Orthofix Announces Preliminary 2020 Fourth Quarter and Full Year Net Sales Results

Rhea-AI Summary

Orthofix Medical Inc. (NASDAQ:OFIX) reported preliminary fourth quarter 2020 net sales of approximately $118 million, down 3% year-over-year. Full year net sales totaled about $407 million, a 12% decrease from 2019. Sequentially, Q4 sales rose 6% from Q3 2020, driven mainly by the Spinal Implants segment. Despite COVID-19 challenges, the company noted stable sales in Bone Growth Therapies and growth in Spinal Implants due to the M6-C™ artificial cervical disc. Cash reserves improved to approximately $96-97 million compared to $70 million in 2019.

Positive

• Fourth quarter net sales increased by 6% compared to Q3 2020.
• Spinal Implants sales rose 9%, driven by the adoption of M6-C™ artificial cervical disc.
• Cash reserves improved to approximately $96-97 million from $70 million in 2019.

Negative

• Q4 net sales decreased by 3% year-over-year.
• Full year net sales fell by 12%, indicating ongoing market struggles.
• Global Extremities sales dropped 15%, primarily due to lower procedure volumes amid the pandemic.

Orthofix Medical Inc. (NASDAQ:OFIX) today announced preliminary unaudited fourth quarter 2020 net sales of approximately $118 million, a decrease of 3% on a reported basis and 4% on a constant currency basis. For the full year 2020, preliminary unaudited net sales were approximately $407 million, a decrease of 12% on both a reported and constant currency basis. On a sequential basis, compared to the third quarter of 2020, net sales increased 6%.

“First I would like to thank all of our team members for their remarkable efforts throughout this unprecedented and volatile year. This pandemic presented patients, surgeons and hospital teams with extraordinary challenges, which continues to require an extraordinary response by the Orthofix team. I am grateful to work alongside people so motivated and committed to improving patients’ lives,” said Orthofix President and Chief Executive Officer Jon Serbousek.

“We are pleased by our continued positive revenue momentum in the fourth quarter driven primarily by our Spinal Implants business, despite the continued headwinds and uncertainty caused by COVID-19 across the globe. When normalizing for certain large stocking orders that did not recur in 2020, our Q4 2020 consolidated net sales were approximately flat to last year. Our solid finish to 2020 directly reflects on the tenacity and resolve of our teams around the world, and our ability to execute on our strategic initiatives throughout the year. As we move into 2021, we will use this momentum and believe we are better positioned to deliver growth.”

		Three Months Ended December 31,
(Unaudited, U.S. Dollars, in millions)		2020				2019				Change				Constant Currency Change
Bone Growth Therapies		$	51			$	51				(1	%)			(1	%)
Spinal Implants			28				25				9	%			9	%
Biologics			15				17				(9	%)			(9	%)
Global Spine			94				93				0	%			0	%
Global Extremities			24				28				(15	%)			(18	%)
Net sales		$	118			$	121				(3	%)			(4	%)

		Year Ended December 31,
(Unaudited, U.S. Dollars, in millions)		2020				2019				Change				Constant Currency Change
Bone Growth Therapies		$	171			$	197				(13	%)			(13	%)
Spinal Implants			95				95				0	%			0	%
Biologics			55				65				(15	%)			(15	%)
Global Spine			322				357				(10	%)			(10	%)
Global Extremities			85				103				(17	%)			(18	%)
Net sales		$	407			$	460				(12	%)			(12	%)

Fourth Quarter Revenue Highlights

Global Spine

• Bone Growth Therapies net sales approximated prior year amounts due to adding new surgeon users that offset limited access to physicians’ offices as a result of the COVID-19 pandemic
• Spinal Implants net sales increased largely due to the growth and continued adoption of our M6-C^™ artificial cervical disc in the U.S.
• Biologics net sales decreased primarily due to the effects of the COVID-19 pandemic, channel transition and continued pricing pressure in the market

Global Extremities

• Global Extremities net sales decreased primarily due to lower procedure volumes attributable to the COVID-19 pandemic, particularly within international markets, and the non-recurrence of certain large stocking orders occurring in fourth quarter of 2019

As of December 31, 2020, cash, cash equivalents, and restricted cash was approximately $96-97 million compared to $70 million as of December 31, 2019.

Upcoming Presentations / Conference Calls

Orthofix will report its full financial results for 2020 and provide its financial outlook for 2021 during its earnings announcement planned for late February.

Also, as previously announced, the Company’s President and Chief Executive Officer, Jon Serbousek, and Chief Financial Officer, Doug, Rice, will present at two upcoming virtual investor conferences.

J.P. Morgan Healthcare Conference
The Company will be presenting on Thursday, January 14, 2021 at 2:00pm ET.

ICR Westwicke Conference 2021
The Company will be presenting on Thursday, January 14, 2021 at 4:00pm ET.

Both presentations will be webcast live and will be available on the Company’s website 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 as we partner 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.

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.

Usefulness and Limitations of Non-GAAP Financial Measures

Management uses non-GAAP measures to evaluate performance period-over-period, to analyze the underlying trends in our business, to assess performance relative to competitors and to establish operational goals and forecasts that are used in allocating resources. In addition, management uses these non-GAAP measures to further its understanding of the performance of our business units.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

The non-GAAP measures used in this press release may have limitations as analytical tools, and should not be

FAQ

What were Orthofix's fourth quarter 2020 net sales?

Orthofix reported preliminary fourth quarter 2020 net sales of approximately $118 million.

How much did Orthofix's net sales decrease in 2020?

In 2020, Orthofix's net sales decreased by 12% compared to the previous year.

What contributed to Orthofix's revenue increase in the fourth quarter?

The increase was primarily driven by growth in the Spinal Implants business.

When will Orthofix provide full financial results for 2020?

Orthofix is expected to report its full financial results for 2020 in late February.

What was the cash position of Orthofix at the end of 2020?

As of December 31, 2020, Orthofix's cash and equivalents were approximately $96-97 million.