Sign In  |  Register  |  About Sunnyvale  |  Contact Us

Sunnyvale, CA
September 01, 2020 10:10am
7-Day Forecast | Traffic
  • Search Hotels in Sunnyvale

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Orthofix Medical Reports Orthofix and SeaSpine Fourth Quarter and Full-Year 2022 Results

(NASDAQ:OFIX) The merger of Orthofix Medical Inc. ("Orthofix") and SeaSpine Holdings Corporation ("SeaSpine") became effective as of January 5, 2023. This news release includes the financial results of stand-alone Orthofix and stand-alone SeaSpine for the fourth quarter and full year ended December 31, 2022. As such, these financial results do not include any potential accounting adjustments the merger may have on future net sales or operating results.

Orthofix Fourth Quarter Highlights

  • Net sales of $122.2 million, a decrease of 2% on a reported basis and flat on a constant currency basis over prior year
  • Bone Growth Therapies net sales growth of approximately 3%, driven by the commercial roll-out of AccelStim™ Bone Healing Therapy and channel investments
  • Global Orthopedics net sales growth of over 6% on a constant currency basis driven by new product launches and channel investments

SeaSpine Fourth Quarter Highlights

  • Net sales of $63.4 million, an increase of 14% on a reported basis over prior year and an increase of 18% when adjusted to exclude the impact of SeaSpine’s exit from the European Spinal Implants market in the third quarter of 2022
  • U.S. Spinal Implants and Orthobiologics net sales growth of 23% and 20%, respectively, driven by recently launched products and expanded distribution
  • A record twelve 7D FLASH Technology System units placed in the fourth quarter, and the achievement of 100th unit placement milestone



“We are proud of the strong revenue results for the fourth quarter of 2022 within the legacy SeaSpine U.S. Spinal Implants and Orthobiologics portfolios as well as within the Orthofix Bone Growth Therapies and Global Orthopedics portfolios,” said Keith Valentine, President and Chief Executive Officer of Orthofix. “Following the completion of the merger on January 5th, we have begun our focused integration of these two highly complementary businesses to realize the meaningful synergy opportunities that we identified. We will continue to deliver innovative and differentiated solutions to both our surgeon and hospital partners, helping them provide the best treatment to their patients through a full continuum of care from pre-operative planning through post-surgical recovery. Our revenue guidance for the first quarter and the full year 2023 assumes minimal realization of potential revenue synergies, which we believe will accelerate as we move into 2024.”

Fourth Quarter Financial Results Overview

Orthofix Stand-Alone Fourth Quarter Net Sales and Financial Results

 

 

Orthofix

 

 

 

Three Months Ended December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

Change

 

 

Constant

Currency

Change

 

Bone Growth Therapies

 

$

51,003

 

 

$

49,627

 

 

 

2.8

%

 

 

2.8

%

Spinal Implants

 

 

28,852

 

 

 

31,150

 

 

 

(7.4

%)

 

 

(6.6

%)

Biologics

 

 

13,696

 

 

 

15,071

 

 

 

(9.1

%)

 

 

(9.1

%)

Global Spine

 

 

93,551

 

 

 

95,848

 

 

 

(2.4

%)

 

 

(2.1

%)

Global Orthopedics

 

 

28,678

 

 

 

29,216

 

 

 

(1.8

%)

 

 

6.4

%

Net sales

 

$

122,229

 

 

$

125,064

 

 

 

(2.3

%)

 

 

(0.1

%)

Gross margin decreased to 73.0% compared to 73.4% in the prior year period.

Net loss was $(7.1) million, or $(0.35) per share, compared to net loss of $(32.8) million, or $(1.65) per share in the prior year period. Adjusted net income was $3.8 million, or $0.19 per share, compared to adjusted net income of $5.4 million, or $0.27 per share in the prior year period.

EBITDA was $0.7 million, compared to $10.0 million in the prior year period. Adjusted EBITDA was $15.8 million, or 12.9% of net sales, compared to $17.0 million, or 13.6% of net sales, in the prior year period.

As of December 31, 2022, Orthofix's cash totaled $50.7 million, compared to $87.8 million as of December 31, 2021. As of December 31, 2022, Orthofix had no borrowings under its five year $300 million secured revolving credit facility; however, on January 3, 2023, and March 3, 2023, Orthofix borrowed $30.0 million and $15.0 million, respectively, under this credit facility to fund (i) the repayment of the outstanding balance on SeaSpine’s credit facility, (ii) certain merger-related expenses, and (iii) working capital purposes.

SeaSpine Stand-Alone Fourth Quarter Net Sales and Financial Results

 

 

SeaSpine

 

 

 

Three Months Ended December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

Percentage

Change

 

U.S. Spinal Implants and Enabling Technologies

 

$

30,637

 

 

$

27,315

 

 

 

12.2

%

U.S. Orthobiologics

 

 

27,454

 

 

 

22,860

 

 

 

20.1

%

U.S. Net Sales

 

 

58,091

 

 

 

50,175

 

 

 

15.8

%

International Net Sales

 

 

5,282

 

 

 

5,413

 

 

 

(2.4

%)

Net sales

 

$

63,373

 

 

 

55,588

 

 

 

14.0

%

Gross margin increased to 62.5% compared to 53.7% in the prior year period. Adjusted gross margin was 63.8% compared to 61.6% in the prior year period.

Net loss was $(19.0) million, or $(0.51) per share, compared to net loss of $(18.8) million, or $(0.52) per share in the prior year period. Adjusted EBITDA was $(5.7) million, or (9.1)% of net sales, compared to $(6.8) million, or (12.2)% of net sales in the prior year period.

As of December 31, 2022, SeaSpine's cash totaled $29.4 million, compared to $83.1 million as of December 31, 2021. As of December 31, 2022, SeaSpine had $26.2 million in borrowing outstanding under its credit facility, which was subsequently repaid in full on January 5, 2023, in connection with the merger.

Full Year Financial Results Overview

Orthofix Stand-Alone Full Year Net Sales and Financial Results

 

 

Orthofix

 

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

Change

 

 

Constant

Currency

Change

 

Bone Growth Therapies

 

$

187,247

 

 

$

187,448

 

 

 

(0.1

%)

 

 

(0.1

%)

Spinal Implants

 

 

109,546

 

 

 

115,094

 

 

 

(4.8

%)

 

 

(4.0

%)

Biologics

 

 

56,381

 

 

 

56,421

 

 

 

(0.1

%)

 

 

(0.1

%)

Global Spine

 

 

353,174

 

 

 

358,963

 

 

 

(1.6

%)

 

 

(1.4

%)

Global Orthopedics

 

 

107,539

 

 

 

105,516

 

 

 

1.9

%

 

 

11.0

%

Net sales

 

$

460,713

 

 

$

464,479

 

 

 

(0.8

%)

 

 

1.5

%

Gross profit decreased $12.4 million to $337.2 million. Gross margin decreased to 73.2% compared to 75.3% in the prior year period.

Net loss was $(19.7) million, or $(0.98) per share, compared to net loss of $(38.4) million, or $(1.95) per share in the prior year period. Adjusted net income was $6.0 million, or $0.30 per share, compared to adjusted net income of $17.2 million, or $0.86 per share in the prior year period.

EBITDA was $12.6 million, compared to $29.7 million in the prior year period. Adjusted EBITDA was $48.6 million, or 10.5% of net sales, compared to $61.3 million, or 13.2% of net sales, in the prior year period.

SeaSpine Stand-Alone Full Year Net Sales and Financial Results

 

 

SeaSpine

 

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

Percentage

Change

 

U.S. Spinal Implants and Enabling Technologies

 

$

107,170

 

 

$

88,192

 

 

 

21.5

%

U.S. Orthobiologics

 

 

97,049

 

 

 

83,249

 

 

 

16.6

%

U.S. Net Sales

 

 

204,219

 

 

 

171,441

 

 

 

19.1

%

International Net Sales

 

 

33,312

 

 

 

20,010

 

 

 

66.5

%

Net sales

 

$

237,531

 

 

 

191,451

 

 

 

24.1

%

Gross profit increased $33.0 million to $147.6 million. Gross margin increased to 62.1% compared to 59.9% in the prior year period. Adjusted gross margin was 63.8% compared to 63.5% in the prior year period.

Net loss was $(65.0) million, or $(1.76) per share, compared to net loss of $(54.3) million, or $(1.62) per share in the prior year period. Adjusted EBITDA was $(21.2) million, or (8.9)% of net sales, compared to $(22.9) million, or (12.0)% of net sales in the prior year period.

Business Outlook

As of the date hereof, the combined company expects the following net sales results for the quarter ended March 31, 2023, and the year ended December 31, 2023. These expectations are based on the current foreign currency exchange rates and do not assume any additional exchange rate changes that may occur this year and exclude the 2023 revenue results for SeaSpine for the four-day period prior to the closing of the merger .

 

 

Current 2023 Outlook

 

(Unaudited, U.S. Dollars, in millions)

 

Low

 

 

High

 

Expected net sales for the first quarter

 

$

166

 

 

$

170

 

Expected full year net sales

 

 

743

 

 

 

753

 

The Company expects to provide additional elements of financial guidance in the future.

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the financial results for the fourth quarter and year ended December 31, 2022. Reported results include those for stand-alone Orthofix as well as stand-alone SeaSpine, which was merged into Orthofix effective January 5, 2023. Interested parties may access the conference call by dialing (888) 330-2508 in the U.S. and Canada, and (240) 789-2735 in all other locations, and referencing the access code 9556380. A replay of the call will be available for three weeks by dialing (800) 770-2030 in the U.S. and Canada, and (647) 362-9199 in all other locations, and entering the access code 9556380. A webcast of the conference call may be accessed at ir.Orthofix.com.

About Orthofix

The newly merged Orthofix-SeaSpine organization is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions and a leading surgical navigation system. Its products are distributed in 68 countries worldwide. The Company intends to announce a new name for the Orthofix-SeaSpine organization in the future, but in the interim will continue to operate under the Orthofix name.

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, CA, with a focus on spinal product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for Orthopedics. The Orthofix-SeaSpine organization’s global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France, and Sao Paolo, Brazil. For more information, please visit www.orthofix.com.

Forward-Looking Statements

This communication 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. In this news release, such forward-looking statements include, but are not limited, to, statements relating to: our ability to continue to deliver innovative and differentiated solutions to both our surgeon and hospital partners and to help them provide the best treatment to their patients; and our revenue guidance for the first quarter and the full year 2023, including our belief that realization of potential revenue synergies will accelerate as we move into 2024. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict, including the risks described under the heading “Risk Factors” in Orthofix’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2023, as well as subsequent Quarterly Reports on Form 10-Q and other information filed with the SEC. Factors that could cause or contribute to such differences may include, but are not limited to, (i) risks related to the integration of the legacy Orthofix and SeaSpine businesses and the ability of the combined company to realize the expected long-term financial and other benefits of the merger; (i) risks relating to the effects of the COVID-19 pandemic on our business, (iii) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities, (iv) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (v) development and acceptance of new products or product enhancements, (vi) clinical and statistical verification of the benefits achieved via the use of our products, (vii) our ability to adequately manage inventory, (viii) our ability to recruit and retain management and key personnel (including in connection with disruptions and uncertainties that may occur as the legacy Orthofix and SeaSpine businesses are integrated and the respective management and leadership teams are combined), (ix) global economic instability and potential supply chain disruption, including as a result of Russia’s invasion of Ukraine and resulting sanctions, and (x) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the “SEC”).

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 inaccurate (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.

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

(U.S. Dollars, in thousands, except share and per share data)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

Net sales

 

$

122,229

 

 

$

125,064

 

 

$

460,713

 

 

$

464,479

 

Cost of sales

 

 

33,053

 

 

 

33,254

 

 

 

123,544

 

 

 

114,914

 

Gross profit

 

 

89,176

 

 

 

91,810

 

 

 

337,169

 

 

 

349,565

 

Sales and marketing

 

 

59,324

 

 

 

57,098

 

 

 

228,810

 

 

 

221,318

 

General and administrative

 

 

25,470

 

 

 

18,262

 

 

 

79,966

 

 

 

69,353

 

Research and development

 

 

13,152

 

 

 

13,243

 

 

 

49,065

 

 

 

49,621

 

Acquisition-related amortization and remeasurement

 

 

2,274

 

 

 

12,560

 

 

 

(7,404

)

 

 

17,588

 

Operating income (loss)

 

 

(11,044

)

 

 

(9,353

)

 

 

(13,268

)

 

 

(8,315

)

Interest expense, net

 

 

(229

)

 

 

(437

)

 

 

(1,288

)

 

 

(1,837

)

Other expense, net

 

 

4,286

 

 

 

185

 

 

 

(3,150

)

 

 

(3,343

)

Loss before income taxes

 

 

(6,987

)

 

 

(9,605

)

 

 

(17,706

)

 

 

(13,495

)

Income tax benefit (expense)

 

 

(75

)

 

 

(23,207

)

 

 

(2,043

)

 

 

(24,884

)

Net loss

 

$

(7,062

)

 

$

(32,812

)

 

$

(19,749

)

 

$

(38,379

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.35

)

 

$

(1.65

)

 

$

(0.98

)

 

$

(1.95

)

Diluted

 

 

(0.35

)

 

 

(1.65

)

 

 

(0.98

)

 

 

(1.95

)

Weighted average number of common shares (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20.2

 

 

 

19.9

 

 

 

20.1

 

 

 

19.7

 

Diluted

 

 

20.2

 

 

 

19.9

 

 

 

20.1

 

 

 

19.7

 

ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets

 

(U.S. Dollars, in thousands, except par value data)

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

50,700

 

 

$

87,847

 

Accounts receivable, net of allowances of $6,419 and $4,944, respectively

 

 

82,857

 

 

 

78,560

 

Inventories

 

 

100,150

 

 

 

82,974

 

Prepaid expenses and other current assets

 

 

22,283

 

 

 

20,141

 

Total current assets

 

 

255,990

 

 

 

269,522

 

Property, plant, and equipment, net

 

 

58,229

 

 

 

59,252

 

Intangible assets, net

 

 

47,388

 

 

 

52,666

 

Goodwill

 

 

71,317

 

 

 

71,317

 

Other long-term assets

 

 

25,705

 

 

 

23,866

 

Total assets

 

$

458,629

 

 

$

476,623

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

27,598

 

 

$

26,459

 

Current portion of finance lease liability

 

 

652

 

 

 

2,590

 

Other current liabilities

 

 

55,374

 

 

 

76,781

 

Total current liabilities

 

 

83,624

 

 

 

105,830

 

Long-term portion of finance lease liability

 

 

19,239

 

 

 

19,890

 

Other long-term liabilities

 

 

18,906

 

 

 

13,969

 

Total liabilities

 

 

121,769

 

 

 

139,689

 

Contingencies

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Common shares $0.10 par value; 50,000 shares authorized;

20,162 and 19,837 issued and outstanding as of December 31,

2022 and 2021, respectively

 

 

2,016

 

 

 

1,983

 

Additional paid-in capital

 

 

334,969

 

 

 

313,951

 

Retained earnings

 

 

1,251

 

 

 

21,000

 

Accumulated other comprehensive loss

 

 

(1,376

)

 

 

 

Total shareholders’ equity

 

 

336,860

 

 

 

336,934

 

Total liabilities and shareholders’ equity

$

458,629

$

476,623

ORTHOFIX MEDICAL INC.

Non-GAAP Financial Measures

The following tables present reconciliations of operating income (loss), net income (loss), EPS, and net cash from operating activities, in each case calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to, as applicable, non-GAAP financial measures, referred to as "EBITDA," "Adjusted EBITDA," "Adjusted net income (loss)," "Adjusted EPS," and "Free cash flow" that include or exclude items specified in the tables. The GAAP measures shown in the tables below represent the most comparable GAAP measure to the applicable non-GAAP measure(s) shown in the table. For further information regarding why the Company believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this press release filed today with the Securities and Exchange Commission ("SEC") available on the SEC's website at www.sec.gov and on the “Investors” page of the Company’s website at www.orthofix.com.

EBITDA and Adjusted EBITDA

 

 

Three Months Ended December 31, 2022

 

(Unaudited, U.S. Dollars, in thousands)

 

Total Orthofix

 

 

Global Spine

 

 

Global Orthopedics

 

 

Corporate

 

Operating income (loss)

 

$

(11,044

)

 

$

8,184

 

 

$

(1,901

)

 

$

(17,327

)

Other income (expense), net

 

 

4,286

 

 

 

990

 

 

 

2,258

 

 

 

1,038

 

Depreciation and amortization

 

 

5,348

 

 

 

2,784

 

 

 

1,440

 

 

 

1,124

 

Amortization of acquired intangibles

 

 

2,073

 

 

 

1,916

 

 

 

157

 

 

 

 

EBITDA

 

$

663

 

 

$

13,874

 

 

$

1,954

 

 

$

(15,165

)

Share-based compensation

 

 

4,917

 

 

 

1,980

 

 

 

507

 

 

 

2,430

 

Foreign exchange impact

 

 

(4,195

)

 

 

(1,052

)

 

 

(2,192

)

 

 

(951

)

Strategic investments

 

 

9,844

 

 

 

41

 

 

 

498

 

 

 

9,305

 

Acquisition-related fair value adjustments

 

 

200

 

 

 

200

 

 

 

 

 

 

 

Loss on investment securities

 

 

 

 

 

 

 

 

 

 

 

 

Legal judgments/settlements

 

 

337

 

 

 

156

 

 

 

131

 

 

 

50

 

Succession and transition charges

 

 

 

 

 

 

 

 

 

 

 

 

Medical device regulation

 

 

3,487

 

 

 

1,740

 

 

 

1,743

 

 

 

4

 

Business interruption - COVID-19

 

 

513

 

 

 

509

 

 

 

2

 

 

 

2

 

Adjusted EBITDA

 

$

15,766

 

 

$

17,448

 

 

$

2,643

 

 

$

(4,325

)

As a % of net sales

 

 

12.9

%

 

 

14.3

%

 

 

2.2

%

 

 

-3.5

%

 

 

Year Ended December 31, 2022

 

(Unaudited, U.S. Dollars, in thousands)

 

Total Orthofix

 

 

Global Spine

 

 

Global Orthopedics

 

 

Corporate

 

Operating income (loss)

 

$

(13,268

)

 

$

43,062

 

 

$

(8,646

)

 

$

(47,684

)

Other income (expense), net

 

 

(3,150

)

 

 

(626

)

 

 

(2,087

)

 

 

(437

)

Depreciation and amortization

 

 

20,599

 

 

 

10,663

 

 

 

5,826

 

 

 

4,110

 

Amortization of acquired intangibles

 

 

8,420

 

 

 

7,550

 

 

 

870

 

 

 

 

EBITDA

 

$

12,601

 

 

$

60,649

 

 

$

(4,037

)

 

$

(44,011

)

Share-based compensation

 

 

18,334

 

 

 

7,318

 

 

 

1,836

 

 

 

9,180

 

Foreign exchange impact

 

 

3,291

 

 

 

860

 

 

 

2,136

 

 

 

295

 

Strategic investments

 

 

16,028

 

 

 

194

 

 

 

1,071

 

 

 

14,763

 

Acquisition-related fair value adjustments

 

 

(15,595

)

 

 

(15,595

)

 

 

 

 

 

 

Loss on investment securities

 

 

188

 

 

 

 

 

 

 

 

 

188

 

Legal judgments/settlements

 

 

803

 

 

 

397

 

 

 

354

 

 

 

52

 

Succession and transition charges

 

 

146

 

 

 

10

 

 

 

 

 

 

136

 

Medical device regulation

 

 

10,370

 

 

 

6,494

 

 

 

3,887

 

 

 

(11

)

Business interruption - COVID-19

 

 

2,387

 

 

 

2,365

 

 

 

20

 

 

 

2

 

Adjusted EBITDA

 

$

48,553

 

 

$

62,692

 

 

$

5,267

 

 

$

(19,406

)

As a % of net sales

 

 

10.5

%

 

 

13.6

%

 

 

1.1

%

 

 

-4.2

%

 

 

Three Months Ended December 31, 2021

 

(Unaudited, U.S. Dollars, in thousands)

 

Total Orthofix

 

 

Global Spine

 

 

Global Orthopedics

 

 

Corporate

 

Operating income (loss)

 

$

(9,353

)

 

$

9,016

 

 

$

(9,484

)

 

$

(8,885

)

Other income (expense), net

 

 

185

 

 

 

(279

)

 

 

(233

)

 

 

697

 

Depreciation and amortization

 

 

5,189

 

 

 

2,613

 

 

 

1,557

 

 

 

1,019

 

Amortization of acquired intangibles

 

 

14,013

 

 

 

1,829

 

 

 

12,184

 

 

 

 

EBITDA

 

$

10,034

 

 

$

13,179

 

 

$

4,024

 

 

$

(7,169

)

Share-based compensation expense

 

 

3,956

 

 

 

1,645

 

 

 

523

 

 

 

1,788

 

Foreign exchange impact

 

 

807

 

 

 

294

 

 

 

564

 

 

 

(51

)

Strategic investments

 

 

1,817

 

 

 

429

 

 

 

276

 

 

 

1,112

 

Acquisition-related fair value adjustments

 

 

(1,190

)

 

 

(1,195

)

 

 

 

 

 

5

 

(Gain) loss on investment securities

 

 

(643

)

 

 

 

 

 

 

 

 

(643

)

Legal judgments/settlements

 

 

352

 

 

 

69

 

 

 

279

 

 

 

4

 

Succession and transition charges

 

 

75

 

 

 

30

 

 

 

8

 

 

 

37

 

Medical device regulation

 

 

2,111

 

 

 

1,008

 

 

 

545

 

 

 

558

 

Business interruption - COVID-19

 

 

(312

)

 

 

2,297

 

 

 

(2,618

)

 

 

9

 

Adjusted EBITDA

 

$

17,007

 

 

$

17,756

 

 

$

3,601

 

 

$

(4,350

)

As a % of net sales

 

 

13.6

%

 

 

14.2

%

 

 

2.9

%

 

 

-3.5

%

 

 

Year Ended December 31, 2021

 

(Unaudited, U.S. Dollars, in thousands)

 

Total Orthofix

 

 

Global Spine

 

 

Global Orthopedics

 

 

Corporate

 

Operating income (loss)

 

$

(8,315

)

 

$

41,382

 

 

$

(14,359

)

 

$

(35,338

)

Other income (expense), net

 

 

(3,343

)

 

 

(917

)

 

 

(2,257

)

 

 

(169

)

Depreciation and amortization

 

 

20,647

 

 

 

10,367

 

 

 

6,464

 

 

 

3,816

 

Amortization of acquired intangibles

 

 

20,708

 

 

 

7,182

 

 

 

13,526

 

 

 

 

EBITDA

 

$

29,697

 

 

$

58,014

 

 

$

3,374

 

 

$

(31,691

)

Share-based compensation expense

 

 

15,416

 

 

 

6,361

 

 

 

2,145

 

 

 

6,910

 

Foreign exchange impact

 

 

3,981

 

 

 

966

 

 

 

2,203

 

 

 

812

 

Strategic investments

 

 

5,700

 

 

 

823

 

 

 

2,329

 

 

 

2,548

 

Acquisition-related fair value adjustments

 

 

(2,015

)

 

 

(1,645

)

 

 

 

 

 

(370

)

(Gain) loss on investment securities

 

 

(643

)

 

 

 

 

 

 

 

 

(643

)

Legal judgments/settlements

 

 

33

 

 

 

462

 

 

 

(381

)

 

 

(48

)

Succession and transition charges

 

 

739

 

 

 

482

 

 

 

70

 

 

 

187

 

Medical device regulation

 

 

8,034

 

 

 

2,753

 

 

 

2,112

 

 

 

3,169

 

Business interruption - COVID-19

 

 

320

 

 

 

2,870

 

 

 

(2,592

)

 

 

42

 

Adjusted EBITDA

 

$

61,262

 

 

$

71,086

 

 

$

9,260

 

 

$

(19,084

)

As a % of net sales

 

 

13.2

%

 

 

15.3

%

 

 

2.0

%

 

 

-4.1

%

Adjusted Net Income

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(7,062

)

 

$

(32,812

)

 

$

(19,749

)

 

$

(38,379

)

Foreign exchange impact

 

 

(4,195

)

 

 

807

 

 

 

3,291

 

 

 

3,981

 

Strategic investments

 

 

9,841

 

 

 

1,837

 

 

 

16,006

 

 

 

5,813

 

Acquisition-related fair value adjustments

 

 

200

 

 

 

(1,190

)

 

 

(15,595

)

 

 

(2,015

)

Amortization of acquired intangibles

 

 

2,073

 

 

 

14,019

 

 

 

8,425

 

 

 

20,732

 

(Gain) loss on investment securities

 

 

 

 

 

(643

)

 

 

188

 

 

 

(643

)

Legal judgments/settlements

 

 

337

 

 

 

352

 

 

 

803

 

 

 

33

 

Succession and transition charges

 

 

 

 

 

75

 

 

 

146

 

 

 

739

 

Medical device regulation

 

 

3,491

 

 

 

2,111

 

 

 

10,381

 

 

 

8,034

 

Business interruption - COVID-19

 

 

514

 

 

 

(310

)

 

 

2,395

 

 

 

328

 

Long-term income tax rate adjustment

 

 

(1,402

)

 

 

21,195

 

 

 

(291

)

 

 

18,537

 

Adjusted net income

 

$

3,797

 

 

$

5,441

 

 

$

6,000

 

 

$

17,160

 

Adjusted EPS

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, per diluted share)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

EPS

 

$

(0.35

)

 

$

(1.65

)

 

$

(0.98

)

 

$

(1.95

)

Foreign exchange impact

 

 

(0.21

)

 

 

0.04

 

 

 

0.16

 

 

 

0.20

 

Strategic investments

 

 

0.49

 

 

 

0.09

 

 

 

0.79

 

 

 

0.29

 

Acquisition-related fair value adjustments

 

 

0.01

 

 

 

(0.06

)

 

 

(0.77

)

 

 

(0.10

)

Amortization of acquired intangibles

 

 

0.10

 

 

 

0.70

 

 

 

0.42

 

 

 

1.04

 

Loss on investment securities

 

 

 

 

 

(0.03

)

 

 

0.01

 

 

 

(0.03

)

Legal judgments/settlements

 

 

0.02

 

 

 

0.02

 

 

 

0.04

 

 

 

 

Succession and transition charges

 

 

 

 

 

 

 

 

0.01

 

 

 

0.04

 

Medical device regulation

 

 

0.17

 

 

 

0.11

 

 

 

0.52

 

 

 

0.40

 

Business interruption - COVID-19

 

 

0.03

 

 

 

(0.02

)

 

 

0.12

 

 

 

0.02

 

Long-term income tax rate adjustment

 

 

(0.07

)

 

 

1.07

 

 

 

(0.02

)

 

 

0.95

 

Adjusted EPS

 

$

0.19

 

 

$

0.27

 

 

$

0.30

 

 

$

0.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares (treasury stock method, in millions)

 

 

20.3

 

 

 

20.0

 

 

 

20.1

 

 

 

20.0

 

Cash Flow and Free Cash Flow

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2022

 

 

2021

 

Net cash from operating activities

 

$

(11,538

)

 

$

18,475

 

Net cash from investing activities

 

 

(24,534

)

 

 

(23,013

)

Net cash from financing activities

 

 

(78

)

 

 

(3,621

)

Effect of exchange rate changes on cash

 

 

(997

)

 

 

(815

)

Net change in cash and cash equivalents

 

$

(37,147

)

 

$

(8,974

)

 

 

Year Ended December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

Net cash from operating activities

 

$

(11,538

)

 

$

18,475

 

Capital expenditures

 

 

(23,160

)

 

 

(19,592

)

Free cash flow

 

$

(34,698

)

 

$

(1,117

)

SEASPINE HOLDINGS CORPORATION

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

(U.S. Dollars, in thousands, except share and per share data)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

Net sales

 

$

63,373

 

 

$

55,589

 

 

$

237,531

 

 

$

191,451

 

Cost of sales

 

 

23,780

 

 

 

25,727

 

 

 

89,920

 

 

 

76,864

 

Gross profit

 

 

39,593

 

 

 

29,862

 

 

 

147,611

 

 

 

114,587

 

Sales and marketing

 

 

36,208

 

 

 

30,886

 

 

 

131,726

 

 

 

107,299

 

General and administrative

 

 

16,137

 

 

 

10,889

 

 

 

54,035

 

 

 

42,944

 

Research and development

 

 

6,625

 

 

 

6,388

 

 

 

24,720

 

 

 

22,006

 

Intangible amortization

 

 

855

 

 

 

739

 

 

 

3,423

 

 

 

3,316

 

Operating loss

 

 

(20,232

)

 

 

(19,040

)

 

 

(66,293

)

 

 

(60,978

)

Other (expense) income, net

 

 

(55

)

 

 

(157

)

 

 

(1,031

)

 

 

5,532

 

Loss before income taxes

 

 

(20,287

)

 

 

(19,197

)

 

 

(67,324

)

 

 

(55,446

)

Income tax benefit

 

 

1,329

 

 

 

411

 

 

 

2,315

 

 

 

1,100

 

Net loss

 

$

(18,958

)

 

$

(18,786

)

 

$

(65,009

)

 

$

(54,346

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.51

)

 

$

(0.52

)

 

$

(1.76

)

 

$

(1.62

)

Diluted

 

 

(0.51

)

 

 

(0.52

)

 

 

(1.76

)

 

 

(1.62

)

Weighted average number of common shares (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

37.0

 

 

 

36.5

 

 

 

37.0

 

 

 

33.6

 

Diluted

 

 

37.0

 

 

 

36.5

 

 

 

37.0

 

 

 

33.6

 

SEASPINE HOLDINGS CORPORATION

Condensed Consolidated Balance Sheets

 

(U.S. Dollars, in thousands, except par value data)

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

29,418

 

 

$

83,106

 

Accounts receivable, net of allowances of $137 and $74, respectively

 

 

42,311

 

 

 

36,231

 

Inventories

 

 

84,580

 

 

 

72,299

 

Prepaid expenses and other current assets

 

 

4,404

 

 

 

4,328

 

Total current assets

 

 

160,713

 

 

 

195,964

 

Property, plant, and equipment, net

 

 

62,379

 

 

 

46,892

 

Right of use assets

 

 

16,019

 

 

 

6,948

 

Intangible assets, net

 

 

46,985

 

 

 

42,056

 

Goodwill

 

 

84,595

 

 

 

84,595

 

Long-term trade receivable

 

 

4,203

 

 

 

 

Other assets

 

 

1,465

 

 

 

812

 

Total assets

 

$

376,359

 

 

$

377,267

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

20,724

 

 

$

20,301

 

Accrued compensation

 

 

12,695

 

 

 

8,769

 

Accrued commissions

 

 

13,537

 

 

 

9,877

 

Short-term lease liability

 

 

2,463

 

 

 

2,234

 

Deferred revenue

 

 

2,180

 

 

 

1,545

 

Other accrued expenses and current liabilities

 

 

10,114

 

 

 

10,255

 

Total current liabilities

 

 

61,713

 

 

 

52,981

 

Long-term borrowings under credit facility

 

 

26,240

 

 

 

 

Long-term lease liability

 

 

14,787

 

 

 

5,866

 

Deferred tax liability, net

 

 

1,746

 

 

 

4,308

 

Contingent consideration liabilities

 

 

11,579

 

 

 

83

 

Other long-term liabilities

 

 

 

 

 

1,665

 

Total liabilities

 

 

116,065

 

 

 

64,903

 

Contingencies

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Common stock, $0.01 par value; 120,000 authorized; 38,205 and 36,584 shares issued and outstanding at December 31, 2022 and 2021, respectively

 

 

382

 

 

 

366

 

Additional paid-in capital

 

 

597,308

 

 

 

584,031

 

Accumulated other comprehensive income

 

 

1,216

 

 

 

1,570

 

Accumulated deficit

 

 

(338,612

)

 

 

(273,603

)

Total shareholders’ equity

 

 

260,294

 

 

 

312,364

 

Total liabilities and shareholders’ equity

 

$

376,359

 

 

$

377,267

 

SEASPINE HOLDINGS CORPORATION

Non-GAAP Financial Measures

SeaSpine presents two financial measures in this press release not reported in accordance with GAAP: adjusted gross margin and adjusted EBITDA loss. Adjusted gross margin represents GAAP gross margin excluding the impact of the following items recorded to cost of goods sold: technology-related intangible asset amortization expense, nonrecurring, fixed NanoMetalene supplier processing charge, and purchase accounting inventory fair market value adjustment charges. Adjusted EBITDA loss represents earnings (loss) before interest, taxes, depreciation and amortization and excludes the impact of: other income / expense, fixed NanoMetalene supplier processing charge, spinal set instrument replacement and impairment expenses, stock-based compensation, non-recurring employee severance and other charges related to the restructuring of SeaSpine’s European sales and marketing organization, litigation special charges, purchase accounting inventory fair market value adjustment charges, acquisition and integration-related charges, and charges associated with SeaSpine's business combination with Orthofix. A reconciliation of GAAP gross margin to adjusted gross margin and of GAAP net loss to adjusted EBITDA loss for all periods presented in this press release appears in the financial tables below.

The Company believes that the presentation of SeaSpine's adjusted gross margin and adjusted EBITDA loss provides important supplemental information to management and investors regarding financial and business trends relating to legacy SeaSpine's historical results of operations. For further information regarding why the Company believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this press release filed today with the SEC available on the SEC's website at www.sec.gov and on the “Investors” page of the Company’s website at www.orthofix.com.

Adjusted EBITDA

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP net loss

 

$

(18,958

)

 

$

(18,786

)

 

$

(65,009

)

 

$

(54,346

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and intangible asset amortization expense

 

 

4,349

 

 

 

3,653

 

 

 

17,187

 

 

 

13,933

 

Other expense (income)

 

 

55

 

 

 

157

 

 

 

1,031

 

 

 

(5,532

)

Income tax (benefit) provision

 

 

(1,329

)

 

 

(411

)

 

 

(2,315

)

 

 

(1,100

)

Fixed NanoMetalene supplier processing charge

 

 

 

 

 

3,704

 

 

 

 

 

 

3,704

 

Spinal set instrument replacement expense

 

 

2,630

 

 

 

1,239

 

 

 

7,179

 

 

 

3,904

 

Stock-based compensation

 

 

3,412

 

 

 

3,065

 

 

 

13,584

 

 

 

11,856

 

European sales and marketing organization restructuring

 

 

426

 

 

 

161

 

 

 

984

 

 

 

1,826

 

Litigation special charges

 

 

1,066

 

 

 

 

 

 

1,610

 

 

 

 

Purchase accounting inventory fair market value adjustments

 

 

 

 

 

125

 

 

 

208

 

 

 

542

 

Acquisition and integration-related charges (7D Surgical)

 

 

(16

)

 

 

305

 

 

 

362

 

 

 

2,302

 

Business combination charges related to Orthofix

 

 

2,616

 

 

 

 

 

 

4,028

 

 

 

 

Adjusted EBITDA loss

 

 

(5,749

)

 

 

(6,788

)

 

 

(21,151

)

 

 

(22,911

)

Adjusted Gross Profit and Adjusted Gross Margin

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net sales

 

$

63,373

 

 

$

55,589

 

 

$

237,531

 

 

$

191,451

 

Less: Cost of sales

 

 

23,780

 

 

 

25,727

 

 

 

89,920

 

 

 

76,864

 

Gross profit

 

 

39,593

 

 

 

29,862

 

 

 

147,611

 

 

 

114,587

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

Technology-related intangible asset amortization

 

 

864

 

 

 

551

 

 

 

3,821

 

 

 

2,718

 

Fixed NanoMetalene supplier processing charge

 

 

 

 

 

3,704

 

 

 

 

 

 

3,704

 

Purchase accounting inventory fair market value adjustments

 

 

 

 

 

125

 

 

 

208

 

 

 

542

 

Adjusted gross profit

 

 

40,457

 

 

 

34,242

 

 

 

151,640

 

 

 

121,551

 

Adjusted gross margin (Adjusted gross profit / Net sales)

 

 

63.8

%

 

 

61.6

%

 

 

63.8

%

 

 

63.5

%

Cash Flow and Free Cash Flow

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2022

 

 

2021

 

Net cash from operating activities

 

$

(38,157

)

 

$

(33,512

)

Net cash from investing activities

 

 

(40,325

)

 

 

(55,358

)

Net cash from financing activities

 

 

24,654

 

 

 

95,545

 

Effect of exchange rate changes on cash

 

 

140

 

 

 

(382

)

Net change in cash and cash equivalents

 

$

(53,688

)

 

$

6,293

 

 

 

Year Ended December 31,

 

(Unaudited, U.S. Dollars, in thousands)

 

2022

 

 

2021

 

Net cash from operating activities

 

$

(38,157

)

 

$

(33,512

)

Capital expenditures

 

 

(37,752

)

 

 

(26,041

)

Free cash flow

 

$

(75,909

)

 

$

(59,553

)

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 Sunnyvale.com & California Media Partners, LLC. All rights reserved.