Orthofix International Q1 14% Sales Decline

In short

Orthofix International N.V. has announced its results for the first quarter ended March 31, 2013. Net sales were $100.3 million, a 14% decrease over the first quarter of the prior year, or 13% on a constant currency basis. Revenue was down pretty much across the board, although the company is doing its best to explain that it’s all under control.

Background

Net sales were $100.3 million in the first quarter of 2013, down 14% from $116.0 million in the first quarter of the prior year. Foreign currency translation and two less selling days both negatively impacted the first quarter net sales by 0.6% and 3.2%, respectively.

Looking at the specific business units, Total Spine sales of $66.3 million represented a 12% decrease from the prior year. The company says this was primarily a result of residual effects of distribution disruptions and higher than ordinary mix of wholesale revenue in 2012 in its Stimulation business. In addition, sales from Spine Implants were impacted by weakness in international markets as well as pricing pressures in the U.S.

In the Orthopedic business, sales of $33.9 million represented a decrease of 17% on a reported basis and 16% on a constant currency basis compared to the prior year. The company blames a number of challenges currently impacting its operation in Brazil, coupled with sales from Europe being negatively impacted by poor macroeconomic conditions.

Company comments

Brad Mason, President and Chief Executive Officer, commented, “I am delighted to rejoin Orthofix and am confident that I can lead the Company in a way that will maximize its potential to create shareholder value. I am very encouraged by the many strengths I see in our organization.

“That said, the first quarter sales and earnings results were disappointing. The good news is that the primary issues that led to these results are identifiable, within our control, and fixable. We are developing a strategy with specific initiatives that will both improve our internal competencies and drive growth.”

Full release here

Source: Orthofix International N.V., Business Wire