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Orthofix Reports Second Quarter 2019 Results

LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the second quarter ended June 30, 2019. Net sales were $115.9 million, loss per share (“EPS”) was ($0.03) and adjusted EPS was $0.28.

“First and foremost, I am very pleased to announce that Jon Serbousek, a highly regarded and seasoned orthopedic and spine executive, has joined the Orthofix executive team. For more details, please see the press release we will issue today on the announcement,” said Brad Mason, Orthofix President and Chief Executive Officer. “Regarding the second quarter results, net sales were in line with our expectations, led by another quarter of outstanding performance in our Biologics products and notably, as reported by SmartTRAK®, Orthofix now has the number one market share position in the U.S. cellular allograft segment.”

Mason continued, “I am also happy to report that the launch of the M6-C cervical disc in the U.S. is going very well and ahead of plan. With fewer than two dozen surgeons implanting discs to date, we’ve generated $500,000 in sales since June 1st and expect to end the year with more than 150 surgeons trained. This gives us great confidence that we will meet or exceed our sales expectations for 2019 and exit the year on a strong growth trajectory.”

Financial Results Overview

The following table provides net sales by major product category by reporting segment:

 

 

Three Months Ended June 30,

 

(Unaudited, U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

Change

 

 

Constant

Currency

Change

 

Bone Growth Therapies

 

$

50,109

 

 

$

48,211

 

 

 

3.9

%

 

 

3.9

%

Spinal Implants

 

 

23,226

 

 

 

23,880

 

 

 

(2.7

%)

 

 

(2.0

%)

Biologics

 

 

16,744

 

 

 

14,668

 

 

 

14.2

%

 

 

14.2

%

Global Spine

 

 

90,079

 

 

 

86,759

 

 

 

3.8

%

 

 

4.0

%

Global Extremities

 

 

25,771

 

 

 

24,788

 

 

 

4.0

%

 

 

8.5

%

Net sales

 

$

115,850

 

 

$

111,547

 

 

 

3.9

%

 

 

5.0

%

Gross profit increased $1.3 million to $90.0 million. Gross margin decreased to 77.7% compared to 79.5% in the prior year period, primarily due to higher than normal charges related to the buildup of Spinal Implants inventory to support sales growth from our new sales partners in key geographies.

Net loss was ($0.5) million, or ($0.03) per share, compared to net income of $0.9 million, or $0.05 per share in the prior year period. Adjusted net income from continuing operations was $5.5 million, or $0.28 per share, compared to adjusted net income of $8.0 million, or $0.42 per share in the prior year period.

EBITDA was $6.4 million, compared to $6.8 million in the prior year period. Adjusted EBITDA was $17.3 million, or 14.9% of net sales, compared to $22.0 million, or 19.7% of net sales, in the prior year period.

Liquidity

As of June 30, 2019, cash, cash equivalents, and restricted cash totaled $52.1 million compared to $72.2 million as of December 31, 2018. As of June 30, 2019, the Company had no outstanding indebtedness and borrowing capacity of $125 million under its existing credit facility. Cash flow from operations for the six months ended June 30, 2019 decreased $4.7 million to $8.3 million when compared to the prior year period, while free cash flow decreased $8.4 million to ($2.0) million.

2019 Outlook

For the year ending December 31, 2019, the Company expects the following results, assuming exchange rates are the same as those currently prevailing.

 

 

Previous 2019 Outlook

 

 

Current 2019 Outlook

(Unaudited, U.S. Dollars, in millions, except per share data)

 

Low

 

 

High

 

 

Low

 

High

Net sales

 

$

472.0

 

 

$

477.0

 

 

$

472.0

 

1

 

$

477.0

 

1

Net income

 

$

14.6

 

 

$

15.5

 

 

$

12.7

 

2

 

$

13.6

 

2

Adjusted EBITDA

 

$

86.0

 

 

$

89.0

 

 

$

86.0

 

3

 

$

89.0

 

3

EPS

 

$

0.75

 

 

$

0.80

 

 

$

0.66

 

4

 

$

0.70

 

4

Adjusted EPS

 

$

1.75

 

 

$

1.82

 

 

$

1.75

 

5

 

$

1.82

 

5

1

Represents a year-over-year increase of 4.2% to 5.3% on a reported basis

2

Represents a year-over-year decrease of 8.0% to 1.5%

3

Represents a year-over-year decrease of 1.8% to a year-over-year increase of 1.6%

4

Represents a year-over-year decrease of 8.3% to 2.8%

5

Represents a year-over-year decrease of 2.2% to year-over-year increase of 1.7%

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company’s financial results for the second quarter of 2019. Interested parties may access the conference call by dialing (844) 809-1992 in the U.S. and (612) 979-9886 outside the U.S., and referencing the conference ID 1534617. A replay of the call will be available for two weeks by dialing (855) 859-2056 in the U.S. and (404) 537-3406 outside the U.S., and entering the conference ID 1534617. A webcast of the conference call may be accessed by going to the Company’s website at www.orthofix.com, by clicking on the Investors link and then the Events and Presentations page.

About Orthofix

Orthofix Medical Inc. is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients’ lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic extremities products are distributed in over 70 countries via the Company’s sales representatives and distributors. 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 (“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. Therefore, 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 further update any such statement, or the risk factors described in Part I, Item 1A under the heading Risk Factors in our Form 10-K for the year ended December 31, 2018, to reflect new information, the occurrence of future events or circumstances or otherwise.

1 Per SmartTRAK Q1/19 Market Recap: OrthoBio Report, US Stem Cell segment

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)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net sales

 

$

115,850

 

 

$

111,547

 

 

$

224,962

 

 

$

220,256

 

Cost of sales

 

 

25,812

 

 

 

22,835

 

 

 

49,520

 

 

 

46,982

 

Gross profit

 

 

90,038

 

 

 

88,712

 

 

 

175,442

 

 

 

173,274

 

Sales and marketing

 

 

56,864

 

 

 

51,529

 

 

 

110,558

 

 

 

101,797

 

General and administrative

 

 

21,935

 

 

 

21,958

 

 

 

42,407

 

 

 

41,382

 

Research and development

 

 

8,980

 

 

 

7,891

 

 

 

18,209

 

 

 

14,828

 

Acquisition-related amortization and remeasurement

 

 

1,808

 

 

 

1,419

 

 

 

8,265

 

 

 

1,482

 

Operating income (loss)

 

 

451

 

 

 

5,915

 

 

 

(3,997

)

 

 

13,785

 

Interest income (expense), net

 

 

457

 

 

 

(251

)

 

 

200

 

 

 

(434

)

Other expense, net

 

 

(236

)

 

 

(3,643

)

 

 

(640

)

 

 

(731

)

Income (loss) before income taxes

 

 

672

 

 

 

2,021

 

 

 

(4,437

)

 

 

12,620

 

Income tax benefit (expense)

 

 

(1,219

)

 

 

(1,096

)

 

 

4,787

 

 

 

(6,469

)

Net income (loss)

 

$

(547

)

 

$

925

 

 

$

350

 

 

$

6,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.03

)

 

$

0.05

 

 

$

0.02

 

 

$

0.33

 

Diluted

 

 

(0.03

)

 

 

0.05

 

 

 

0.02

 

 

 

0.32

 

Weighted average number of common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,834,886

 

 

 

18,413,756

 

 

 

18,790,612

 

 

 

18,409,331

 

Diluted

 

 

18,834,886

 

 

 

18,835,560

 

 

 

19,179,057

 

 

 

18,811,356

 

ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets

 

(U.S. Dollars, in thousands, except share data)

 

June 30,

2019

 

 

December 31,

2018

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,143

 

 

$

69,623

 

Restricted cash

 

 

 

 

 

2,566

 

Trade accounts receivable, net of allowances of $4,205 and $7,463, respectively

 

 

80,591

 

 

 

77,747

 

Inventories

 

 

79,141

 

 

 

76,847

 

Prepaid expenses and other current assets

 

 

20,954

 

 

 

17,856

 

Total current assets

 

 

232,829

 

 

 

244,639

 

Property, plant and equipment, net

 

 

64,402

 

 

 

42,835

 

Intangible assets, net

 

 

55,628

 

 

 

51,897

 

Goodwill

 

 

71,177

 

 

 

72,401

 

Deferred income taxes

 

 

37,566

 

 

 

33,228

 

Other long-term assets

 

 

27,204

 

 

 

21,641

 

Total assets

 

$

488,806

 

 

$

466,641

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Trade accounts payable

 

$

19,523

 

 

$

17,989

 

Current portion of finance lease liability

 

 

301

 

 

 

 

Other current liabilities

 

 

48,161

 

 

 

67,919

 

Total current liabilities

 

 

67,985

 

 

 

85,908

 

Long-term portion of finance lease liability

 

 

20,847

 

 

 

 

Other long-term liabilities

 

 

52,180

 

 

 

45,336

 

Total liabilities

 

 

141,012

 

 

 

131,244

 

Contingencies

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

Common shares $0.10 par value; 50,000,000 shares authorized; 18,831,581 and

18,579,688 issued and outstanding as of June 30, 2019 and December 31, 2018,

respectively

 

 

1,883

 

 

 

1,858

 

Additional paid-in capital

 

 

257,888

 

 

 

243,165

 

Retained earnings

 

 

86,561

 

 

 

87,078

 

Accumulated other comprehensive income

 

 

1,462

 

 

 

3,296

 

Total shareholders’ equity

 

 

347,794

 

 

 

335,397

 

Total liabilities and shareholders’ equity

 

$

488,806

 

 

$

466,641

 

ORTHOFIX MEDICAL INC.

Non-GAAP Financial Measures

The following tables present reconciliations of operating income (loss), net income (loss), EPS, and net cash from operating activities, in each case calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to, as applicable, non-GAAP financial measures, referred to as “EBITDA,” “Adjusted EBITDA,” “Adjusted net income,” “Adjusted EPS,” and “Free cash flow” that exclude items specified in the tables. A more detailed explanation of the items excluded from these non-GAAP financial measures, as well as why management believes the non-GAAP financial measures are useful to them, is included following the reconciliations.

EBITDA and Adjusted EBITDA

 

 

Three Months Ended June 30, 2019

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

12,696

 

 

$

1,353

 

 

$

(13,598

)

 

$

451

 

Other income (expense), net

 

 

175

 

 

 

71

 

 

 

(482

)

 

 

(236

)

Depreciation and amortization

 

 

2,314

 

 

 

1,326

 

 

 

1,200

 

 

 

4,840

 

Amortization of acquired intangibles

 

 

1,338

 

 

 

 

 

 

 

 

 

1,338

 

EBITDA

 

$

16,523

 

 

$

2,750

 

 

$

(12,880

)

 

$

6,393

 

Share-based compensation

 

 

1,733

 

 

 

607

 

 

 

2,454

 

 

 

4,794

 

Foreign exchange impact

 

 

(168

)

 

 

(116

)

 

 

1

 

 

 

(283

)

Strategic investments

 

 

591

 

 

 

 

 

 

4,234

 

 

 

4,825

 

Acquisition-related fair value adjustments

 

 

647

 

 

 

 

 

 

 

 

 

647

 

Loss on investment securities

 

 

 

 

 

 

 

 

491

 

 

 

491

 

Legal judgments/settlements

 

 

(555

)

 

 

(318

)

 

 

(4

)

 

 

(877

)

Succession charges

 

 

132

 

 

 

 

 

 

1,136

 

 

 

1,268

 

Adjusted EBITDA

 

$

18,903

 

 

$

2,923

 

 

$

(4,568

)

 

$

17,258

 

 

 

 

Six Months Ended June 30, 2019

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

20,426

 

 

$

358

 

 

$

(24,781

)

 

$

(3,997

)

Other income (expense), net

 

 

(224

)

 

 

(407

)

 

 

(9

)

 

 

(640

)

Depreciation and amortization

 

 

4,501

 

 

 

2,626

 

 

 

2,383

 

 

 

9,510

 

Amortization of acquired intangibles

 

 

2,395

 

 

 

 

 

 

 

 

 

2,395

 

EBITDA

 

$

27,098

 

 

$

2,577

 

 

$

(22,407

)

 

$

7,268

 

Share-based compensation

 

 

3,313

 

 

 

1,133

 

 

 

3,907

 

 

 

8,353

 

Foreign exchange impact

 

 

225

 

 

 

342

 

 

 

23

 

 

 

590

 

Strategic investments

 

 

1,249

 

 

 

 

 

 

5,645

 

 

 

6,894

 

Acquisition-related fair value adjustments

 

 

6,579

 

 

 

 

 

 

 

 

 

6,579

 

Loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

Legal judgments/settlements

 

 

(500

)

 

 

(273

)

 

 

21

 

 

 

(752

)

Succession charges

 

 

132

 

 

 

 

 

 

3,868

 

 

 

4,000

 

Adjusted EBITDA

 

$

38,096

 

 

$

3,779

 

 

$

(8,943

)

 

$

32,932

 

 

 

 

Three Months Ended June 30, 2018

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

17,240

 

 

$

878

 

 

$

(12,203

)

 

$

5,915

 

Other income (expense), net

 

 

(544

)

 

 

(1,675

)

 

 

(1,424

)

 

 

(3,643

)

Depreciation and amortization

 

 

2,024

 

 

 

1,285

 

 

 

935

 

 

 

4,244

 

Amortization of acquired intangibles

 

 

310

 

 

 

 

 

 

 

 

 

310

 

EBITDA

 

$

19,030

 

 

$

488

 

 

$

(12,692

)

 

$

6,826

 

Share-based compensation

 

 

1,836

 

 

 

613

 

 

 

2,766

 

 

 

5,215

 

Foreign exchange impact

 

 

456

 

 

 

1,626

 

 

 

1,173

 

 

 

3,255

 

Strategic investments

 

 

812

 

 

 

 

 

 

3,837

 

 

 

4,649

 

Acquisition-related fair value adjustments

 

 

1,473

 

 

 

 

 

 

 

 

 

1,473

 

Loss on investment securities

 

 

 

 

 

 

 

 

230

 

 

 

230

 

Legal judgments/settlements

 

 

212

 

 

 

87

 

 

 

75

 

 

 

374

 

Succession charges

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

23,819

 

 

$

2,814

 

 

$

(4,611

)

 

$

22,022

 

 

 

 

Six Months Ended June 30, 2018

 

(Unaudited, U.S. Dollars, in thousands)

 

Global Spine

 

 

Global Extremities

 

 

Corporate

 

 

Total Orthofix

 

Operating income (loss)

 

$

34,007

 

 

$

2,721

 

 

$

(22,943

)

 

$

13,785

 

Other income (expense), net

 

 

(564

)

 

 

(1,486

)

 

 

1,319

 

 

 

(731

)

Depreciation and amortization

 

 

4,039

 

 

 

2,581

 

 

 

1,930

 

 

 

8,550

 

Amortization of acquired intangibles

 

 

373

 

 

 

 

 

 

 

 

 

373

 

EBITDA

 

$

37,855

 

 

$

3,816

 

 

$

(19,694

)

 

$

21,977

 

Share-based compensation

 

 

3,236

 

 

 

1,120

 

 

 

4,775

 

 

 

9,131

 

Foreign exchange impact

 

 

433

 

 

 

1,485

 

 

 

261

 

 

 

2,179

 

Strategic investments

 

 

812

 

 

 

 

 

 

7,054

 

 

 

7,866

 

Acquisition-related fair value adjustments

 

 

1,473

 

 

 

 

 

 

 

 

 

1,473

 

Gain on investment securities

 

 

 

 

 

 

 

 

(1,399

)

 

 

(1,399

)

Legal judgments/settlements

 

 

179

 

 

 

294

 

 

 

48

 

 

 

521

 

Succession charges

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

43,988

 

 

$

6,715

 

 

$

(8,955

)

 

$

41,748

 

 

Adjusted Net Income

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(Unaudited, U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income (loss)

 

$

(547

)

 

$

925

 

 

$

350

 

 

$

6,151

 

Foreign exchange impact

 

 

(283

)

 

 

3,255

 

 

 

590

 

 

 

2,179

 

Strategic investments

 

 

4,825

 

 

 

4,651

 

 

 

6,894

 

 

 

7,868

 

Acquisition-related fair value adjustments

 

 

647

 

 

 

1,473

 

 

 

6,579

 

 

 

1,473

 

Amortization of acquired intangibles

 

 

1,338

 

 

 

310

 

 

 

2,395

 

 

 

373

 

Interest and (gain) loss on investment securities

 

 

(96

)

 

 

230

 

 

 

(689

)

 

 

(1,399

)

Legal judgments/settlements

 

 

(877

)

 

 

374

 

 

 

(752

)

 

 

521

 

Succession charges

 

 

1,268

 

 

 

 

 

 

4,000

 

 

 

 

Long-term income tax rate adjustment

 

 

(804

)

 

 

(3,213

)

 

 

(8,723

)

 

 

(1,803

)

Adjusted net income

 

$

5,471

 

 

$

8,005

 

 

$

10,644

 

 

$

15,363

 

 

Adjusted EPS

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(Unaudited, per diluted share)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

EPS

 

$

(0.03

)

 

$

0.05

 

 

$

0.02

 

 

$

0.32

 

Foreign exchange impact

 

 

(0.01

)

 

 

0.17

 

 

 

0.03

 

 

 

0.12

 

Strategic investments

 

 

0.25

 

 

 

0.24

 

 

 

0.36

 

 

 

0.41

 

Acquisition-related fair value adjustments

 

 

0.03

 

 

 

0.08

 

 

 

0.34

 

 

 

0.08

 

Amortization of acquired intangibles

 

 

0.07

 

 

 

0.02

 

 

 

0.12

 

 

 

0.02

 

Interest and (gain) loss on investment securities

 

 

 

 

 

0.01

 

 

 

(0.04

)

 

 

(0.07

)

Legal judgments/settlements

 

 

(0.05

)

 

 

0.02

 

 

 

(0.04

)

 

 

0.03

 

Succession charges

 

 

0.07

 

 

 

 

 

 

0.21

 

 

 

 

Long-term income tax rate adjustment

 

 

(0.05

)

 

 

(0.17

)

 

 

(0.45

)

 

 

(0.10

)

Adjusted EPS

 

$

0.28

 

 

$

0.42

 

 

$

0.55

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares (treasury stock method)

 

 

19,272,139

 

 

 

18,980,808

 

 

 

19,280,140

 

 

 

18,945,356

 

 

Free Cash Flow

 

 

Six Months Ended

June 30,

 

(Unaudited, U.S. Dollars, in thousands)

 

2019

 

 

2018

 

Net cash from operating activities

 

$

8,344

 

 

$

13,032

 

Capital expenditures

 

 

(10,338

)

 

 

(6,652

)

Free cash flow

 

$

(1,994

)

 

$

6,380

 

 

2019 Outlook

 

 

Previous 2019 Outlook

 

 

Current 2019 Outlook

 

(Unaudited, U.S. Dollars, in millions)

 

Low

 

 

High

 

 

Low

 

 

High

 

Net income

 

$

14.6

 

 

$

15.5

 

 

$

12.7

 

 

$

13.6

 

Interest expense, net

 

 

0.8

 

 

 

0.9

 

 

 

(1.2

)

 

 

(1.2

)

Income tax expense

 

 

5.9

 

 

 

6.4

 

 

 

6.8

 

 

 

7.3

 

Depreciation and amortization

 

 

24.2

 

 

 

24.2

 

 

 

24.5

 

 

 

24.6

 

EBITDA

 

$

45.5

 

 

$

47.0

 

 

$

42.8

 

 

$

44.3

 

Share-based compensation

 

 

19.1

 

 

 

20.1

 

 

 

19.3

 

 

 

20.4

 

Foreign exchange impact

 

 

0.9

 

 

 

0.9

 

 

 

0.6

 

 

 

0.6

 

Strategic investments

 

 

4.8

 

 

 

4.9

 

 

 

8.7

 

 

 

8.9

 

Acquisition-related fair value adjustments

 

 

8.5

 

 

 

8.7

 

 

 

7.7

 

 

 

7.7

 

Interest and (gain) loss on investment securities

 

 

(0.5

)

 

 

(0.5

)

 

 

 

 

 

 

Legal judgments/settlements

 

 

1.3

 

 

 

1.3

 

 

 

(0.5

)

 

 

(0.5

)

Succession charges

 

 

6.4

 

 

 

6.6

 

 

 

7.4

 

 

 

7.6

 

Adjusted EBITDA

 

$

86.0

 

 

$

89.0

 

 

$

86.0

 

 

$

89.0

 

 

 

 

Previous 2019 Outlook

 

 

Current 2019 Outlook

 

(Unaudited, per diluted share)

 

Low

 

 

High

 

 

Low

 

 

High

 

EPS

 

$

0.75

 

 

$

0.80

 

 

$

0.66

 

 

$

0.70

 

Foreign exchange impact

 

 

0.05

 

 

 

0.05

 

 

 

0.03

 

 

 

0.03

 

Strategic investments

 

 

0.25

 

 

 

0.25

 

 

 

0.45

 

 

 

0.46

 

Acquisition-related fair value adjustments

 

 

0.44

 

 

 

0.45

 

 

 

0.40

 

 

 

0.40

 

Amortization of intangible assets

 

 

0.25

 

 

 

0.25

 

 

 

0.25

 

 

 

0.26

 

Interest and (gain) loss on investment securities

 

 

(0.03

)

 

 

(0.03

)

 

 

(0.09

)

 

 

(0.09

)

Legal judgments/settlements

 

 

0.07

 

 

 

0.07

 

 

 

(0.02

)

 

 

(0.02

)

Succession charges

 

 

0.33

 

 

 

0.34

 

 

 

0.38

 

 

 

0.39

 

Long-term income tax rate adjustment

 

 

(0.36

)

 

 

(0.36

)

 

 

(0.31

)

 

 

(0.31

)

Adjusted EPS

 

$

1.75

 

 

$

1.82

 

 

$

1.75

 

 

$

1.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares (treasury stock method)

 

 

19,375,000

 

 

 

19,375,000

 

 

 

19,375,000

 

 

 

19,375,000

 

 

Constant Currency

Constant currency is a non-GAAP measure, which is calculated by using foreign currency rates from the comparable, prior-year period, to present net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze net sales without the impact of changes in foreign currency rates.

EBITDA

EBITDA is a non-GAAP financial measure, which is calculated by adding interest expense, net; income tax expense; and depreciation and amortization to net income. EBITDA provides management with additional insight to its results of operations. EBITDA is the primary metric used by our Chief Operating Decision Maker in managing our business.

Adjusted EBITDA, Adjusted Net Income and Adjusted EPS

These non-GAAP financial measures provide management with additional insight to its results of operations and are calculated using the following adjustments:

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.

Contacts

Orthofix Medical Inc.

Mark Quick

P: 214-937-2924

E: markquick@orthofix.com

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