Orthofix(OFIX) - 2020 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Orthofix Medical Inc.'s unaudited Q1 2020 and 2019 consolidated financial statements are presented, detailing balance sheets, income, equity, cash flows, and notes on operations, acquisitions, and COVID-19 impact Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (U.S. Dollars, in thousands) | Metric (U.S. Dollars, in thousands) | March 31, 2020 | December 31, 2019 | | :---------------------------------- | :------------- | :---------------- | | Assets | | | | Total current assets | $239,995 | $260,553 | | Property, plant and equipment, net | $64,836 | $62,727 | | Intangible assets, net | $58,770 | $54,139 | | Goodwill | $82,646 | $71,177 | | Total assets | $493,490 | $495,620 | | Liabilities | | | | Total current liabilities | $65,961 | $84,883 | | Total liabilities | $138,121 | $167,989 | | Shareholders' Equity | | | | Total shareholders' equity | $355,369 | $327,631 | Condensed Consolidated Statements of Income and Comprehensive Income (Loss) Condensed Consolidated Statements of Income and Comprehensive Income (Loss) (U.S. Dollars, in thousands, except per share data) | Metric (U.S. Dollars, in thousands, except per share data) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net sales | $104,823 | $109,112 | -3.9% | | Gross profit | $81,414 | $85,404 | -4.7% | | Operating income (loss) | $6,854 | $(4,448) | +$11,302 | | Income (loss) before income taxes | $5,633 | $(5,109) | +$10,742 | | Net income | $25,665 | $897 | +$24,768 | | Basic Net income per common share | $1.33 | $0.05 | +$1.28 | | Diluted Net income per common share | $1.32 | $0.05 | +$1.27 | | Comprehensive income (loss) | $23,954 | $(1,504) | +$25,458 | Condensed Consolidated Statements of Changes in Shareholders' Equity Condensed Consolidated Statements of Changes in Shareholders' Equity (U.S. Dollars, in thousands) | Metric (U.S. Dollars, in thousands) | At December 31, 2019 | At March 31, 2020 | | :---------------------------------- | :------------------- | :---------------- | | Total Shareholders' Equity | $327,631 | $355,369 | | Net income | - | $25,665 | | Other comprehensive loss, net of tax| - | $(1,711) | | Share-based compensation | - | $3,859 | | Common shares issued, net | - | $812 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (U.S. Dollars, in thousands) | Metric (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net cash from operating activities | $12,464 | $(1,039) | +$13,503 | | Net cash from investing activities | $(24,184) | $(11,316) | -$12,868 | | Net cash from financing activities | $315 | $(10,396) | +$10,711 | | Net change in cash, cash equivalents, and restricted cash | $(12,135) | $(22,981) | +$10,846 | | Cash, cash equivalents, and restricted cash at end of period | $58,268 | $49,208 | +$9,060 | Notes to the Unaudited Condensed Consolidated Financial Statements Note 1. Business, basis of presentation, and COVID-19 update - Orthofix Medical Inc. is a global medical device company specializing in musculoskeletal products and therapies, distributed in over 70 countries[20] - The COVID-19 pandemic has introduced significant uncertainty, impacting elective surgical procedures, potentially delaying customer payments, disrupting supply chains, and affecting overall financial conditions and liquidity, with the full extent of the impact still uncertain[24] - The CARES Act provided a $3.0 million benefit to the Company's Q1 2020 financial statements due to a beneficial rate difference on a potential federal loss carryback[25][26] Note 2. Recently adopted accounting standards and recently issued accounting pronouncements - The Company adopted ASU 2016-13 (Credit Losses) effective January 1, 2020, increasing the allowance for expected credit losses by $1.1 million and decreasing retained earnings by $0.9 million[27][63] - ASU 2017-04 (Goodwill Impairment) was adopted prospectively, simplifying goodwill impairment measurement without immediate financial statement impact[28] - ASU 2020-04 (Reference Rate Reform) was adopted prospectively, providing temporary guidance for the transition away from LIBOR, with no material immediate financial impact but expected to affect future borrowing rates[31] - The Company is currently evaluating the impact of ASU 2019-12 (Simplifying the accounting for income taxes), effective January 1, 2021[33] Note 3. Acquisitions - On March 26, 2020, Orthofix acquired assets related to the FITBONE intramedullary lengthening system from Wittenstein SE for $18 million in cash, recorded as a business combination[34] Acquired Asset (U.S. Dollars, in thousands) | Acquired Asset (U.S. Dollars, in thousands) | Fair Value | | :------------------------------------------ | :--------- | | Inventories | $528 | | Developed technology | $4,500 | | Customer relationships | $800 | | Trade name | $600 | | In-process research and development (IPR&D) | $440 | | Goodwill | $11,132 | | Total fair value of consideration transferred | $18,000 | - The acquisition resulted in $11.1 million in goodwill, assigned to the Global Extremities segment and expected to be tax-deductible[36] Note 4. Inventories Inventory Category (U.S. Dollars, in thousands) | Inventory Category (U.S. Dollars, in thousands) | March 31, 2020 | December 31, 2019 | | :---------------------------------------------- | :------------- | :---------------- | | Raw materials | $7,479 | $9,587 | | Work-in-process | $10,618 | $14,027 | | Finished products | $35,242 | $20,712 | | Field/consignment | $29,405 | $38,071 | | Total Inventories | $82,744 | $82,397 | Note 5. Leases Lease Metric (U.S. Dollars, in thousands) | Lease Metric (U.S. Dollars, in thousands) | March 31, 2020 | December 31, 2019 | | :---------------------------------------- | :------------- | :---------------- | | Total Right-of-use assets | $27,441 | $26,005 | | Total lease liabilities | $28,516 | $26,930 | - In March 2020, the Company entered into a Contract Manufacturing and Supply Agreement (CMSA) with Wittenstein for the FITBONE product line, accounted for as a finance lease, resulting in a $1.9 million lease finance liability and related ROU asset[42][43] Note 6. Other current liabilities - As of March 31, 2020, the Company had a $4.4 million liability related to a U.S. restructuring plan initiated in December 2019, which included personnel realignment and severance payments, with an additional $1.2 million accrual in Q1 2020 for a former executive's departure[44] Note 7. Long-term debt - As of March 31, 2020, Orthofix had no borrowings under its $300 million secured revolving credit facility or its €5.5 million lines of credit in Italy, and was in compliance with all financial covenants[45] - Subsequent to quarter-end, on April 16, 2020, the Company borrowed $100.0 million under its secured revolving credit facility as a precautionary measure to increase cash position and preserve financial flexibility due to COVID-19 uncertainty[46] Note 8. Fair value measurements and investments Liability (U.S. Dollars, in thousands) | Liability (U.S. Dollars, in thousands) | March 31, 2020 | December 31, 2019 | | :------------------------------------- | :------------- | :---------------- | | Contingent consideration | $(33,700) | $(42,700) | | Deferred compensation plan | $(1,235) | $(1,255) | | Total Liabilities | $(34,935) | $(43,955) | - The estimated fair value of the remaining contingent consideration for the Spinal Kinetics acquisition was $33.7 million as of March 31, 2020, a decrease of $9.0 million from December 31, 2019, primarily due to the impact of COVID-19 on future net sales forecasts[49][50] Note 9. Contingencies - The Company accrued $5.2 million related to the Italian Medical Device Payback (IMDP) as of March 31, 2020, with significant judgment involved due to uncertainties in the law's implementation[58] - Approximately $0.5 million of cash in Brazil was reclassified to restricted cash due to an ongoing legal dispute with a former distributor, with an accrual of $1.3 million related to this matter as of March 31, 2020[59] Note 10. Accumulated other comprehensive loss Metric (U.S. Dollars, in thousands) | Metric (U.S. Dollars, in thousands) | Balance at December 31, 2019 | Other comprehensive loss | Balance at March 31, 2020 | | :---------------------------------- | :--------------------------- | :----------------------- | :------------------------ | | Currency Translation Adjustments | $(3,039) | $(1,711) | $(4,750) | | Total Accumulated Other Comprehensive Loss | $(3,039) | $(1,711) | $(4,750) | Note 11. Revenue recognition and accounts receivable Product Category (U.S. Dollars, in thousands) | Product Category (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | | :-------------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Bone Growth Therapies | $45,443 | $47,283 | -3.9% | | Spinal Implants | $22,926 | $22,903 | 0.1% | | Biologics | $13,949 | $15,732 | -11.3% | | Global Spine Total | $82,318 | $85,918 | -4.2% | | Global Extremities | $22,505 | $23,194 | -3.0% | | Net sales Total | $104,823 | $109,112 | -3.9% | Net Sales Component (U.S. Dollars, in thousands) | Net Sales Component (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------------------------------- | :-------------------------------- | :-------------------------------- | | Product sales | $91,421 | $93,934 | | Marketing service fees | $13,402 | $15,178 | | Total Net sales | $104,823 | $109,112 | Allowance for Expected Credit Losses (U.S. Dollars, in thousands) | Allowance for Expected Credit Losses (U.S. Dollars, in thousands) | 2020 | | :---------------------------------------------------------------- | :--- | | Balance at December 31, 2019 | $3,987 | | Impact of adoption of ASU 2016-13 | $1,120 | | Current period provision for expected credit losses | $679 | | Writeoffs charged against the allowance and other | $(114) | | Effect of changes in foreign exchange rates | $(81) | | Balance at March 31, 2020 | $5,591 | Note 12. Business segment information Segment EBITDA (U.S. Dollars, in thousands) | Segment EBITDA (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Global Spine | $22,417 | $10,575 | | Global Extremities | $(1,894) | $(173) | | Corporate | $(8,140) | $(9,527) | | Total EBITDA | $12,383 | $875 | Net Sales by Geography (U.S. Dollars, in thousands) | Net Sales by Geography (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Global Spine U.S. | $77,106 | $79,526 | | Global Spine International | $5,212 | $6,392 | | Global Extremities U.S. | $6,043 | $6,598 | | Global Extremities International | $16,462 | $16,596 | | Consolidated U.S. | $83,149 | $86,124 | | Consolidated International | $21,674 | $22,988 | | Total Net sales | $104,823 | $109,112 | Note 13. Acquisition-related amortization and remeasurement Component (U.S. Dollars, in thousands) | Component (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------------------- | :-------------------------------- | :-------------------------------- | | Changes in fair value of contingent consideration | $(9,000) | $5,400 | | Amortization of acquired intangibles | $1,418 | $1,057 | | Total | $(7,582) | $6,457 | Note 14. Share-based compensation Expense Category (U.S. Dollars, in thousands) | Expense Category (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of sales | $181 | $187 | | Sales and marketing | $696 | $610 | | General and administrative | $2,530 | $4,564 | | Research and development | $452 | $324 | | Total Share-based compensation | $3,859 | $5,685 | Share-based Compensation Type (U.S. Dollars, in thousands) | Share-based Compensation Type (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Stock options | $304 | $2,112 | | Time-based restricted stock awards and units | $2,421 | $1,706 | | Market-based restricted stock units | $670 | $1,347 | | Stock purchase plan | $464 | $520 | | Total | $3,859 | $5,685 | Note 15. Income taxes Income Tax Metric | Income Tax Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :---------------- | :-------------------------------- | :-------------------------------- | | Effective tax rate| (355.6%) | 117.6% | - The effective tax rate for Q1 2020 was significantly impacted by a $17.8 million net benefit from statute expirations related to unrecognized tax benefits and anticipated benefits from the CARES Act[76][77][78] Note 16. Earnings per share ("EPS") Weighted Average Common Shares | Weighted Average Common Shares | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----------------------------- | :-------------------------------- | :-------------------------------- | | Basic | 19,143,934 | 18,750,184 | | Diluted | 19,299,820 | 19,191,146 | Note 17. Subsequent Events - In April 2020, the Company received $13.9 million from the CMS Accelerated and Advance Payment Program and $4.7 million from the CARES Act Provider Relief Fund, both subject to repayment or eligibility criteria[81][82] - As precautionary measures due to COVID-19, the Company borrowed $100.0 million from its credit facility, initiated temporary salary reductions for U.S. employees and the Board, and suspended its 401(k) match program until September 30, 2020[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Orthofix's Q1 2020 financial performance and condition, focusing on COVID-19's impact on operations, sales, liquidity, revenue, expenses, and cash flows Executive Summary - Orthofix is a global medical device company focused on musculoskeletal products and therapies, distributing in over 70 countries[87] - Q1 2020 highlights include net sales of $104.8 million (-3.9%), net income of $25.7 million (+$24.8 million YoY), and an $11.5 million increase in EBITDA, largely due to reduced acquisition-related remeasurement expenses[90] - The Company completed the acquisition of assets for the FITBONE intramedullary lengthening system on March 26, 2020[90] COVID-19 Update and Outlook - The COVID-19 pandemic has created significant uncertainty, impacting elective surgical procedures, capital markets, and potentially leading to economic recession, which could materially affect the Company's business, operations, and liquidity[89] - Future results and liquidity are expected to be materially impacted by decreased elective surgeries, potential payment delays from customers, supply chain disruptions, and extended 'shelter in place' orders[89] Results of Operations Metric (as % of net sales) | Metric (as % of net sales) | Three Months Ended March 31, 2020 (%) | Three Months Ended March 31, 2019 (%) | | :------------------------- | :------------------------------------ | :------------------------------------ | | Net sales | 100.0 | 100.0 | | Cost of sales | 22.3 | 21.7 | | Gross profit | 77.7 | 78.3 | | Sales and marketing | 51.8 | 49.2 | | General and administrative | 17.0 | 18.8 | | Research and development | 9.5 | 8.5 | | Acquisition-related amortization and remeasurement | (7.2) | 5.9 | | Operating income (loss) | 6.6 | (4.1) | | Net income | 24.5 | 0.8 | Metric (U.S. Dollars, in thousands) | Metric (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | % Change | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Gross profit | $81,414 | $85,404 | (4.7%) | | Sales and marketing | $54,313 | $53,694 | 1.2% | | General and administrative | $17,865 | $20,472 | (12.7%) | | Research and development | $9,964 | $9,229 | 8.0% | | Acquisition-related amortization and remeasurement | $(7,582) | $6,457 | (217.4%) | | Interest expense, net | $(423) | $(257) | 64.6% | | Other expense, net | $(798) | $(404) | 97.5% | | Income tax expense (benefit) | $(20,032) | $(6,006) | 233.5% | - Gross profit decreased by $4.0 million due to lower net sales and increased inventory reserve expense, both impacted by COVID-19[96] - General and administrative expense decreased by $2.6 million, primarily due to lower succession and transition charges for executive officers and reduced strategic investment expenses[99] - Acquisition-related amortization and remeasurement decreased by $14.0 million, mainly due to a $13.0 million reduction in the fair value of contingent consideration for the Spinal Kinetics acquisition, driven by COVID-19's impact on future revenue forecasts[101][103] Net Sales by Product Category and Reporting Segment Product Category (U.S. Dollars, in thousands) | Product Category (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Reported Change | Constant Currency Change | | :-------------------------------------------- | :-------------------------------- | :-------------------------------- | :-------------- | :----------------------- | | Bone Growth Therapies | $45,443 | $47,283 | (3.9%) | (3.9%) | | Spinal Implants | $22,926 | $22,903 | 0.1% | 0.5% | | Biologics | $13,949 | $15,732 | (11.3%) | (11.3%) | | Global Spine Total | $82,318 | $85,918 | (4.2%) | (4.1%) | | Global Extremities | $22,505 | $23,194 | (3.0%) | (0.6%) | | Net sales Total | $104,823 | $109,112 | (3.9%) | (3.4%) | - Global Spine net sales decreased by 4.2%, primarily due to a 3.9% decrease in Bone Growth Therapies (COVID-19 impact on order volume) and an 11.3% decrease in Biologics (loss of key distributor and COVID-19 impact) while Spinal Implants remained flat with Motion Preservation growth offset by declines in legacy Spine Fixation due to COVID-19[92][93] - Global Extremities net sales decreased by 3.0%, with a $0.5 million negative impact from foreign currency exchange rates and a $0.6 million decrease in U.S. sales due to COVID-19, partially offset by a $0.4 million increase in international sales (excluding currency effects)[93][94] Segment Review (EBITDA) Segment EBITDA (U.S. Dollars, in thousands) | Segment EBITDA (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Global Spine | $22,417 | $10,575 | | Global Extremities | $(1,894) | $(173) | | Corporate | $(8,140) | $(9,527) | | Total EBITDA | $12,383 | $875 | Liquidity and Capital Resources Cash Flow Activity (U.S. Dollars, in thousands) | Cash Flow Activity (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net cash from operating activities | $12,464 | $(1,039) | $13,503| | Net cash from investing activities | $(24,184) | $(11,316) | $(12,868)| | Net cash from financing activities | $315 | $(10,396) | $10,711| | Net change in cash, cash equivalents and restricted cash | $(12,135) | $(22,981) | $10,846| Free Cash Flow (U.S. Dollars, in thousands) | Free Cash Flow (U.S. Dollars, in thousands) | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----- | | Net cash from operating activities | $12,464 | $(1,039) | $13,503| | Capital expenditures | $(4,944) | $(4,916) | $(28) | | Free cash flow | $7,520 | $(5,955) | $13,475| - Cash, cash equivalents, and restricted cash decreased to $58.3 million at March 31, 2020, from $70.4 million at December 31, 2019, primarily due to the $18.0 million cash payment for the FITBONE acquisition[106] - Operating cash flows increased by $13.5 million, driven by a $24.8 million increase in net income and a $3.5 million increase from working capital changes, partially offset by a $14.7 million net decrease from non-cash gains/losses (contingent consideration fair value changes)[108] - Investing cash flows decreased by $12.9 million, mainly due to the $18.0 million cash payment for the FITBONE acquisition, partially offset by a $5.2 million change in cash paid for former distributor asset acquisitions[109][116] - Financing cash flows increased by $10.7 million, primarily due to a $13.7 million increase from the payment of the Spinal Kinetics FDA Milestone in Q1 2019, offset by a $3.2 million decrease in net proceeds from common share issuance[109][116] - The Company borrowed $100.0 million under its secured revolving credit facility in April 2020 as a precautionary measure to enhance liquidity amidst COVID-19 uncertainty[110][116] Critical Accounting Estimates - The primary change to critical accounting estimates is the adoption of ASU 2016-13, which now requires the allowance for expected credit losses to represent the portion of receivables not expected to be collected over their contractual life, considering past events, current conditions, and future economic forecasts[125] Non-GAAP Financial Measures - The Company uses non-GAAP measures like Constant Currency (net sales without foreign currency impact), EBITDA (earnings before interest, taxes, depreciation, and amortization), and Free Cash Flow (net cash from operating activities minus capital expenditures) to provide transparency and facilitate comparisons of underlying operating performance[128][130][131][132] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes to the Company's market risks were reported compared to the 2019 Form 10-K disclosure - No material changes to market risks were reported compared to the 2019 Form 10-K[133] Item 4. Controls and Procedures Management, including CEO and CFO, deemed disclosure controls effective as of March 31, 2020, with no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2020[134] - No material changes in internal control over financial reporting occurred during the quarter[135] PART II. OTHER INFORMATION Item 1. Legal Proceedings Legal proceedings information is incorporated by reference from Note 9 of the unaudited condensed consolidated financial statements - Legal proceedings information is referenced from Note 9 of the financial statements[137] Item 1A. Risk Factors Updated risk factors from the 2019 Form 10-K highlight COVID-19's significant negative impact on business, operations, and financial condition, and potential increased competition from FDA down-classification of bone growth stimulators COVID-19 Impact on Business and Operations - The COVID-19 pandemic has caused significant disruptions, including postponement of non-essential surgeries, telework mandates, and global economic uncertainty, leading to decreased revenues and lower EPS in Q1 2020, with expected continued negative impacts[140][142] - The severity, magnitude, and duration of COVID-19's impact are uncertain, potentially affecting supplier/distributor relationships, manufacturing, product shipments, customer spending, and employee access to facilities[142][143] - The pandemic could heighten other risks, such as the need to generate sufficient cash flows for indebtedness and the ability to protect IT networks in a remote working environment[144] Inability to Access Funding or the Terms on which such Funding is Available - Due to COVID-19 uncertainty, the Company borrowed $100 million under its $300 million secured revolving credit facility in April 2020 to preserve cash for operations and strategic initiatives[146] - The credit agreement contains financial covenants (total net leverage ratio, interest coverage ratio) that the Company must maintain, and failure to do so could result in an event of default and acceleration of loans[148][149] - Market dislocations from COVID-19 could lead lenders to become unwilling or unable to provide financing, potentially increasing financing costs or limiting access to funds, materially affecting financial condition[150] Potential Down Classification of Bone Growth Stimulator Devices - The FDA is considering reclassifying Class III bone growth stimulator products to Class II, which could increase future competition and negatively affect sales of Orthofix's market-leading products in this category[151][152][154] - The FDA had previously maintained Class III status in 2006 for safety and efficacy reasons, and the Company intends to oppose the down classification at the rescheduled Advisory Committee panel meeting[153][154] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company did not repurchase any of its common stock during the first quarter of 2020 - No repurchases of common stock were made during Q1 2020[155] Item 3. Defaults Upon Senior Securities This item is not applicable to the current report - Not applicable[156] Item 4. Mine Safety Disclosures This item is not applicable to the current report - Not applicable[157] Item 5. Other Information There are no other matters to be reported under this heading - No other information to report[158] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications, and Inline XBRL documents Exhibit List | Exhibit Number | Description | | :------------- | :---------- | | 31.1* | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | | 31.2* | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | | 32.1* | Section 1350 Certifications of each of the Chief Executive Officer and Chief Financial Officer | | 101.INS* | Inline XBRL Instance Document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104* | Cover Page Interactive Data File | SIGNATURES Signatures The report was duly signed on behalf of Orthofix Medical Inc. by its President and CEO, Jon Serbousek, and CFO, Doug Rice, on May 8, 2020 - The report was signed by Jon Serbousek, President and CEO, and Doug Rice, CFO, on May 8, 2020[165]