Form 8-K - Current report

0000884624false00008846242024-11-072024-11-07

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 07, 2024

 

 

ORTHOFIX MEDICAL INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			0-19961	98-1340767
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
3451 Plano Parkway
Lewisville, Texas				75056
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: [phone]

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.10 par value per share		OFIX		Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02. Results of Operations and Financial Condition.

On November 7, 2024, Orthofix Medical Inc. (the “Company”) issued a press release announcing, among other things, its financial results for the third quarter ended September 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and attached hereto.

The information furnished in this Item 2.02, including the exhibit furnished herewith as Exhibit 99.1, will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or into another filing under the Exchange Act, unless that filing expressly incorporates by reference this Item 2.02 of this report.

Discussion of Non-GAAP Financial Measures

In addition to using standard measures of performance and liquidity that are recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP"), the Company uses additional financial measures excluding certain GAAP items ("non-GAAP measures"), such as:

Constant Currency

Constant currency is a non-GAAP measure, which the Company calculates by using foreign currency rates from the comparable, prior-year period, to present net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to analyze net sales without the impact of changes in foreign currency rates.

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 the Company's business operations, including capital expenditures. Management uses free cash flow to measure progress on its capital efficiency and cash flow initiatives.

Adjusted Gross Profit and Adjusted Gross Margin

Adjusted gross profit represents GAAP gross profit with adjustments to exclude the impact of the certain items recorded to cost of goods sold. Such potential adjustments are listed within the section below under the header "Non-GAAP Adjustments." Adjusted gross margin represents adjusted gross profit as a percentage of GAAP net sales.

Adjusted Net Income (Loss)

Adjusted net income (loss) represents GAAP net loss with adjustments to exclude the impact of certain items recorded in such GAAP net loss. Potential adjustments are listed within the sections below under the header "Non-GAAP Adjustments."

Adjusted Operating Expenses

Adjusted operating expenses represents GAAP expenses, such as sales and marketing expense, general and administrative expense, and research and development expense, with adjustments to exclude the impact of certain items recorded in such GAAP operating expenses. Potential adjustments are listed within the section below under the header "Non-GAAP Adjustments."

Adjusted Non-Operating Expenses

Adjusted non-operating expenses represents GAAP expenses, such as interest income (expense), net and other income (expense), net, with adjustments to exclude the impact of certain items recorded in such GAAP non-operating expenses. Potential adjustments are listed within the section below under the header "Non-GAAP Adjustments."

EBITDA

EBITDA is a non-GAAP financial measure, which the Company calculates by adding interest expense (income), net; income tax expense (benefit); and depreciation and amortization to net income (loss). EBITDA provides management with additional insight to the Company's results of operations. Adjusted EBITDA, which is the primary metric used by the Company's Chief Operating Decision Maker in managing the business, consists of EBITDA with adjustments to exclude certain items listed within the section below under the header "Non-GAAP Adjustments."

Non-GAAP Adjustments

The Company's non-GAAP financial measures provide management with additional insight to the Company's results of operations and reflect the exclusion of the following items:

•

Share-based compensation expense – Costs related to awards granted under the Company's share-based compensation plans, which include stock options, performance-based or market-based stock options, restricted stock units, performance-based or market-based restricted stock units, and stock issued under the Company's stock purchase plan; see the share-based compensation footnote in the Company's Form 10-Q for the quarter ended September 30, 2024, for an allocation of

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these costs by consolidated statement of operations line item. Management excludes this item when evaluating the Company's operating performance as it represents a non-cash expense.

•

Foreign exchange impact – Gains and losses related to foreign currency transactions, which are recorded as other income (expense), net. Management excludes this item when evaluating the Company's operating results as it is primarily a non-cash expense or benefit and is non-operating in nature.

•

SeaSpine merger-related costs – Costs related to the Company's merger with SeaSpine Holdings Corporation ("SeaSpine"), which was consummated in January 2023, including costs relating to integration efforts, severance and retention costs, product rationalization charges, contract termination penalties, and professional fees related to the merger. Management excludes this item when evaluating the Company's operating results as these costs associated with this event are of a temporary nature, are not related to the Company's core operating performance, and are not expected to recur at a similar frequency and magnitude in the future.

•

Strategic investments – Costs related to the Company's strategic investments, such as due diligence and integration costs (unrelated to the merger with SeaSpine), which are primarily recorded as general and administrative expenses. These costs are not factored into the evaluation of the Company's performance by management because they are of a temporary nature, not related to the Company's core operating performance, and because the frequency and amount of such costs vary significantly based on the timing and magnitude of the Company's strategic investments.

•

Acquisition-related fair value adjustments – Comprised of (i) gains and losses related to remeasurement of contingent consideration to fair value, which are recorded as operating expenses, (ii) recognized costs related to acquired in-process research and development ("IPR&D") assets, which are expensed immediately, and (iii) amortization of acquired inventory fair market value adjustments. Management excludes this item when evaluating the Company's operating results as the remeasurement of contingent consideration is primarily non-cash in nature, the frequency and amount of IPR&D charges can vary significantly based on the timing and magnitude of the Company's acquisition transactions, and inventory fair market value adjustments are of a temporary and non-cash nature.

•

Amortization/depreciation of acquired long-lived assets – Amortization of intangible assets acquired in business combinations or asset acquisitions, including items such as developed technologies, customer relationships, trade names, manufacturing agreements, and other intangible assets, and any impairment of acquired goodwill, which are recorded in cost of sales or operating expenses. This item also includes depreciation recognized on adjustments to the fair value of certain long-lived assets acquired in the merger with SeaSpine. Management excludes this item when evaluating the Company's operating performance as it represents a non-cash expense.

•

Interest and (Gain) Loss on investment securities – Interest income and net gains or losses recognized (realized or unrealized) within interest income (expense), net and other income (expense), net, respectively, relating to certain of our investments. Management excludes these items when evaluating the Company's operating performance as it typically represents a non-cash gain or loss and is not related to the Company's core operating performance.

•

Litigation and investigation costs – Inclusive of (i) adverse or favorable legal judgments or negotiated legal settlements and certain related legal expenses and (ii) amounts incurred in relation to and as a result of the Board of Directors’ investigation conducted by independent outside legal counsel that resulted in the departure of three former executive officers and certain charges stemming from these actions. These charges are primarily recorded within general and administrative expenses. Management excludes these items when evaluating the Company's operating results as these costs and/or benefits can vary significantly based on the timing, frequency, and magnitude of litigation matters.

•

Medical device regulation – Incremental costs incurred (i) to establish initial compliance with the regulations set forth by the European Union Medical Device Regulation (“MDR”) related to the Company's currently-approved medical devices, which are recorded primarily as research and development expenses, and (ii) related to rationalization of certain product lines that the Company does not expect to continue to market subsequent to the effective date of these regulations, which are recorded primarily as costs of sales. Management excludes this item when evaluating the Company's operating results as these costs are temporary in nature and associated with events that are not expected to recur at a similar frequency and magnitude in the future.

•

Succession charges – Costs related to the transition of certain named executive officers, including any cessation and onboarding amounts, consulting services, and other related expenses, which are primarily recorded as general and administrative expenses. Management excludes this item when evaluating the Company's operating results as these costs associated with events that are not expected to recur at a similar frequency and magnitude in the future.

•

Long-term income tax rate adjustment – Reflects management’s expectation of a long-term normalized effective tax rate of 28% for 2023 and 2024 results, which is based on current tax law and current expected adjusted income; actual reported tax expense will ultimately be based on GAAP earnings and may differ from the expected long-term normalized effective tax rate due to a variety of factors, including the resolutions of issues arising from tax audits with various tax authorities, the ability to realize deferred tax assets, and the tax impact of certain reconciling items that are excluded in determining Adjusted Net Income (Loss).

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Usefulness and Limitations of Non-GAAP Financial Measures

Management uses non-GAAP measures to evaluate performance period-over-period, analyze the underlying trends in the Company's business, assess the Company's performance relative to its competitors, and establish operational goals and forecasts used in allocating resources. Management uses these non-GAAP measures as the basis for evaluating the ability of the Company's underlying operations to generate cash, prior to required investments in working capital, and to further its understanding of the performance of the Company's business units.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

The non-GAAP financial measures described above 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 and can have a material effect on cash flows. Similarly, certain non-cash expenses, such as share-based compensation, do not directly impact cash flows, but are part of total compensation costs accounted for under GAAP.

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures

The Company compensates for the limitations of its non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company's performance. GAAP results provide management with the ability to understand the Company's performance based on a defined set of criteria. The Company provides reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and encourages investors to review these reconciliations.

Usefulness of Non-GAAP Financial Measures to Investors

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

Item 7.01 Regulation FD Disclosure.

The Company expects to use the corporate investor relations presentation furnished as Exhibit 99.2 to this report, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts, and others during the fiscal year ending December 31, 2024.

The information furnished in this Item 7.01, including the exhibit furnished herewith as Exhibit 99.2, will not be treated as “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. This information will not be deemed incorporated by reference into any filing under the Securities Act, or into another filing under the Exchange Act, unless that filing expressly incorporates by reference this Item 7.01 of this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

99.1	Press release, dated November 7, 2024
99.2	Earnings Call Presentation, dated November 7, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Orthofix Medical Inc.
By:		/s/ JULIE ANDREWS
		Julie Andrews Chief Financial Officer

 

 

Date: November 7, 2024

 

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Exhibit 99.1

News Release

Orthofix Reports Third Quarter 2024 Results, Reiterates Full-Year 2024 Financial Guidance, and

Introduces New Three-Year Financial Targets

Building on Positive Momentum from Compelling Combination of Profitable, Above-Market Growth with a Stronger Financial Profile

LEWISVILLE, Texas — November 7, 2024 — Orthofix Medical Inc. (NASDAQ:OFIX), a leading global medical technology company, today reported its financial results for the third quarter ended September 30, 2024, reiterated its full-year 2024 financial guidance, and introduced new three-year financial targets.

Recent Highlights

•

Third quarter 2024 net sales of $196.6 million, an increase of 7% on a reported and constant currency basis compared to third quarter 2023

•

U.S. Spine Fixation1 net sales growth of 18% compared to third quarter 2023, driven by distribution expansion and further penetration in existing accounts

•

Bone Growth Therapies (BGT) net sales growth of 9% and BGT Fracture net sales growth of 13% compared to third quarter 2023

•

U.S. Orthopedics delivered a record net sales quarter with net sales growth of 15% compared to third quarter of 2023

•

Company entered into record number of 7D FLASH™ Navigation System earnout agreements and matched record for highest number of 7D placements in any quarter to date

•

Third quarter 2024 net loss of $(27.4) million; Non-GAAP adjusted EBITDA of $19.2 million, an increase of $5.7 million, with adjusted EBITDA margin expanding approximately 250 basis points compared to third quarter 2023

•

Achieves free cash flow of $5.9 million in third quarter 2024, a significant improvement in cash usage compared to previous quarters

•

Announces new $275 million credit facility that replaces existing financing and further optimizes the Company's capital structure to support long-term profitable growth

•

Maintains full-year 2024 net sales guidance of $795 million to $800 million and full-year 2024 non-GAAP adjusted EBITDA guidance of $64 million to $69 million; continue to expect positive free cash flow for the second half of 2024

•

Introduces new 2027 financial targets to increase transparency and maximize value creation

Third quarter net sales were $196.6 million, an increase of 7% on a reported and constant currency basis. Net loss was $(27.4) million and earnings per share ("EPS") was $(0.71) on a reported basis, representing an improvement of 8% when compared to the prior year period. Non-GAAP adjusted EBITDA was $19.2 million for the third quarter, an increase of $5.7 million, representing adjusted EBITDA margin expansion of approximately 250 basis points over the prior year period.

“Our third quarter net sales results were driven by focused execution of our key growth priorities, and we also delivered strong adjusted EBITDA margin expansion and positive free cash flow, all of which we believe keeps us on a clear course to achieve our 2024 and long-term financial targets,” said Massimo Calafiore, President and Chief Executive Officer. “Highlights in the quarter included year-over-year revenue growth across each of our business segments where our performance once again was led by strength in our U.S. markets, including U.S. Spine Fixation, which grew 18%, and Bone Growth Therapies, which grew 9% overall and 13% in Fracture, further highlighting the benefit of cross-selling in our integrated spine channel. Notably, our U.S. Orthopedics business delivered a record net sales quarter and grew 15% year-over-year, benefiting from strong commercial execution. In addition to reiterating our full-year 2024 financial guidance, we are also introducing our new 2027 financial targets, which reflect our

1 Spine Fixation is comprised of the Company's Spinal Implants product category, excluding motion preservation product offerings

 

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confidence in sustainable growth trends, the strength of our differentiated and expanding product portfolio, which continues to win share, and our commercial strategy and execution. We are well-positioned to accelerate our positive momentum and deliver on our commitment to drive disciplined, profitable growth and innovation while increasing long-term shareholder value.”

Financial Results Overview

Third Quarter 2024 Net Sales and Financial Results

The following table provides net sales by major product category by reporting segment:

		Three Months Ended September 30,
(Unaudited, U.S. Dollars, in millions)		2024				2023				Change				Constant Currency Change
Bone Growth Therapies		$	57.9			$	53.4				8.6	%			8.6	%
Spinal Implants, Biologics and Enabling Technologies			108.2				101.0				7.1	%			7.1	%
Global Spine			166.1				154.4				7.6	%			7.6	%
Global Orthopedics			30.5				29.7				2.9	%			2.5	%
Net sales		$	196.6			$	184.0				6.8	%			6.8	%

Gross margins were 68.7% for the quarter and were 71.3% on a non-GAAP adjusted basis.

Net loss was $(27.4) million, or $(0.71) per share, compared to net loss of $(28.9) million, or $(0.77) per share in the prior year period. Non-GAAP adjusted EBITDA was $19.2 million, or 9.8% of net sales, compared to non-GAAP adjusted EBITDA of $13.5 million, or 7.3% of net sales, in the prior year period.

Liquidity

Cash, cash equivalents, and restricted cash on September 30, 2024, totaled $32.6 million compared to $28.9 million on June 30, 2024.

Orthofix Announces New Three-Year Financial Targets

The Company is providing new three-year financial targets for 2025 through 2027:

•

6% to 7% net sales CAGR from 2025 through 2027

•

Mid-teens non-GAAP adjusted EBITDA as a percent of net sales for the full-year 2027

•

Positive free cash flow generation from 2025 through 2027

Calafiore concluded, “With a compelling combination of profitable, above-market growth and a stronger financial profile, I believe our focused commercial strategy and broad, differentiated technologies, combined with a robust innovation pipeline and our pace-setting, enabling technologies position us well to achieve these targets and deliver increased value to our shareholders.”

Business Outlook

The Company is reiterating its 2024 full-year guidance as follows:

•

Net sales are expected to range between $795 million to $800 million, representing implied growth of 6.6% to 7.2% year-over year on a constant currency basis. These expectations are based on the current foreign currency exchange rates and do not take into account any additional potential exchange rate changes that may occur this year.

•

Non-GAAP adjusted EBITDA is expected to range from $64 million to $69 million.

•

The Company expects to continue to be free cash flow positive for the remainder of 2024.

These guidance ranges do not contemplate any potential impact to elective procedures as a result of IV fluid shortages or other hurricane-related effects.

An investor presentation for the Company's third quarter 2024 financial results, corporate strategy and new three-year financial targets is available in the "Investors" section of Orthofix's website at https://ir.orthofix.com/events-and-presentations.

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Conference Call

Orthofix will host a conference call today at 8:30 AM Eastern time to discuss the Company's financial results for the quarter ended September 30, 2024. Interested parties may access the conference call by dialing [phone] in the U.S., and [phone] in all other locations, and referencing the access code 9556380. A replay of the call will be available for three weeks by dialing [phone] in the U.S., and [phone] in all other locations, and entering the access code 9556380. A webcast of the conference call may be accessed at ir.Orthofix.com.

About Orthofix

Orthofix is a global medical technology company headquartered in Lewisville, Texas. By providing medical technologies that heal musculoskeletal pathologies, we deliver exceptional experiences and life-changing solutions to patients around the world. Orthofix offers a comprehensive portfolio of spinal hardware, bone growth therapies, specialized orthopedic solutions, biologics and enabling technologies, including the 7D FLASH™ navigation system. To learn more, visit Orthofix.com and follow on LinkedIn.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, intentions, plans, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. Forward-looking statements in this communication include the Company's expectations regarding net sales, adjusted EBITDA, and free cash flow for the year ended December 31, 2024, and its three-year financial targets for 2025 through 2027. Forward-looking statements are not guarantees of our future performance, are based on our current expectations and assumptions regarding our business, the economy and other future conditions, and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, including the risks described in Part I, Item 1A under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), and in Part II, Item 1A under the heading Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. Factors that could cause future results to differ from those expressed by forward-looking statements include, but are not limited to, (i) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities, (ii) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (iii) development and acceptance of new products or product enhancements, (iv) clinical and statistical verification of the benefits achieved via the use of our products, (v) our ability to adequately manage inventory, (vi) our ability to recruit and retain management and key personnel, (vii) our success in defending legal proceedings brought against us, and (viii) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the “SEC”). As a result of these various risks, our actual outcomes and results may differ materially from those expressed in these forward-looking statements.

Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise, except as required by law.

The Company is unable to provide expectations of GAAP income (loss) before income taxes, the closest comparable GAAP measures to adjusted EBITDA (which is a non-GAAP measure), on a forward-looking basis because the Company is unable to predict, without unreasonable efforts, the ultimate outcome of matters (including acquisition-related expenses, accounting fair value adjustments, and other such items) that will determine the quantitative amount of the items excluded in calculating adjusted EBITDA, which items are further described in the reconciliation tables and related descriptions below. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP.

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Company Contacts

Investor Relations

Julie Dewey, Chief Investor Relations and Communications Officer

[e-mail]

[phone]

Media Relations

Denise Landry, Vice President, Global Corporate Communications

[e-mail]

[phone]

 

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ORTHOFIX MEDICAL INC.

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)		2024				2023				2024				2023
Net sales		$	196,606			$	184,006			$	583,834			$	546,226
Cost of sales			61,553				64,243				186,790				196,583
Gross profit			135,053				119,763				397,044				349,643
Sales and marketing			96,576				94,947				296,843				287,987
General and administrative			33,561				27,136				99,203				110,124
Research and development			17,294				18,559				54,835				61,290
Acquisition-related amortization and remeasurement			6,521				3,570				19,305				11,037
Operating loss			(18,899	)			(24,449	)			(73,142	)			(120,795	)
Interest expense, net			(5,210	)			(1,576	)			(14,711	)			(4,131	)
Other expense, net			(2,528	)			(2,360	)			(6,312	)			(1,704	)
Loss before income taxes			(26,637	)			(28,385	)			(94,165	)			(126,630	)
Income tax expense			(751	)			(472	)			(2,686	)			(2,591	)
Net loss		$	(27,388	)		$	(28,857	)		$	(96,851	)		$	(129,221	)
Net loss per common share:
Basic		$	(0.71	)		$	(0.77	)		$	(2.55	)		$	(3.53	)
Diluted			(0.71	)			(0.77	)			(2.55	)			(3.53	)
Weighted average number of common shares (in millions):
Basic			38.5				37.2				37.9				36.6
Diluted			38.5				37.2				37.9				36.6

 

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ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets

 

(U.S. Dollars, in thousands, except par value data)		September 30, 2024				December 31, 2023
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	30,054			$	33,107
Restricted Cash			2,500				4,650
Accounts receivable, net of allowances of $7,878 and $7,130, respectively			124,845				128,098
Inventories			205,812				222,166
Prepaid expenses and other current assets			23,003				32,422
Total current assets			386,214				420,443
Property, plant, and equipment, net			146,685				159,060
Intangible assets, net			104,546				117,490
Goodwill			194,934				194,934
Other long-term assets			35,493				33,388
Total assets		$	867,872			$	925,315
Liabilities and shareholders’ equity
Current liabilities
Accounts payable		$	47,060			$	58,357
Current portion of long-term debt			6,250				1,250
Current portion of finance lease liability			743				708
Other current liabilities			107,845				104,908
Total current liabilities			161,898				165,223
Long-term debt			112,215				93,107
Long-term portion of finance lease liability			18,027				18,532
Other long-term liabilities			49,808				49,723
Total liabilities			341,948				326,585
Contingencies
Shareholders’ equity
Common shares $0.10 par value; 100,000 shares authorized;     38,209 and 37,165 issued and outstanding as of September 30,     2024, and December 31, 2023, respectively			3,821				3,717
Additional paid-in capital			770,000				746,450
Accumulated deficit			(246,995	)			(150,144	)
Accumulated other comprehensive loss			(902	)			(1,293	)
Total shareholders’ equity			525,924				598,730
Total liabilities and shareholders’ equity		$	867,872			$	925,315

 

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ORTHOFIX MEDICAL INC.
Non-GAAP Financial Measures

The following tables present reconciliations of various financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to various non-GAAP financial measures that exclude (or in the case of free cash flow, include) items specified in the tables. The GAAP measures shown in the tables below represent the most comparable GAAP measure to the applicable non-GAAP measure(s) shown in the table. For further information regarding the nature of these exclusions, why the Company believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this press release filed today with the SEC available on the SEC's website at www.sec.gov and on the “Investors” page of the Company’s website at www.orthofix.com.

Adjusted Gross Profit and Adjusted Gross Margin

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Gross profit		$	135,053			$	119,763			$	397,044			$	349,643
Share-based compensation expense			557				463				1,591				1,416
SeaSpine merger-related costs			1,161				2,161				5,579				6,647
Strategic investments			32				55				160				264
Acquisition-related fair value adjustments			3,047				7,922				9,141				29,007
Amortization/depreciation of acquired long-lived assets			313				280				840				824
Medical device regulation			—				6				—				676
Adjusted gross profit		$	140,163			$	130,650			$	414,355			$	388,477
Adjusted gross margin			71.3	%			71.0	%			71.0	%			71.1	%

Adjusted EBITDA

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Net loss		$	(27,388	)		$	(28,857	)		$	(96,851	)		$	(129,221	)
Income tax expense (benefit)			751				472				2,686				2,591
Interest expense, net			5,210				1,576				14,711				4,131
Depreciation and amortization			15,173				13,097				44,067				39,094
Share-based compensation expense			6,531				6,274				25,290				32,540
Foreign exchange impact			(1,176	)			1,909				1,263				1,057
SeaSpine merger-related costs			2,616				5,416				12,992				34,362
Strategic investments			39				484				470				1,454
Acquisition-related fair value adjustments			5,017				7,122				15,351				26,907
Interest and loss on investments			3,567				429				5,120				429
Litigation and investigation costs			8,335				3,851				10,318				5,611
Succession charges			505				(92	)			8,061				170
Medical device regulation			—				1,840				—				7,519
Adjusted EBITDA		$	19,180			$	13,521			$	43,478			$	26,644
Adjusted EBITDA as a percentage of net sales			9.8	%			7.3	%			7.4	%			4.9	%

 

7

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Adjusted Net Income

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Net loss		$	(27,388	)		$	(28,857	)		$	(96,851	)		$	(129,221	)
Share-based compensation expense			6,531				6,274				25,290				32,540
Foreign exchange impact			(1,176	)			1,909				1,263				1,057
SeaSpine merger-related costs			2,619				5,247				13,434				35,600
Strategic investments			69				525				566				1,631
Acquisition-related fair value adjustments			5,017				7,122				15,351				26,907
Amortization/depreciation of acquired long-lived assets			5,046				5,026				14,486				14,970
Litigation and investigation costs			8,335				3,851				10,318				5,611
Succession charges			505				(94	)			8,061				168
Medical device regulation			—				1,842				—				7,531
Interest and loss on investments			3,567				399				5,071				339
Long-term income tax rate adjustment			(335	)			(569	)			2,777				2,669
Adjusted net income (loss)		$	2,790			$	2,675			$	(234	)		$	(198	)

Cash Flow and Free Cash Flow

		Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023
Net cash from operating activities		$	2,060			$	(39,059	)
Net cash from investing activities			(26,445	)			(18,078	)
Net cash from financing activities			19,222				40,042
Effect of exchange rate changes on cash			(40	)			58
Net change in cash and cash equivalents		$	(5,203	)		$	(17,037	)

 

		Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023
Net cash from operating activities		$	2,060			$	(39,059	)
Capital expenditures			(26,345	)			(46,997	)
Free cash flow		$	(24,285	)		$	(86,056	)

Reconciliation of Non-GAAP Financial Measures to Reported Operating Expenses

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Sales and marketing expense, as reported		$	96,576			$	94,947			$	296,843			$	287,987
Reconciling items impacting sales and marketing:
Strategic investments			65				(1,680	)			(3,347	)			(5,201	)
Litigation and investigation costs			377				—				377				(857	)
Medical device regulation			—				(6	)			—				(11	)
Amortization/depreciation of acquired long-lived assets			(178	)			(178	)			(475	)			(475	)
Sales and marketing expense, as adjusted		$	96,840			$	93,083			$	293,398			$	281,443
Sales and marketing expense as a percentage of net sales, as adjusted			49.3	%			50.6	%			50.3	%			51.5	%

 

8

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		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
General and administrative expense, as reported		$	33,561			$	27,136			$	99,203			$	110,124
Reconciling items impacting general and administrative:
Strategic investments			(1,420	)			(1,522	)			(4,254	)			(21,514	)
Amortization/depreciation of acquired long-lived assets			(4	)			(201	)			(76	)			(537	)
Litigation and investigation costs			(8,712	)			(3,852	)			(10,695	)			(4,754	)
Succession charges			(505	)			93				(8,061	)			(169	)
General and administrative expense, as adjusted		$	22,920			$	21,654			$	76,117			$	83,150
General and administrative expense as a percentage of net sales, as adjusted			11.7	%			11.8	%			13.0	%			15.2	%

 

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Research and development expense, as reported		$	17,294			$	18,559			$	54,835			$	61,290
Reconciling items impacting research and development:
Strategic investments			(69	)			(356	)			(645	)			(2,730	)
Medical device regulation			—				(1,837	)			—				(6,854	)
Research and development expense, as adjusted		$	17,225			$	16,366			$	54,190			$	51,706
Research and development expense as a percentage of net sales, as adjusted			8.8	%			8.9	%			9.3	%			9.5	%

Reconciliation of Non-GAAP Financial Measures to Reported Non-Operating (Income) Expense

		Three Months Ended September 30,								Nine Months Ended September 30,
(Unaudited, U.S. Dollars, in thousands)		2024				2023				2024				2023
Non-operating expense		$	7,738			$	3,936			$	21,023			$	5,835
Reconciling items impacting non-operating expense:
Foreign exchange impact			1,176				(1,909	)			(1,263	)			(1,057	)
Strategic investments			—				—				—				(895	)
Interest and loss on investments			(3,566	)			(399	)			(5,070	)			(339	)
Non-operating expense, as adjusted		$	5,348			$	1,628			$	14,690			$	3,544
Non-operating expense as a percentage of net sales, as adjusted			2.7	%			0.9	%			2.5	%			0.6	%

Source

Orthofix Medical Inc.

 

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9

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Clear Course for Profitable Growth Investor Presentation November 7, 2024

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Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, intentions, plans, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential,” or “continue” or other comparable terminology. Forward-looking statements in this presentation include the Company's expectations regarding net sales, adjusted EBITDA, and free cash flow for the year ended December 31, 2024, and its three-year financial targets for 2025 through 2027. Forward-looking statements are not guarantees of our future performance, are based on our current expectations and assumptions regarding our business, the economy and other future conditions, and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, including the risks described in Part I, Item 1A under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), and in Part II, Item 1A under the heading Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. Factors that could cause future results to differ from those expressed by forward-looking statements include, but are not limited to, (i) our ability to maintain operations to support our customers and patients in the near-term and to capitalize on future growth opportunities, (ii) risks associated with acceptance of surgical products and procedures by surgeons and hospitals, (iii) development and acceptance of new products or product enhancements, (iv) clinical and statistical verification of the benefits achieved via the use of our products, (v) our ability to adequately manage inventory, (vi) our ability to recruit and retain management and key personnel, (vii) our success in defending legal proceedings brought against us, and (viii) the other risks and uncertainties more fully described in our periodic filings with the Securities and Exchange Commission (the “SEC”). As a result of these various risks, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. Further, any forward-looking statement speaks only as of the date hereof, unless it is specifically otherwise stated to be made as of a different date. We undertake no obligation to update, and expressly disclaim any duty to update, our forward-looking statements, whether as a result of circumstances or events that arise after the date hereof, new information, or otherwise, except as required by law. The Company is unable to provide expectations of GAAP income (loss) before income taxes, the closest comparable GAAP measures to adjusted EBITDA (which is a non-GAAP measure), on a forward-looking basis because the Company is unable to predict, without unreasonable efforts, the ultimate outcome of matters (including acquisition-related expenses, accounting fair value adjustments, and other such items) that will determine the quantitative amount of the items excluded in calculating adjusted EBITDA, which items are further described in the reconciliation tables and related descriptions below. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP.

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Non-GAAP Financial Measures Management uses certain non-GAAP financial measures in this presentation, most specifically Adjusted EBITDA, Adjusted Gross Margin, Adjusted Net Income and Free Cash Flow, as a supplement to GAAP financial measures to further evaluate the company’s operating performance period over period, analyze the underlying business trends, assess performance relative to competitors and establish operational objectives. ​ Management believes it is important to provide investors with the same non-GAAP metrics it uses to evaluate the performance and underlying trends of the company’s business operations to facilitate comparisons to its historical operating results and evaluate the effectiveness of its operating strategies. Disclosure of these non-GAAP financial measures also facilitates comparisons of the company’s underlying operating performance with other companies in the industry that also supplement their GAAP results with non-GAAP financial measures.​ Full-year guidance is based on the current foreign currency exchange rates and does not take into account any additional potential exchange rate changes that may occur this year or contemplate any potential impact to elective procedures as a result of IV fluid shortages or other hurricane-related effects. These non-GAAP financial measures should not be considered in isolation from, or as replacements for, the most directly comparable GAAP financial measures, as these measures are not prepared in accordance with U.S. GAAP.​ Reconciliations between GAAP and non‐GAAP results are included at the end of this presentation and represent the most comparable GAAP measure(s) to the applicable non-GAAP measure(s) shown in the table. For further information regarding the nature of these exclusions, why the Company believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this press release filed today with the SEC available on the SEC's website at www.sec.gov and on the “Investors” page of the Company’s website at www.orthofix.com. Amounts may not add due to rounding.​

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Key Themes Disciplined, Profitable Growth to Maximize Value Creation Building on a strong foundation as a leading global med tech company with a comprehensive portfolio of innovative spinal hardware, bone growth therapies, biologics, specialized orthopedic solutions, and an advanced surgical navigation system (7D FLASH) Driving meaningful and sustainable, above-market growth with broad, differentiated technologies, extensive commercial reach, and improving financial strength Delivering significant value to our shareholders, surgeons, and employees and setting new standards of innovation through our products and extensive solutions Executing a clear strategy for profitable growth led by a world-class management team Unveiling new 2027 financial targets to build on positive momentum, increase transparency, and maximize value creation 05 03 04 02 01

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Our third quarter net sales results were driven by focused execution of our key growth priorities, and we also delivered strong adjusted EBITDA margin expansion and positive free cash flow, all of which we believe keeps us on a clear course to achieve our 2024 and long-term financial targets. We are well-positioned to accelerate our positive momentum and deliver on our commitment to drive disciplined, profitable growth and innovation while increasing long-term shareholder value. “ Massimo Calafiore President & Chief Executive Officer ” 5 $19.2M Non-GAAP Adjusted EBITDA2 $5.7M YoY increase and ~250 bps expansion $5.9M Free Cash Flow2 Significant improvement in cash usage compared to previous quarters 18% U.S. Spine Fixation3 YoY Net Sales Growth Driven by distribution expansion and penetration in existing accounts 9% Bone Growth Therapies YoY Net Sales Growth 13% Growth in BGT Fracture  71.3% Non-GAAP Adjusted Gross Margin2 Compared to 71.0% for Q3 2023  $196.6M Net Sales 7% Growth YoY as reported and constant currency1 15% U.S. Orthopedics YoY Net Sales Growth U.S. Orthopedics delivered a record quarter, benefiting from strong execution 1 Constant Currency is calculated by applying foreign currency rates applicable to the comparable, prior-year period to present the current period net sales at comparable rates. Constant currency can be presented for numerous GAAP measures, but is commonly used by management to analyze net sales excluding the impact of changes in foreign currency rates. 2 The reasons for and nature of non-GAAP disclosures by the Company, descriptions of the adjustments used to calculate those non-GAAP financial measures, and reconciliations of those non-GAAP financial measures to the most comparable GAAP financial measure, are provided in the Company’s press release issued and Current Report on Form 8-K filed on November 7, 2024. 3 Spine fixation is comprised of the Company's Spinal Implants product category, excluding motion preservation product offerings. Q3 2024 Financial Highlights

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6 Strong Q3 driven by above-market growth where our performance once again was led by strength in our U.S. markets 01 Solid operational execution – On track to reach profitability objectives, including positive free cash flow for 2H 2024, much earlier than originally anticipated 02 Achieved $5.9M in free cash flow – Significant improvement in cash usage compared to previous quarters 03 Company entered into record number of 7D FLASH™ Navigation System earnout agreements and matched record for highest number of 7D placements in any quarter to date 04 New three-year financial targets building on positive momentum – Compelling combination of profitable, above-market growth with a stronger financial profile 05 Q3 2024 Key Messages

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Commitment to Disciplined, Profitable Growth to Deliver Life-Changing Solutions and Maximize Value Creation The New Orthofix

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Building on a Strong Foundation – Transformation Focused on Accelerating Excellence At an Inflection Point in Our Journey Focused on Strategic, Operational, and Financial Discipline RECENT ACCOMPLISHMENTS AND TRANSFORMATIVE ACTIONS Building on clear competitive advantages Delivering consistent execution – on track to reach profitability objectives, including positive free cash flow (FCF) for 2H24 Supporting profitable growth with disciplined capital deployment Continuing on track with SeaSpine integration and capturing synergies Driving a culture of execution and accountability through new, world-class management team CONTINUED LEADERSHIP FOCUS AREAS –MULTIPLE LEVERS FOR PROFITABLE GROWTH Innovation FocusContinued development of differentiated products to meet diverse surgeon preferences Commercial Strategy EnhancementDeeper market penetration through comprehensive portfolio offerings Technology LeadershipHarnessing advanced systems for improved surgical outcomes and efficiency Growth SustainabilityEmphasis on high-quality revenue streams and operational excellence Cash Flow ManagementStrategic financial planning to sustain positive FCF

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Reinvigorated and Aligned Around Our New Vision and Mission Vision The unrivaled partner in med tech, delivering exceptional experiences and life-changing solutions Mission We provide medical technologies that heal musculoskeletal pathologies. We enable our teams through opportunities for growth, ownership of responsibilities, and empowerment to execute. We do this for patients and the healthcare professionals who treat them. We collaborate with world-class surgeons and other partners to bring to market highly innovative, cost-effective, and user-friendly medical technologies through excellent customer service. We do this to improve people’s quality of life, and in doing so, create exceptional value for our customers, employees and stockholders.

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Orthofix Today Unrivaled Partner in Med Tech Delivering Exceptional Experiences and Life-Changing Solutions Key Stats TTM Net Sales2 by Business ~$784M Bone Growth Therapies Spinal Implants, Biologics, and Enabling Technologies Orthopedics ~16% Int’l HQLewisville, TX ~84% U.S. Founded 1980 Employees 1,600+ NASDAQ OFIX Office Manufacturing /Distribution 3rd-Party Logistics Global Presence TTM Net Sales2by Geography ~$647M Market-Cap1 ~$63.1M TTM Adjusted EBITDA2 ~71.3% TTM Adjusted Gross Margin2 ~$32.5M Cash, Cash Equivalents, and Restricted Cash2 Note: TTM = Trailing 12 Months. 1 11/1/2024. 2 As of September 30, 2024.

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Comprehensive Portfolio of Transformative Solutions Improved Clinical Efficiencies and Economic Value with 7D Enabling Technology EstablishedDistribution Channels and Extensive Global Commercial Reach Large Addressable Markets with High-Growth Opportunities Across Continuum of Care World-Class, Visionary Leadership Team with Deep Sector Expertise Expanding and Deepening Customer Relationships 11 Capitalizing on Clear Competitive Advantages

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Total Addressable Market 2025 – 2027 Expected Market Growth Rate Spinal Implants ~$10.1B ~3% – 4% Bone Growth Therapies ~$0.6B ~2% – 3% Biologics ~$2.1B ~2% – 3% Orthopedics ~$1.7B ~5% – 6% Enabling Technologies ~$0.4B ~10% – 12% Addressable Markets ~$15B within Full Continuum of Care Significant Runway Ahead for Further Above-Market Growth Well-Positioned for Favorable Macro Trends Aging Population Digital Healthcare AI and Machine Learning Enabling Technology Advancement Evolving Standards of Care

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Spinal Implants Executing Innovation and Taking Share Select Product Examples Market Overview Sales channel optimization for growth, cross-selling, and OPEX leverage Pull through from lateral, cervical, and 7D earnouts Best-in-class implants to improve patient outcomes Interbody Cervical Thoracolumbar Fixation NorthStar™ OCT Mariner™ Deformity WaveForm™ (3D Printed) Explorer™ (Expandable) Reef™ (IBDs) ~$10.1BTAM1 Thoracolumbar Fixation Significant share capture opportunity ~3% – 4% market growth rate (2025 – 2027) Interbody Significant share capture opportunity ~3% – 4% market growth rate (2025 – 2027) Cervical Significant share capture opportunity ~3% – 4% market growth rate (2025 – 2027) OFIX Growth Drivers Shoreline™ ACS Wayfinder™ Phoenix™ MIS Meridian™ 1 U.S. Total Addressable Market. Sources: iData Research Inc.; U.S. Market Report for Spinal Implants and VCF; SmartTrak US Spine Market Report; Internal OFIX estimates Supporting Clinicians and Patients through Continuous Innovation of Procedure Solutions Comprehensive, best-in-class spinal implants designed to work in concert with 7D Navigation and biologics to support improved clinical outcomes Focus on deformity correction and experts in cervical fixation and material science

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AccelStim™ SpinalStim™ PhysioStim™ CervicalStim™ Complex Foot & Ankle Reconstruction and Fracture Management Bone Growth Therapies Maximizing #1 Market Position Growing Above Market through Innovation and Expansion Safe, effective, non-surgical alternative to aid in bone healing of fracture management and high-risk spine fusions Most comprehensive portfolio of bone growth stimulation devices Most indications on the market to aid in bone healing solutions Select Product Examples #1 prescribed bone growth stimulator First to offer free recycling for patients to properly dispose their devices PEMF technology approved since 1986 Prescribed devices 1,100,000+ Spine Fusion Therapy Market Overview Procedural selling focused on cross-selling with orthopedics and spine New market channels with established sales representatives AccelStim growth to penetrate Fracture market ~$0.6BTAM1 Spine #1 Position ~2% – 3% market growth rate (2025 – 2027) Fracture #2 Position ~2% – 3% market growth rate (2025 – 2027) OFIX Growth Drivers Note: PEMF = Pulsed Electromagnetic Field. 1 U.S. Total Addressable Market.

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Biologics Growing from a Position of Strength Strategically Introducing New Products to Capture Additional Market Share Full spectrum of biologic solutions to enhance fusion process and promote bone repair and growth Provide industry leading, best-in-class products in each of the major bone grafting categories Select Product Examples Demineralized Bone Matrix OsteoSurge™ 300 OsteoStrand™ Plus Synthetic Procedure-Specific OsteoCove™ OsteoBallast™ Market Overview Opportunities in current portfolio and spine Product innovation with clinical research Disc regeneration, channel expansion options ~$2.1BTAM1 Synthetic Significant share capture opportunity ~2% – 3% market growth rate (2025 – 2027) Cellular Allograft #2 Position ~2% – 3% market growth rate (2025 – 2027) OFIX Growth Drivers Trinity Elite™ Cellular Allograft Growth Factors, Other Do not participate 1 Global Total Addressable Market, including Growth Factors. Demineralized Bone Matrix #2 Position ~2% – 3% market growth rate (2025 – 2027)

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Orthopedics Redefining Limb Reconstruction Proven Leader with Room to Grow through Innovation of Hardware and Digital Solutions Enabling Technologies - OrthoNext™ 1 Global Total Addressable Market. Select Product Examples Unique portfolio of limb reconstruction solutions, addressing the most challenging orthopedic conditions in patients of all ages Galaxy Gemini™ ComplexFracture Management Fitbone™ Limb Lengthening TL-HEX™ Extremity Deformity Correction G-Beam™ Limb Restoration Market Overview Accelerating U.S. growth and expanding position Global sales channel optimization through execution and focused distribution New product platforms with next-gen digital capabilities OFIX Growth Drivers ~$1.7BTAM1 Complex Fracture Management Significant share capture opportunity ~3% – 4% market growth rate (2025 – 2027) Limb Lengthening Significant share capture opportunity ~7% – 8% market growth rate (2025 – 2027) Extremity Deformity Correction & Limb Restoration Significant share capture opportunity ~5% – 6% market growth rate (2025 – 2027)

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Enabling Technologies Empowering Excellence with Real-Time, Integrated Smart Technologies Capturing Significant Opportunity to Leverage Technology and Expand Share in Spine FLASHTM Navigation with 7D Technology, world’s leading, zero-radiation1 spine image-guided surgery system Allows surgeons to perform fast, cost-effective, and radiation-free surgery Pacesetting leader for open spine procedures and deformity correction Open and Percutaneous Spine Modules2 Market Overview OFIX Growth Drivers 7D deployments through commercial financing structures and product pull through Product integration with spinal implant portfolio Digital ecosystem expansion (pre-op planning, intra-op navigation, and post-op care) ~$0.4BTAM3 Spinal Navigation Significant share capture opportunity ~10% – 12% market growth rate (2025 – 2027) FLASH™ Navigation with 7D Technology Product Example Significant Focus in Spine 1 Based on a pre-op CT or MRI, no intra-op radiation is required using Open Spine Module, eliminating exposure to surgeons, staff, and patients. Intra-op radiation is required for Percutaneous Module. 2 ~40% of U.S. installed base has cranial module. 3 Global Total Addressable Market.

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Significant Cross-Portfolio Commercial Opportunities Bone Growth Therapies (BGT) Combined portfolio with Biologics to target Trauma surgeons Combine with select Orthopedics product lines Expanding domestically through legacy SeaSpine distribution and orthopedics Expand internationally via Orthopedics Channels Biologics Expand cross-selling with U.S. Orthopedics channels Spine Maximize procedural selling opportunity with Biologics, 7D, and BGT Orthopedics Maximize procedural selling opportunity with Biologics, BGT, and Enabling Technologies Enabling Technologies (ET) Focus on 7D equipment placements to drive recurring implant usage Leverage investment and drive synergistic approach across the portfolio

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Uniquely Positioned to Accelerate Our Profitable Growth Engine Looking Forward

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Looking Forward – Accelerating Our Profitable Growth Engine Advancing Toward Our Goals for Consistent Above-Market Growth,Improved Profitability, and Positive Free Cash Flow Invest inDifferentiatedTechnologies in Areas Where We Can Win and Lead Innovation Capitalize on Multiple Access Points to Grow Business at Sustained, Above-Market Rates Operate with Discipline for Margin Expansion Improve Financial Strengthand Drive Strong, Positive Cash Flow

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Invest in Differentiated Technologies Innovation Driving Growth and Strengthening Leading Market Positions Systematic Approach to Driving Innovation Rigorous allocation of resources to high-return opportunities Leverage technologies (7D, Biologics, BGT) and sales channels (Spine, Orthopedics) across complementary product segments Build enabling technology ecosystem using next-gen data, navigation and connected products for pre-, intra-, and post-op solutions Exceptional expertise in intra-op surgical navigation creating accurate, efficient, and uninterrupted surgical workflow Continuum of musculoskeletal care integrated by Enabling Technologies Focal KPIs 1 Regular cadence of meaningful, high-impact new product launches 2 8% - 9% of salesinvested in R&D 3 Sustained sharecapture in U.S. Spine & U.S. Orthopedics

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Innovation Spotlight – FLASHTM Navigation with 7D Technology Technology Differentiates Portfolio While Enabling Service to Full Continuum of Surgical Care 97.8% reduction in intraoperative radiation during adult degenerative spinal fusions1* Revolutionizing Spinal Navigation Created Meaningful Advantages with FLASHTM Navigation with 7D Technology 61% reduction in intraoperative radiation during complex pediatric deformity spinal fusions2* 98.8% accurate with no pedicle breach1* 94% faster than intraoperative CT-based systems3* 63.6 minutes saved per case4* Flexible Selling Models to Meet Unique Needs of Facility First and only image guided surgery system featuring 7D’s machine-vision technology, allowing you to perform fast, cost-effective, radiation-free IGS Capital Purchase Lease “Earnout” through purchase of spine hardware and/or biologics; creating recurring revenue stream and stronger customer relationships Voyager Earnout Program *Not an Orthofix sponsored clinical study. 1 Malham GM, Munday NR. Comparison of novel machine vision spinal image guidance system with existing 3D fluoroscopy-based navigation system: a randomized prospective study. Spine J. 2022 Apr;22(4):561-569. doi: 10.1016/j.spinee.2021.10.002. Epub 2021 Oct 16. PMID: 34666179. 2 Comstock, Christopher P. MD; Wait, Eric MD. Novel Machine Vision Image Guidance System Significantly Reduces Procedural Time and Radiation Exposure Compared With 2-dimensional Fluoroscopy-based Guidance in Pediatric Deformity Surgery. Journal of Pediatric Orthopaedics ():10.1097/BPO.0000000000002377, March 6, 2023. | DOI: 10.1097/ BPO.0000000000002377 3 Jakubovic R, Guha D, Gupta S, et al. High speed, high density intraoperative 3D optical topographical imaging with efficient registration to MRI and CT for craniospinal surgical navigation. Sci Rep. 2018;8:14894. doi:10.1038/s41598-018-32424-z. 4 Lim KBL, Yeo ISX, Ng SWL, Pan WJ, Lee NKL. The machine-vision image guided surgery system reduces fluoroscopy time, ionizing radiation and intraoperative blood loss in posterior spinal fusion for scoliosis. Eur Spine J. 2023 Jul 10. doi: 10.1007/s00586-023-07848-5. Epub ahead of print. PMID: 37428212.Stewart G. Visible Light Navigation in Spine Surgery: My Experience With My First 150 Cases. Int J Spine Surg. 2022 Oct;16(S2):S28-S36. doi: 10.14444/8274. Epub 2022 Aug 5. PMID: 36456113; PMCID: PMC9808787.

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Capitalize on Multiple Access Points to Grow Business at Sustained, Above-Market Rates KeyBenefits Creates New Entry Points and Cross-Sell Opportunities Enables StickierSurgeon Relationships ✓ ✓ Current Access Points Spine BGT Adding to OFIX Accounts ✓ Spine Hardware 7D Selling into New Spine Accounts ✓ ✓ Adding Spine Hardware ✓ ✓ Adding Biologics ✓ ✓ ✓ Orthopedics Adding BGT ✓ ✓ ✓ Fracture BGT Adding Orthopedics ✓ Future Opportunities Adding 7D ✓ ✓

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Patient Case Study – Cross-Portfolio Continuum of Care Background When Olympic Gold Medalist Laura Wilkinson was training for her fourth Olympic Games, her quest was almost derailed by cervical disc degeneration OFIX Unique Solution Laura had successful anterior cervical discectomy and fusion surgery Used Orthofix cervical plate system in combination with Trinity ELITE™ allograft to aid in bone fusion Wore CervicalStim™ Device to stimulate bone growth during recovery Result / Outcomes Successful Orthofix cross-portfolio procedure Greater customer wallet share Stickier surgeon relationships In order to do things no one has ever done, you have to be willing to do things no one else is willing to do. – Laura Wilkinson

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On a Faster Path to Profitability with a Stronger Financial Profile Advancing Toward Our New 2027 Financial Goals

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Operate with Discipline for Margin Expansion Strong Infrastructure in Place to Further Scale ~$50M Estimated Cost Synergies1 Significant Working Capital & CAPEX Synergies Our Approach to Operational Excellence Building culture of excellence and accountability through implementation of the High Performance Management System (HPMS) Early in journey focusing on “Vital Few” initiatives to enhance operational excellence and drive business performance Key levers to drive higher margins and profitability across Company include: Rigorous allocation of resources to high-return opportunities Gross margin improvement Process improvements SPOTLIGHT – SeaSpine Merger Integrating and Capturing Synergies Commercial Benefit Portfolio Benefit + Significant cross-selling opportunities #1 prescribed bone growth simulator portfolio in the U.S. Broadest advanced DBM portfolio, market leading cellular allograft, and comprehensive line of synthetics Accelerated adoption of differentiated technologies Sustainable growth and value creation Strengthened U.S. and international sales channels Rapid product innovation driving market-share taking 1 Cost synergies of ~$50M expected by 3 years post-close of merger. Captured ~$40M of cost synergies as of Q3 2024.

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Improving Financial Strength and Driving Strong, Positive Free Cash Flow Strong Execution and Positive Momentum Towards Free Cash Flow Inflection Point Driving Positive Free Cash Flow Expect to be free cash flow positive for the 2nd half of 2024 and for full-year 2025 Drop-through to EBITDA of incremental revenue Working Capital improvements Efficient Working Capital Management Reduction in Inventory Days on Hand (DOH)and Instrument Efficiency Continued improvement in Days Sales Outstanding (DSO)

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Improving Financial Strength and Balance Sheet Flexibility Seeks to Further Optimize the Company’s Capital Structure to Support Long-Term, Profitable Growth 1 $65M at borrower’s option from 1/1/25 through 6/30/26; $50M at lender’s discretion through 1/1/29. Entered into New Agreement on 11/7/2024 ~$275M term loan ~$160M funded up front ~$115M available after 1/1/251 Improves Financial Strength Lower interest rate with better terms Extra capacity to bolster the Company’s access to capital Shores up liquidity Outcomes New Term Loan Established, Which Allows for Extra Capacity and Increased Flexibility Ran competitive process to replace existing term loan with goal to secure better terms and strengthen financial flexibility ✓ ✓

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Reiterating Full-Year 2024 Guidance1 $795M –$800M Net Sales $64M –$69M Adjusted EBITDA Positive Free Cash Flowfor 2H24 1 As of the Company’s Q3 2024 Earnings Call hosted on 11/7/24. Inclusion of this information in this presentation is not a confirmation or an update of, and should not be construed or otherwise assumed to reflect any confirmation or update of, that guidance by Orthofix leadership as of any date other than 11/7/2024. Net sales range represents 6.6% to 7.2% YoY growth. These expectations are based on the current foreign currency exchange rates and do not take into account any additional potential exchange rate changes that may occur this year or contemplate any potential impact to elective procedures as a result of IV fluid shortages or other hurricane-related effects.

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Strategy is Driving Long-Term Profitable Growth – Introducing Our 2027 Financial Goals GrowthEngine Pillars Assumptions 6% – 7% Net Sales CAGR (2025 – 2027) Mid-Teens Adj. EBITDA (Full-year 2027) Positive FCF Generation (2025 – 2027) Sustained market demand: weighted average market growth of ~4% – 5% Includes negative pricing impact of 1% to 2% No material change in reimbursement or regulatory environment ~300 bps of Gross Margin expansion over period Capture remaining merger synergies Fixed cost leverage, moderating expense growth Driven by continued Adj. EBITDA improvement Reduction in inventory DOH Improved instrument utilization DifferentiatedTechnologies Multiple Access Points MarginExpansion StrongCash Flow New 2027 Financial Targets Note: FCF = Free Cash Flow.

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World-Class Leadership Team with Extensive Med Tech Expertise – Focused on Results Combining Deep Institutional Knowledge with Fresh Perspectives and Proven Approaches Massimo Calafiore President and Chief Executive Officer Patrick Fisher President, Global Orthopedics Max Reinhardt President, Global Spine Julie Andrews Chief Financial Officer Year Joined: 2024 Years in Industry: 20+ Year Joined: 2024 Years in Industry: 25+ Year Joined: 2024 Years in Industry: 25+ Year Joined: 2024 Years in Industry: 25+ Jason Shallenberger President,Bone Growth Therapies Aviva McPherron President, Global Operations & Quality Lucas Vitale Chief People & Business Operations Officer Beau StandishPhD, PEng Chief EnablingTechnologies Officer Year Joined: 2005 Years in Industry: 20+ Year Joined: 2023 Years in Industry: 15+ Year Joined: 2024 Years in Industry: 10+ Year Joined: 2024 Years in Industry: 20+ Andrés Cedrón Chief Legal Officer Jill Mason Chief Compliance & Risk Officer Julie Dewey Chief Investor Relations & Communications Officer Year Joined: 2024 Years in Industry: 10+ Year Joined: 2024 Years in Industry: 25+ Year Joined: 2015 Years in Industry: 15+

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Investment Summary – Why Invest in Orthofix? 01 Strong fundamentals with profitable growth opportunity and compelling value proposition across diverse portfolio 02 More focused commercial strategy with robust innovation pipeline complemented by successful cross-selling 03 New leadership team well-positioned to implement strategic vision and achieve sustainable, profitable growth across portfolio 04 Improved operational execution; on track to reach profitability objectives, including positive free cash flow for second half of 2024, much earlier than originally anticipated 05 New 2027 financial targets reflect confidence in sustainable growth trends and commercial strategy and execution

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Financial and Non-GAAP Reconciliation Tables Appendix

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Net Sales by Major Product Category by Reporting Segment     Three Months Ended September 30,   (Unaudited, U.S. Dollars, in millions)   2024     2023     Change     ConstantCurrencyChange   Bone Growth Therapies   $ 57.9     $ 53.4       8.6 %     8.6 % Spinal Implants, Biologics and Enabling Technologies     108.2       101.0       7.1 %     7.1 % Global Spine     166.1       154.4       7.6 %     7.6 % Global Orthopedics     30.5       29.7       2.9 %     2.5 % Net sales   $ 196.6     $ 184.0       6.8 %     6.8 %

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Condensed Consolidated Balance Sheets

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Condensed Consolidated Statements of Operations

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Adjusted Gross Profit and Adjusted Gross Margin Adjusted EBITDA     Three Months Ended September 30,     Nine Months Ended September 30,   (Unaudited, U.S. Dollars, in thousands)   2024     2023     2024     2023   Gross profit   $ 135,053     $ 119,763     $ 397,044     $ 349,643   Share-based compensation expense     557       463       1,591       1,416   SeaSpine merger-related costs     1,161       2,161       5,579       6,647   Strategic investments     32       55       160       264   Acquisition-related fair value adjustments     3,047       7,922       9,141       29,007   Amortization/depreciation of acquired long-lived assets     313       280       840       824   Medical device regulation     —       6       —       676   Adjusted gross profit   $ 140,163     $ 130,650     $ 414,355     $ 388,477   Adjusted gross margin     71.3 %     71.0 %     71.0 %     71.1 %     Three Months Ended September 30,     Nine Months Ended September 30,   (Unaudited, U.S. Dollars, in thousands)   2024     2023     2024     2023   Net loss   $ (27,388 )   $ (28,857 )   $ (96,851 )   $ (129,221 ) Income tax expense (benefit)     751       472       2,686       2,591   Interest expense, net     5,210       1,576       14,711       4,131   Depreciation and amortization     15,173       13,097       44,067       39,094   Share-based compensation expense     6,531       6,274       25,290       32,540   Foreign exchange impact     (1,176 )     1,909       1,263       1,057   SeaSpine merger-related costs     2,616       5,416       12,992       34,362   Strategic investments     39       484       470       1,454   Acquisition-related fair value adjustments     5,017       7,122       15,351       26,907   Interest and loss on investments     3,567       429       5,120       429   Litigation and investigation costs     8,335       3,851       10,318       5,611   Succession charges     505       (92 )     8,061       170   Medical device regulation     —       1,840       —       7,519   Adjusted EBITDA   $ 19,180     $ 13,521     $ 43,478     $ 26,644   Adjusted EBITDA as a percentage of net sales     9.8 %     7.3 %     7.4 %     4.9 %

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Adjusted Net Income     Three Months EndedSeptember 30,     Nine Months EndedSeptember 30,   (Unaudited, U.S. Dollars, in thousands)   2024     2023     2024     2023   Net loss   $ (27,388 )   $ (28,857 )   $ (96,851 )   $ (129,221 ) Share-based compensation expense     6,531       6,274       25,290       32,540   Foreign exchange impact     (1,176 )     1,909       1,263       1,057   SeaSpine merger-related costs     2,619       5,247       13,434       35,600   Strategic investments     69       525       566       1,631   Acquisition-related fair value adjustments     5,017       7,122       15,351       26,907   Amortization/depreciation of acquired long-lived assets     5,046       5,026       14,486       14,970   Litigation and investigation costs     8,335       3,851       10,318       5,611   Succession charges     505       (94 )     8,061       168   Medical device regulation     —       1,842       —       7,531   Interest and loss on investments     3,567       399       5,071       339   Long-term income tax rate adjustment     (335 )     (569 )     2,777       2,669   Adjusted net income (loss)   $ 2,790     $ 2,675     $ (234 )   $ (198 )

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Cash Flow and Free Cash Flow

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For additional information, please contact: Julie Dewey, IRC Chief IR & Communications Officer [e-mail] 209-613-6945 www.Orthofix.com NASDAQ: OFIX

Document And Entity Information	Nov. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 07, 2024
Entity Registrant Name	ORTHOFIX MEDICAL INC.
Entity Central Index Key	0000884624
Entity Emerging Growth Company	false
Entity File Number	0-19961
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	98-1340767
Entity Address, Address Line One	3451 Plano Parkway
Entity Address, City or Town	Lewisville
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75056
City Area Code	(214)
Local Phone Number	937-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.10 par value per share
Trading Symbol	OFIX
Security Exchange Name	NASDAQ

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