Orthofix Reports 2Q18 Revenue

Orthofix (OFIX) posted 2Q18 revenue of US $111.5MM, +2.4% vs. 2Q17, with 1H18 revenue of $220.3MM, +4.1% vs. 1H17.

Revenue by geographic region:

Within 2Q, OFIX has integrated Spinal Kinetics following its purchase in 1Q18, realigned its business units into Global Orthofix Extremities and Global Orthofix Spine, reduced inventories by 10% vs. last year (excluding Spinal Kinetics) and got positioned to move the corporate domicile from Curacao to Delaware. The latter initiative was completed in early 3Q, and the company name changed from Orthofix International to Orthofix Medical.

On 2Q18 top line performance, leadership cited some disappointments. BioStim came up ~$1MM short of plan due to late receipt of documentation needed to convert orders to sales at quarter’s end. (It was processed in early 3Q and converted to revenue.) On a bright note, the customer base for this segment grew by 4.2% vs. 2Q17.

Low-double-digit growth in Spine was supported by Spinal Kinetics revenue of $2.3MM, the CETRA Anterior Cervical Plate and the FORZA Expandable Interbody, the latter which launched in 1Q18. Without Spinal Kinetics, spine growth was cited at +0.8% for 2Q18.

The Spinal Kinetics management team is now running all ex-U.S. spinal implant sales. This planned integration did have a disruptive affect that will level out within two quarters.

Headwinds mentioned in 1Q18 continued to affect biologics, though the realignment of the spine business is expected to bring improvements there.

Finally, in trauma/extremity fixation, OFIX joined GMED in product rollout delay news: full launch of the RIVAL foot and ankle plating system is behind schedule, and will remain delayed for the rest of 2018. Following U.S. limited launch of the system in 2Q17, issues arose on a few of the components, so those are being corrected for re-launch. This resulted in a miss of $0.5MM in the quarter, per leadership (and ~$3MM for the rest of the year). Trauma was also dinged in 2Q by changes in currency exchange rates and an increase in unshipped orders at the end of June.

Based on a mixture of misses, OFIX updated the full-year revenue guidance range to $450MM-$456MM, down from $458-$464MM. In more positive news, the M6-C cervical disc is on target for FDA premarket approval in 2019—likely mid-year. And the BioStim and certain of the Trauma shortfalls are expected to recover in 2H18.

Onward!

Source: Orthofix Medical, Inc.