Orthofix Reports Second Quarter 2023 Results and Raises Revenue and Adjusted EBITDA Guidance
- Net sales of $187.0 million, an increase of 58% on a reported basis and 7% on a pro forma constant currency basis over prior year
- Bone Growth Therapies growth of 10%, marking two consecutive quarters with double-digit net sales increases, with growth coming from both spine and fracture commercial channels
- U.S. spinal implants, biologics, and enabling technologies sales up 7% over prior year on a pro forma basis, driven by new distribution and product innovation
- Global Orthopedics net sales increase of 6% on a reported basis and 5% on a constant currency basis over prior year
- Announced full commercial launch of the following products:
- WaveForm® A interbody for Anterior Lumbar Interbody Fusion (“ALIF”) procedures
- TrueLok™ Phantom and Tornado Hinges, the latest addition to the Orthopedics TrueLok circular frame portfolio
LEWISVILLE, Texas, August 8, 2023–(BUSINESS WIRE)–Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the quarter ended June 30, 2023. Net sales were $187.0 million, earnings per share (“EPS”) was $(1.07), and adjusted EPS was $0.02.
“I am very pleased with Orthofix’s performance this quarter, delivering 7% year-over-year growth, on a proforma basis, and once again achieving double-digit growth in the Bone Growth Therapies franchise,” said Keith Valentine, President and Chief Executive Officer of Orthofix. “We have been successful in managing revenue dis-synergy risks and capitalizing on operating expense synergy opportunities throughout the merger process and are encouraged to see continued market share taking in the U.S. spinal implants, biologics and enabling technologies franchises by leveraging our complementary product portfolios. We look forward to a strong back half of 2023 and remain focused on meeting the needs of our patients and providing value for other stakeholders by continuing to deliver quality driven solutions.”
Financial Results Overview
The following table provides net sales by major product category by reporting segment as reported:
| Three Months Ended June 30, | |||||||
| (Unaudited, U.S. Dollars, in millions) | 2023 | 2022 | Change | Constant Currency Change | |||
| Bone Growth Therapies | $ 52.7 | $ 47.8 | 10.3% | 10.3% | |||
| Spinal Implants, Biologics and Enabling Technologies | 105.3 | 43.0 | 144.8% | 144.8% | |||
| Global Spine | 158.0 | 90.8 | 74.0% | 74.0% | |||
| Global Orthopedics | 29.0 | 27.3 | 6.4% | 5.0% | |||
| Net sales | $187.0 | $ 118.1 | 58.4% | 58.1% |
Further, the following table provides net sales by major product category by reporting segment on a pro forma basis:
| Three Months Ended June 30, | ||||||||
| (Unaudited, U.S. Dollars, in millions) | 2023 | 2022 Pro Forma | Change | Constant Currency Change | ||||
| Bone Growth Therapies | $ 52.7 | $ 47.8 | 10.3% | 10.3% | ||||
| Spinal Implants, Biologics and Enabling Technologies | 105.3 | 100.0 | 5.4% | 5.4% | ||||
| Global Spine | 158.0 | 147.7 | 6.9% | 6.9% | ||||
| Global Orthopedics | 29.0 | 27.3 | 6.4% | 5.0% | ||||
| Net sales | $ 187.0 | $ 175.0 | 6.9% | 6.6% |
Gross profit increased $33.1 million to $119.6 million. Gross margin decreased to 63.9% compared to 73.2% in the prior year period. Adjusted gross profit increased $46.6 million to $133.9 million. Adjusted gross margin decreased to 71.6% compared to 73.9% in the prior year period.
Net loss was $(39.4) million, or $(1.07) per share, compared to net income of $2.5 million, or $0.12 per share in the prior year period. Adjusted net income was $0.7 million, or $0.02 per share, compared to adjusted net income of $4.7 million, or $0.23 per share, in the prior year period.
Adjusted EBITDA was $9.9 million, or 5.3% of net sales, compared to $11.4 million, or 9.7% of net sales, in the prior year period.
Liquidity
As of June 30, 2023, cash totaled $37.6 million, compared to $50.7 million as of December 31, 2022. As of June 30, 2023, the Company had $51.0 million in borrowings outstanding under its five year $175 million secured revolving credit facility. The Company subsequently borrowed an additional $8.0 million in July 2023. On a year-to-date basis through June 30, 2023, cash flow from operations decreased $26.9 million to $(39.5) million, while free cash flow decreased $39.9 million to $(64.2) million.
