Orthofix Medical Inc (OFIX) Reports Significant Sales Growth and Improved EBITDA in Q4 and Full ...

• Net Sales: Q4 net sales soared by 64% to $200.4 million, and full-year sales climbed by 62% to $746.6 million.

• Net Loss: Q4 net loss narrowed to $22 million, showing a 19% improvement year-over-year.

• Adjusted EBITDA: Q4 adjusted EBITDA surged by 96% to $19.6 million, with full-year adjusted EBITDA up by 69% to $46.3 million.

• Gross Margin: Q4 gross margin stood at 68.2%, with a non-GAAP adjusted gross margin of 72.2%.

• 2024 Guidance: Orthofix projects net sales between $785 million to $795 million and adjusted EBITDA of $62 million to $67 million for the full year 2024.

• Liquidity: Cash and equivalents totaled $37.8 million as of December 31, 2023.

• Product Performance: Bone Growth Therapies and U.S. Orthopedic segments reported robust sales growth of 15% and 11% respectively for the year.

• Warning! GuruFocus has detected 4 Warning Signs with OFIX.

Orthofix Medical Inc (NASDAQ:OFIX), a global medical device company specializing in orthopedic and spine solutions, announced its fourth quarter and full-year 2023 financial results, revealing significant growth in sales and improved profitability metrics. The company's performance is particularly noteworthy as it marks the first full year since its merger with SeaSpine, highlighting the successful integration and synergy realization.

Orthofix Medical Inc (OFIX) Reports Significant Sales Growth and Improved EBITDA in Q4 and Full Year 2023

Financial Performance Highlights

Orthofix's fourth-quarter net sales reached $200.4 million, a 64% increase on a reported basis and a 7% increase on a pro forma constant currency basis. The company's net loss for the quarter was $22 million, which represents a 19% improvement compared to the previous year. The non-GAAP adjusted EBITDA for Q4 was $19.6 million, or 10% of sales, showcasing a significant 96% growth over Q4 of 2022.

For the full year, net sales were $746.6 million, a 62% increase on a reported basis and a 6% increase on a pro forma constant currency basis. The net loss for the year was $151.4 million, with an EPS of $(4.12). The non-GAAP adjusted EBITDA for the full year was $46.3 million, a 69% increase over 2022.

Operational and Segment Performance

Orthofix's Bone Growth Therapies segment experienced a 15% growth in net sales for Q4, marking the strongest quarter in the company's history for this product line. The U.S. Orthopedic segment also reported an 11% net sales growth for the full year. U.S. spine fixation net sales grew by 13.5% in Q4, with net distributor additions since Q3.

The company achieved $32 million in annualized merger-related synergies by the end of 2023, demonstrating the effectiveness of its integration strategies and cost-saving measures.

Future Outlook and Liquidity

Looking ahead to 2024, Orthofix anticipates net sales to range between $785 million to $795 million, implying a 5% to 7% year-over-year growth on a constant currency basis. The company also projects a non-GAAP adjusted EBITDA of $62 million to $67 million, representing a significant increase over the full year 2023. Furthermore, Orthofix expects to exit Q4 2024 with positive free cash flow.

As of December 31, 2023, the company's liquidity position included $37.8 million in cash, cash equivalents, and restricted cash. Orthofix had $100.0 million in borrowings outstanding under its four-year $150.0 million financing agreement, with an additional $15.0 million borrowed in January 2024.

Management Commentary

We are pleased to report another quarter of strong performance as Orthofix completes its first full year as a combined company with SeaSpine. We delivered accelerated growth exiting 2023 and demonstrated resilience, increased internal efficiencies and cost synergies, said Massimo Calafiore, President and Chief Executive Officer of Orthofix.

Orthofix's robust financial results and optimistic outlook for 2024 reflect the company's strategic focus on growth, operational efficiency, and market differentiation. Investors and stakeholders can look forward to Orthofix's continued progress as it leverages its diverse product portfolio and strengthens its position in the global spine and orthopedics market.

For more detailed information, investors are encouraged to review the full 8-K filing and listen to the conference call hosted by Orthofix.

Explore the complete 8-K earnings release (here) from Orthofix Medical Inc for further details.

This article first appeared on GuruFocus.