Orthofix (OFIX) came out with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of a loss of $0.17. This compares to loss of $0.46 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 52.94%. A quarter ago, it was expected that this medical device maker would post earnings of $0.06 per share when it actually produced earnings of $0.02, delivering a surprise of -66.67%.Over the last four quarters, the company h ...

Orthofix Medical (OFIX) Q1 2025 Earnings Call May 06, 2025 08:30 AM ET Company Participants Julie Dewey - Chief Investor Relations & Communications OfficerMassimo Calafiore - President, CEO & DirectorJulie Andrews - Chief Financial OfficerIseult McMahon - Equity Research AssociateMathew Blackman - Managing DirectorCaitlin Cronin - DirectorJeffrey Cohen - MD - Equity Research Operator Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welco ...

Orthofix Medical (OFIX) Q1 2025 Earnings Call May 06, 2025 08:30 AM ET Speaker0 Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Orthofix First Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I will now turn the call over to Julie Dewey. Please go ahead. Speaker1 Thank ...

Clear Course for Profitable Growth 1Q 2025 Earnings Call May 6, 2025 Forward-Looking Statements This presentation 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, intentions, plans, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looki ...

Financial Performance - Net sales for Q1 2025 were $193,646,000, an increase of 2% compared to $188,608,000 in Q1 2024[16] - Gross profit for Q1 2025 was $121,619,000, down from $127,242,000 in Q1 2024, representing a decrease of approximately 4.1%[16] - The net loss for Q1 2025 was $53,094,000, compared to a net loss of $36,020,000 in Q1 2024, indicating an increase in losses of approximately 47.5%[16] - Operating loss for Q1 2025 was $48,873,000, compared to an operating loss of $29,337,000 in Q1 2024, reflecting a worsening of approximately 66.5%[16] - The company reported a comprehensive loss of $51,348,000 for Q1 2025, compared to a comprehensive loss of $35,387,000 in Q1 2024, an increase of approximately 45.2%[16] - The Company reported net sales of $193.646 million for the three months ended March 31, 2025, representing a 2.7% increase from $188.608 million in the same period of 2024[53] - Bone Growth Therapies generated sales of $55.050 million, up 4.9% from $52.477 million in the prior year, while Global Orthopedics sales increased by 9.1% to $29.810 million from $27.315 million[53] - Total revenues for the three months ended March 31, 2024, were $188,608,000, a 2.1% increase from $184,000,000 in the same period of 2023[64] - Global Spine segment revenues reached $161,293,000, while Global Orthopedics segment revenues were $27,315,000 for the same period[64] Cash and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $57,953,000, compared to $26,964,000 at the end of Q1 2024, showing an increase of approximately 114.5%[18] - The Company had no borrowings on its available lines of credit in Italy, which provide up to an aggregate amount of €5.5 million ($5.9 million) as of March 31, 2025[30] - The Company entered into a $275.0 million secured credit agreement on November 7, 2024, with financial covenants requiring maintenance of a minimum liquidity level and a maximum total debt-to-EBITDA leverage ratio[29] Expenses and Losses - Research and development expenses for Q1 2025 were $19,766,000, slightly up from $19,492,000 in Q1 2024, indicating a growth of approximately 1.4%[16] - The allowance for expected credit losses increased to $8.602 million as of March 31, 2025, compared to $8.398 million at the end of March 2024[55] - The Company accrued $8.9 million related to the Italian Medical Device Payback (IMDP) as of March 31, 2025, with expenses of $0.3 million recorded for both the three months ended March 31, 2025, and 2024[49] - Share-based compensation expenses totaled $6,469,000 for the three months ended March 31, 2025, down from $8,800,000 in the same period of 2024[69] - The company recognized impairment charges of $29,026,000 related to the discontinued M6 product lines during the three months ended March 31, 2025[77] - Amortization of acquired intangibles was $18,355,000 for the three months ended March 31, 2025, compared to $4,226,000 in the same period of 2024[68] Inventory and Assets - As of March 31, 2025, total inventories decreased to $174,480,000 from $189,452,000 as of December 31, 2024, representing a decline of approximately 7.5%[26] - Total lease assets as of March 31, 2025, amounted to $31,727,000, down from $32,624,000 as of December 31, 2024, indicating a reduction of about 2.7%[27] - The total indebtedness from outstanding term loans as of March 31, 2025, was $156,885,000, slightly decreasing from $157,015,000 as of December 31, 2024, a change of approximately 0.1%[28] - The estimated fair value of the Lattus Contingent Consideration as of March 31, 2025, was $14,790,000, down from $15,400,000 at the beginning of the year, reflecting a decrease of about 4.0%[36] - The fair value of Neo Medical Convertible Loan at March 31, 2024, was $8,355,000, up from $6,760,000 at the beginning of the year, indicating an increase of approximately 23.5%[34] Strategic Initiatives - The company expects to leverage anticipated cross-selling opportunities from the merger with SeaSpine Holdings Corporation to enhance future sales[13] - The company plans to continue investing in new product development and enhancements to existing products to drive future growth[13] - The Company is currently in negotiations with a distributor regarding a potential acquisition, which is subject to certain conditions being met[46] - The Company has received notification from a distributor exercising its buyout option, indicating ongoing market expansion efforts[46] - The company plans to complete the sale of M6 product lines assets before December 31, 2025, as part of its strategy to focus on more profitable growth opportunities[75] Legal and Regulatory Matters - The Company intends to vigorously defend against arbitration claims from former executives, which may have financial implications that are currently not estimable[40] - The Company has taken legal action to dispute the legality of the IMDP measures imposed by the Italian government[48] - The consolidated securities litigation case is pending in the Eastern District of Texas, with allegations of misleading statements made by former directors and officers[44] Taxation - The effective tax rate for the three months ended March 31, 2025, was (1.8%), compared to (2.4%) for the same period in 2024[71] EBITDA - Adjusted EBITDA for the Global Spine segment was $19.516 million, while the total adjusted EBITDA for the Company was $19.489 million for the three months ended March 31, 2025[63] - Adjusted EBITDA for the total segments was $18,398,000, with Global Spine contributing $19,889,000 and Global Orthopedics showing a loss of $1,491,000[64]

Exhibit 99.1 News Release Orthofix Reports First Quarter 2025 Financial Results LEWISVILLE, Texas — May 6, 2025 — Orthofix Medical Inc. (NASDAQ:OFIX), a leading global medical technology company, today reported its financial results for the first quarter ended March 31, 2025, updated its full-year 2025 net sales guidance, and reaffirmed its full-year 2025 non-GAAP adjusted EBITDA and positive free cash flow guidance. All pro forma measures contained within this release exclude the impact of the Company's de ...

Financial Data and Key Metrics Changes - Fourth quarter net sales reached $215.7 million, reflecting an 8% year-over-year growth on a constant currency basis, with record performance across all major product lines [18][50] - Positive free cash flow of $15.2 million in Q4 and $21 million in the second half of 2024, a significant improvement from negative $30 million in the first half of 2024 [15][44] - Non-GAAP adjusted EBITDA of $23.9 million in Q4, representing growth at nearly 3x revenue with 130 basis points of margin expansion [43] Business Line Data and Key Metrics Changes - U.S. spine fixation revenue grew 12%, driven by strong demand for recently launched products and a 30% increase in global 7D FLASH Navigation System placements [19][21] - Bone Growth Therapies (BGT) revenue grew 9% to $63.9 million in Q4, with 10% growth in the BGT fracture channel [25][41] - Global orthopedics business delivered record net sales in Q4, with 18% growth compared to the prior year, led by a 21% increase in U.S. sales [28][42] Market Data and Key Metrics Changes - The international business grew 17% year-over-year, with variability expected due to the nature of stocking distributor and tender orders [42] - The U.S. spinal fixation market saw Orthofix outperforming the market growth rate significantly, particularly in the lateral portfolio which grew 33% [19][20] Company Strategy and Development Direction - The company is focused on long-term profitable growth, emphasizing innovation and enhancing market penetration through a comprehensive portfolio [16][17] - A new leadership team has been established to align the organization with a cohesive growth strategy [10] - The company plans to discontinue non-core products, including the M6 artificial discs, to focus resources on more profitable growth opportunities [46][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustainable growth trends and the strength of the differentiated and expanding portfolio [37] - The company anticipates continued above-market growth across all business lines, driven by a robust innovation pipeline and strategic focus on enabling technologies [35][61] - Management highlighted the importance of disciplined capital deployment and the potential for M&A opportunities in the future [70][71] Other Important Information - The company received FDA clearance for the FLASH EVD cranial navigation product, expanding its footprint in the hospital market [22] - The anticipated launch of several new products in 2025, including the Reef L Lateral Lumbar Interbody, is expected to enhance market share [24][32] Q&A Session Summary Question: Can you provide more color on the discontinuation of M6? - Management indicated that the decrease in demand for M6 did not justify further investment, aiming for a cleaner slate in 2025 to enhance growth potential [66][68] Question: What are your current thoughts on M&A? - Management is focused on executing current strategies but is open to M&A opportunities that fit the portfolio, supported by a strengthened balance sheet [70][71] Question: Any updates on the 7D system adoption? - Management reported a record year for 7D, with a 150% year-over-year increase in earn-out agreements, indicating strong demand and performance [72][75] Question: Is there any margin impact from exiting the M6 product line? - Management will provide more details on the historical financial impact in the next earnings call but has accounted for it in the current guidance [78][79] Question: Will there be any gaps in the U.S. spine portfolio due to product phase-out? - Management believes there will not be significant gaps as the M6 product will be phased out gradually, allowing for resource reallocation to more strategic areas [80][82] Question: Which upcoming product launch are you most excited about? - Management highlighted the full commercial launch of the new interbody product in spine and the Elevate system in orthopedics as key growth drivers [84][86]

Clear Course for Profitable Growth 4Q and Full-Year 2024 Earnings Call February 25, 2025 Forward-Looking Statements This presentation 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, intentions, plans, expectations, estimates, forecasts and projections. In some cases, you can id ...

Company Performance - Orthofix reported quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.06 per share, compared to a loss of $0.10 per share a year ago, representing an earnings surprise of -66.67% [1] - The company posted revenues of $215.66 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.53%, and showing an increase from year-ago revenues of $200.42 million [2] - Over the last four quarters, Orthofix has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - The immediate price movement of Orthofix's stock will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - Orthofix shares have increased about 4% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] Earnings Estimates - The current consensus EPS estimate for the coming quarter is -$0.21 on revenues of $200.2 million, and -$0.23 on revenues of $848 million for the current fiscal year [7] - The estimate revisions trend for Orthofix is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Instruments industry, to which Orthofix belongs, is currently in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Sales and Market Segments - Orthofix's total net sales in 2024 were divided into 84% from Global Spine and 16% from Global Orthopedics[26]. - The company operates under two reporting segments: Global Spine (84% of total net sales) and Global Orthopedics (16% of total net sales) for 2024[114]. - The Global Spine segment focuses on bone growth therapies and spinal implants, with significant growth initiatives planned[30]. - The Global Orthopedics segment emphasizes limb reconstruction solutions and digital technologies to enhance patient treatment pathways[69]. Product Offerings and Innovations - The company offers market-leading bone growth stimulation devices, including PEMF and LIPUS technologies, primarily sold in the U.S.[31]. - The 7D FLASH Navigation System enhances surgical procedures with improved speed, accuracy, and safety, providing significant economic value[34]. - Orthofix's biologics portfolio includes various bone graft substitutes, addressing a wide range of clinical applications[35]. - The company plans to conduct clinical research to support and broaden its spine implant, biologics, and bone growth stimulation portfolios[30]. - The company is focused on acquiring or licensing products and technologies to enhance its spine portfolio[30]. - The company’s interbody group includes various material types, such as 3D printed titanium and thermoplastic compounds, catering to different surgical approaches[51]. - The biologics portfolio includes best-in-class bone grafting solutions across major categories: demineralized bone, cellular allografts, and synthetics[58]. - The company’s Biologics products are sourced from FDA-registered tissue banks, ensuring compliance with safety and quality standards[131]. Clinical and Regulatory Challenges - The company is subject to extensive regulations by the FDA and other authorities, with all products sold in the U.S. requiring premarket notification or approval[90]. - The company’s Spinal Implants and Global Orthopedics products are primarily classified as Class II devices, while Bone Growth Therapies products are classified as Class III[90]. - The European Union's Medical Device Regulation requires compliance for all medical devices marketed in the E.U., with significant costs expected during the transition period[91]. - The company faces potential risks from regulatory changes that could affect its biomaterial products, particularly those derived from animal sources[93]. - The FDA's potential reclassification of bone growth stimulators from Class III to Class II could increase competition and negatively affect future sales[177]. - The company must obtain FDA premarket approval or clearance for new medical devices and modifications, which could significantly affect its ability to market products[205]. Financial Performance and Investments - Research and development expenses for 2024, 2023, and 2022 were $73.6 million, $80.2 million, and $49.1 million, respectively, indicating a decrease of 8.2% from 2023 to 2024 and an increase of 63.5% from 2022 to 2023[85]. - The company incurred substantial expenses related to the merger and expects to continue facing significant integration costs in the future[146]. - A material weakness in internal controls over financial reporting was identified during the financial close for the quarter ended December 31, 2023, but was subsequently remediated[148]. Market Access and Reimbursement - Reimbursement policies from third-party payors are critical for maintaining product sales, and any changes could significantly impact sales and profitability[162]. - A major U.S. insurer has previously reduced coverage for biomechanical devices, which could limit patient access to the company's products[163]. - International market acceptance of products may depend on timely reimbursement approvals, which can vary significantly by country[166]. - The company is actively monitoring changes in Medicare coverage policies that could restrict access to its products[164]. Competition and Industry Dynamics - The company faces intense competition in the medical device industry, with many competitors having greater resources and established relationships, which complicates market positioning[190]. - The healthcare industry consolidation has led to increased pricing pressures, with Group Purchasing Organizations (GPOs) negotiating discounts that could adversely affect the company's profitability[186]. Corporate Social Responsibility and Compliance - The company is committed to fostering diversity and inclusion, recognizing various cultural events throughout the year[138]. - The company contributed 2,517 hours to community outreach programs, exceeding its goal under the "Orthofix Gives Back" initiative[140]. - The company is subject to various U.S. laws regulating healthcare fraud and abuse, including the Anti-Kickback Statute and the Stark Law, which impact sales and marketing practices[106]. - The company’s compliance and ethics program is overseen by a Chief Compliance and Risk Officer, ensuring adherence to legal and ethical standards[88]. Operational and Supply Chain Management - The company maintains a sufficient inventory of components and raw materials to avoid production disruptions, with manufacturing occurring in the U.S., Canada, Germany, Spain, China, and Italy[129][128]. - The company relies on a limited number of suppliers for key components, which poses risks of supply chain interruptions and potential significant additional costs[184]. Employee Engagement and Development - The company is committed to providing competitive compensation and benefits packages to attract and retain top talent, including a 401(k) retirement plan and comprehensive health plans[136]. - The company has developed a comprehensive onboarding program for new hires to familiarize them with its product portfolio and company history[137]. Risks and Uncertainties - Cybersecurity threats pose risks to the company's information technology systems, which are essential for operations and customer interactions[220]. - The company may face legal liabilities and reputational damage if products are found to have undiscovered risks or complications[216]. - Negative media reports regarding tissue recovery practices could limit market acceptance of the company’s products[200]. - The company must manage the introduction of new products carefully to avoid excess inventory and margin-reducing write-offs[203].