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]

Orthofix First Quarter 2025 Financial Results [Financial and Operational Highlights](index=1&type=section&id=Highlights) Orthofix Q1 2025 pro forma net sales rose 4.3% to $189.2 million, adjusted EBITDA grew 49.1%, with strong segment performance and a key regulatory clearance Q1 2025 Key Financial Metrics | Metric | Value | Growth vs Q1 2024 | | :--- | :--- | :--- | | **Reported Net Sales** | $193.6 million | 2.7% Reported | | **Pro Forma Net Sales** | $189.2 million | 4.3% Constant Currency | | **Net Loss** | $(53.1) million | N/A | | **Non-GAAP Pro Forma Adjusted EBITDA** | $11.4 million | 49.1% | - **U.S. Spine Fixation** net sales grew **4%** compared to Q1 2024[5](index=5&type=chunk) - **Bone Growth Therapies (BGT)** net sales reached **$55.1 million**, a **5%** increase, with BGT Fracture sales up **6%**[5](index=5&type=chunk) - **Global Orthopedics** net sales were **$29.8 million**, showing **11%** constant currency growth and **10%** U.S. growth[5](index=5&type=chunk) - Received **510(k) clearance** and **CE Mark** for the **TrueLok™ Elevate Transverse Bone Transport (TBT) System**, the first FDA-cleared device for this specific application[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management noted commercial channel optimization impacting short-term guidance but building a stronger organization, with strategic focus on execution, gross margin, and capital allocation - Ongoing **commercial channel optimization** caused temporary softness in Biologics and Spine Fixation, with expected return to historical growth levels once completed[4](index=4&type=chunk) - Proactive **spine commercial channel optimization** and accelerated distributor transitions are impacting short-term guidance but are expected to build a stronger, scalable organization for future growth[4](index=4&type=chunk) - Future strategic priorities include **sharpening commercial execution** (e.g., 7D FLASH™ Navigation System adoption), **improving gross margin**, and **disciplined capital allocation** for adjusted EBITDA expansion and positive free cash flow generation[4](index=4&type=chunk) [Financial Results Overview](index=3&type=section&id=Financial%20Results%20Overview) Q1 2025 pro forma net sales reached $189.2 million, up 3.9%, with a GAAP net loss of $53.1 million, while non-GAAP pro forma adjusted EBITDA improved to $11.4 million Q1 2025 Pro Forma Net Sales by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | Change (Reported) | Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | Bone Growth Therapies | $55.1 | $52.5 | 4.9% | 4.9% | | Global Spine* | $159.4 | $154.8 | 3.0% | 3.0% | | Global Orthopedics | $29.8 | $27.3 | 9.1% | 11.5% | | **Total Pro Forma Net Sales*** | **$189.2** | **$182.1** | **3.9%** | **4.3%** | Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 (Reported) | | :--- | :--- | :--- | | **Gross Margin (GAAP)** | 62.8% | N/A | | **Gross Margin (Non-GAAP Pro Forma Adjusted)** | 70.3% | N/A | | **Net Loss (GAAP)** | $(53.1) million | $(36.0) million | | **Net Loss per Share (GAAP)** | $(1.35) | $(0.95) | | **Non-GAAP Pro Forma Adjusted EBITDA** | $11.4 million | $7.7 million | - Cash and cash equivalents totaled **$60.5 million** as of March 31, 2025, a decrease from **$85.7 million** at year-end 2024, primarily due to bonus and commission payments[8](index=8&type=chunk) [Business Outlook (Full-Year 2025 Guidance)](index=3&type=section&id=Business%20Outlook) Orthofix updated full-year 2025 net sales guidance to $808-$816 million due to a $5 million NGO business impact, while reaffirming adjusted EBITDA and positive free cash flow guidance Full-Year 2025 Guidance | Metric | Updated Guidance | Previous Guidance | Notes | | :--- | :--- | :--- | :--- | | **Net Sales (Pro Forma)** | $808M - $816M | $818M - $826M | Implied constant currency growth of 5.0% YoY at midpoint | | **Non-GAAP Adjusted EBITDA** | $82M - $86M | No Change | Includes impact from M6 discontinuation | | **Free Cash Flow** | Positive | No Change | Excludes restructuring charges related to M6 discontinuation | [Financial Statements](index=6&type=section&id=Financial%20Statements) Orthofix's Q1 2025 financial statements detail consolidated operations, including net sales and losses, alongside the balance sheet reflecting asset and liability changes [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net sales increased to $193.6 million, but higher costs and a $17.7 million impairment charge led to an operating loss of $48.9 million and a widened net loss of $53.1 million Q1 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net sales** | $193,646 | $188,608 | | **Gross profit** | $121,619 | $127,242 | | **Operating loss** | $(48,873) | $(29,337) | | **Net loss** | $(53,094) | $(36,020) | | **Net loss per share (Diluted)** | $(1.35) | $(0.95) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $823.1 million, primarily due to reduced cash and inventories, leading to a decline in total shareholders' equity to $458.3 million Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $57,953 | $83,238 | | **Total current assets** | $390,310 | $433,285 | | **Total assets** | $823,144 | $893,294 | | **Total current liabilities** | $144,116 | $168,628 | | **Total liabilities** | $364,850 | $390,170 | | **Total shareholders' equity** | $458,294 | $503,124 | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures) Orthofix provides reconciliations for non-GAAP financial measures, including adjusted gross profit, EBITDA, net income, and free cash flow, to their comparable GAAP counterparts [Reconciliation: Adjusted Gross Profit and Gross Margin](index=8&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Margin) Q1 2025 GAAP gross profit of $121.6 million adjusted to $133.9 million, with pro forma adjusted gross profit at $133.0 million, yielding a 70.3% pro forma adjusted gross margin Q1 Gross Profit Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Gross Profit (GAAP)** | $121,619 | $127,242 | | **Adjusted Gross Profit** | $133,926 | $132,512 | | **Pro Forma Adjusted Gross Profit** | $133,020 | $129,617 | | **Pro Forma Adjusted Gross Margin** | 70.3% | 71.2% | [Reconciliation: Adjusted EBITDA](index=8&type=section&id=Adjusted%20EBITDA) Q1 2025 pro forma adjusted EBITDA increased to $11.4 million (6.0% of pro forma net sales) from a GAAP net loss of $53.1 million, after adding back non-cash and non-recurring items Q1 Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | $(53,094) | $(36,020) | | **Adjusted EBITDA** | $9,185 | $7,665 | | **Pro Forma Adjusted EBITDA** | $11,431 | $9,519 | | **Pro Forma Adjusted EBITDA Margin** | 6.0% | 5.2% | [Reconciliation: Adjusted Net Income](index=9&type=section&id=Adjusted%20Net%20Income) Q1 2025 pro forma adjusted net loss improved to $1.2 million from a GAAP net loss of $53.1 million, after adjustments for restructuring costs, share-based compensation, and amortization Q1 Adjusted Net Loss Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | $(53,094) | $(36,020) | | **Adjusted Net Loss** | $(3,184) | $(4,743) | | **Pro Forma Adjusted Net Loss** | $(1,249) | $(3,015) | [Reconciliation: Cash Flow and Free Cash Flow](index=9&type=section&id=Cash%20Flow%20and%20Free%20Cash%20Flow) Q1 2025 net cash used in operating activities was $18.4 million, resulting in a free cash flow outflow of $25.1 million after capital expenditures, an improvement from the prior year Q1 Free Cash Flow (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $(18,391) | $(18,595) | | **Capital expenditures** | $(6,736) | $(10,817) | | **Free cash flow** | $(25,127) | $(29,412) |

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].

Financial Performance - Fourth quarter 2024 net sales reached $215.7 million, an increase of 8% year-over-year on a reported and constant currency basis[3] - Full-year 2024 net sales totaled $799.5 million, reflecting a 7% increase compared to 2023[4] - The net loss for the fourth quarter 2024 was $(29.1) million, with an EPS of $(0.75), a decline of 27% compared to the prior year[3] - Non-GAAP adjusted EBITDA for the fourth quarter was $23.9 million, representing a 22% growth year-over-year[3] - The company reported record Bone Growth Therapies net sales of $63.9 million, a 9% increase compared to the fourth quarter of 2023[5] - U.S. Spine Fixation net sales grew by 12% in the fourth quarter 2024, driven by distribution expansion[5] - Net sales for Q4 2024 reached $215,657,000, a 7.3% increase from $200,415,000 in Q4 2023[22] - Gross profit for the year ended December 31, 2024, was $545,885,000, up 12.2% from $486,273,000 in 2023[22] - Adjusted EBITDA for Q4 2024 was $23,938,000, representing 11.1% of net sales, compared to 9.8% in Q4 2023[28] - The net loss for Q4 2024 was $29,147,000, compared to a net loss of $22,174,000 in Q4 2023[22] - Free cash flow for the year ended December 31, 2024, was $(9,086,000), an improvement from $(107,803,000) in 2023[30] Future Projections - The company expects full-year 2025 net sales to range between $818 million to $826 million, implying constant currency growth of 6.5% year-over-year at the midpoint[12] - Non-GAAP adjusted EBITDA for 2025 is projected to be between $82 million to $86 million, including the impact from the discontinuation of the M6 product lines[12] - Free cash flow is expected to be positive for full-year 2025, excluding restructuring charges related to the discontinued M6 product lines[12] - The long-term net sales CAGR target has been increased to 6.5% to 7.5% from the previous target of 6% to 7%[12] Expenses and Costs - Research and development expenses for the year were $73,643,000, down from $80,231,000 in 2023[22] - Sales, general, and administrative expenses for Q4 2024 were $136,479,000, compared to $132,284,000 in Q4 2023, reflecting an increase of 1.6%[31] - Adjusted sales, general, and administrative expenses as a percentage of net sales decreased to 58.7% in Q4 2024 from 60.0% in Q4 2023[31] - Research and development expenses for Q4 2024 were reported at $18,807,000, slightly down from $18,941,000 in Q4 2023[32] - Adjusted research and development expenses as a percentage of net sales decreased to 8.1% in Q4 2024 from 8.3% in Q4 2023[32] - Total sales, general, and administrative expenses for the year ended December 31, 2024, were $532,525,000, slightly up from $530,395,000 in 2023[31] Cash and Assets - Cash and cash equivalents increased to $83,238,000 in 2024 from $33,107,000 in 2023[24] - Total assets decreased to $893,294,000 in 2024 from $925,315,000 in 2023[24] - Long-term debt increased to $157,015,000 in 2024 from $93,107,000 in 2023[24] Non-Operating Expenses - Non-operating expenses for Q4 2024 were $18,235,000, significantly higher than $3,734,000 in Q4 2023[33] - Adjusted non-operating expenses as a percentage of net sales increased to 7.0% in Q4 2024 from 2.3% in Q4 2023[33] - The foreign exchange impact on non-operating expenses was $(3,133,000) for Q4 2024[33] Strategic Investments - The company reported a strategic investment impact of $(4,073,000) on sales, general, and administrative expenses for Q4 2024[31]

Financial Data and Key Metrics Changes - The company reported Q3 2024 net sales of $196.6 million, representing a year-over-year growth of 7% on a constant currency basis [11][38] - Adjusted EBITDA for the quarter was $19.2 million, with an adjusted EBITDA margin expansion of approximately 250 basis points [38][44] - Free cash flow generation was $5.9 million, marking a significant improvement over the first half of the year [45] Business Line Data and Key Metrics Changes - Bone Growth Therapies (BGT) revenue grew 9% to $57.9 million in Q3, with a 13% increase in the BGT fracture market [39] - U.S. spine fixation revenue grew 18%, significantly outpacing the market growth rate [12][41] - U.S. Orthopedics business grew 15%, driven by strong performance from TrueLok and Fitbone products [15][41] Market Data and Key Metrics Changes - The global orthopedics business grew 3%, with U.S. growth at 15% while international sales declined by 2% [43] - The company holds over 50% market share in the BGT spine market, indicating strong competitive positioning [40] Company Strategy and Development Direction - The company is focused on innovation and responsible growth, with a clear strategy for profitable growth and long-term shareholder value [10][18] - New financial targets for 2027 were introduced, reflecting confidence in sustainable growth trends and an expanded product portfolio [17][49] - The strategic plan includes enhancing commercial focus, continuing innovation in enabling technology, and ensuring long-term value creation for shareholders [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and the opportunities ahead, emphasizing a commitment to disciplined profitable growth [18][52] - The company is well-positioned to leverage strategic advantages and maintain positive momentum into 2025 and beyond [11][38] Other Important Information - The company completed a new $275 million financing to optimize its capital structure for long-term growth [45][46] - The company expects to maintain its full-year 2024 guidance for net sales between $795 million and $800 million, representing growth of 6.6% to 7.2% year-over-year [47] Q&A Session Summary Question: What are the key metrics that concern you the most until 2027? - Management highlighted market growth as a key factor to monitor but expressed confidence in achieving targets [55] Question: Is the mid-teens EBITDA target a milestone or a final goal? - Management indicated that the mid-teens EBITDA target is a milestone, not a final goal, and they do not see it as a stopping point [56] Question: How do you view cash generation in the coming years? - Management is focused on cash conversion but wants to maintain flexibility for strategic investments [57] Question: What will sustain above-market growth rates in each segment? - Management pointed to strong market share and the strength of their portfolio as key drivers for sustained growth [59][60] Question: What are the drivers for adjusted EBITDA margin expansion? - Key drivers include gross margin expansion, capturing merger-related synergies, and leveraging higher revenue to improve EBITDA [62] Question: Who are the main customers for the 7D system and how is it utilized? - The main customers are in the spine sector, with increasing demand due to the system's efficiency in the operating room [63][64] Question: Is guidance exclusive of hurricane and IV shortage impacts? - Yes, management confirmed that current guidance does not account for potential impacts from these factors [66]

Group 1 - A class action has been filed on behalf of former SeaSpine Holdings Corporation shareholders who acquired Orthofix Medical Inc. stock in a stock-for-stock transaction on January 5, 2023 [1] - The allegations state that Orthofix misled investors regarding its internal controls and compliance programs, which were reportedly deficient, leading to various issues including harassment and misconduct among senior management [2] - Shareholders interested in serving as lead plaintiffs must submit their applications by November 8, 2024, and can choose to remain absent class members if they do not wish to participate [3] Group 2 - Robbins LLP is a recognized leader in shareholder rights litigation, having recovered over $1 billion for shareholders since its inception in 2002 [5]