Here are eight key notes on the company’s financial report:
1. Orthofix reported a 4.1 percent increase in the third quarter net sales, hitting $101.2 million.
2. The company reported growth in the BioStim and Biologics lines and decline in the extremity and fixation lines in net sales:
• BioStim: Up 8.6 percent to $41.5 million
• Biologics: Up 5.7 percent to $14.6 million
• Extremity fixation: Down 10.6 percent to $24.6 million
• Spine fixation: Down 4.5 percent to $20.2 million
3. The company reached a settlement in principle in the shareholder action related to the first restatement. The settlement is within the company’s insurance coverage limit and still subject to court approval.
4. Gross profit increased $1.6 million to $77.3 million over the same period last year. The gross margin was 76.4 percent, compared with 75 percent for the third quarter of 2014. The change was primarily due to the increased sales mix of the BioStim and Biologics regenerative solutions in relation to other products.
5. The net margin decreased due to an increase in the sales and marketing expenses of $5.1 million, partially due to an increase in bad debt expense of $3 million, $2 million of which came from an increase in accounts receivable reserves after the recent fiscal and economic difficulties the Puerto Rico Commonwealth experienced.
6. Net loss from continuing operations was $800,000, or $0.04 per diluted share.
7. Operating expenses increased to $73.1 million in the third quarter, primarily due to the increase in sales and marketing expenses, but partially offset by a decrease in restatements and related costs from lower professional fees.
8. The company expects net sales to reach $392 million to $395 million and adjusted EBITDA in the range of $58 million to $60 million.
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