Orthofix, Stock, NASDAQ Feb 28, 2018 - Now
Orthofix International Reports Fourth Quarter and Fiscal 2017 Financial Results
Fourth Quarter Highlights
- Net sales of $116.9 million, an increase of 7.7% compared to prior year and 6.1% on a constant currency basis
- Net income from continuing operations of $1.5 million; compared to net loss of $5.1 million in the prior year
- Adjusted EBITDA of $24.3 million; an increase of $3.2 million, or 15.1%, over prior year
LEWISVILLE, Texas–(BUSINESS WIRE)– Orthofix International
N.V. (NASDAQ:OFIX) today reported its financial results for the fourth
quarter and fiscal year ended December 31, 2017. For the fourth quarter
of 2017, net sales were $116.9 million, earnings per share from
continuing operations was $0.08 and adjusted earnings per share from
continuing operations was $0.52. For fiscal year 2017, net sales
were $433.8 million, earnings per share from continuing operations
was $0.39 and adjusted earnings per share from continuing operations
was $1.62.
We also made significant progress in the transformation of
our Spine Fixation business and completed our worldwide restructuring
initiatives,” said Brad Mason, President and Chief Executive Officer.
“With 2017 in the rear-view mirror, we are now focused fully on
executing our 2018 global and business unit strategies. Globally, we
expect to drive shareholder value through three pillars, topline organic
growth better than market growth rates, margin expansion through
operational improvements, and strategic deployment of our capital in
ways that we believe will accelerate topline growth in our core
businesses. We are well positioned and expect to execute in each of
these areas in 2018.”
Financial Results Overview
Fourth Quarter
The following table provides net sales by strategic business unit (“SBU”):
| Three Months Ended December 31, | ||||||||||||||||
| (Unaudited, U.S. Dollars, in thousands) | 2017 | 2016 | Change | Constant Currency Change | ||||||||||||
| BioStim | $ | 49,760 | $ | 47,803 | 4.1 | % | 4.1 | % | ||||||||
| Extremity Fixation | 29,103 | 26,843 | 8.4 | % | 2.2 | % | ||||||||||
| Spine Fixation | 21,175 | 18,664 | 13.5 | % | 13.2 | % | ||||||||||
| Biologics | 16,858 | 15,227 | 10.7 | % | 10.7 | % | ||||||||||
| Net sales | $ | 116,896 | $ | 108,537 | 7.7 | % | 6.1 | % | ||||||||
Gross profit increased $8.1 million to $93.3 million. Gross margin
increased to 79.8% compared to 78.5% in the prior year period, primarily
due to increased revenue from international Extremity Fixation stocking
distributors, as well as our domestic and international restructuring
initiatives during 2017. Non-GAAP net margin (gross profit less sales
and marketing expenses) was $41.5 million, an increase of 13.6% compared
to $36.5 million in the prior year period. The increase in non-GAAP net
margin was primarily due to the increase in gross margin and a slight
decrease in sales and marketing expenses as a percent of sales.
Net income from continuing operations was $1.5 million, or $0.08 per
share, compared to net loss of $5.1 million, or ($0.29) per share in the
prior year period. Adjusted net income from continuing operations
was $9.7 million, or $0.52 per share, compared to adjusted net income
of $7.7 million, or $0.42 per share in the prior year period.
EBITDA was $21.8 million, compared to $8.6 million in the prior year
period. Adjusted EBITDA was $24.3 million or 20.8% of net sales for the
fourth quarter, compared to $21.1 million or 19.4% of net sales in the
prior year period.
2018 Outlook
For the year ending December 31, 2018, the Company expects the
following results, assuming exchange rates are the same as those
currently prevailing. This guidance reflects the new revenue recognition
standard that is required as of January 1, 2018 and discussed above,
for which net sales will be recorded on invoiced sales instead of
deferring recognition until cash is received.
| 2018 Outlook | ||||||||||||
| (Unaudited, U.S. Dollars, in millions, except per share data) | Low | High | ||||||||||
| Net sales | $ | 450.0 | 1 | $ | 455.0 | 1 | ||||||
| Net income from continuing operations | $ | 28.3 | 2 | $ | 30.6 | 2 | ||||||
| Adjusted EBITDA | $ | 89.0 | 3 | $ | 91.0 | 3 | ||||||
| EPS from continuing operations | $ | 1.50 | 4 | $ | 1.62 | 4 | ||||||
| Adjusted EPS from continuing operations | $ | 1.76 | 5 | $ | 1.84 | 5 | ||||||
| 1 | Represents a year-over-year increase of 3.7% to 4.9% on a reported basis | |
| 2 | Represents a year-over-year increase of 288.1% to 319.7% | |
| 3 | Represents a year-over-year decrease of 9.1% to 11.6% | |
| 4 | Represents a year-over-year increase of 284.6% to 315.4% | |
| 5 | Represents a year-over-year increase of 8.6% to 13.6% |
Orthofix said it expects to report adjusted EPS of $1.76 to 1.84 this year on sales $450.0 million to $455.0 million.
OFIX shares were up 3.6% to $56.79 apiece today in morning trading.
Orthofix also said its review of redomiciling to the U.S. concluded
that the move could confer “a number of benefits” including a lower tax
rate and increased cash flow.
“Subject to the outcome of final diligence, the company currently
anticipates requesting shareholder approval for this move in conjunction
with its annual shareholder meeting later this year,” Orthofix said.
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