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Orthofix reported 1Q20 orthopedic revenue of USD $104.8 million, -3.9% vs. 1Q19. Through January and February, the company was on pace to exceed revenue expectations for the year as late-2019 initiatives began to take hold. Orthofix’s spine segment benefitted from $2.9 million in sales of the M6 cervical disc, an increase of 85% vs. the prior year. COVID negatively impacted the company’s trauma segment due to a large portion of its portfolio focusing on more elective deformity correction solutions. Biologics declined steeply due to ongoing realignment efforts, procedure deferrals and mid-single-digit price pressure.
Orthofix’s revenue declined -60% in April, with bone therapies and biologics volumes down -65%, spinal implants down -50% and trauma down -60%. Like others in the industry, the company expects 2Q to be the market low point with volumes steadily increasing throughout the remainder of the year. All three Orthofix manufacturing facilities remain open, and the company has secured enough raw materials to meet customer needs throughout 2020.
Cost saving measures enacted to strengthen liquidity include tiered pay reductions for salaried employees and the suspension of 401(k) matching for two quarters. Orthofix drew down $100 million on its existing credit facility in April in the event of a prolonged slowdown of elective procedures.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $22.9 | $22.9 | $0.0 | 0.1% |
| Trauma | $22.5 | $23.2 | ($0.7) | (3%) |
| Orthobiologics | $13.9 | $15.7 | ($1.8) | (11.3%) |
| Other (Bone Growth Therapies) | $45.4 | $47.3 | ($1.8) | (3.9%) |
| Total | $104.8 | $109.1 | ($4.3) | (3.9%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $83.1 | $86.1 | ($3.0) | (3.5%) |
| OUS | $21.7 | $23.0 | ($1.3) | (5.7%) |
| Europe | $9.5 | $9.9 | ($0.4) | (4%) |
| Other | $12.1 | $13.1 | ($0.9) | (7.1%) |
| Total | $104.8 | $109.1 | ($4.3) | (3.9%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $104.8 | |
| Cost of Sales | $23.4 | 22.3% |
| General and Admin | $17.9 | 17% |
| Selling and Marketing | $54.3 | 51.8% |
| R & D | $10.0 | 9.5% |
| Other | ($26.4) | 25.2% |
| Net Earnings | $25.7 | 24.5% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Orthofix reported 1Q20 orthopedic revenue of USD $104.8 million, -3.9% vs. 1Q19. Through January and February, the company was on pace to exceed revenue expectations for the year as late-2019 initiatives began to take hold. Orthofix’s spine segment benefitted from $2.9 million in sales of the M6 cervical disc, an increase of 85% vs. the prior...
Orthofix reported 1Q20 orthopedic revenue of USD $104.8 million, -3.9% vs. 1Q19. Through January and February, the company was on pace to exceed revenue expectations for the year as late-2019 initiatives began to take hold. Orthofix’s spine segment benefitted from $2.9 million in sales of the M6 cervical disc, an increase of 85% vs. the prior year. COVID negatively impacted the company’s trauma segment due to a large portion of its portfolio focusing on more elective deformity correction solutions. Biologics declined steeply due to ongoing realignment efforts, procedure deferrals and mid-single-digit price pressure.
Orthofix’s revenue declined -60% in April, with bone therapies and biologics volumes down -65%, spinal implants down -50% and trauma down -60%. Like others in the industry, the company expects 2Q to be the market low point with volumes steadily increasing throughout the remainder of the year. All three Orthofix manufacturing facilities remain open, and the company has secured enough raw materials to meet customer needs throughout 2020.
Cost saving measures enacted to strengthen liquidity include tiered pay reductions for salaried employees and the suspension of 401(k) matching for two quarters. Orthofix drew down $100 million on its existing credit facility in April in the event of a prolonged slowdown of elective procedures.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $22.9 | $22.9 | $0.0 | 0.1% |
| Trauma | $22.5 | $23.2 | ($0.7) | (3%) |
| Orthobiologics | $13.9 | $15.7 | ($1.8) | (11.3%) |
| Other (Bone Growth Therapies) | $45.4 | $47.3 | ($1.8) | (3.9%) |
| Total | $104.8 | $109.1 | ($4.3) | (3.9%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $83.1 | $86.1 | ($3.0) | (3.5%) |
| OUS | $21.7 | $23.0 | ($1.3) | (5.7%) |
| Europe | $9.5 | $9.9 | ($0.4) | (4%) |
| Other | $12.1 | $13.1 | ($0.9) | (7.1%) |
| Total | $104.8 | $109.1 | ($4.3) | (3.9%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $104.8 | |
| Cost of Sales | $23.4 | 22.3% |
| General and Admin | $17.9 | 17% |
| Selling and Marketing | $54.3 | 51.8% |
| R & D | $10.0 | 9.5% |
| Other | ($26.4) | 25.2% |
| Net Earnings | $25.7 | 24.5% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
