paid-in capital
764,538
746,450
Accumulated deficit
(219,607
)
(150,144
)
Accumulated other comprehensive loss
(2,731
)
(1,293
)
Total shareholders’ equity
546,004
598,730
Total liabilities and shareholders’
equity
$
881,998
$
925,315
ORTHOFIX MEDICAL INC.
Non-GAAP Financial Measures
The following tables present
reconciliations of various financial measures calculated in
accordance with U.S. generally accepted accounting principles
(“GAAP”), to various non-GAAP financial measures that exclude (or
in the case of free cash flow, include) items specified in the
tables. The GAAP measures shown in the tables below represent the
most comparable GAAP measure to the applicable non-GAAP measure(s)
shown in the table. For further information regarding the nature of
these exclusions, why the Company believes that these non-GAAP
financial measures provide useful information to investors, the
specific manner in which management uses these measures, and some
of the limitations associated with the use of these measures,
please refer to the Company's Current Report on Form 8-K regarding
this press release filed today with the SEC available on the SEC's
website at www.sec.gov and on the “Investors” page of the Company’s
website at www.orthofix.com.
Adjusted Gross Profit and Adjusted
Gross Margin
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Gross profit
$
134,749
$
119,551
$
261,991
$
229,880
Share-based compensation expense
497
482
1,034
953
SeaSpine merger-related costs
3,115
3,782
4,418
4,486
Strategic investments
63
29
128
210
Acquisition-related fair value
adjustments
3,047
9,449
6,094
21,085
Amortization/depreciation of acquired
long-lived assets
209
544
527
544
Medical device regulation
—
41
—
669
Adjusted gross profit
$
141,680
$
133,878
$
274,192
$
257,827
Adjusted gross margin
71.3
%
71.6
%
70.8
%
71.2
%
Adjusted EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Net loss
$
(33,443
)
$
(39,426
)
$
(69,463
)
$
(100,364
)
Income tax expense (benefit)
1,084
1,508
1,935
2,119
Interest expense, net
4,943
1,266
9,501
2,555
Depreciation and amortization
14,032
13,327
28,894
25,997
Share-based compensation expense
9,959
13,246
18,759
26,266
Foreign exchange impact
851
(269
)
2,439
(852
)
SeaSpine merger-related costs
5,897
8,206
10,376
28,946
Strategic investments
311
309
431
970
Acquisition-related fair value
adjustments
6,117
8,149
10,334
19,785
Interest and loss on investments
1,813
—
1,553
—
Litigation and investigation costs
(277
)
1,291
1,983
1,760
Succession charges
5,346
262
7,556
262
Medical device regulation
—
2,050
—
5,679
Adjusted EBITDA
$
16,633
$
9,919
$
24,298
$
13,123
Adjusted EBITDA as a percentage of net
sales
8.4
%
5.3
%
6.3
%
3.6
%
Adjusted Net Income
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Net loss
$
(33,443
)
$
(39,426
)
$
(69,463
)
$
(100,364
)
Share-based compensation expense
9,959
13,246
18,759
26,266
Foreign exchange impact
851
(269
)
2,439
(852
)
SeaSpine merger-related costs
5,967
8,049
10,815
30,353
Strategic investments
371
348
497
1,046
Acquisition-related fair value
adjustments
6,117
8,149
10,334
19,785
Amortization/depreciation of acquired
long-lived assets
4,648
5,810
9,440
9,944
Litigation and investigation costs
(277
)
1,291
1,983
1,760
Succession charges
5,346
262
7,556
262
Medical device regulation
—
2,055
—
5,689
Interest and loss on investments
1,764
—
1,504
—
Long-term income tax rate adjustment
416
1,224
3,112
3,238
Adjusted net income (loss)
$
1,719
$
739
$
(3,024
)
$
(2,873
)
Cash Flow and Free Cash Flow
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
Net cash from operating activities
$
(9,611
)
$
(39,536
)
Net cash from investing activities
(20,583
)
4,265
Net cash from financing activities
21,678
21,791
Effect of exchange rate changes on
cash
(375
)
387
Net change in cash and cash
equivalents
$
(8,891
)
$
(13,093
)
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
Net cash from operating activities
$
(9,611
)
$
(39,536
)
Capital expenditures
(20,533
)
(24,654
)
Free cash flow
$
(30,144
)
$
(64,190
)
Reconciliation of Non-GAAP Financial Measures to Reported
Operating Expenses
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Sales and marketing expense, as
reported
$
100,224
$
99,249
$
200,267
$
193,040
Reconciling items impacting sales and
marketing:
Strategic investments
(1,193
)
(1,422
)
(3,412
)
(3,521
)
Litigation and investigation costs
—
(752
)
—
(857
)
Medical device regulation
—
—
—
(5
)
Amortization/depreciation of acquired
long-lived assets
(119
)
(297
)
(297
)
(297
)
Sales and marketing expense, as
adjusted
$
98,912
$
96,778
$
196,558
$
188,360
Sales and marketing expense as a
percentage of net sales, as adjusted
49.8
%
51.7
%
50.8
%
52.0
%
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
General and administrative expense, as
reported
$
33,994
$
34,177
$
65,642
$
82,988
Reconciling items impacting general and
administrative:
Strategic investments
(1,623
)
(2,694
)
(2,834
)
(19,992
)
Amortization/depreciation of acquired
long-lived assets
(2
)
(336
)
(72
)
(336
)
Litigation and investigation costs
277
(538
)
(1,983
)
(902
)
Succession charges
(5,346
)
(262
)
(7,556
)
(262
)
General and administrative expense, as
adjusted
$
27,300
$
30,347
$
53,197
$
61,496
General and administrative expense as a
percentage of net sales, as adjusted
13.7
%
16.2
%
13.7
%
17.0
%
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Research and development expense, as
reported
$
18,049
$
19,424
$
37,541
$
42,731
Reconciling items impacting research and
development:
Strategic investments
(340
)
(490
)
(576
)
(2,374
)
Medical device regulation
—
(2,027
)
—
(5,017
)
Research and development expense, as
adjusted
$
17,709
$
16,907
$
36,965
$
35,340
Research and development expense as a
percentage of net sales, as adjusted
8.9
%
9.0
%
9.5
%
9.8
%
Reconciliation of Non-GAAP Financial
Measures to Reported Non-Operating (Income) Expense
Three Months Ended June
30,
Six Months Ended June
30,
(Unaudited, U.S. Dollars, in
thousands)
2024
2023
2024
2023
Non-operating expense
$
7,453
$
1,286
$
13,285
$
1,899
Reconciling items impacting non-operating
expense:
Foreign exchange impact
(851
)
269
(2,439
)
852
Strategic investments
—
(15
)
—
(895
)
Interest and (gain) loss on
investments
(1,787
)
30
(1,504
)
60
Non-operating expense, as
adjusted
$
4,815
$
1,570
$
9,342
$
1,916
Non-operating expense as a percentage of
net sales, as adjusted
2.4
%
0.8
%
2.4
%
0.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806732152/en/
Investor Relations Julie Dewey, Chief Investor Relations
and Communications Officer JulieDewey@Orthofix.com (209) 613-6945
Media Relations Denise Landry, Vice President, Global
Corporate Communications DeniseLandry@Orthofix.com (214)
937-2529
Orthofix Medical (NASDAQ:OFIX)
過去 株価チャート
から 8 2024 まで 9 2024
Orthofix Medical (NASDAQ:OFIX)
過去 株価チャート
から 9 2023 まで 9 2024