LOS ANGELES, Aug. 22, 2024 /PRNewswire/ -- The Schall Law Firm, a national shareholder rights litigation firm, reminds investors of a class action lawsuit against Orthofix Medical Inc. ("Orthofix" or "the Company") (NASDAQ: OFIX) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission. Investors who purchased the Company's securities between October 11, 2022, and September 12, 2023, inclusive (the "Class ...

NEW YORK, Aug. 21, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Orthofix Medical Inc. ("Orthofix" or the "Company") (NASDAQ: OFIX) in the United States District Court for the Eastern District of Texas on behalf of all persons and entities who purchased or otherwise acquired Orthofix securities between October 11, 2022, and September 12, 2023, both dates inclusive (the "Class Period"). I ...

ATLANTA, Aug. 19, 2024 (GLOBE NEWSWIRE) -- Holzer & Holzer, LLC is investigating whether Orthofix Medical Inc. ("Orthofix" or "the Company") (NASDAQ: OFIX) complied with federal securities laws. On September 12, 2023, Orthofix announced it had terminated three executives in the Company for cause, following an investigation conducted by independent counsel. The Company stated that "the Board determined that each of these executives engaged in repeated inappropriate and offensive conduct that violated multipl ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 0-19961 ORTHOFIX MEDICAL INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) ...

Orthofix Medical Inc. (NASDAQ:OFIX) Q3 2021 Earnings Conference Call November 5, 2021 8:30 AM ET Company Participants Alexa Huerta - Senior Director of Investor Relations Jon Serbousek - President & Chief Executive Officer Doug Rice - Chief Financial Officer Conference Call Participants Mathew Blackman - Stifel Anthony Petrone - Jefferies Jeffrey Cohen - Ladenburg Thalmann Jim Sidoti - Sidoti & Company David Turkaly - JMP Securities Operator Good day, and thank you for standing by. Welcome to the Orthofix Q ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2021 was $121.4 million, representing a growth of approximately 66% compared to 2020 and 5% compared to 2019 [7][25] - Gross margin increased to over 77% in Q2 2021 from 68% in the prior year, indicating a return to pre-COVID margin levels [26][27] - Adjusted EBITDA for Q2 2021 was $18.4 million, compared to a loss of $5.6 million in Q2 2020 [31] Performance by Business Lines - Bone Growth Therapies (BGT) sales were $50 million, up 75% from Q2 2020, but flat compared to 2019 [8] - Spinal Implants revenue increased by 62% compared to 2020 and 30% compared to 2019, driven by strong performance in the U.S. [9] - The biologic portfolio saw a 34% increase compared to 2020, but was down 11% compared to 2019 [12] - Global Orthopedics sales were up 78% compared to 2020 and 4% compared to 2019 [13] Market Data and Key Metrics Changes - U.S. total net sales for Q2 2021 were up 4% over Q2 2019, while international sales were up 7% as reported [26] - The U.S. M6-C artificial cervical disc sales grew over 105% compared to Q2 2020 [9] Company Strategy and Industry Competition - The company is focusing on product innovation and differentiation, with 22 new spine and orthopedic products launched since January 2020 [20] - Strategic channel development is a priority, with U.S. strategic channel partners growing 30% compared to 2% for other distributors [21] - The company is expanding its biologics portfolio and investing in new technologies to support long-term growth [50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2021, expecting mid-single-digit growth compared to 2019 [51] - The company anticipates a strong recovery in procedure volumes as COVID-related restrictions ease [68] Other Important Information - Changes to the Board of Directors included the election of Cathy Burzik as the new Chair [14][15] - The company maintains a strong liquidity position with $81 million in cash at the end of Q2 2021 [33] Q&A Session Summary Question: What is the expected revenue shape for the second half of the year? - Management expects mid-single-digit growth in Q3 and Q4 compared to 2019, with similar cadence in both quarters [58] Question: How should models for 2022 be adjusted based on current performance? - Management indicated that mid-single-digit growth could be a good starting point for 2022 models [59] Question: What pull-through is being seen with the M6 product? - Currently, minimal pull-through is observed, but management is focused on improving this as they enhance their channel [63] Question: What is the view on backlog and competitive landscape for M6? - Management noted that there is still a backlog of patients needing surgical care, and they have not seen significant competitive impacts from new entrants [68] Question: Can you discuss the relationship with IGEA and the potential of Pulsed Ultrasound? - Management highlighted the positive effects of electrical stimulation for soft tissue and bone healing, with ongoing research into its efficacy [81]

PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Orthofix Medical Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the periods ended June 30, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$502.0 million** as of June 30, 2021, primarily due to lower cash, while shareholders' equity slightly increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $79,968 | $96,291 | | Total current assets | $258,452 | $270,379 | | Total assets | $502,010 | $525,861 | | Total current liabilities | $81,646 | $103,899 | | Total liabilities | $139,726 | $168,997 | | Total shareholders' equity | $362,284 | $356,864 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Q2 2021 net sales increased **66.0%** to **$121.4 million**, resulting in **$2.4 million** net income, a significant turnaround from the prior year Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $121,394 | $73,135 | $226,987 | $177,958 | | Gross profit | $93,955 | $49,969 | $173,634 | $131,383 | | Operating income (loss) | $4,267 | $(21,000) | $1,351 | $(14,146) | | Net income (loss) | $2,420 | $(18,424) | $(3,396) | $7,241 | | Diluted EPS | $0.12 | $(0.96) | $(0.17) | $0.37 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to **$0.3 million** for the six months ended June 30, 2021, leading to a **$16.3 million** total cash decrease Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from operating activities | $264 | $30,094 | | Net cash from investing activities | $(9,792) | $(28,572) | | Net cash from financing activities | $(6,528) | $101,918 | | Net change in cash, cash equivalents, and restricted cash | $(16,299) | $102,988 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, including the **CARES Act** impact, asset acquisitions, and a **$20.7 million** contingent consideration liability for Spinal Kinetics - In April 2020, the Company received **$13.9 million** from the CMS Accelerated and Advance Payment Program as part of the CARES Act. As of June 30, 2021, the remaining liability is **$11.0 million**, with recoupment having started in April 2021[25](index=25&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) - On February 2, 2021, the Company acquired intellectual property rights in an asset acquisition for consideration of up to **$10.0 million**, consisting of **$1.0 million** upfront and **$9.0 million** in contingent milestones[30](index=30&type=chunk) - The estimated fair value of the remaining contingent consideration for the Spinal Kinetics acquisition was **$20.7 million** as of June 30, 2021. A **$15.0 million** milestone payment was made in Q2 2021[43](index=43&type=chunk)[44](index=44&type=chunk) Net Sales by Segment (Six Months Ended June 30, in thousands) | Segment | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Global Spine | $176,990 | $140,416 | 26.0% | | Global Orthopedics | $49,997 | $37,542 | 33.2% | | **Total Net Sales** | **$226,987** | **$177,958** | **27.6%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the **66%** year-over-year increase in Q2 2021 net sales, improved gross margin, increased operating expenses, and decreased operating cash flow - Q2 2021 net sales increased **66%** year-over-year to **$121.4 million**, driven by the recovery of elective procedures from the COVID-19 pandemic's impact in the prior year[72](index=72&type=chunk)[75](index=75&type=chunk) Net Sales Growth by Segment (Q2 2021 vs Q2 2020) | Segment | Q2 2021 Sales (in thousands) | Reported Growth | Constant Currency Growth | | :--- | :--- | :--- | :--- | | Global Spine | $94,650 | 62.9% | 62.5% | | Global Orthopedics | $26,744 | 77.9% | 66.0% | | **Total** | **$121,394** | **66.0%** | **63.2%** | - Gross margin for Q2 2021 improved to **77.4%** from **68.3%** in Q2 2020, primarily due to higher sales volume, increased fixed cost absorption, and the absence of significant inventory-related charges that occurred in 2020[79](index=79&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - Operating expenses (Sales & Marketing, G&A, R&D) increased compared to Q2 2020, largely because cost-saving initiatives implemented during the pandemic in 2020 (e.g., salary reductions, 401(k) match suspension) were no longer in place in 2021[84](index=84&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Net cash from operating activities decreased by **$29.8 million** for the first six months of 2021 compared to 2020, primarily due to a decrease in net income, changes in fair value of contingent consideration, and changes in working capital, including the CMS advance payment[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - A contingent consideration milestone payment of **$15.0 million** related to the Spinal Kinetics acquisition was made in the second quarter of 2021[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's market risks have occurred since the 2020 Form 10-K disclosure - There have been no material changes to the company's market risks as disclosed in the 2020 Form 10-K[122](index=122&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - The President and CEO and the CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[124](index=124&type=chunk) - No change in internal control over financial reporting occurred during the quarter that has materially affected, or is reasonably likely to materially affect, the company's internal controls[125](index=125&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal matters include a **$7.3 million** accrual for the Italian Medical Device Payback and a **$1.7 million** dispute with a former Brazilian distributor - The company has accrued **$7.3 million** related to the Italian Medical Device Payback (IMDP) measure, though the final amount is uncertain[49](index=49&type=chunk) - An accrual of **$1.7 million** has been made for a legal dispute with a former Brazilian distributor, and approximately **$0.6 million** of the company's cash in Brazil remains frozen[50](index=50&type=chunk)[112](index=112&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Ongoing risks include the **COVID-19 pandemic's** impact on operations and supply chain, particularly the global shortage of semiconductor chips - The company highlights the continuing material risk from the COVID-19 pandemic on its global operations and supply chain[128](index=128&type=chunk) - A specific supply chain risk identified is the global shortage of semiconductor chips, which could affect the company's ability to manufacture certain products or require costly redesigns[128](index=128&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during the second quarter of 2021 - The company made no repurchases of its common stock in the second quarter of 2021[129](index=129&type=chunk) [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is reported as not applicable - Not applicable[130](index=130&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is reported as not applicable - Not applicable[131](index=131&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No matters are reported under this item - There are no matters to be reported under this item[132](index=132&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed, including amendments to incentive plans and required CEO/CFO certifications - Filed exhibits include amendments to the 2012 Long-Term Incentive Plan and the Stock Purchase Plan[133](index=133&type=chunk) - Required certifications from the Chief Executive Officer and Chief Financial Officer under Rule 13a-14(a)/15d-14(a) and Section 1350 are included as exhibits[133](index=133&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR (Registrant's telephone number, including area code) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Not applicable For the transition period from to . (Former name, former address and former fiscal year, if changed since last report) Commi ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) 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](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) 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)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income%20(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](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) 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](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) 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](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Business, basis of presentation, and COVID-19 update](index=8&type=section&id=1.%20Business,%20basis%20of%20presentation,%20and%20COVID-19%20update) - Orthofix Medical Inc. is a global medical device company specializing in musculoskeletal products and therapies, distributed in over 70 countries[20](index=20&type=chunk) - 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](index=24&type=chunk) - 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](index=25&type=chunk)[26](index=26&type=chunk) [Note 2. Recently adopted accounting standards and recently issued accounting pronouncements](index=9&type=section&id=2.%20Recently%20adopted%20accounting%20standards%20and%20recently%20issued%20accounting%20pronouncements) - 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](index=27&type=chunk)[63](index=63&type=chunk) - ASU 2017-04 (Goodwill Impairment) was adopted prospectively, simplifying goodwill impairment measurement without immediate financial statement impact[28](index=28&type=chunk) - 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](index=31&type=chunk) - The Company is currently evaluating the impact of ASU 2019-12 (Simplifying the accounting for income taxes), effective January 1, 2021[33](index=33&type=chunk) [Note 3. Acquisitions](index=10&type=section&id=3.%20Acquisitions) - 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](index=34&type=chunk) 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](index=36&type=chunk) [Note 4. Inventories](index=11&type=section&id=4.%20Inventories) 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](index=11&type=section&id=5.%20Leases) 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](index=42&type=chunk)[43](index=43&type=chunk) [Note 6. Other current liabilities](index=12&type=section&id=6.%20Other%20current%20liabilities) - 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](index=44&type=chunk) [Note 7. Long-term debt](index=12&type=section&id=7.%20Long-term%20debt) - 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](index=45&type=chunk) - 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](index=46&type=chunk) [Note 8. Fair value measurements and investments](index=12&type=section&id=8.%20Fair%20value%20measurements%20and%20investments) 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](index=49&type=chunk)[50](index=50&type=chunk) [Note 9. Contingencies](index=14&type=section&id=9.%20Contingencies) - 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](index=58&type=chunk) - 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](index=59&type=chunk) [Note 10. Accumulated other comprehensive loss](index=14&type=section&id=10.%20Accumulated%20other%20comprehensive%20loss) 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](index=14&type=section&id=11.%20Revenue%20recognition%20and%20accounts%20receivable) 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](index=16&type=section&id=12.%20Business%20segment%20information) 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](index=17&type=section&id=13.%20Acquisition-related%20amortization%20and%20remeasurement) 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](index=17&type=section&id=14.%20Share-based%20compensation) 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](index=18&type=section&id=15.%20Income%20taxes) 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](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [Note 16. Earnings per share ("EPS")](index=18&type=section&id=16.%20Earnings%20per%20share%20(%22EPS%22)) 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](index=19&type=section&id=17.%20Subsequent%20Events) - 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](index=81&type=chunk)[82](index=82&type=chunk) - 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](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 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](index=20&type=section&id=Executive%20Summary) - Orthofix is a global medical device company focused on musculoskeletal products and therapies, distributing in over 70 countries[87](index=87&type=chunk) - 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](index=90&type=chunk) - The Company completed the acquisition of assets for the FITBONE intramedullary lengthening system on March 26, 2020[90](index=90&type=chunk) [COVID-19 Update and Outlook](index=20&type=section&id=COVID-19%20Update%20and%20Outlook) - 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](index=89&type=chunk) - 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](index=89&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) 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](index=96&type=chunk) - 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](index=99&type=chunk) - 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](index=101&type=chunk)[103](index=103&type=chunk) [Net Sales by Product Category and Reporting Segment](index=21&type=section&id=Net%20Sales%20by%20Product%20Category%20and%20Reporting%20Segment) 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](index=92&type=chunk)[93](index=93&type=chunk) - 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](index=93&type=chunk)[94](index=94&type=chunk) [Segment Review (EBITDA)](index=24&type=section&id=Segment%20Review) 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](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) 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](index=106&type=chunk) - 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](index=108&type=chunk) - 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](index=109&type=chunk)[116](index=116&type=chunk) - 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](index=109&type=chunk)[116](index=116&type=chunk) - 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](index=110&type=chunk)[116](index=116&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) - 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](index=125&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) - 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](index=128&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) 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](index=133&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) 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](index=134&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[135](index=135&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) 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](index=137&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) 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](index=29&type=section&id=COVID-19%20Impact%20on%20Business%20and%20Operations) - 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](index=140&type=chunk)[142](index=142&type=chunk) - 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](index=142&type=chunk)[143](index=143&type=chunk) - 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](index=144&type=chunk) [Inability to Access Funding or the Terms on which such Funding is Available](index=30&type=section&id=Inability%20to%20Access%20Funding%20or%20the%20Terms%20on%20which%20such%20Funding%20is%20Available) - 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](index=146&type=chunk) - 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](index=148&type=chunk)[149](index=149&type=chunk) - 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](index=150&type=chunk) [Potential Down Classification of Bone Growth Stimulator Devices](index=30&type=section&id=Potential%20Down%20Classification%20of%20Bone%20Growth%20Stimulator%20Devices) - 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](index=151&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk) - 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](index=153&type=chunk)[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) 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](index=155&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the current report - Not applicable[156](index=156&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the current report - Not applicable[157](index=157&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) There are no other matters to be reported under this heading - No other information to report[158](index=158&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) 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](index=33&type=section&id=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](index=165&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 0-19961 ORTHOFIX MEDICAL INC. (Exact name of registrant as specified in its charter) Delaware 98-1340767 (State or other jurisdiction of incorporat ...