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Orthofix International Announces 4th Quarter And Full Year 2012 Results

Stocks in this article: OFIX

Orthofix International N.V. (NASDAQ:OFIX) (the Company) today announced its results for the fourth quarter and year ended December 31, 2012. Net sales were $112.0 million and $462.3 million for the fourth quarter and full year ended December 31, 2012, respectively.

Net income from continuing operations was $14.6 million, or $0.74 per diluted share, for the fourth quarter and net income was $53.9 million, or $2.78 per diluted share, for the full year ended December 31, 2012. Adjusted net income from continuing operations was $16.0 million, or $0.81 per diluted share, for the fourth quarter and $58.9 million, or $3.04 per diluted share, for the full year ended December 31, 2012.

Robert Vaters, President and Chief Executive Officer, commented, “I am extremely pleased with our fourth quarter and full year adjusted net income from continuing operations, both records for the Company as we have exceeded our multi-year margin expansion goals. As we previously announced, I was disappointed by our performance in international markets, as well as by our Spine Regenerative Stimulation business where we experienced sales turnover from the implementation of our Corporate Integrity Agreement. While we remain focused on overcoming near-term challenges that are impacting top-line growth, we have improved the Company’s margins and overall financial profile while removing the burden of significant government investigations. This improved financial position provides financial flexibility for increased investment in the product pipeline and inorganic activities that will drive future growth.”

Sales Performance

Net sales were $112.0 million in the fourth quarter of 2012, decreasing 9% on a reported basis from $123.1 million in the fourth quarter of the prior year. On a constant currency basis, net sales decreased 8% as foreign currency translation negatively impacted the fourth quarter net sales by approximately $1.6 million. For the full year 2012, net sales were $462.3 million, decreasing 2% on a reported basis but up slightly on a constant currency basis as foreign currency translation negatively impacted net sales by approximately $9.8 million.

External net sales by global business unit                  
    Three Months Ended December 31,
Reported Currency
(USD in millions) 2012 2011 Growth Growth
Spine Repair Implants and Regenerative Biologics $ 36.3 $ 36.2 0 % 0 %
Spine Regenerative Stimulation   39.4   42.4 -7 % -7 %
Total Spine 75.7 78.6 -4 % -4 %
Orthopedics   36.4   44.5 -18 % -15 %
Total net sales $ 112.0 $ 123.1 -9 % -8 %
Note: Some calculations may be impacted by rounding.

Fourth quarter net sales in the Company’s Spine global business unit were $75.7 million, which decreased 4% from the prior year. Strength in domestic Repair Implants and Regenerative Biologics sales were offset by challenging regulatory and macroeconomic conditions in international markets. In addition, Spine Regenerative Stimulation business was negatively impacted in the second half of the year by sales force turnover as we initially implemented our Corporate Integrity Agreement in June 2012.

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