Orthofix International ((OFIX)) has held its Q4 earnings call. Read on for the main highlights of the call.
Orthofix International’s recent earnings call conveyed a generally positive sentiment, highlighting the company’s robust financial performance in 2024. The call underscored record achievements across major segments, particularly in Spine and Orthopedics, despite facing challenges such as the discontinuation of the M6 product lines and foreign currency headwinds. The company’s strategic focus on profitable growth and innovation was emphasized as a key driver for future success.
Record Financial Performance
Orthofix reported record results for both the fourth quarter and the full year of 2024, surpassing its guidance with net sales reaching $215.7 million. This represents an impressive 8% year-over-year growth on a constant currency basis, showcasing the company’s strong financial health and operational efficiency.
Spine Segment Growth
The U.S. spinal fixation business experienced a remarkable 12% year-over-year growth. This was driven by significant advancements in the top six implant systems, thoracolumbar fixation, and interbody and cervical fusion, highlighting Orthofix’s leadership in the spine market.
Expansion of Bone Growth Therapy
Orthofix’s Bone Growth Therapy segment achieved record revenue, with a 9% growth in Q4. The company maintained its #1 market share position in Spine and drove a 10% growth in BGT Fracture, demonstrating its strong foothold in this innovative area.
Orthopedics Segment Achievements
The orthopedics business saw an 18% growth in Q4, with U.S. sales reaching a record 21% increase. This growth was led by successful products like TrueLok and Fitbone, underscoring the segment’s robust performance.
Innovation and Product Launches
Orthofix continued its commitment to innovation with several planned product launches for 2025, including the Reef L Lateral Lumbar Interbody and the TrueLok Elevate TBT system. These initiatives are expected to bolster the company’s market position and drive future growth.
Positive Cash Flow and Financial Health
The company generated $21 million in positive free cash flow in the second half of 2024 and secured a favorable new term loan, reflecting its strong financial health and ability to manage resources effectively.
Discontinuation of M6 Product Lines
Orthofix announced the discontinuation of the underperforming M6 artificial cervical and lumbar disc product lines, which posed a headwind to the company’s top-line growth. This strategic decision is aimed at refocusing resources on more profitable areas.
Foreign Currency Impact
The company anticipates a negative impact from foreign currency fluctuations, amounting to approximately $4 million or 50 basis points on a reported basis for the full year 2025. This presents a challenge that Orthofix is prepared to navigate.
Forward-Looking Guidance
Orthofix provided guidance for 2025, projecting net sales between $818 million and $826 million, reflecting a 6.5% year-over-year growth at the midpoint, excluding revenues from the discontinued M6 product lines. The company expects non-GAAP adjusted EBITDA between $82 million and $86 million, with an 180 basis point margin expansion at the midpoint compared to 2024. Orthofix aims to sustain positive free cash flow, driven by a strategic focus on profitable growth initiatives and new product launches.
In summary, Orthofix International’s earnings call painted a picture of a company performing strongly in 2024, with record achievements across its key segments. Despite challenges like the M6 product line discontinuation and foreign currency impacts, the company’s proactive strategies and focus on innovation position it well for continued success. The forward-looking guidance for 2025 further underscores Orthofix’s confidence in sustaining growth and enhancing its market presence.