Orthofix(OFIX)2025-05-06 11:05Financial 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]