CMS Publishes 2017 Final Hospital Outpatient and Ambulatory Surgical Center Payment Rule Increasing Outpatient Facility Reimbursement for MIS SI Joint Fusion Using SI-BONE’s iFuse Implant System®

SAN JOSE, Calif., Nov. 2, 2016 /PRNewswire/ — SI-BONE, Inc., a medical device company that pioneered the use of the iFuse Implant System® (“iFuse”), a minimally invasive surgical (MIS) device indicated for fusion for certain disorders of the sacroiliac (SI) joint, reported that the Centers for Medicare & Medicaid Services (CMS) has issued its 2017 Final Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center (ASC) payment rule for MIS SI joint fusion.  The final payment rule shows AMA CPT® code 27279 has been assigned to APC 5116 and provides an increased Medicare national average hospital outpatient payment from $10,538to $14,698, representing an increase of $4,160 or 40% over the current payment amount.  In the ASC, the new Medicare national average payment will increase from $7,887 to $12,553, representing an increase of $4,666 or 59% over the current payment amount.  The new payments will become effective January 1, 2017.

“With these significant increases in facility payments, CMS continues to recognize the value of MIS SI joint fusion when billed using AMA CPT® code 27279 and the importance of providing access to our procedure for all Medicare beneficiaries in the outpatient setting,” said Michael Mydra, Vice President of Health Outcomes & Reimbursement at SI-BONE.  “We believe that iFuse fits strategically with the overall goals of the Affordable Care Act (ACA) by providing a safe and effective treatment of degenerative sacroiliitis and SI joint disruption, which has been demonstrated to improve pain, patient function and quality of life in a cost-effective manner.”

About SI-BONE, Inc.

SI-BONE, Inc. (San Jose, California) is a leading medical device company dedicated to the development, manufacture and commercialization of minimally invasive surgical devices for the treatment of patients with low back symptoms related to certain sacroiliac (SI) joint disorders.  SI-BONE, Inc. first received 510(k) clearance to market its iFuse Implant System (“iFuse”) from the Food and Drug Administration (FDA) in November 2008. The CE mark for European commercialization was obtained in November 2010.

The iFuse Implant System provides a minimally invasive surgical solution to fuse the SI joint using patented triangular titanium implants inserted across the joint from the ilium to the sacrum.  The triangular implant shape combined with an interference press fit is designed to provide immediate fixation by minimizing rotation and joint motion.  The implants’ porous surface provides an ideal environment for bone ongrowth and ingrowth, facilitating long-term fusion of the joint.  iFuse is the only commercially available SI joint fusion system in the United States with published evidence that demonstrates safety, effectiveness and economic benefits, including clinical results from three large multicenter prospective studies, two of which are randomized controlled trials. Currently, there are more than 45 peer-reviewed publications (  It is the only SI joint fusion system with an FDA clearance recognizing demonstrated improvements in pain, patient function and quality of life following treatment.

The iFuse Implant System is intended for sacroiliac fusion for conditions including sacroiliac joint dysfunction that is a direct result of sacroiliac joint disruption and degenerative sacroiliitis.  This includes conditions whose symptoms began during pregnancy or in the peripartum period and have persisted postpartum for more than 6 months.  Clinical studies have demonstrated that treatment with the iFuse Implant System improved pain, patient function, and quality of life.  There are potential risks associated with the iFuse Implant System.  It may not be appropriate for all patients and all patients may not benefit.  For information about the risks, visit:

SI-BONE and iFuse Implant System are registered trademarks of SI-BONE, Inc. ©2016 SI-BONE, Inc. All Rights Reserved. 9754.110216


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TissueGene Licensee, Kolon Life Science, Partners With Mitsubishi Tanabe Pharma To Develop And Commercialize Invossa™, The World’s First Cell-Mediated Gene Therapy For Degenerative Osteoarthritis

ROCKVILLE, Md., Nov. 1, 2016 /PRNewswire/ — TissueGene, Inc. (TGI), a Maryland-based regenerative medicine company, today announced an exclusive licensing and development agreement between Mitsubishi Tanabe Pharma Corporation of Japan (4508:JP TOKYO) and TissueGene’s Asia licensee, Kolon Life Science of Korea (102940:KS KOSDAQ). The agreement between the two companies focuses on the development and commercialization of Invossa™, the world’s first cell-mediated gene therapy for degenerative osteoarthritis for the Japanese market.  Market forecasts predict that the number of osteoarthritis patients in Japan aged 40 and older amounts to more than 25 million and is expected to accelerate with the aging population.

Under the terms of the agreement, Mitsubishi Tanabe will pay an upfront payment of approximately $24 Million plus additional payments of up to approximately $410 Million upon achievement of certain development, regulatory and commercial milestones, as well as a double-digit sales royalty.  The deal amount announced today represents the largest single-territory deal on record for Korea.

Invossa™ is a first-in-class osteoarthritis drug designed to conveniently and effectively treat osteoarthritis of the knee through a single intra-articular injection.  Clinical trials completed in Korea and on-going trials in the US have demonstrated pain relief, increased mobility, and improvements in joint structure – offering substantial convenience for osteoarthritis patients who would otherwise be in need of surgery.  TissueGene has completed U.S. Phase 2 trials of Invossa™ and received a Special Protocol Assessment (“SPA”) designation for Phase 3 trials scheduled to begin in the second quarter of 2017.  The US Phase 3 will aim for approval from the US Food and Drug Administration (FDA) as the first disease-modifying osteoarthritis drug (DMOAD). Additional Information can be found at the NIH registry,

Upon completion of its clinical trials in Korea in July of this year, which successfully verified the safety and efficacy of Invossa™, Kolon Life Science filed for a biologics license application with the Korea Ministry of Food and Drug Safety (MFDS).  Similarly, Mitsubishi Tanabe will proceed with Japanese clinical trials and regulatory filings and Kolon Life Science will be responsible for manufacturing activities.

“This license agreement for Invossa™ is significant in that it marks the first key step for global recognition of Korea’s first gene-therapy drug,” said Kolon Life Science CEO Woo-Sok Lee. “Mitsubishi Tanabe already has expertise and experience in the successful commercialization of Johnson and Johnson’s rheumatoid arthritis drug Remicade™ which should boost the potential success of Invossa™ in the Japanese market.”

About Osteoarthritis Osteoarthritis (also known as OA) is a common joint disease that most often affects middle-age to elderly people. It is commonly referred to as “wear and tear” of the joints, but we now know that OA is a disease of the entire joint, involving the cartilage, joint lining, ligaments, and bone.  It is more common in older people and characterized by breakdown of the cartilage (the tissue that cushions the ends of the bones between joints), bony changes of the joints, deterioration of tendons and ligaments, and various degrees of inflammation of the joint lining (called the synovium).  There is no cure for OA and there is a significant need for additional therapies to bridge the treatment gap between palliative care and surgery.  For more information see

About Special Protocol Assessment The Special Protocol Assessment (SPA) process is a procedure by which the FDA provides official evaluation and written guidance on the design and size of proposed protocols that are intended to form the basis for a new drug application. TissueGene’s Invossa™ was given an SPA designation in May, 2015. Final marketing approval depends on the results of efficacy, the adverse event profile and an evaluation of the benefit/risk of treatment demonstrated in the Phase 3 clinical program. The SPA agreement may only be changed through a written agreement between the sponsor and the FDA, or if the FDA becomes aware of a substantial scientific issue essential to product efficacy or safety. For more information on Special Protocol Assessment, please visit

Mitsubishi Tanabe Pharma Corporation Mitsubishi Tanabe Pharma Corporation is a research-driven pharmaceutical company based in Osaka, Japan. MTPC is taking on the challenge of drug discovery in the fields of autoimmune/inflammatory diseases, central nervous system diseases, diabetes and kidney diseases, and vaccines. To those ends, MTPC is strengthening its R&D pipeline. MTPC contributes to the healthier lives of people around the world through the creation of pharmaceuticals.

Kolon Life Science Kolon Life Science has been developing innovative cell and gene therapies including Invossa, the world’s first cell-mediated gene therapy for osteoarthritis, since its founding in 2000. In addition to its biopharmaceuticals business, the company is also engaged in the business of providing active pharmaceuticals ingredients (API), eco-chemicals including antimicrobials for personal-care and industrial applications, as well as water-treatment solutions. For more information, please visit

TissueGene, Inc. TissueGene, Inc., is a Maryland-based regenerative medicine company specializing in cell and gene therapy. TissueGene’s lead product is Invossa™, an allogeneic, cell-mediated gene therapy for osteoarthritis of the knee that has completed Phase II clinical trials in the US.  TissueGene has recently reached an agreement with the U.S. Food and Drug Administration regarding a Special Protocol Assessment (SPA) for a Phase 3 clinical trial for Invossa™. Information can be found at the NIH registry,  For additional information about TissueGene, Inc., please visit

To view the original version on PR Newswire, visit:

SOURCE TissueGene, Inc.


HKJDC Limited Announces New Biomechanical Technology Invention From Hong Kong for Orthopedic Medicine

HONG KONG, Nov. 1, 2016 /PRNewswire/ — In the United States alone, an estimated 15 million fractures occurs annually, including 1.6 million hospital admissions for traumatic fractures and 2 million osteoporotic fractures, costing over 60 billion dollars and calling for 1.6 million bone grafts each year; a growing demand for bone grafts is similarly observed worldwide. Bone is the second most commonly implanted material in the human body, after blood transfusion. The science of bone grafts in nonunion and bone loss have been established and refined, and new methods of bone graft extraction that limits pain and complications for these treatments should be determined, developed and implemented for the minimally invasive treatment advantages. A passive and effortless percutaneous method providing full control and precision for the endeavor would be supreme.

A “Bone Graft” is the basic ingredient and the basis of almost every major reconstructions for many orthopedic and spinal disorders which include deformities, degeneration, fractures and damages. Degenerative Disc Disease (DDD) commonly known as ‘slipped disc’, scoliosis, spondylolisthesis, spinal stenosis, and vertebral fractures all require a spinal fusion treatment using a “Bone Graft”. According to the WHO Low Back Pain (LBC) is the number 1 cause of disability worldwide, and together with the treatments for severe neck pain, nonunion fractures of long bones, cranial maxillofacial fractures commonly consequent to automobile accidents and so on, they all firstly require a “Bone Graft” to repair the patient. Without a “Bone Graft”, none of all these conditions can be suitably treated. The increased prevalence of spinal fusion surgery alone has created an industry focus on bone graft alternatives. While autologous bone graft, also known as autograft – the patient’s own solid living bone tissue usually extracted from the hips remains the gold standard, but the pain and complications from extracting autologous bone graft, the problems with open surgery extraction drives the endless search for a reliable and safe bone graft substitute product. Many approaches are used in the repair of skeletal defects in reconstructive orthopedic surgery, and bone grafting is involved in virtually every procedure. Autografting (live bone extracted from the patient) remains the gold standard for replacing bone loss. Moreover most alternatives, including bone bank which bear contamination, artificial discs and stem cell products are expensive and mostly not compatible nor validated by Evidence based medicine EBM, thus being scarcely recommendable for clinical use. The search for alternative biomaterials for a bone graft continues.

This new surgical tool holds the United States Patent Number: 8920423 December 30, 2014 by Inventor : Dr. Benjamino Kah Hung Lee. It was first conceived, initiated and collaborated with The Government of the HKSAR (supported via The Hong Kong Productivity Council), and was presented at The Hong Kong Hospital Authority at their Annual Convention on 7th May, 2014.

After initial tests on animal bone, currently top USA scientists and surgeons at Barrow Neurological Institute in Phoenix, Arizona in the United States are preparing to conduct a Biomechanical Study to translate and introduce this surgical tool into the medical industry for clinical use. (Barrow Neurological Institute is the world’s largest neurological disease treatment and research institution, and is consistently ranked as one of the best neurosurgical training centers in the United States). This new surgical tool is not available from any manufacturers and offers many new advantages which are equally applicable in many fields of medicine including for the spine and also for many other procedures; orthopedic surgery, spinal surgery, plastic surgery, cranial maxillofacial surgery, dentistry and dental implantology. A growing market for an aging population. Currently we are ready to manufacture the tool and a Gant Chart scheduled for the production process which will require 15-18 months to complete. We have two large hospitals in China interested to work together with us in using the surgical tool we developed for live bone extraction.  One hospital group has orthopedic hospitals in Guangzhou and Wuhan. The second one is in Dalian port in Liaoning Province. All these 3 cities are important healthcare centers with enormous popularity with Chinese patients. While orthopedic surgeries, including spinal fusion and non-union fractures as well a host of degenerative bone ailments are currently being treated, their standards and quality of care and recovery has much room for improvement. Both groups are very excited about the potential of introducing new tools and procedures into China. We were also told that the demand for re-constructive surgery, dental implants has grown rapidly in recent years due to aging population. The China hospitals also explained that since this is a virgin territory without competition, it is possible to set up a “separate foundation specifically categorized for this tool and its novelty technique” to look into various limitless applications of this proven surgical percutaneous procedure for the direct transfer of bodily tissues and to popularize it in China for the beneficial sake of patients among the Chinese physicians and orthopedic surgeons, especially for how exactly to get a piece of live bone with effortless ease, remarkable expediency to save operation theatre time, and minimal discomfort, minimizing the risks of complications, reduce blood loss and reduce pain for an  uneventful recovery.

The level of interest is for knowing that if this percutaneous approach can be installed, then ALL of the currently available known approaches for the reconstructions would bear far greater risks of complications overall, in addition to their greater time and costs involved, nevertheless.

In view of this, it is for certain that all the efforts of all persons interested to be pioneers in this medical field by joining in with our scientific team for collaborating with more biomechanical studies, beginning in USA and China will be immortalized, and to publish scientific documents under their names.

For further information and technical specifications, FDA details, engineering details, about this new orthopedic instrument, please contact: Dr. Benjamino Lee at or please feel free to call Tel : 852-2808-4768 for press information.

For scientific information and the biomechanical study details, with potential interest to join our scientific team for biomechanical study side, please contact:

Dr. Brian P. Kelly phD, Director of Spine Biomechanics Laboratory
Barrow Neurological Institute, Department of Neurosurgery,
350 West Thomas Rd, PhoenixArizona, United States.

For investors who are interested in equity side, please contact our company with the IPR, and welcome to contact our CEO Dr. Ting Ho at QiBiotech Company for funding opportunity and business discussions.


Room 510, 5th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong. Tel: +852 2765 8500 Fax: +852 2765 8555

This content was issued through the press release distribution service at For more info visit:

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PR Newswire

Last updated on: 01/11/2016


In’Tech Medical’s Wayvio line of intelligent surgical instruments for orthopedics

November 1, 2016

Memphis, Tennessee – In’Tech Medical SAS, a world leader in contract manufacturing of surgical instruments in orthopedics, announced the launch of its new Wayvio platform, dedicated to enhancing standalone surgical instruments with smart communication tools.

“With the launch of Wayvio, In’Tech Medical continues to drive innovation and set new standards in the world of Orthopedics,” says Laurent Pruvost, president. He adds “The Wayvio technology strikes a new balance between manufacturing excellence and electronics, enabling OEMs and medical staff to achieve more than what they ever thought possible with a surgical instrument. It is fulfilling for the In’Tech Medical team across the world – U.S., Europe, and Asia, to bring to market a technological platform that will help our customers as well as hospitals and surgery centers optimize their logistics while keeping in tune with their instruments & trays.”

The Wayvio technology can be retrofitted and integrated into almost any instrument, instantaneously turning it into a powerful wireless device. Transparent for the surgeon or medical staff, instruments bearing the Wayvio technology will seamlessly store and communicate key parameters, such as number of sterilizations, helping with data exchange between OEMs, medical staff, and sales reps.

“By facilitating traceability, and increasing accountability as well as efficiency, the Wayvio technology decreases the collateral risks associated with any instrument’s life-cycle,” said Patrick Khalife, R&D director. “The Wayvio on board electronics are self-triggered throughout the instrument’s life-cycle with no human interaction. Specific data points, such as number of sterilization or amount of torque “clicks” are collected and can wirelessly be accessed through an intuitive Android-based NFC reader. It truly is a game changer.”

Wayvio allows OEMs, hospitals and all actors in supply chain to stay in tune with their surgical instruments. By accessing its core, they can monitor at any time occurrences such as:

  • Frequency of OR (ie. operation room) exposure
  • Recurrence of surgical use (ie. impaction, torque limiting “click,” etc.)
  • History of inadvertent events such as accidental dropping of instruments or tray, and out of range impaction or strains

As an adaptable platform, Wayvio’s applications are virtually limitless with possibility to geotag last known connection of a device or adding notes post-operative comments.

About In’Tech Medical
Founded in France in 2000, In’Tech Medical is a global leader in orthopedic contract-manufacturing. With the company’s recent expansion in USA and Malaysia, In’Tech Medical is now the world’s largest provider of surgical instruments to the Spine Industry. Powered by a diverse product portfolio, an ability to find solutions to complex engineering challenges, and over 500 employees globally, In’Tech Medical is ideally positioned for sustainable growth and personalized customer care.

In’Tech Medical is also home to The Prototype Garage – prototype dedicated cells located both in Europe & the US, with the intent of serving industry with production-equivalent prototypes in a rapid-delivery setting.


Xtant Medical Receives Approval of Compliance Plan from NYSE MKT

BELGRADE, Mont., Nov. 01, 2016 (GLOBE NEWSWIRE) — Xtant Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development, manufacturing and marketing of orthopedic products for domestic and international markets, today announced that the NYSE MKT LLC (the “Exchange”) notified the Company that it accepted the Company’s plan to regain compliance with the continued listing requirements of the Exchange.

On August 19, 2016, the Company received notice that they are not in compliance with NYSE MKT LLC continued listing standards. Specifically, the company is not in compliance with section 1003(a)(i) and 1003(a)(ii) and section 1003(a)(iii) of the NYSE MKT Company Guide since it reported stockholder’s equity deficit of $496,000 as of June 30, 2016, and net losses in its five most recent fiscal years ended December 31, 2015.

The Company submitted its plan of compliance on September 13, 2016, and on November 1, 2016, the Exchange notified the Company that it accepted the Company’s plan of compliance and granted the Company an extension until February 15, 2018 to regain compliance with the continued listing standards. The Company will be subject to periodic review by Exchange Staff during the extension period.

About Xtant Medical Holdings

Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets class-leading regenerative medicine products and medical devices for domestic and international markets. Xtant products serve the specialized needs of orthopedic and neurological surgeons, including orthobiologics for the promotion of bone healing, implants and instrumentation for the treatment of spinal disease, tissue grafts for the treatment of orthopedic disorders, and biologics to promote healing following cranial, and foot and ankle surgeries. With core competencies in both biologic and non-biologic surgical technologies, Xtant can leverage its resources to successfully compete in global neurological and orthopedic surgery markets. For further information, please visit

Important Cautions Regarding Forward-looking Statements

This press release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “continue,” “efforts,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “projects,” “forecasts,” “strategy,” “will,” “goal,” “target,” “prospects,” “potential,” “optimistic,” “confident,” “likely,” “probable” or similar expressions or the negative thereof.

Statements of historical fact also may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: our ability to integrate the acquisition of X-spine Systems, Inc. and any other business combinations or acquisitions successfully; our ability to remain listed on the NYSE MKT; our ability to obtain financing on reasonable terms; our ability to increase revenue; our ability to comply with the covenants in our credit facility; our ability to maintain sufficient liquidity to fund our operations; the ability of our sales force to achieve expected results; our ability to remain competitive; government regulations; our ability to innovate and develop new products; our ability to obtain donor cadavers for our products; our ability to engage and retain qualified technical personnel and members of our management team; the availability of our facilities; government and third-party coverage and reimbursement for our products; our ability to obtain regulatory approvals; our ability to successfully integrate recent and future business combinations or acquisitions; our ability to use our net operating loss carry-forwards to offset future taxable income; our ability to deduct all or a portion of the interest payments on the notes for U.S. federal income tax purposes; our ability to service our debt; product liability claims and other litigation to which we may be subjected; product recalls and defects; timing and results of clinical studies; our ability to obtain and protect our intellectual property and proprietary rights; infringement and ownership of intellectual property; our ability to remain accredited with the American Association of Tissue Banks; influence by our management; our ability to pay dividends; our ability to issue preferred stock; and other factors.

Additional risk factors are listed in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors.” You should carefully consider the trends, risks and uncertainties described in this document, the Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Investor Contact
Rich Cockrell 

Company Contact 
Xtant Medical 
Molly Mason

DJO Global Announces Date for Release of Third Quarter 2016 Results

October 31, 2016

SAN DIEGO–(BUSINESS WIRE)–DJO Global, Inc., a leading global provider of medical technologies designed to get and keep people moving, today announced the following information for the release of its third quarter 2016 financial results and a conference call to discuss those results.

Date: Tuesday, November 8, 2016

Time: Financial Results: 7:35 AM Eastern Time | Conference Call: 1:00 PM Eastern Time; 10:00 AM Pacific Time

Dial In: 866-394-8509 (International callers please use 706-643-6833) and use reservation code: 22322226. Please dial in 5 to 10 minutes prior to scheduled start time.

Replay: 855-859-2056 for all callers. Enter reservation code: 22322226. Replay ends 48 hours after call.

Live Internet:, accessed through the Investor Relations page of the Company’s website. The webcast will be archived after the completion of the call.

About DJO Global

DJO Global is a leading global provider of medical technologies designed to get and keep people moving. The Company’s products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Its products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. In addition, many of the Company’s medical devices and related accessories are used by athletes and patients for injury prevention and at-home physical therapy treatment. The Company’s product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. The Company’s surgical division offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Global’s products are marketed under a portfolio of brands including Aircast®, Chattanooga, CMF™, Compex®, DonJoy®, ProCare®, DJO® Surgical, Dr. Comfort®, Bell-Horn® and Exos™. For additional information on the Company, please visit


DJO Investor/Media Contact:
DJO Global, Inc.
Matt Simons
SVP Business Development and Investor Relations

Orthofix International Reports Third Quarter 2016 Financial Results

October 31, 2016

LEWISVILLE, Texas–(BUSINESS WIRE)–Orthofix International N.V. (NASDAQ:OFIX) today reported its financial results for the third quarter ended September 30, 2016. For the third quarter of 2016, net sales were $98.5 million, earnings per share from continuing operations was $0.56 and adjusted earnings per share from continuing operations was $0.36.

“While we underperformed on the top-line during the quarter, primarily in our Spine Fixation business, I am very happy about where the company is today. We now have a solid infrastructure in place, a dominant position in the bone growth stimulation market, a strong balance sheet, improving free cash flow, and double-digit ROIC,” said President and Chief Executive Officer Brad Mason. “Although highly competitive, our markets remain very healthy, and we have plans in place to reinvigorate our top-line growth going forward.”

Third Quarter Financial Results

The following table provides net sales, net sales change and constant currency net sales change by strategic business unit (“SBU”) for the three months ended September 30, 2016 and 2015:

Three Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands) 2016 2015 Change Constant



BioStim $ 42,956 $ 41,559 3.4 % 3.4 %
Biologics 14,335 14,639 (2.1 %) (2.1 %)
Extremity Fixation 24,314 24,694 (1.5 %) 0.0 %
Spine Fixation 16,892 20,259 (16.6 %) (16.7 %)
Total net sales $ 98,497 $ 101,151 (2.6 %) (2.3 %)

The growth in the BioStim SBU in the period was primarily driven by increased order counts from an expanding customer base and procedure volumes. The decrease in the Biologics SBU was due to underperformance in our largest of three sales regions, which has now been restructured, in addition to an increasing number of competitors in the stem cell allograft market and an associated reduction in average sales price. Trinity allograft tissue volumes and net sales increased slightly over prior year in the U.S. The decrease in the Extremity Fixation SBU was largely due to the negative impact of foreign currency translation. Excluding this impact, net sales were consistent with the prior year and up 5.4% on a trailing twelve month basis. The decrease in net sales in the Spine Fixation SBU was primarily due to the timing of international cash collections, the loss of several key surgeons early in the year in the U.S. and the exclusion from a large national hospital account in the second quarter.

Gross profit increased $1.3 million to $78.6 million. Gross margin increased to 79.8% as compared to 76.4% in the prior year period.

Sales and marketing expenses decreased primarily due to bad debt expense recorded for Puerto Rico in the third quarter of 2015 and a reduction of certain indirect tax liabilities in the current quarter.

Net margin (gross profit less sales and marketing expenses) was $36.9 million, an increase of 18.4% compared to $31.2 million in the prior year period.

General and administrative expenses decreased primarily due to a commercial litigation settlement whereby the Company will receive a $3.0 million cash payment and a decrease in other professional fees and consulting costs of $1.9 million, offset by an increase in share-based compensation expense of $5.8 million, which included $4.8 million in expense associated with the Company’s performance-based vesting restricted stock.

Charges related to U.S. Government resolutions were incurred during the quarter of $1.5 million relating to our ongoing settlement discussions with the SEC as further discussed in our Form 10-Q for the third quarter ended September 30, 2016.

Operating income was $9.3 million compared to operating income of $4.1 million in the prior year period.

Net income from continuing operations was $10.4 million, or $0.56 per share, compared to net loss of $0.8 million, or ($0.04) per share in the prior year period.

Adjusted net income from continuing operations was $6.6 million, or $0.36 per share, compared to adjusted net income of $5.3 million, or $0.28 per share in the prior year period.

EBITDA increased to $14.1 million, compared to $7.6 million in the prior year period. Adjusted EBITDA increased to $23.5 million or 23.9% of net sales for the third quarter, compared to $15.9 million or 15.7% of net sales in the prior year period.

As of September 30, 2016, cash and cash equivalents were $46.8 million compared to $63.7 million as of December 31, 2015. This change was primarily driven by share repurchases, partially offset by an increase in operating cash flows. As of September 30, 2016 the Company had no outstanding indebtedness and borrowing capacity of $125 million.

Share Repurchase Plan

As previously announced, the Company initiated a share repurchase plan in the fourth quarter of 2015 of up to $75 million of the Company’s common stock through the end of September 2017. As of September 30, 2016, the Company had repurchased a cumulative total of approximately 1,627,000 shares of common stock for $66.6 million under this plan, of which approximately 253,000 shares of common stock were repurchased for $11.1 million in the third quarter of 2016. From October 1, 2016, to October 28, 2016, the Company has made additional repurchases of 211,671 shares for an amount equal to $8.4 million to complete the share repurchase plan.

Fiscal 2016 Outlook

For the fiscal year ending December 31, 2016, the Company expects the following results, assuming exchange rates are the same as those currently prevailing.

Previous 2016 Outlook Current 2016 Outlook
(Unaudited, U.S. Dollars, in millions, except per share data) Low High Low High
Net sales $ 412.0 $ 416.0 $ 404.0


$ 408.0


GAAP Net income from continuing operations $ 8.9 $ 12.7 $ 12.2


$ 15.7


Adjusted EBITDA $ 69.0 $ 72.0 $ 76.0


$ 79.0


GAAP EPS from continuing operations $ 0.48 $ 0.68 $ 0.65


$ 0.85


Adjusted EPS from continuing operations $ 1.35 $ 1.45 $ 1.35


$ 1.45


1 Represents a year-over-year increase of 1.9% to 2.9% on a reported basis.

2 Represents a year-over-year increase of approximately $14.5 million to $18.0 million on a reported basis.
3 Represents a year-over-year increase of 25.2% to 30.2%.
4 Represents a year-over-year increase of approximately $0.77 to $0.97 per share.

5 Represents a year-over-year increase of 28.6% and 38.1%.

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company’s financial results for the third quarter of 2016. Interested parties may access the conference call by dialing (888) 576-4398 in the U.S. and (719) 457-2601 outside the U.S., and referencing the conference ID 9383336. A replay of the call will be available for two weeks by dialing (888) 203-1112 in the U.S. and (719) 457-0820 outside the U.S., and entering the conference ID 9383336. A webcast of the conference call may be accessed by going to the Company’s website at, by clicking on the Investors link and then the Events and Presentations page.

About Orthofix

Orthofix International N.V. is a diversified, global medical device company focused on improving patients’ lives by providing superior reconstructive and regenerative orthopedic and spine solutions to physicians worldwide. Headquartered in Lewisville, Texas, the Company has four strategic business units that include BioStim, Biologics, Extremity Fixation and Spine Fixation. Orthofix products are widely distributed via the Company’s sales representatives, distributors and its subsidiaries. In addition, Orthofix is collaborating on research and development activities with leading clinical organizations such as the Musculoskeletal Transplant Foundation and the Texas Scottish Rite Hospital for Children. For more information, please visit

Forward-Looking Statements

This communication contains certain forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may include, but are not limited to, statements concerning the projections, financial condition, results of operations and businesses of Orthofix and its subsidiaries, are based on management’s current expectations and estimates and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements.

The forward-looking statements in this release do not constitute guarantees or promises of future performance. Factors that could cause or contribute to such differences may include, but are not limited to, risks relating to: the expected sales of our products, including recently launched products; the continuation of our ongoing share repurchase program; our ongoing settlement discussions with the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) related to investigations that arose out of our prior accounting review and restatements of financial statements and our review of allegations of improper payments involving our Brazil-based subsidiary; the geographic concentration of certain of our sales and accounts receivable in countries or territories that are facing severe fiscal challenges; unanticipated expenditures; changing relationships with customers, suppliers, strategic partners and lenders; changes to and the interpretation of governmental regulations; the resolution of pending litigation matters (including our indemnification obligations with respect to certain product liability claims against our former sports medicine global business unit); our ongoing compliance obligations under a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (and related terms of probation); risks relating to the protection of intellectual property; changes to the reimbursement policies of third parties; the impact of competitive products; changes to the competitive environment; the acceptance of new products in the market; conditions of the orthopedic and spine industry; credit markets and the global economy; corporate development and market development activities, including acquisitions or divestitures; unexpected costs or operating unit performance related to recent acquisitions; and other risks described in the “Risk Factors” section of our 2015 Annual Report on Form 10-K, as well as in other reports that we file in the future. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information contained in this press release.

Condensed Consolidated Statements of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited, U.S. Dollars, in thousands, except share and per share data) 2016 2015 2016 2015
Product sales $ 84,997 $ 87,761 $ 261,490 $ 251,461
Marketing service fees 13,500 13,390 39,761 40,406
Net sales 98,497 101,151 301,251 291,867
Cost of sales 19,880 23,865 64,533 65,114
Gross profit 78,617 77,286 236,718 226,753
Operating expenses
Sales and marketing 41,717 46,129 132,582 133,360
General and administrative 18,581 19,348 53,341 63,423
Research and development 6,858 6,523 21,294 18,819
Restatements and related costs 691 1,147 1,481 9,276
Charges related to U.S. Government resolutions 1,499 14,369
69,346 73,147 223,067 224,878
Operating income 9,271 4,139 13,651 1,875
Other income and expense
Interest income (expense), net 471 (125 ) 320 (323 )
Other income (expense), net (634 ) (1,736 ) 1,346 (192 )
(163 ) (1,861 ) 1,666 (515 )
Income before income taxes 9,108 2,278 15,317 1,360
Income tax benefit (expense) 1,276 (3,066 ) (6,703 ) (5,808 )
Net income (loss) from continuing operations 10,384 (788 ) 8,614 (4,448 )
Discontinued operations
Loss from discontinued operations (1,018 ) (804 ) (3,580 ) (2,315 )
Income tax benefit 530 221 1,258 585
Net loss from discontinued operations (488 ) (583 ) (2,322 ) (1,730 )
Net income (loss) $ 9,896 $ (1,371 ) $ 6,292 $ (6,178 )
Net income (loss) per common share—basic:
Net income (loss) from continuing operations $ 0.57 $ (0.04 ) $ 0.47 $ (0.24 )
Net loss from discontinued operations (0.02 ) (0.03 ) (0.13 ) (0.09 )
Net income (loss) per common share—basic $ 0.55 $ (0.07 ) $ 0.34 $ (0.33 )
Net income (loss) per common share—diluted:
Net income (loss) from continuing operations $ 0.56 $ (0.04 ) $ 0.46 $ (0.24 )
Net loss from discontinued operations (0.02 ) (0.03 ) (0.12 ) (0.09 )
Net income (loss) per common share—diluted $ 0.54 $ (0.07 ) $ 0.34 $ (0.33 )
Weighted average number of common shares:
Basic 18,091,650 18,855,533 18,238,533 18,785,696
Diluted 18,382,118 18,855,533 18,569,861 18,785,696
Condensed Consolidated Balance Sheets
September 30, December 31,
(U.S. Dollars, in thousands except share data) 2016 2015
Current assets:
Cash and cash equivalents $ 46,824 $ 63,663

Trade accounts receivable, less allowance for doubtful accounts of $8,840 and $8,923 at September 30, 2016 and December 31, 2015, respectively

52,893 59,839
Inventories 65,013 57,563
Prepaid expenses and other current assets 20,519 31,187
Total current assets 185,249 212,252
Property, plant and equipment, net 51,861 52,306
Patents and other intangible assets, net 8,020 5,302
Goodwill 53,565 53,565
Deferred income taxes 56,222 57,306
Other long-term assets 21,136 19,491
Total assets $ 376,053 $ 400,222
Liabilities and shareholders’ equity
Current liabilities:
Trade accounts payable $ 14,375 $ 16,391
Other current liabilities 68,900 65,597
Total current liabilities 83,275 81,988
Other long-term liabilities 19,598 27,923
Total liabilities 102,873 109,911
Shareholders’ equity

Common shares $0.10 par value; 50,000,000 shares authorized; 18,036,712 and 18,659,696 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively

1,804 1,866
Additional paid-in capital 208,109 232,126
Retained earnings 67,415 62,551
Accumulated other comprehensive loss (4,148 ) (6,232 )
Total shareholders’ equity 273,180 290,311
Total liabilities and shareholders’ equity $ 376,053 $ 400,222


Selected Financial Data

Non-GAAP Financial Measures

The following tables in this press release present reconciliations of net income (loss) from continuing operations, earnings per diluted share from continuing operations, gross profit, and net cash provided by 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 from continuing operations,” “Adjusted diluted earnings per share from continuing operations,” “Net margin” and “Free cash flow” that exclude items specified in the tables. A more detailed explanation of the items excluded from these non-GAAP measures, as well as why management believes the non-GAAP measures are useful to them, is included following the reconciliations of non-GAAP financial measures below.

Adjusted EBITDA

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Unaudited, U.S. Dollars, in thousands) 2016 2015 2016 2015
Net income (loss) from continuing operations $ 10,384 $ (788 ) $ 8,614 $ (4,448 )
Interest expense (income), net (471 ) 125 (320 ) 323
Income tax (benefit) expense (1,276 ) 3,066 6,703 5,808
Depreciation and amortization 5,480 5,171 15,483 15,746
EBITDA $ 14,117 $ 7,574 $ 30,480 $ 17,429
Share-based compensation1 7,862 1,948 11,874 5,524
Foreign exchange impact 566 1,696 (1,434 ) 3,374
Strategic investments (62 ) 199 342 1,100
Restatements and related costs 691 1,147 1,481 9,276
Infrastructure investments 827 1,270 3,073 4,732
Legal judgments/settlements (3,000 ) (3,000 ) 1,066
Gain on sale of assets (3,100 )
Puerto Rico 2,024 2,024
Charges related to U.S. Government resolutions 1,499 14,369
Succession charges1 1,026 1,026
Adjusted EBITDA $ 23,526 $ 15,858 $ 58,211 $ 41,425
As a % of net sales 23.9 % 15.7 % 19.3 % 14.2 %

1 The Succession charges adjustment includes $0.3 million of accelerated share-based compensation expense as a result of the termination of a former executive officer. This amount is not included within the Share-based compensation adjustment for adjusted EBITDA.

Adjusted Net Income from Continuing Operations

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Unaudited, U.S. Dollars, in thousands) 2016 2015 2016 2015
Net income (loss) from continuing operations $ 10,384 $ (788 ) $ 8,614 $ (4,448 )
Income tax (benefit) expense as reported (1,276 ) 3,066 6,703 5,808
Income before income taxes from continuing operations 9,108 2,278 15,317 1,360
Foreign exchange impact 566 1,696 (1,434 ) 3,374
Strategic investments (62 ) 199 342 1,100
Restatements and related costs 691 1,147 1,481 9,276
Infrastructure investments 827 1,270 3,073 4,732
Legal judgments/settlements (3,000 ) (3,000 ) 1,066
Gain on sale of assets (3,100 )
Puerto Rico 2,024 2,024
Charges related to U.S. Government resolutions 1,499 14,369
Succession charges1 1,026 1,026
Adjusted net income from continuing operations before income taxes 10,655 8,614 31,174 19,832
Income tax expense at 38% (4,049 ) (3,273 ) (11,846 ) (7,536 )
Adjusted net income from continuing operations $ 6,606 $ 5,341 $ 19,328 $ 12,296

Adjusted Earnings per Diluted Share from Continuing Operations

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Unaudited, per diluted share) 2016 2015 2016 2015
EPS from continuing operations $ 0.56 $ (0.04 ) $ 0.46 $ (0.24 )
Income tax (benefit) expense as reported (0.07 ) 0.16 0.36 0.31
EPS before income taxes from continuing operations 0.49 0.12 0.82 0.07
Foreign exchange impact 0.03 0.09 (0.08 ) 0.18
Strategic investments 0.01 0.02 0.06
Restatements and related costs 0.04 0.05 0.08 0.48
Infrastructure investments 0.04 0.07 0.17 0.25
Legal judgments/settlements (0.16 ) (0.16 ) 0.06
Gain on sale of assets (0.16 )
Puerto Rico 0.11 0.11
Charges related to U.S. Government resolutions 0.08 0.77
Succession charges1 0.06 0.06
Adjusted EPS from continuing operations before income taxes 0.58 0.45 1.68 1.05
Income tax expense at 38% (0.22 ) (0.17 ) (0.64 ) (0.40 )
Adjusted EPS from continuing operations $ 0.36 $ 0.28 $ 1.04 $ 0.65
Weighted average number of diluted common shares 18,382,118 19,059,965 18,569,861 18,997,093
1 The Succession charges adjustment includes $0.3 million of accelerated share-based compensation expense as a result of the termination of a former executive officer. This amount is not included within the Share-based compensation adjustment for adjusted EBITDA.

Net Margin

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Unaudited, U.S. Dollars, in thousands) 2016 2015 2016 2015
Gross profit $ 78,617 $ 77,286 $ 236,718 $ 226,753
Sales and marketing (41,717 ) (46,129 ) (132,582 ) (133,360 )
Total net margin $ 36,900 $ 31,157 $ 104,136 $ 93,393
BioStim $ 19,996 $ 16,834 $ 54,980 $ 47,634
Biologics 6,821 6,296 19,642 19,525
Extremity Fixation 8,834 6,442 24,170 22,607
Spine Fixation 1,388 1,938 5,925 4,582
Corporate (139 ) (353 ) (581 ) (955 )
Total net margin $ 36,900 $ 31,157 $ 104,136 $ 93,393

Free Cash Flow

Nine Months Ended

September 30,

(Unaudited, U.S. Dollars, in thousands) 2016 2015
Net cash provided by operating activities $ 38,396 $ 26,539
Capital expenditures (14,261 ) (21,199 )
Free cash flow $ 24,135 $ 5,340

Fiscal 2016 Outlook

Previous 2016 Outlook Current 2016 Outlook
(Unaudited, U.S. Dollars, in millions) Low High Low High
Net income from continuing operations $ 8.9 $ 12.7 $ 12.2 $ 15.7
Interest (income) expense, net 0.3 0.2 (0.5 ) (0.4 )
Income tax expense 13.0 15.2 11.7 12.3
Depreciation and amortization 20.5 20.0 20.5 20.0
EBITDA $ 42.7 $ 48.1 $ 43.9 $ 47.6
Share-based compensation1 8.4 8.4 15.4 15.1
Foreign exchange impact (2.0 ) (2.0 ) (1.4 ) (1.4 )
Strategic investments 0.5 0.4 0.5 0.4
Restatements and related costs 1.3 0.8 1.5 1.5
Infrastructure investments 2.8 2.5 3.7 3.4
Legal judgments/settlements (3.0 ) (3.0 )
Charges related to U.S. Government resolutions 14.4 12.9 14.4 14.4
Succession charges1 0.9 0.9 1.0 1.0
Adjusted EBITDA $ 69.0 $ 72.0 $ 76.0 $ 79.0

1 The Succession charges adjustment includes $0.3 million of accelerated share-based compensation expense as a result of the termination of a former executive officer. This amount is not included within the Share-based compensation adjustment for adjusted EBITDA.

Previous 2016 Outlook Current 2016 Outlook
(Unaudited, per diluted share) Low High Low High
EPS from continuing operations $ 0.48 $ 0.68 $ 0.65 $ 0.85
Income tax expense as forecasted 0.70 0.82 0.63 0.66
Foreign exchange impact (0.11 ) (0.11 ) (0.08 ) (0.08 )
Strategic investments 0.03 0.02 0.03 0.02
Restatements and related costs 0.07 0.04 0.08 0.08
Infrastructure investments 0.15 0.14 0.20 0.18
Legal judgments/settlements (0.16 ) (0.16 )
Charges related to U.S. Government resolutions 0.77 0.70 0.78 0.78
Succession charges1 0.05 0.05 0.05 0.05
Income tax expense at 38% (0.79 ) (0.89 ) (0.83 ) (0.93 )
Adjusted EPS from continuing operations $ 1.35 $ 1.45 $ 1.35 $ 1.45
Weighted average number of diluted common shares 18,700,000 18,500,000 18,500,000 18,500,000
1 The Succession charges adjustment includes $0.3 million of accelerated share-based compensation expense as a result of the termination of a former executive officer. This amount is not included within the Share-based compensation adjustment for adjusted EBITDA.

Reconciling Items for Adjusted EBITDA, Adjusted Net Income from Continuing Operations and Adjusted Earnings per Diluted Share from Continuing Operations

  • Share-based compensation – costs related to the Company’s share-based compensation plans, which include stock options, restricted stock awards, performance-based restricted stock awards and the Company’s stock purchase plan
  • Foreign exchange impact – gains and losses related to foreign currency transactions; guidance presented does not include the impact of any future foreign exchange fluctuations and may be adjusted based on future foreign exchange fluctuations
  • Strategic investments – costs related to the Company’s strategic investments, including our investment in eNeura, Inc.
  • Restatements and related costs – legal, accounting, and other professional costs related to the Company’s accounting review and restatements through March 2015 and legal fees associated with the ongoing SEC Investigation and Securities Class Action Complaint and Brazil subsidiary compliance review
  • Infrastructure investments – costs associated with our multi-year process and systems improvement effort, “Bluecore”
  • Legal judgments/settlements – adverse or favorable legal judgments or negotiated legal settlements
  • Gain on sale of assets – gain on the sale of the Company’s Tempus Cervical Plate product line
  • Puerto Rico – bad debt expense in response to the recent fiscal and economic difficulties experienced by the Puerto Rico Commonwealth
  • Charges related to U.S. Government resolutions – charges for potential payments related to ongoing settlement discussions with the Division of Enforcement of the SEC as further discussed in our Form 10-Q for the third quarter ended September 30, 2016
  • Succession charges – costs related to the succession of certain of the Company’s former named executive officers

Net Margin

Net margin is a non-GAAP financial measure, which is calculated by subtracting sales and marketing from gross profit. Net margin is the primary metric used by the Company’s Chief Operating Decision Maker in managing the Company.

Free Cash Flow

Free cash flow is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operating activities. Free cash flow is an important indicator of how much cash is generated or used by our normal business operations, including capital expenditures. Management uses free cash flow as a measure of progress on its capital efficiency and cash flow initiatives.

Constant Currency

Constant currency measures actual performance using foreign currency rates from the comparable, prior-year period, to present actuals at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to compare revenues without the impact of changes in foreign currencies. When disclosed, constant currency measures are presented with the applicable GAAP measure for comparability.

Effective Tax Rate Used in Adjusted Net Income from Continuing Operations and Adjusted Earnings per Diluted Share from Continuing Operations

The Company believes using a 38% effective tax rate is meaningful given it reflects management’s expectation of its long-term normalized tax rate, which is based on current tax law and current expected income. The Company’s actual income tax expense will ultimately be based on its GAAP performance and may differ from the 38% rate used in the financial measures due to a variety of factors, including the jurisdictions in which profits are determined to be earned and taxed, the resolution of issues arising from tax audits with various tax authorities, and the ability to realize deferred tax assets.

Management use of, and economic substance behind, Non-GAAP Financial Measures

Management uses non-GAAP measures to evaluate performance period-over-period, to analyze the underlying trends in the Company’s business, to assess its performance relative to its competitors and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP measures as the basis for assessing the ability of the underlying operations to generate cash. In addition, management uses these non-GAAP measures to further its understanding of the performance of the Company’s business units.

Material Limitations Associated with the Use of Non-GAAP Measures

The non-GAAP measures used in this press release may have limitations as analytical tools, and should not be considered in isolation or as a replacement for GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are that they exclude items that reflect an economic cost to the Company and can have a material effect on cash flows. Similarly, certain non-cash expenses such as equity compensation expense does not directly impact cash flows, but is part of total compensation costs accounted for under GAAP.

Compensation for Limitations Associated with Use of Non-GAAP Measures

Orthofix compensates for the limitations of its non-GAAP financial measures by relying upon its GAAP results to gain a complete picture of the Company’s performance. The GAAP results provide the ability to understand the Company’s performance based on a defined set of criteria. The non-GAAP measures reflect the underlying operating results of the Company’s businesses, which management believes is an important measure of the Company’s overall performance. The Company provides a detailed reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures, and encourages investors to review this reconciliation.

Usefulness of Non-GAAP Measures to Investors

Orthofix believes that providing non-GAAP measures that exclude certain items provides investors with greater transparency to the information used by the Company’s senior management in its financial and operational decision-making. Management believes it is important to provide investors with the same non-GAAP metrics it uses to supplement information regarding the performance and underlying trends of Orthofix’s business operations in order to facilitate comparisons to its historical operating results and internally evaluate the effectiveness of the Company’s operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of Orthofix’s underlying operating performance with other companies in its industry that also supplement their GAAP results with non-GAAP financial measures.


Orthofix International N.V.
Mark Quick, 214-937-2924

Exactech Q3 Revenue Up 7% to $59.9 Million. Net Income up 10% to $3.2 Million. Diluted EPS $0.22 vs. $0.20.

October 31, 2016

GAINESVILLE, Fla.–(BUSINESS WIRE)–Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint restoration products for hip, knee, extremity, spine and biologic materials, today announced revenue of $59.9 million for the third quarter of 2016, a 7% increase from $56.2 million in the third quarter of 2015. On a constant currency basis, revenue was up 6%. Net income increased 10% to $3.2 million, or $0.22 per diluted share, compared to $2.9 million, or $0.20 per diluted share, in the same quarter a year ago.

Third Quarter Segment Performance

The following are company revenue results, as well as adjusted revenue comparisons on a constant currency basis:

  • Extremity implant revenue increased 14% to $22.8 million, a 15% constant currency increase
  • Knee implant revenue increased 11% to $17.0 million, a 10% constant currency increase
  • Hip implant revenue increased 17% to $11.6 million, a 14% constant currency increase
  • Biologic and Spine revenue decreased 23% to $4.4 million, a 22% constant currency decrease
  • Other revenue decreased 21% to $4.2 million, a 22% constant currency decrease

Nine Months Highlights and Segment Performance

For the first nine months of 2016, revenue was $191.3 million, an increase of 7% over $179.1 million for the comparable period last year. On a constant currency basis, revenue for the first nine months of 2016 was also up 7%. Net income for the first nine months of 2016 increased 12% to $12.0 million, or $0.84 per diluted share compared to $10.7 million, or $0.75 per diluted share, for the first nine months of 2015. First nine month product revenues were as follows:

  • Extremity implant revenue increased 16% to $71.2 million, a 16% constant currency increase
  • Knee implant revenue increased 5% to $55.6 million, a 5% constant currency increase
  • Hip implant revenue increased 11% to $35.3 million, a 10% constant currency increase
  • Biologic and Spine revenue decreased 9% to $15.2 million, a 8% constant currency decrease
  • Other revenue decreased 14% to $14.1 million, a 14% constant currency decrease

Management Comment

Exactech CEO and President David Petty said, “We were very pleased with strong double digit growth in our Extremities, Knee and Hip businesses. The momentum in our Extremities segment is based on the continuing successful adoption of the Equinoxe shoulder system and notably with our highly competitive range of glenoid solutions. The Equinoxe Humeral Reconstruction Prosthesis launched earlier in the year also contributed positively to the good quarter. Success in developing our U.S. sales channels was helpful in all three major joint segments. We continued ramping up availability of the Alteon Monoblock Revision Hip stem, which supported 17% hip growth for the quarter. Similarly, our knee revision system contributed positively to 11% knee growth this quarter. In the fourth quarter and the first half of next year, we are moving from the pilot launch phase into a limited launch of the revision knee. This should be increasingly important to growth in coming quarters. We were disappointed with results in our smaller segments, attributable in part to pricing pressures and slower adoption of new products.

“Our new Vantage Total Ankle system achieved an important milestone during the third quarter with successful treatment of the first patient. The pilot launch phase starts in the fourth quarter and continues the first part of next year. During the third quarter we also recorded our first successful surgeries with the new ExactechGPS® total shoulder application and we expanded our computer-assisted surgery system with a revision total knee application. Adding these two applications to the ExactechGPS platform can facilitate commercial adoption of the system in 2017.

“Worldwide sales increased 7% to $191.3 million for the first nine months of 2016. U.S. sales were up 7% to $131.4 million compared with $123.3 million in the first nine months a year ago. International sales increased 7% to $59.9 million in the first nine months of 2016 and increased 7% on a constant currency basis. U.S. sales for the third quarter of 2016 were up 4% to $42.2 million compared with $40.7 million in the third quarter a year ago. International sales increased 14% to $17.7 million from $15.5 million in the third quarter of 2015 which reflected a 12% constant currency increase. U.S. sales represented 70% of total, sales and international sales represented 30% of total sales during the third quarter.”

Chief Financial Officer Jody Phillips said, “Gross margins decreased to 68.7% from 70.5% for the third quarter a year ago, primarily due to growth in our international distribution business and general pricing pressures. Total operating expenses for the quarter increased 4% to $36.6 million; however, as a percentage of sales, decreased to 61% for the third quarter of 2016. Sales and marketing expenses increased 5% to $21.7 million, due to expanding medical education programs and product launch expenses. General and administrative expenses remained flat at $5.2 million and research and development expenses decreased 3% to $5.1 million during the third quarter though we expect those expenses to increase going forward.”

Looking forward, Exactech updated its 2016 revenue guidance to $256-$258 million and its diluted full year EPS target to $1.15–$1.17. This translates to anticipated revenues of $64.7-$66.7 million and diluted EPS of $0.31-$0.33 for the fourth quarter ending December 31, 2016. The foregoing statements regarding targets for the quarter and full year are forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance.

The financial statements are below.

Conference Call

The company will hold a conference call with CEO David Petty and key members of the management team on Tuesday, November 1st at 9:00 a.m. Eastern Time. The call will cover Exactech’s third quarter 2016 results. Mr. Petty will open the conference call and a question-and-answer session will follow.

To participate in the call, dial 1-877-440-5803 any time after 8:50 a.m. Eastern on November 1st. International and local callers should dial 1-719-325-4765. A live webcast of the call will be available at or This call will be archived for approximately 90 days.

About Exactech

Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant devices, related surgical instruments and biologic materials and services to hospitals and physicians. The company manufactures many of its orthopaedic devices at its Gainesville facility. Exactech’s orthopaedic products are used in the restoration of bones and joints that have deteriorated as a result of injury or diseases such as arthritis. Exactech markets its products in the United States, in addition to more than 30 markets in Europe, Latin America, Asia and the Pacific. Additional information about Exactech, Inc. can be found at Copies of Exactech’s press releases, SEC filings, current price quotes and other valuable information for investors may be found at and

An investment profile on Exactech may be found at To receive future releases in e-mail alerts, sign up at

This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent the company’s expectations or beliefs concerning future events of the company’s financial performance. These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include the effect of competitive pricing, the company’s dependence on the ability of third party manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company’s products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.

Non-GAAP financial measures – Because we operate internationally, we present the percentage change in sales by reporting segment on a constant currency basis, which is a non-GAAP financial measure. We calculate this change on a constant currency basis by translating current period sales at the comparable average historical exchange rates for the same period in the prior year. We believe that presenting the percentage change in sales on a constant currency basis assists in the understanding of actual sales fluctuations by excluding the impact of foreign currency fluctuations.


(in thousands)
(unaudited) (audited)
September 30, December 31,
2016 2015
Cash and cash equivalents $ 12,613 $ 12,713
Trade receivables, net of allowances of $1,122 and $1,011 50,712 52,442
Prepaid expenses and other assets, net 3,615 2,552
Income taxes receivable 229 486
Inventories, current 77,566 71,429
Total current assets 144,735 139,622
Land 4,510 4,494
Machinery and equipment 39,968 37,008
Surgical instruments 134,426 123,533
Furniture and fixtures 4,665 4,655
Facilities 21,366 20,348
Projects in process 3,334 1,218
Total property and equipment 208,269 191,256
Accumulated depreciation (102,046 ) (96,713 )
Net property and equipment 106,223 94,543
Deferred financing and deposits, net 889 858
Deferred tax assets 1,204
Non-current inventory 12,341 8,995
Product licenses and designs, net 10,396 11,121
Patents and trademarks, net 1,228 1,426
Customer relationships, net 577 92
Goodwill 22,479 18,850
Total other assets 49,114 41,342
TOTAL ASSETS $ 300,072 $ 275,507
Accounts payable $ 14,111 $ 13,932
Income taxes payable 2,046 603
Accrued expenses 11,112 9,498
Other current liabilities 3,172 792
Total current liabilities 30,441 24,825
Deferred tax liabilities 213 443
Long-term debt, net of current portion 20,000 16,000
Other long-term liabilities 5,607 5,850
Total long-term liabilities 25,820 22,293
Total liabilities 56,261 47,118
Common stock 143 142
Additional paid-in capital 86,120 81,963
Treasury Stock (3,042 )
Accumulated other comprehensive loss, net of tax (9,633 ) (11,986 )
Retained earnings 170,223 158,270
Total shareholders’ equity 243,811 228,389


(in thousands, except per share amounts)
Three Month Periods Nine Month Periods
Ended September 30, Ended September 30,
2016 2015 2016 2015
NET SALES $ 59,919 $ 56,237 $ 191,341 $ 179,106
COST OF GOODS SOLD 18,772 16,597 59,408 54,573
Gross profit 41,147 39,640 131,933 124,533
Sales and marketing 21,684 20,587 68,838 63,901
General and administrative 5,186 5,180 16,740 16,803
Research and development 5,096 5,258 15,495 14,389
Depreciation and amortization 4,592 4,073 13,326 12,697
Total operating expenses 36,558 35,098 114,399 107,790
INCOME FROM OPERATIONS 4,589 4,542 17,534 16,743
Interest income 29 3 35 7
Other income (loss) 43 26 115 91
Interest expense (186 ) (283 ) (716 ) (860 )
Foreign currency exchange (loss) gain 73 (103 ) 665 (862 )
Total other income (expenses) (41 ) (357 ) 99 (1,624 )
INCOME BEFORE INCOME TAXES 4,548 4,185 17,633 15,119
PROVISION FOR INCOME TAXES 1,383 1,307 5,680 4,468
NET INCOME $ 3,165 $ 2,878 $ 11,953 $ 10,651
BASIC EARNINGS PER SHARE $ 0.22 $ 0.20 $ 0.85 $ 0.76
DILUTED EARNINGS PER SHARE $ 0.22 $ 0.20 $ 0.84 $ 0.75
SHARES – BASIC 14,123 14,058 14,108 13,996
SHARES – DILUTED 14,370 14,201 14,303 14,201


Exactech, Inc.
Investor contacts
Jody Phillips, 352-377-1140
Executive Vice President of Finance & Chief Financial Officer
Hawk Associates
Julie Marshall or Frank Hawkins, 305-451-1888
Media contact
Priscilla Bennett, 352-377-1140
Vice President, Corporate & Marketing Communication

DePuy Synthes Spine introduces new lower back implant that promotes fusion, restores function

October 31, 2016

Today DePuy Synthes Spine, Part of the Johnson & Johnson Family of Companies, launched the SYNFIX® Evolution System, a new implant for stand-alone Anterior Lumbar Interbody Fusion (ALIF). The SYNFIX Evolution System delivers biomechanical stability to promote fusion and restore function, coupled with instrumentation designed to optimize surgical workflow. The System offers a broad range of implant options to accommodate a variety of patient anatomies.

The use of stand-alone ALIF, in which the spine is accessed through the abdomen, is growing at a rate of three percent each year globally thanks to reduced complication rates compared to fusion surgery performed through the patient’s back. Multiple studies of SYNFIX® Implant technology show that it provides superior biomechanical stability compared to other stand-alone ALIF implants and equivalent biomechanical stability relative to lumbar fusion performed through the back.

“Biomechanical stability in an implant is paramount,” said Alexandre Rasouli, MD, Cedars-Sinai Medical Center. “It is the difference between a single stage surgery and a more involved multi-stage surgery that can increase complications and drive up costs.”

The SYNFIX Evolution System consists of a PEEK spacer coupled with a titanium zero-profile plate and four divergent locking screws, which create a wedge of bone that helps anchor the implant during the healing process. The range of implant options allows the surgeon to accommodate varying patient anatomies and restores spine balance. The SYNFIX Evolution System increases surgical efficiency by reducing the number of instruments and increasing screw insertion speed. The SYNFIX Evolution System design team engineered an innovative thread lock sleeve to capture the screw to the screwdriver, preventing the screw from becoming disengaged during surgery.

“DePuy Synthes has been a leader in providing solutions for stand-alone ALIF procedures for more than a decade, and we are committed to investing in this market to ensure we continue to meet the needs of our customers and patients,” said Dan Wildman, Platform Leader, DePuy Synthes Spine. “The launch of the SYNFIX Evolution System shows that we continue to respond to our customers by developing a product that is easy to use while helping improve operating room efficiency.”