LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the second quarter ended June 30, 2019. Net sales were $115.9 million, loss per share (“EPS”) was ($0.03) and adjusted EPS was $0.28.
“First and foremost, I am very pleased to announce that Jon Serbousek, a highly regarded and seasoned orthopedic and spine executive, has joined the Orthofix executive team. For more details, please see the press release we will issue today on the announcement,” said Brad Mason, Orthofix President and Chief Executive Officer. “Regarding the second quarter results, net sales were in line with our expectations, led by another quarter of outstanding performance in our Biologics products and notably, as reported by SmartTRAK®, Orthofix now has the number one market share position in the U.S. cellular allograft segment.”
Mason continued, “I am also happy to report that the launch of the M6-C™cervical disc in the U.S. is going very well and ahead of plan. With fewer than two dozen surgeons implanting discs to date, we’ve generated $500,000 in sales since June 1st and expect to end the year with more than 150 surgeons trained. This gives us great confidence that we will meet or exceed our sales expectations for 2019 and exit the year on a strong growth trajectory.”
Financial Results Overview
The following table provides net sales by major product category by reporting segment:
Gross profit increased $1.3 million to $90.0 million. Gross margin decreased to 77.7% compared to 79.5% in the prior year period, primarily due to higher than normal charges related to the buildup of Spinal Implants inventory to support sales growth from our new sales partners in key geographies.
Net loss was ($0.5) million, or ($0.03) per share, compared to net income of $0.9 million, or $0.05 per share in the prior year period. Adjusted net income from continuing operations was $5.5 million, or $0.28 per share, compared to adjusted net income of $8.0 million, or $0.42 per share in the prior year period.
EBITDA was $6.4 million, compared to $6.8 million in the prior year period. Adjusted EBITDA was $17.3 million, or 14.9% of net sales, compared to $22.0 million, or 19.7% of net sales, in the prior year period.
As of June 30, 2019, cash, cash equivalents, and restricted cash totaled $52.1 million compared to $72.2 million as of December 31, 2018. As of June 30, 2019, the Company had no outstanding indebtedness and borrowing capacity of $125 million under its existing credit facility. Cash flow from operations for the six months ended June 30, 2019 decreased $4.7 million to $8.3 million when compared to the prior year period, while free cash flow decreased $8.4 million to ($2.0) million.
Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company’s financial results for the second quarter of 2019. Interested parties may access the conference call by dialing (844) 809-1992 in the U.S. and (612) 979-9886 outside the U.S., and referencing the conference ID 1534617. A replay of the call will be available for two weeks by dialing (855) 859-2056 in the U.S. and (404) 537-3406 outside the U.S., and entering the conference ID 1534617. A webcast of the conference call may be accessed by going to the Company’s website at www.orthofix.com, by clicking on the Investors link and then the Events and Presentations page.
Orthofix Medical Inc. is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients’ lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic extremities products are distributed in over 70 countries via the Company’s sales representatives and distributors. For more information, please visit www.orthofix.com.
This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), 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, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to further update any such statement, or the risk factors described in Part I, Item 1A under the heading Risk Factors in our Form 10-K for the year ended December 31, 2018, to reflect new information, the occurrence of future events or circumstances or otherwise.
1 Per SmartTRAK Q1/19 Market Recap: OrthoBio Report, US Stem Cell segment