Orthofix(US:OFIX)2023-03-07 00:10Financial Data and Key Metrics Changes - SeaSpine's total revenue for Q4 2022 was $63.4 million, a 14% increase year-over-year, with U.S. growth at 16% [1] - Orthofix reported total revenue of $122.2 million for Q4 2022, a 2% decrease year-over-year on a reported basis, but flat on a constant currency basis [4] - Net loss for SeaSpine in Q4 2022 was $19 million, compared to a net loss of $18.8 million in Q4 2021 [3] - Orthofix's GAAP loss per share for Q4 2022 was $0.35, an improvement from a loss of $1.65 per share in Q4 2021 [9] Business Line Data and Key Metrics Changes - U.S. spinal implant revenue for SeaSpine increased by more than 23% in Q4 2022, while U.S. Biologics revenue grew by 20% [1][2] - Orthofix's Bone Growth Therapies (BGT) sales were $51 million, up 3% year-over-year [5] - Orthofix's Global Orthopedics revenue decreased by 2% on a reported basis but increased by 6% on a constant currency basis [6] Market Data and Key Metrics Changes - International spinal implant sales for SeaSpine were down 57% in Q4 2022 due to the exit from the European market [2] - Orthofix's international total net sales were $26.6 million, or 22% of total revenue, up 6% in constant currency over Q4 2021 [123] Company Strategy and Development Direction - The merger between Orthofix and SeaSpine aims to create a leading global spine and orthopedic company, focusing on innovative solutions and expanded commercial access [88][39] - The combined company plans to leverage complementary product portfolios to address unmet clinical needs in the musculoskeletal space [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth momentum from both standalone companies and the potential for synergy from the merger [39][40] - The company anticipates first quarter 2023 revenues in the range of $166 million to $170 million, representing 7% to 10% year-over-year constant currency growth [89] Other Important Information - Orthofix plans to host an Analyst Teach-In on March 13, 2023, to provide further insights into the merger and future growth strategies [11] - The company has no borrowings under its $300 million secured revolving credit facility as of December 31, 2022, but borrowed $30 million in January 2023 for working capital and merger-related expenses [38] Q&A Session Summary Question: Guidance during integration - Management indicated that they feel good about Q1 growth and are cautious about setting full-year expectations due to potential dis-synergy risks [15][40] Question: Sales force stability post-merger - Management noted early positive signs of sales force stability and cross-selling opportunities, with both legacy products being utilized together [18][45] Question: G&A expenditures and synergies - Management discussed that Q1 will see heavy deal-specific costs, with a transition to costs aimed at achieving synergies in subsequent quarters [22][115] Question: Segment reporting going forward - Management is still evaluating how to report segments and will provide more clarity by the first quarter reporting deadline [113] Question: Revenue synergies in 2023 guidance - Management confirmed that the 2023 guidance does not include material revenue synergies, but they are confident in mitigating dis-synergy risks [108][110]