Orthofix Reports Fourth Quarter and Fiscal Year 2020 Results
- Fourth quarter net sales of $117.6 million, within 3% of our 2019 results
- US Spine implant sales grew 11% compared to fourth quarter 2019, driven by record M6-C artificial cervical disc performance
- Strong cash flow performance in the quarter, free cash flow of $17.9 million
- FITBONE® intramedullary lengthening and deformity system receives FDA clearance for pediatric indication
LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2020. Net sales for the fourth quarter were $117.6 million, earnings (loss) per share (“EPS”) was $(0.48) and adjusted EPS was $0.44. For fiscal year 2020, net sales were $406.6 million, EPS was $0.13 and adjusted EPS was $0.26.
“We were very pleased with our performance during the fourth quarter both from a financial and operating perspective. We were able to drive revenue to levels approaching 2019 while continuing to strengthen our organization during the continued disruption from restrictions on elective procedures globally,” said Orthofix President and Chief Executive Officer Jon Serbousek.
“Although early 2021 has seen some significant COVID and winter weather headwinds, looking ahead, we are very excited about the future of Orthofix. We are now moving our transformation into an execution phase, and we look forward to leveraging the new capabilities we built throughout 2020 to drive growth and pursue high value solutions for patients, surgeons, and hospitals around the world. A great example is our recent expanded FDA clearance for the FITBONE® system, making it the only pediatric lengthening nail in the U.S., and an important addition to our pediatric portfolio.”
Financial Results Overview
Fourth Quarter
The following table provides net sales by major product category by reporting segment:
|
|
|
Three Months Ended December 31, |
|
|||||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
Constant Currency Change |
|
||||
|
Bone Growth Therapies |
|
$ |
50,508 |
|
|
$ |
50,953 |
|
|
|
(0.9 |
%) |
|
|
(0.9 |
%) |
|
Spinal Implants |
|
|
27,832 |
|
|
|
25,468 |
|
|
|
9.3 |
% |
|
|
8.6 |
% |
|
Biologics |
|
|
15,163 |
|
|
|
16,712 |
|
|
|
(9.3 |
%) |
|
|
(9.3 |
%) |
|
Global Spine |
|
|
93,503 |
|
|
|
93,133 |
|
|
|
0.4 |
% |
|
|
0.2 |
% |
|
Global Extremities |
|
|
24,116 |
|
|
|
28,361 |
|
|
|
(15.0 |
%) |
|
|
(18.4 |
%) |
|
Net sales |
|
$ |
117,619 |
|
|
$ |
121,494 |
|
|
|
(3.2 |
%) |
|
|
(4.1 |
%) |
Gross profit decreased $6.8 million to $88.5 million. Gross margin decreased to 75.3% compared to 78.4% in the prior year period.
Net loss was $(9.4) million, or $(0.48) per share, compared to net income of $11.7 million, or $0.60 per share in the prior year period. Adjusted net income was $8.6 million, or $0.44 per share, compared to adjusted net income of $9.9 million, or $0.51 per share in the prior year period.
EBITDA was $14.2 million, compared to $11.3 million in the prior year period. Adjusted EBITDA was $22.1 million, or 18.8% of net sales, compared to $22.5 million, or 18.5% of net sales, in the prior year period.
Fiscal Year 2020
The following table provides net sales by major product category by reporting segment:
|
|
|
Year Ended December 31, |
|
|||||||||||||
|
(U.S. Dollars, in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
Constant Currency Change |
|
||||
|
Bone Growth Therapies |
|
$ |
171,396 |
|
|
$ |
197,181 |
|
|
|
(13.1 |
%) |
|
|
(13.1 |
%) |
|
Spinal Implants |
|
|
94,857 |
|
|
|
94,544 |
|
|
|
0.3 |
% |
|
|
0.2 |
% |
|
Biologics |
|
|
55,482 |
|
|
|
65,496 |
|
|
|
(15.3 |
%) |
|
|
(15.3 |
%) |
|
Global Spine |
|
|
321,735 |
|
|
|
357,221 |
|
|
|
(9.9 |
%) |
|
|
(10.0 |
%) |
|
Global Extremities |
|
|
84,827 |
|
|
|
102,734 |
|
|
|
(17.4 |
%) |
|
|
(18.2 |
%) |
|
Net sales |
|
$ |
406,562 |
|
|
$ |
459,955 |
|
|
|
(11.6 |
%) |
|
|
(11.8 |
%) |
Gross profit decreased $54.7 million to $304.7 million. Gross margin decreased to 74.9% compared to 78.1% in the prior year period.
Net income was $2.5 million, or $0.13 per share, compared to a net loss of $(28.5) million, or $(1.51) per share in the prior year period. Adjusted net income was $5.1 million, or $0.26 per share, compared to adjusted net income of $28.4 million, or $1.47 per share in the prior year period.
EBITDA was $32.7 million, compared to $(2.2) million in the prior year period. Adjusted EBITDA was $47.6 million, or 11.7% of net sales, compared to $75.7 million, or 16.5% of net sales, in the prior year period.
Liquidity
As of December 31, 2020, cash, cash equivalents, and restricted cash totaled $96.8 million compared to $70.4 million as of December 31, 2019. As of December 31, 2020, the Company had no borrowings under its five year $300 million secured revolving credit facility. Cash flow from operations increased $42.2 million to $74.3 million, while free cash flow increased $45.7 million to $57.2 million for the year ended December 31, 2020.
COVID-19 Impact and 2021 Outlook
The global Coronavirus Disease 2019 (“COVID-19”) pandemic has significantly affected the Company’s customers, communities, employees and business operations. The pandemic has led to the cancellation or deferral of elective surgeries and procedures, restrictions on travel, the implementation of physical distancing measures, and the temporary or permanent closure of businesses. However, the Company remains focused on protecting the health and wellbeing of its employees, partners, patients, and the communities in which it operates while assuring the continuity of its business operations.
At the beginning of the first quarter of 2021, COVID-19 restrictions have increased over December 2020 measures and from January through early February we saw procedural volume declines of approximately 15%. In addition, the weather emergency experienced last week will likely have an additional negative impact on our business for the first quarter. While we expect improvements in March, we still anticipate a modest impact from COVID-19 related restrictions into the second quarter. The third and fourth quarters are expected to show stronger growth when compared to the second half of 2019 as a result of expected rebounds in procedural volumes and case complexity.
As of the date hereof, the Company expects the following net sales results for the year ended December 31, 2021, and for the quarter ended March 31, 2021, including the impact of any expected changes in foreign currency exchange rates:
|
|
|
2021 Full Year Outlook |
|
|
Q1 2021 Outlook |
||||||||||||
|
(Unaudited, U.S. Dollars, in millions, except per share data) |
|
Low |
|
|
High |
|
|
Low |
High |
||||||||
|
Net sales |
|
$ |
445.0 |
|
1 |
$ |
460.0 |
|
1 |
$ |
95.0 |
|
2 |
$ |
96.0 |
|
2 |
|
Adjusted EBITDA |
|
$ |
50.0 |
|
3 |
$ |
54.0 |
|
3 |
|
|
|
|
|
|
|
|
|
Adjusted EPS |
|
$ |
0.45 |
|
4 |
$ |
0.55 |
|
4 |
|
|
|
|
|
|
|
|
|
1 Represents a year-over-year increase of 9.5% to 13.1% on a reported basis |
|
2 Represents a year-over-year decrease of 9.4% to 8.4% on a reported basis |
|
3 Represents a year-over-year increase of 5.0% to 13.4% |
|
4 Represents a year-over-year increase of 73.1% to 111.5% |
Guidance for the quarter ended March 31, 2021 is provided for increased clarity during the continued impact from COVID-19 and recent severe national weather events. However, the Company remains focused on its longer-term results and, assuming current improvements continue, the Company does not expect to provide quarterly guidance prospectively.
The Company does not provide U.S. GAAP financial measures, other than net sales, on a forward-looking basis because the Company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, acquisition-related expenses, accounting fair value adjustments, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with U.S. GAAP.
Conference Call
Orthofix will host a conference call today at 8:30 AM Eastern time to discuss the Company’s financial results for the fourth quarter and fiscal year 2020. Interested parties may access the conference call by dialing (833) 670-0709 in the U.S. and (343) 761-2533 outside the U.S., and referencing the conference ID 6288562. A replay of the call will be available for three weeks by dialing (800) 585-8367 in the U.S. and (416) 621-4642 outside the U.S., and entering the conference ID 6288562. A webcast of the conference call may be accessed at ir.Orthofix.com/events-and-presentations.
About Orthofix
Orthofix Medical Inc. is a global medical device and biologics company with a spine and extremities focus. The Company’s mission is to deliver innovative, quality-driven solutions while partnering with health care professionals to improve patients’ lives. 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, 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, 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, 2020 (the “2020 Form 10-K”). Factors that could cause or contribute to such differences may include, but are not limited to, (i) risks relating to the effects of the COVID-19 pandemic on our business, including (A) surgeries that use our products being delayed or cancelled as a result of hospitals and surgery centers being closed or limited to life-threatening and/or essential procedures, (B) portions of our global workforce being unable to work fully and/or effectively due to illness, quarantines, government actions (including “shelter in place” orders or advisories), facility closures or other reasons related to the pandemic, (C) disruptions to our supply chain, (D) customers and payors being unable to satisfy contractual obligations to us, including the ability to make timely payment for purchases, (E) general economic weakness in markets in which we operate affecting customer spending, and (F) other unpredictable aspects of the pandemic; (ii) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities; (iii) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (iv) development and acceptance of new products or product enhancements, (v) clinical and statistical verification of the benefits achieved via the use of our products, (vi) our ability to adequately manage inventory, (vii) our ability to recruit and retain management and key personnel, and (viii) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the “SEC”). To the extent that the COVID-19 pandemic continues to adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described in Part I, Item 1A under the heading Risk Factors in our 2020 Form 10-K, such as our ability to generate sufficient cash flows to run our business and our ability to protect our information technology networks and infrastructure from unauthorized access, misuse, malware, phishing and other events that could have a security impact as a result of our remote working environment or otherwise. 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.
|
ORTHOFIX MEDICAL INC. Condensed Consolidated Statements of Operations |
||||||||||||||||
|
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
(U.S. Dollars, in thousands, except share and per share data) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
|
|
(unaudited) |
|
|
|
|
||||||||||
|
Net sales |
|
$ |
117,619 |
|
|
$ |
121,494 |
|
|
$ |
406,562 |
|
|
$ |
459,955 |
|
|
Cost of sales |
|
|
29,071 |
|
|
|
26,191 |
|
|
|
101,889 |
|
|
|
100,607 |
|
|
Gross profit |
|
|
88,548 |
|
|
|
95,303 |
|
|
|
304,673 |
|
|
|
359,348 |
|
|
Sales and marketing |
|
|
53,716 |
|
|
|
58,313 |
|
|
|
204,434 |
|
|
|
223,676 |
|
|
General and administrative |
|
|
18,495 |
|
|
|
22,110 |
|
|
|
67,948 |
|
|
|
85,607 |
|
|
Research and development |
|
|
10,365 |
|
|
|
8,446 |
|
|
|
39,056 |
|
|
|
34,637 |
|
|
Acquisition-related amortization and remeasurement |
|
|
2,267 |
|
|
|
2,339 |
|
|
|
(499 |
) |
|
|
34,212 |
|
|
Operating income (loss) |
|
|
3,705 |
|
|
|
4,095 |
|
|
|
(6,266 |
) |
|
|
(18,784 |
) |
|
Interest expense, net |
|
|
(428 |
) |
|
|
(508 |
) |
|
|
(2,483 |
) |
|
|
(122 |
) |
|
Other income (expense), net |
|
|
2,293 |
|
|
|
643 |
|
|
|
8,381 |
|
|
|
(8,143 |
) |
|
Income (loss) before income taxes |
|
|
5,570 |
|
|
|
4,230 |
|
|
|
(368 |
) |
|
|
(27,049 |
) |
|
Income tax benefit (expense) |
|
|
(14,948 |
) |
|
|
7,456 |
|
|
|
2,885 |
|
|
|
(1,413 |
) |
|
Net income (loss) |
|
$ |
(9,378 |
) |
|
$ |
11,686 |
|
|
$ |
2,517 |
|
|
$ |
(28,462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.48 |
) |
|
$ |
0.61 |
|
|
$ |
0.13 |
|
|
$ |
(1.51 |
) |
|
Diluted |
|
|
(0.48 |
) |
|
|
0.60 |
|
|
|
0.13 |
|
|
|
(1.51 |
) |
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
19,418,550 |
|
|
|
19,068,067 |
|
|
|
19,267,920 |
|
|
|
18,903,289 |
|
|
Diluted |
|
|
19,418,550 |
|
|
|
19,315,836 |
|
|
|
19,391,718 |
|
|
|
18,903,289 |
|
|
ORTHOFIX MEDICAL INC. Condensed Consolidated Balance Sheets |
||||||||
|
(U.S. Dollars, in thousands, except share data) |
|
December 31, 2020 |
|
|
December 31, 2019 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
96,291 |
|
|
$ |
69,719 |
|
|
Restricted cash |
|
|
530 |
|
|
|
684 |
|
|
Accounts receivable, net of allowances of $4,848 and $3,987, respectively |
|
|
72,423 |
|
|
|
86,805 |
|
|
Inventories |
|
|
84,635 |
|
|
|
82,397 |
|
|
Prepaid expenses and other current assets |
|
|
16,500 |
|
|
|
20,948 |
|
|
Total current assets |
|
|
270,379 |
|
|
|
260,553 |
|
|
Property, plant and equipment, net |
|
|
63,613 |
|
|
|
62,727 |
|
|
Intangible assets, net |
|
|
60,517 |
|
|
|
54,139 |
|
|
Goodwill |
|
|
84,018 |
|
|
|
71,177 |
|
|
Deferred income taxes |
|
|
25,042 |
|
|
|
35,117 |
|
|
Other long-term assets |
|
|
22,292 |
|
|
|
11,907 |
|
|
Total assets |
|
$ |
525,861 |
|
|
$ |
495,620 |
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
23,118 |
|
|
$ |
19,886 |
|
|
Current portion of finance lease liability |
|
|
510 |
|
|
|
323 |
|
|
Other current liabilities |
|
|
80,271 |
|
|
|
64,674 |
|
|
Total current liabilities |
|
|
103,899 |
|
|
|
84,883 |
|
|
Long-term portion of finance lease liability |
|
|
22,338 |
|
|
|
20,648 |
|
|
Other long-term liabilities |
|
|
42,760 |
|
|
|
62,458 |
|
|
Total liabilities |
|
|
168,997 |
|
|
|
167,989 |
|
|
Contingencies |
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
Common shares $0.10 par value; 50,000,000 shares authorized; 19,423,874 and 19,022,619 issued and outstanding as of December 31, 2020 and 2019, respectively |
|
|
1,942 |
|
|
|
1,902 |
|
|
Additional paid-in capital |
|
|
292,291 |
|
|
|
271,019 |
|
|
Retained earnings |
|
|
59,379 |
|
|
|
57,749 |
|
|
Accumulated other comprehensive income (loss) |
|
|
3,252 |
|
|
|
(3,039 |
) |
|
Total shareholders’ equity |
|
|
356,864 |
|
|
|
327,631 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
525,861 |
|
|
$ |
495,620 |
|
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 December 31, 2020 |
|
|||||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
Global Spine |
|
|
Global Extremities |
|
|
Corporate |
|
|
Total Orthofix |
|
||||
|
Operating income (loss) |
|
$ |
19,386 |
|
|
$ |
(5,151 |
) |
|
$ |
(10,530 |
) |
|
$ |
3,705 |
|
|
Other income (expense), net |
|
|
664 |
|
|
|
1,278 |
|
|
|
351 |
|
|
|
2,293 |
|
|
Depreciation and amortization |
|
|
2,532 |
|
|
|
2,429 |
|
|
|
1,056 |
|
|
|
6,017 |
|
|
Amortization of acquired intangibles |
|
|
1,784 |
|
|
|
446 |
|
|
|
— |
|
|
|
2,230 |
|
|
EBITDA |
|
$ |
24,366 |
|
|
$ |
(998 |
) |
|
$ |
(9,123 |
) |
|
$ |
14,245 |
|
|
Share-based compensation |
|
|
1,495 |
|
|
|
498 |
|
|
|
1,816 |
|
|
|
3,809 |
|
|
Foreign exchange impact |
|
|
(575 |
) |
|
|
(1,197 |
) |
|
|
(349 |
) |
|
|
(2,121 |
) |
|
Strategic investments |
|
|
— |
|
|
|
1,246 |
|
|
|
1,686 |
|
|
|
2,932 |
|
|
Acquisition-related fair value adjustments |
|
|
300 |
|
|
|
52 |
|
|
|
— |
|
|
|
352 |
|
|
Loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Legal judgments/settlements |
|
|
224 |
|
|
|
95 |
|
|
|
86 |
|
|
|
405 |
|
|
Succession and transition charges |
|
|
5 |
|
|
|
187 |
|
|
|
(3 |
) |
|
|
189 |
|
|
Medical device regulation |
|
|
35 |
|
|
|
744 |
|
|
|
1,366 |
|
|
|
2,145 |
|
|
Business interruption – COVID-19 |
|
|
14 |
|
|
|
61 |
|
|
|
27 |
|
|
|
102 |
|
|
Adjusted EBITDA |
|
$ |
25,864 |
|
|
$ |
688 |
|
|
$ |
(4,494 |
) |
|
$ |
22,058 |
|
|
|
|
Year Ended December 31, 2020 |
|
|||||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
Global Spine |
|
|
Global Extremities |
|
|
Corporate |
|
|
Total Orthofix |
|
||||
|
Operating income (loss) |
|
$ |
43,265 |
|
|
$ |
(14,917 |
) |
|
$ |
(34,614 |
) |
|
$ |
(6,266 |
) |
|
Other income (expense), net |
|
|
1,409 |
|
|
|
2,028 |
|
|
|
4,944 |
|
|
|
8,381 |
|
|
Depreciation and amortization |
|
|
12,091 |
|
|
|
6,580 |
|
|
|
4,288 |
|
|
|
22,959 |
|
|
Amortization of acquired intangibles |
|
|
6,271 |
|
|
|
1,316 |
|
|
|
— |
|
|
|
7,587 |
|
|
EBITDA |
|
$ |
63,036 |
|
|
$ |
(4,993 |
) |
|
$ |
(25,382 |
) |
|
$ |
32,661 |
|
|
Share-based compensation |
|
|
6,081 |
|
|
|
2,076 |
|
|
|
7,107 |
|
|
|
15,264 |
|
|
Foreign exchange impact |
|
|
(1,287 |
) |
|
|
(2,099 |
) |
|
|
(510 |
) |
|
|
(3,896 |
) |
|
Strategic investments |
|
|
30 |
|
|
|
1,719 |
|
|
|
3,052 |
|
|
|
4,801 |
|
|
Acquisition-related fair value adjustments |
|
|
(7,300 |
) |
|
|
152 |
|
|
|
— |
|
|
|
(7,148 |
) |
|
Loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
219 |
|
|
|
219 |
|
|
Legal judgments/settlements |
|
|
(196 |
) |
|
|
641 |
|
|
|
458 |
|
|
|
903 |
|
|
Succession and transition charges |
|
|
2,027 |
|
|
|
1,589 |
|
|
|
759 |
|
|
|
4,375 |
|
|
Medical device regulation |
|
|
411 |
|
|
|
1,240 |
|
|
|
2,333 |
|
|
|
3,984 |
|
|
Business interruption – COVID 19 |
|
|
403 |
|
|
|
369 |
|
|
|
(4,308 |
) |
|
|
(3,536 |
) |
|
Adjusted EBITDA |
|
$ |
63,205 |
|
|
$ |
694 |
|
|
$ |
(16,272 |
) |
|
$ |
47,627 |
|
|
|
|
Three Months Ended December 31, 2019 |
|
|||||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
Global Spine |
|
|
Global Extremities |
|
|
Corporate |
|
|
Total Orthofix |
|
||||
|
Operating income (loss) |
|
$ |
14,257 |
|
|
$ |
1,823 |
|
|
$ |
(11,985 |
) |
|
$ |
4,095 |
|
|
Other income (expense), net |
|
|
476 |
|
|
|
270 |
|
|
|
(104 |
) |
|
|
642 |
|
|
Depreciation and amortization |
|
|
2,391 |
|
|
|
1,597 |
|
|
|
1,192 |
|
|
|
5,180 |
|
|
Amortization of acquired intangibles |
|
|
1,339 |
|
|
|
— |
|
|
|
— |
|
|
|
1,339 |
|
|
EBITDA |
|
$ |
18,463 |
|
|
$ |
3,690 |
|
|
$ |
(10,897 |
) |
|
$ |
11,256 |
|
|
Share-based compensation |
|
|
1,000 |
|
|
|
591 |
|
|
|
1,734 |
|
|
|
3,325 |
|
|
Foreign exchange impact |
|
|
(438 |
) |
|
|
(311 |
) |
|
|
(4 |
) |
|
|
(753 |
) |
|
Strategic investments |
|
|
17 |
|
|
|
— |
|
|
|
454 |
|
|
|
471 |
|
|
Acquisition-related fair value adjustments |
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
Loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Legal judgments/settlements |
|
|
1,515 |
|
|
|
468 |
|
|
|
6 |
|
|
|
1,989 |
|
|
Succession and transition charges |
|
|
719 |
|
|
|
— |
|
|
|
4,168 |
|
|
|
4,887 |
|
|
Medical device regulation |
|
|
445 |
|
|
|
84 |
|
|
|
(175 |
) |
|
|
354 |
|
|
Adjusted EBITDA |
|
$ |
22,721 |
|
|
$ |
4,522 |
|
|
$ |
(4,714 |
) |
|
$ |
22,529 |
|
|
|
|
Year Ended December 31, 2019 |
|
|||||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
Global Spine |
|
|
Global Extremities |
|
|
Corporate |
|
|
Total Orthofix |
|
||||
|
Operating income (loss) |
|
$ |
25,722 |
|
|
$ |
2,872 |
|
|
$ |
(47,378 |
) |
|
$ |
(18,784 |
) |
|
Other income (expense), net |
|
|
(523 |
) |
|
|
(951 |
) |
|
|
(6,670 |
) |
|
|
(8,144 |
) |
|
Depreciation and amortization |
|
|
9,257 |
|
|
|
5,575 |
|
|
|
4,795 |
|
|
|
19,627 |
|
|
Amortization of acquired intangibles |
|
|
5,072 |
|
|
|
— |
|
|
|
— |
|
|
|
5,072 |
|
|
EBITDA |
|
$ |
39,528 |
|
|
$ |
7,496 |
|
|
$ |
(49,253 |
) |
|
$ |
(2,229 |
) |
|
Share-based compensation |
|
|
5,604 |
|
|
|
2,290 |
|
|
|
7,921 |
|
|
|
15,815 |
|
|
Foreign exchange impact |
|
|
563 |
|
|
|
834 |
|
|
|
37 |
|
|
|
1,434 |
|
|
Strategic investments |
|
|
1,420 |
|
|
|
— |
|
|
|
8,065 |
|
|
|
9,485 |
|
|
Acquisition-related fair value adjustments |
|
|
29,849 |
|
|
|
— |
|
|
|
— |
|
|
|
29,849 |
|
|
Loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
6,534 |
|
|
|
6,534 |
|
|
Legal judgments/settlements |
|
|
1,017 |
|
|
|
1,507 |
|
|
|
29 |
|
|
|
2,553 |
|
|
Succession and transition charges |
|
|
1,608 |
|
|
|
— |
|
|
|
9,719 |
|
|
|
11,327 |
|
|
Medical device regulation |
|
|
712 |
|
|
|
234 |
|
|
|
7 |
|
|
|
953 |
|
|
Adjusted EBITDA |
|
$ |
80,301 |
|
|
$ |
12,361 |
|
|
$ |
(16,941 |
) |
|
$ |
75,721 |
|
|
Adjusted Net Income |
||||||||||||||||
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
Net income (loss) |
|
$ |
(9,378 |
) |
|
$ |
11,686 |
|
|
$ |
2,517 |
|
|
$ |
(28,462 |
) |
|
Foreign exchange impact |
|
|
(2,121 |
) |
|
|
(753 |
) |
|
|
(3,896 |
) |
|
|
1,434 |
|
|
Strategic investments |
|
|
2,947 |
|
|
|
471 |
|
|
|
4,816 |
|
|
|
9,485 |
|
|
Acquisition-related fair value adjustments |
|
|
352 |
|
|
|
1,000 |
|
|
|
(7,148 |
) |
|
|
29,849 |
|
|
Amortization of acquired intangibles |
|
|
2,231 |
|
|
|
1,339 |
|
|
|
7,587 |
|
|
|
5,072 |
|
|
Interest and loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
219 |
|
|
|
5,328 |
|
|
Legal judgments/settlements |
|
|
405 |
|
|
|
1,989 |
|
|
|
903 |
|
|
|
2,553 |
|
|
Succession and transition charges |
|
|
189 |
|
|
|
4,887 |
|
|
|
4,375 |
|
|
|
11,327 |
|
|
Medical device regulation |
|
|
2,145 |
|
|
|
354 |
|
|
|
3,984 |
|
|
|
953 |
|
|
Business interruption – COVID-19 |
|
|
103 |
|
|
|
— |
|
|
|
(3,532 |
) |
|
|
— |
|
|
Long-term income tax rate adjustment |
|
|
11,756 |
|
|
|
(11,106 |
) |
|
|
(4,760 |
) |
|
|
(9,104 |
) |
|
Adjusted net income |
|
$ |
8,629 |
|
|
$ |
9,867 |
|
|
$ |
5,065 |
|
|
$ |
28,435 |
|
|
Adjusted EPS |
||||||||||||||||
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
|
(Unaudited, per diluted share) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
EPS |
|
$ |
(0.48 |
) |
|
$ |
0.60 |
|
|
$ |
0.13 |
|
|
$ |
(1.51 |
) |
|
Foreign exchange impact |
|
|
(0.11 |
) |
|
|
(0.04 |
) |
|
|
(0.20 |
) |
|
|
0.07 |
|
|
Strategic investments |
|
|
0.15 |
|
|
|
0.02 |
|
|
|
0.25 |
|
|
|
0.49 |
|
|
Acquisition-related fair value adjustments |
|
|
0.02 |
|
|
|
0.05 |
|
|
|
(0.37 |
) |
|
|
1.58 |
|
|
Amortization of acquired intangibles |
|
|
0.11 |
|
|
|
0.07 |
|
|
|
0.39 |
|
|
|
0.26 |
|
|
Interest and loss on investment securities |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.28 |
|
|
Legal judgments/settlements |
|
|
0.02 |
|
|
|
0.10 |
|
|
|
0.05 |
|
|
|
0.13 |
|
|
Succession and transition charges |
|
|
0.01 |
|
|
|
0.25 |
|
|
|
0.23 |
|
|
|
0.59 |
|
|
Medical device regulation |
|
|
0.11 |
|
|
|
0.02 |
|
|
|
0.21 |
|
|
|
0.05 |
|
|
Business interruption – COVID-19 |
|
|
0.01 |
|
|
|
— |
|
|
|
(0.18 |
) |
|
|
— |
|
|
Long-term income tax rate adjustment |
|
|
0.60 |
|
|
|
(0.56 |
) |
|
|
(0.26 |
) |
|
|
(0.47 |
) |
|
Adjusted EPS |
|
$ |
0.44 |
|
|
$ |
0.51 |
|
|
$ |
0.26 |
|
|
$ |
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted common shares (treasury stock method) |
|
|
19,611,127 |
|
|
|
19,341,552 |
|
|
|
19,404,524 |
|
|
|
19,303,457 |
|
|
Free Cash Flow |
||||||||
|
|
|
Year Ended December 31, |
|
|||||
|
(Unaudited, U.S. Dollars, in thousands) |
|
2020 |
|
|
2019 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities |
|
$ |
74,272 |
|
|
$ |
32,033 |
|
|
Capital expenditures |
|
|
(17,094 |
) |
|
|
(20,524 |
) |
|
Free cash flow |
|
$ |
57,178 |
|
|
$ |
11,509 |
|
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.
Contacts
Orthofix Medical Inc.
Alexa Huerta
P: 214-937-3190
E: alexahuerta@orthofix.com