ORTHOFIX MEDICAL INC. Supplemental Financials
2023 Proforma Non-GAAP
March 2024
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, 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. Forward-looking statements in this communication include the Company's expectations regarding net sales and adjusted EBITDA for the year ended December 31, 2024. Forward-looking statements are not guarantees of our future performance, are based on our current expectations and assumptions regarding our business, the economy and other future conditions, and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, including the risks described in Part I, Item 1A under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K. Factors that could cause future results to differ from those expressed by forward-looking statements include, but are not limited to, (i) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities, (ii) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (iii) development and acceptance of new products or product enhancements, (iv) clinical and statistical verification of the benefits achieved via the use of our products, (v) our ability to adequately manage inventory, (vi) our ability to recruit and retain management and key personnel,
- global economic instability and potential supply chain disruption caused by Russia's invasion of Ukraine and resulting sanctions, and (viii) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the "SEC"). As a result of these various risks, our actual outcomes and results may differ materially from those expressed in these forward-looking statements.
This list of risks, uncertainties, and other factors is not complete. We discuss some of these matters more fully, as well as certain risk factors that could affect our business, financial condition, results of operations, and prospects, in reports we file from time-to-time with the SEC, which are available to read at www.sec.gov. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise), and 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 update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise, except as required by law.
The Company is unable to provide expectations of GAAP income (loss) before income taxes, the closest comparable GAAP measures to Adjusted EBITDA (which is a non-GAAP measure), on a forward-looking basis because the Company is unable to predict without unreasonable efforts the ultimate outcome of matters (including acquisition-related expenses, accounting fair value adjustments, and other such items) that will determine the quantitative amount of the items excluded in calculating Adjusted EBITDA, which items are further described in the reconciliation tables and related descriptions below. These items are uncertain, depend on various factors, and could be material to the Company's results computed in accordance with GAAP.
©2024 Orthofix Medical Inc. All rights reserved | 2
Proforma Non-GAAP Financial Measures: 1Q23
On the Company's Q1 2023 earnings call held on May 9,
2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 1st quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 1st quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for the first quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial
measures, please see the Company's Current Report on Form 8 K filed on May 9, 2023.
Proforma Non-GAAP Financial Measures: 2Q23
On the Company's Q2 2023 earnings call held on August 8,
2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 2nd quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 2nd quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for the second quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company's Current Report on Form 8 K filed on August 8, 2023.
Proforma Non-GAAP Financial Measures: 3Q23
On the Company's Q3 2023 earnings call held on
November 8, 2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 3rd quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non- GAAP financial measures as reported for the 3rd quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for the third quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company's Current Report on Form 8 K filed on November 8, 2023.
Proforma Non-GAAP Financial Measures: 4Q23
On the Company's Q4 2023 earnings call held on March 5,
2024, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 4th quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 4th quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for the fourth quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial
measures, please see the Company's Current Report on Form 8 K filed on March 5, 2024.
Historical 2022 Quarterly Proforma
Adjusted EBITDA
Proforma Historical Adjusted EBITDA ($ in millions) Loss before income taxes Non-GAAPadjustments Interest expense, net Depreciation and intangible asset amortization expense Share-basedcompensation expense Foreign exchange impact and other non-operatingexpense/(gain) SeaSpine merger-relatedexpenses Strategic investments Acquisition-relatedfair value adjustments Loss on investment securities Legal judgments/settlements Medical device regulation Business interruption - COVID-19Succession and transition charges Spinal set instrument replacement expense European sales and marketing organization restructuring Total Non-GAAP adjustments Adjusted Proforma EBITDA (proforma for SeaSpine merger)
Q1 22 | ||||||
OFIX | SPNE | NewCo | ||||
$ | (4.389) | $ | (16.832) | $ | (21.221) | |
$ | 0.375 | $ | - | $ | 0.375 | |
7.516 | 4.202 | 11.718 | ||||
4.332 | 2.819 | 7.151 | ||||
1.242 | (0.002) | 1.240 | ||||
- | - | - | ||||
0.970 | 0.372 | 1.342 | ||||
(5.500) | 0.125 | (5.375) | ||||
0.065 | - | 0.065 | ||||
0.193 | - | 0.193 | ||||
1.952 | - | 1.952 | ||||
0.343 | - | 0.343 | ||||
0.010 | - | 0.010 | ||||
- | 1.018 | 1.018 | ||||
- | 0.279 | 0.279 | ||||
$ | 11.498 | $ | 8.813 | $ | 20.311 | |
$ | 7.109 | $ | (8.019) | $ | (0.910) |
Q2 22 | ||||||
OFIX | SPNE | NewCo | ||||
$ | 3.042 | $ | (15.094) | $ | (12.052) | |
$ | 0.407 | $ | 0.293 | $ | 0.700 | |
6.512 | 4.295 | 10.807 | ||||
4.460 | 3.701 | 8.161 | ||||
2.991 | 0.266 | 3.257 | ||||
- | - | - | ||||
1.824 | (0.010) | 1.814 | ||||
(10.714) | 0.083 | (10.631) | ||||
0.123 | - | 0.123 | ||||
0.148 | - | 0.148 | ||||
2.246 | - | 2.246 | ||||
0.316 | - | 0.316 | ||||
0.068 | - | 0.068 | ||||
- | 1.665 | 1.665 | ||||
- | 0.127 | 0.127 | ||||
$ | 8.381 | $ | 10.420 | $ | 18.801 | |
$ | 11.423 | $ | (4.674) | $ | 6.749 |
Q3 22 | ||||||
OFIX | SPNE | NewCo | ||||
$ | (9.372) | $ | (15.111) | $ | (24.483) | |
$ | 0.277 | $ | 0.149 | $ | 0.426 | |
7.570 | 4.341 | 11.911 | ||||
4.728 | 3.652 | 8.380 | ||||
3.253 | 0.270 | 3.523 | ||||
2.937 | 1.412 | 4.349 | ||||
0.455 | 0.016 | 0.471 | ||||
0.419 | - | 0.419 | ||||
(0.001) | - | (0.001) | ||||
0.125 | 0.544 | 0.669 | ||||
2.582 | - | 2.582 | ||||
1.216 | - | 1.216 | ||||
0.068 | - | 0.068 | ||||
- | 1.866 | 1.866 | ||||
- | 0.152 | 0.152 | ||||
$ | 23.629 | $ | 12.402 | $ | 36.031 | |
$ | 14.257 | $ | (2.709) | $ | 11.548 |
Q4 22 | ||||||
OFIX | SPNE | NewCo | ||||
$ | (6.987) | $ | (20.287) | $ | (27.274) | |
$ | 0.229 | $ | 0.202 | $ | 0.431 | |
7.421 | 4.349 | 11.770 | ||||
4.923 | 3.412 | 8.335 | ||||
(4.195) | (0.147) | (4.342) | ||||
9.073 | 2.616 | 11.689 | ||||
0.771 | (0.016) | 0.755 | ||||
0.200 | - | 0.200 | ||||
0.001 | - | 0.001 | ||||
0.337 | 1.066 | 1.403 | ||||
3.481 | - | 3.481 | ||||
0.512 | - | 0.512 | ||||
- | - | - | ||||
- | 2.630 | 2.630 | ||||
- | 0.426 | 0.426 | ||||
$ | 22.753 | $ | 14.538 | $ | 37.291 | |
$ | 15.766 | $ | (5.749) | $ | 10.017 |
FY 2022 | ||||||
OFIX | SPNE | NewCo | ||||
$ | (17.706) | $ | (67.324) | $ | (85.030) | |
$ | 1.288 | $ | 0.644 | $ | 1.932 | |
29.019 | 17.187 | 46.206 | ||||
18.443 | 13.584 | 32.027 | ||||
3.291 | 0.387 | 3.678 | ||||
12.010 | 4.028 | 16.038 | ||||
4.020 | 0.362 | 4.382 | ||||
(15.595) | 0.208 | (15.387) | ||||
0.188 | - | 0.188 | ||||
0.803 | 1.610 | 2.413 | ||||
10.261 | - | 10.261 | ||||
2.387 | - | 2.387 | ||||
0.146 | - | 0.146 | ||||
- | 7.179 | 7.179 | ||||
- | 0.984 | 0.984 | ||||
$ | 66.261 | $ | 46.173 | $ | 112.434 | |
$ | 48.555 | $ | (21.151) | $ | 27.404 |
On the Company's Q4 2023 earnings call held on March 5, 2024, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 4th quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 4th quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for each quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company's Current Report on Form 8 K filed on March 5, 2024.
©2024 Orthofix Medical Inc. All rights reserved | 7
Historical 2022 Quarterly Proforma
Adjusted Gross Margin
Proforma Historical Adjusted Gross Margin | Q1 22 | Q2 22 | Q3 22 | Q4 22 | FY 2022 | |||||||||||||||||||||||||||
($ in millions) | OFIX | SPNE | NewCo | OFIX | SPNE | NewCo | OFIX | SPNE | NewCo | OFIX | SPNE | NewCo | OFIX | SPNE | NewCo | |||||||||||||||||
Total revenue, net | $ | 106.418 | $ | 51.263 | $ | 157.681 | $ | 118.070 | $ | 56.942 | $ | 175.012 | $ | 113.996 | $ | 67.772 | $ | 181.768 | $ | 122.229 | $ | 64.144 | $ | 186.373 | $460.713 | $ 240.121 | $ | 700.834 | ||||
Gross profit(1) | $ | 78.100 | $ | 28.966 | $ | 107.066 | $ | 86.470 | $ | 35.768 | $ | 122.238 | $ | 83.423 | $ | 38.585 | $ | 122.008 | $ | 89.176 | $ | 38.515 | $ | 127.691 | $ 337.169 | $ 141.834 | $ | 479.003 | ||||
Add back: | ||||||||||||||||||||||||||||||||
Share-based compensation expense | 0.211 | 0.078 | 0.289 | 0.204 | 0.082 | 0.286 | 0.195 | 0.103 | 0.299 | 0.217 | 0.102 | 0.318 | 0.827 | 0.365 | 1.192 | |||||||||||||||||
SeaSpine merger-related costs | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||
Strategic investments | 0.025 | - | 0.025 | 0.566 | - | 0.566 | 0.304 | - | 0.304 | 0.439 | - | 0.439 | 1.334 | - | 1.334 | |||||||||||||||||
Acquisition-related fair value adjustments | - | 0.125 | 0.125 | - | 0.083 | 0.083 | - | - | - | - | - | - | - | 0.208 | 0.208 | |||||||||||||||||
Amortization/depreciation of acquired long-lived assets | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||
Medical device regulation | 0.006 | - | 0.006 | 0.008 | - | 0.008 | - | - | - | 0.001 | - | 0.001 | 0.015 | - | 0.015 | |||||||||||||||||
Adjusted gross profit | $ | 78.342 | $ | 29.169 | $ | 107.511 | $ | 87.248 | $ | 35.933 | $ | 123.181 | $ | 83.922 | $ | 38.688 | $ | 122.611 | $ | 89.833 | $ | 38.617 | $ | 128.450 | $ 339.345 | $ 142.407 | $ | 481.752 | ||||
Adjusted gross margin (Adjusted gross profit / Total revenue, net) | 73.6% | 56.9% | 68.2% | 73.9% | 63.1% | 70.4% | 73.6% | 57.1% | 67.5% | 73.5% | 60.2% | 68.9% | 73.7% | 59.3% | 68.7% | |||||||||||||||||
(1) SeaSpine gross profit reflects reclassifications of certain expenses to conform to Orthofix presentation.
On the Company's Q4 2023 earnings call held on March 5, 2024, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 4th quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 4th quarter of 2023.
A reconciliation of proforma Adjusted EBITDA for each quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.
For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company's Current Report on Form 8 K filed on March 5, 2024.
©2024 Orthofix Medical Inc. All rights reserved | 8
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Orthofix Medical Inc. published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2024 21:20:04 UTC.
