Orthofix Medical Inc. (Form: 8-K, Received: 08/08/2023 16:25:41)

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): August 08, 2023

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: (214) 937-2000

(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. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 8, 2023, Orthofix Medical Inc. (the “Company”) issued a press release announcing, among other things, its financial results for the second quarter ended June 30, 2023. 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 "Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted EPS." Adjusted gross margin represents adjusted gross profit as a percentage of GAAP net sales.

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 "Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted EPS."

Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted EPS

These 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, restricted stock, performance-based or market-based restricted stock, and under the Company's stock purchase plan; see the share-based compensation footnote in the Company's Form 10-Q for the quarter ended June 30, 2023 for an allocation of 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 were 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 of acquired intangibles – 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.

•

Legal judgments/settlements – Adverse or favorable legal judgments or negotiated legal settlements and certain related legal expenses, which are generally recorded as general and administrative expenses. Management excludes this item 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”) and the U.S. Food and Drug Administration 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.

•

Business interruption – COVID-19 – Gains and losses related to the realized effects the COVID-19 pandemic has had on the Company's business operations, which consist primarily of (i) certain legislative relief received as a result of the COVID-19 pandemic, (ii) costs associated with the redesign of certain products in response to supply chain disruption, and (iii) incremental costs incurred to enhance the safety and sanitation of the Company's facilities. Management excludes this item when evaluating the Company's operating results as these are costs associated with events that are not expected to recur at a similar frequency and magnitude in the future.

•

All other - Comprised of individually insignificant adjustments to the Company's operating results that either represent non-cash gains or losses or are not considered to be related to the Company's core operating performance.

•

Long-term income tax rate adjustment (only for purposes of calculating Adjusted Net Income (Loss) and Adjusted EPS) – Reflects management’s expectation of a long-term normalized effective tax rate of 28% for 2022 and 28% for 2023 results and outlook, 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) and Adjusted EPS.

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, 2023.

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 August 8, 2023
99.2	Corporate Investor Relations Presentation, dated August 8, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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/ Patrick Keran
		Patrick Keran Chief Legal Officer

Date: August 8, 2023

Exhibit 99.1

Orthofix Reports Second Quarter 2023 Results and Raises Revenue and Adjusted EBITDA Guidance

•

Net sales of $187.0 million, an increase of 58% on a reported basis and 7% on a pro forma constant currency basis over prior year

•

Bone Growth Therapies growth of 10%, marking two consecutive quarters with double-digit net sales increases, with growth coming from both spine and fracture commercial channels

•

U.S. spinal implants, biologics, and enabling technologies sales up 7% over prior year on a pro forma basis, driven by new distribution and product innovation

•

Global Orthopedics net sales increase of 6% on a reported basis and 5% on a constant currency basis over prior year

•

Announced full commercial launch of the following products:

WaveForm® A interbody for Anterior Lumbar Interbody Fusion ("ALIF") procedures

TrueLok™ Phantom and Tornado Hinges, the latest addition to the Orthopedics TrueLok circular frame portfolio

LEWISVILLE, Texas — August 8, 2023 — Orthofix Medical Inc. (NASDAQ:OFIX) today reported its financial results for the quarter ended June 30, 2023. Net sales were $187.0 million, earnings per share (“EPS”) was $(1.07), and adjusted EPS was $0.02.

“I am very pleased with Orthofix’s performance this quarter, delivering 7% year-over-year growth, on a proforma basis, and once again achieving double-digit growth in the Bone Growth Therapies franchise,” said Keith Valentine, President and Chief Executive Officer of Orthofix. “We have been successful in managing revenue dis-synergy risks and capitalizing on operating expense synergy opportunities throughout the merger process and are encouraged to see continued market share taking in the U.S. spinal implants, biologics and enabling technologies franchises by leveraging our complementary product portfolios. We look forward to a strong back half of 2023 and remain focused on meeting the needs of our patients and providing value for other stakeholders by continuing to deliver quality driven solutions.”

Financial Results Overview

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


	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023		2022		Change			Constant Currency Change
Bone Growth Therapies	$	52.7	$	47.8		10.3	%		10.3	%
Spinal Implants, Biologics and Enabling Technologies		105.3		43.0		144.8	%		144.8	%
Global Spine		158.0		90.8		74.0	%		74.0	%
Global Orthopedics		29.0		27.3		6.4	%		5.0	%
Net sales	$	187.0	$	118.1		58.4	%		58.1	%

Further, the following table provides net sales by major product category by reporting segment on a pro forma basis:


	Three Months Ended June 30,
(Unaudited, U.S. Dollars, in millions)	2023		2022 Pro Forma		Change			Constant Currency Change
Bone Growth Therapies	$	52.7	$	47.8		10.3	%		10.3	%
Spinal Implants, Biologics and Enabling Technologies		105.3		100.0		5.4	%		5.4	%
Global Spine		158.0		147.7		6.9	%		6.9	%
Global Orthopedics		29.0		27.3		6.4	%		5.0	%
Net sales	$	187.0	$	175.0		6.9	%		6.6	%

Gross profit increased $33.1 million to $119.6 million. Gross margin decreased to 63.9% compared to 73.2% in the prior year period. Adjusted gross profit increased $46.6 million to $133.9 million. Adjusted gross margin decreased to 71.6% compared to 73.9% in the prior year period.

Net loss was $(39.4) million, or $(1.07) per share, compared to net income of $2.5 million, or $0.12 per share in the prior year period. Adjusted net income was $0.7 million, or $0.02 per share, compared to adjusted net income of $4.7 million, or $0.23 per share, in the prior year period.

Adjusted EBITDA was $9.9 million, or 5.3% of net sales, compared to $11.4 million, or 9.7% of net sales, in the prior year period.

Liquidity

As of June 30, 2023, cash totaled $37.6 million, compared to $50.7 million as of December 31, 2022. As of June 30, 2023, the Company had $51.0 million in borrowings outstanding under its five year $175 million secured revolving credit facility. The Company subsequently borrowed an additional $8.0 million in July 2023. On a year-to-date basis through June 30, 2023, cash flow from operations decreased $26.9 million to $(39.5) million, while free cash flow decreased $39.9 million to $(64.2) million.

Business Outlook

As of the date hereof, the Company expects the following financial results for the year ended December 31, 2023. 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.


	Current 2023 Outlook						Previous 2023 Outlook
(Unaudited, U.S. Dollars, in millions, except per share data)	Low			High			Low		High
Full year net sales	$	752	1	$	758	1	$	750	$	756
Full year adjusted EBITDA	$	42		$	46		$	40	$	45

1 Represents a year-over-year increase of 63.2% to 64.3% on a reported basis and an increase of 7.3% to 8.2% on a pro forma basis.

The Company is unable to provide expectations of GAAP operating income (loss), 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.

Conference Call

Orthofix will host a conference call today at 4:30 PM Eastern time to discuss the Company's financial results for the second quarter of 2023. Interested parties may access the conference call by dialing (888) 330-2508 in the U.S. and Canada, and (240) 789-2735 in all other locations, and referencing the access code 9556380. A replay of the call will be available for three weeks by dialing (800) 770-2030 in the U.S. and Canada, and (647) 362-9199 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

The newly merged Orthofix-SeaSpine organization is a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions and a leading surgical navigation system. Its products are distributed in approximately 68 countries worldwide. The Company intends to announce a new name for the Orthofix-SeaSpine organization in the future, but in the interim will continue to operate under the Orthofix name.

The Company is headquartered in Lewisville, Texas, and has primary offices in Carlsbad, CA, with a focus on spinal product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for Orthopedics. The Orthofix-SeaSpine organization’s global R&D, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France, and Sao Paolo, Brazil. For more information, please visit www.orthofix.com.

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, 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 and adjusted EBITDA for the year ended December 31, 2023. 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, 2022 (the “2022 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 June 30, 2023. 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) global economic instability and potential supply chain disruption caused by Russia’s invasion of Ukraine and resulting sanctions, 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.

This list of risks, uncertainties, and other factors is not complete. We discuss some of these matters more fully, as well as certain risk factors that could affect our business, financial condition, results of operations, and prospects, in reports we file from time-to-time with the SEC, which are available to read at www.sec.gov. Any or all forward-looking statements that we make may turn out to be wrong (due to inaccurate assumptions that we make or otherwise), and our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of 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.


Company Contact
Louisa Smith, Gilmartin Group
ir@orthofix.com

ORTHOFIX MEDICAL INC.

Condensed Consolidated Statements of Operations


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(U.S. Dollars, in thousands, except share and per share data)	2023			2022			2023			2022
	(Unaudited)						(Unaudited)
Net sales	$	187,016		$	118,070		$	362,220		$	224,488
Cost of sales		67,465			31,600			132,340			59,918
Gross profit		119,551			86,470			229,880			164,570
Sales and marketing		99,249			59,888			193,040			114,025
General and administrative		34,177			15,846			82,988			35,174
Research and development		19,424			12,758			42,731			23,970
Acquisition-related amortization and remeasurement		3,333			(8,663	)		7,467			(12,162	)
Operating income (loss)		(36,632	)		6,641			(96,346	)		3,563
Interest expense, net		(1,266	)		(407	)		(2,555	)		(782	)
Other income (expense), net		(20	)		(3,192	)		656			(4,128	)
Income (loss) before income taxes		(37,918	)		3,042			(98,245	)		(1,347	)
Income tax expense		(1,508	)		(553	)		(2,119	)		(624	)
Net income (loss)	$	(39,426	)	$	2,489		$	(100,364	)	$	(1,971	)

Net income (loss) per common share:
Basic	$	(1.07	)	$	0.12		$	(2.77	)	$	(0.10	)
Diluted		(1.07	)		0.12			(2.77	)		(0.10	)
Weighted average number of common shares (in millions):
Basic		36.8			20.0			36.3			20.0
Diluted		36.8			20.1			36.3			20.0

ORTHOFIX MEDICAL INC.

Condensed Consolidated Balance Sheets


(U.S. Dollars, in thousands, except par value data)	June 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	37,607		$	50,700
Accounts receivable, net of allowances of $7,015 and $6,419, respectively		112,320			82,857
Inventories		222,474			100,150
Prepaid expenses and other current assets		26,947			22,283
Total current assets		399,348			255,990
Property, plant, and equipment, net		140,584			58,229
Intangible assets, net		126,000			47,388
Goodwill		191,727			71,317
Other long-term assets		43,628			25,705
Total assets	$	901,287		$	458,629
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	51,349		$	27,598
Current portion of finance lease liability		678			652
Other current liabilities		89,777			55,374
Total current liabilities		141,804			83,624
Long-term borrowings under credit facility		51,000			—
Long-term portion of finance lease liability		18,894			19,239
Other long-term liabilities		49,604			18,906
Total liabilities		261,302			121,769
Contingencies
Shareholders’ equity
Common shares $0.10 par value; 100,000 shares authorized; 36,733 and 20,162 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		3,673			2,016
Additional paid-in capital		735,533			334,969
Retained earnings (accumulated deficit)		(99,113	)		1,251
Accumulated other comprehensive loss		(108	)		(1,376	)
Total shareholders’ equity		639,985			336,860
Total liabilities and shareholders’ equity	$	901,287		$	458,629

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 June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Gross profit	$	119,551		$	86,470		$	229,880		$	164,570
Share-based compensation expense		482			204			953			414
SeaSpine merger-related costs		3,783			—			4,486			—
Strategic investments		28			566			209			591
Acquisition-related fair value adjustments		9,449			—			21,085			—
Amortization/Depreciation of Acquired Long-Lived Assets		544			—			544			224
Medical device regulation		41			8			670			14
Adjusted gross profit	$	133,878		$	87,248		$	257,827		$	165,813
Adjusted gross margin		71.6	%		73.9	%		71.2	%		73.9	%

Adjusted EBITDA


	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Income (loss) before income taxes	$	(37,918	)	$	3,042		$	(98,245	)	$	(1,347	)
Interest expense, net		1,266			407			2,555			782
Depreciation and amortization		13,327			6,512			25,997			14,028
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,206			—			28,946			—
Strategic investments		309			1,824			970			2,794
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,050			2,248			5,679			4,198
Business interruption - COVID-19		—			316			—			659
All other		262			189			262			266
Adjusted EBITDA	$	9,919		$	11,423		$	13,123		$	18,532

Adjusted Net Income (Loss)


	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022			2023			2022
Net income (loss)	$	(39,426	)	$	2,489		$	(100,364	)	$	(1,971	)
Share-based compensation expense		13,246			4,460			26,266			8,792
Foreign exchange impact		(269	)		2,991			(852	)		4,233
SeaSpine merger-related costs		8,049			—			30,353			—
Strategic investments		348			1,817			1,046			2,782
Acquisition-related fair value adjustments		8,149			(10,714	)		19,785			(16,214	)
Amortization of acquired intangibles		5,810			2,051			9,944			4,282
Legal judgments/settlements		1,291			148			1,760			341
Medical device regulation		2,055			2,251			5,689			4,202
Business interruption - COVID-19		—			318			—			663
All other		262			190			262			266
Long-term income tax rate adjustment		1,224			(1,283	)		3,238			(1,616	)
Adjusted net income (loss)	$	739		$	4,718		$	(2,873	)	$	5,760

Adjusted EPS


	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, per diluted share)	2023			2022			2023			2022
EPS	$	(1.07	)	$	0.12		$	(2.77	)	$	(0.10	)
Share-based compensation expense		0.36			0.22			0.72			0.44
Foreign exchange impact		(0.01	)		0.15			(0.02	)		0.21
SeaSpine merger-related costs		0.22			—			0.84			—
Strategic investments		0.01			0.09			0.03			0.14
Acquisition-related fair value adjustments		0.22			(0.53	)		0.55			(0.81	)
Amortization of acquired intangibles		0.16			0.10			0.27			0.21
Legal judgments/settlements		0.03			0.01			0.05			0.02
Medical device regulation		0.06			0.11			0.16			0.21
Business interruption - COVID-19		—			0.02			—			0.03
All other		0.01			0.01			0.01			0.01
Long-term income tax rate adjustment		0.03			(0.07	)		0.08			(0.07	)
Adjusted EPS	$	0.02		$	0.23		$	(0.08	)	$	0.29

Weighted average number of diluted common shares (treasury stock method, in millions)		37.1			20.1			36.3			20.1

Cash Flow and Free Cash Flow


	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022
Net cash from operating activities	$	(39,536	)	$	(12,622	)
Net cash from investing activities		4,265			(13,161	)
Net cash from financing activities		21,791			(1,324	)
Effect of exchange rate changes on cash		387			(1,204	)
Net change in cash and cash equivalents	$	(13,093	)	$	(28,311	)


	Six Months Ended June 30,
(Unaudited, U.S. Dollars, in thousands)	2023			2022
Net cash from operating activities	$	(39,536	)	$	(12,622	)
Capital expenditures		(24,654	)		(11,703	)
Free cash flow	$	(64,190	)	$	(24,325	)

Source

Orthofix Medical Inc.

Corporate Investor Deck August 2023

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, 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. Such forward looking statements include, but are not limited, to, statements relating to: expectations regarding future financial performance in the short- and long-term, including, without limitation, revenue (and the source thereof), expenses (including anticipated spend and savings/synergies), adjusted gross margin, adjusted EBITDA loss, free cash flow burn, compound annual growth rate, liquidity runway, and the Company’s ability to generate favorable sales mix of higher gross margin products; expectations regarding investment in inventory and spinal implant sets and regarding product launches and line extensions; availability under the Company’s credit facility; the benefits of initiatives, including investments in a direct sales strategy and in product development and enhancements to existing products; planned discontinuation of products; the Company’s growth and taking of market share; the Company’s ability to lower its manufacturing costs; and the Company’s ability to reduce organization complexity and the benefits thereof. These forward looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict, including the risks described under the heading “Risk Factors” in our Form 10-Q for the period ended June 30, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on August 8, 2023. Factors that could cause or contribute to such differences may include, but are not limited to: risks related to the integration of the legacy Orthofix and SeaSpine businesses and the ability of the combined company to realize the expected long term financial and other benefits of their merger; surgeons’ and hospitals’ willingness to adopt our newly launched products; the ability of newly launched products to meet the needs of surgeons and patients, including as a result of the lack of clinical validation of products in limited commercial (or “alpha”) launch; continued pricing pressure, whether as a result of consolidation in hospital systems, competitors or others, as well as exclusion from major healthcare systems; the risk of supply shortages and associated disruption to product sales, including as a result of our dependence on a limited number of third-party suppliers for components and raw materials, as a result of the pandemic, or otherwise, and our ability to adequately manage inventory; global economic instability and potential supply chain disruption, including as a result of Russia’s invasion of Ukraine and resulting sanctions; our ability to recruit and retain management and key personnel (including in connection with disruptions and uncertainties that may occur as the legacy Orthofix and SeaSpine businesses are integrated and the respective management and leadership teams are combined); our ability to continue to invest in medical education and training, product development, and/or sales and marketing initiatives at levels sufficient to drive future revenue growth; risks relating to the effects of the COVID 19 pandemic; general economic and business conditions in the markets in which we do business, both in the U.S. and abroad; and the other risks and uncertainties more fully described in our periodic filings with the SEC. This list of risks, uncertainties, and other factors is not complete. We discuss some of these matters more fully, as well as certain risk factors that could affect our business, financial condition, results of operations, and prospects, in reports we file from time to time with the SEC, which are available to read at www.sec.gov. Any or all forward looking statements that we make may turn out to be inaccurate (due to inaccurate assumptions that we make or otherwise), and our actual outcomes and results may differ materially from those expressed in these forward looking statements. You should not place undue reliance on any of 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 obligati on 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.

a Investment Highlights Building a Leading Global Spine & Orthopedics Company Extensive PortfolioSolutions with Complementary Technologies Improved Clinical Outcomes & Economic Value Expanded Distribution Channels & Global Commercial Reach $175M Credit Facility Provides Liquidity to Fund Growth and Scale Visionary Leadership Team with Deep Sector Experience Large Addressable Markets with High Growth Opportunities

Executive Leadership Team Experienced leadership with 250+ years in spine/orthopedics Suzanne Armstrong Chief Human Resources Officer Roberto Donadello Senior Vice PresidentGlobal Operations Tyler Lipschultz PresidentGlobal Biologics Beau Standish, PhD, PEng PresidentGlobal Enabling Technologies John Bostjancic Chief Financial Officer Kim Elting President Global Orthopedics Ehab Esmail Senior Vice President, Global Quality, Regulatory & Clinical Affairs Pat Keran Chief Legal Officer Kevin Kenny President Global Spine Frank Vizesi, PhD Chief Scientific Officer Keith C. Valentine President & Chief Executive Officer Puja Leekha Senior Vice President Chief Ethics & Compliance Officer

Complementary High Growth Portfolio SmartTRAK® 2022 – 2026 U.S. Estimates*Focused growth segments include Enabling Technologies, Motion Preservation, Interbody, DBM, LLIF/OLIF, MIS and Long Bone Stimulation $7B of Focused High-Growth Market Segments* | 6.1% CAGR Motion Preservation Spinal Fixation Spinal Implants Limb Reconstruction Deformity Correction Orthopedics Cellular Allograft Demineralized Bone Matrices Synthetic Bone Grafts Biologics Machine-vision 7D FLASH™ Navigation Enabling Technologies Bone Growth Stimulation Non-Surgical Alternative Regenerative Technology Bone Growth Therapies Full Continuum of Care

Orthopedics Specialized portfolio of limb reconstruction and deformity correction products that address the most challenging orthopedic conditions Complex Fracture Management Digital Healthcare Adult & Pediatric Limb Reconstruction Complex Foot & Ankle Reconstruction TrueLok™ Ring Fixation System TrueLok™ EVO Ring Fixation System Galaxy™ Fixation System XCaliber™ Hybrid Fixator AHN Ankle Hindfoot Nailing™ System G-Beam Fusion Beaming System™ TL-HEX™ TrueLok Hexapod System JuniOrtho Pediatric Plating System™ Fitbone® Limb-Lengthening System OrthoNext™ Platform System for Preoperative Planning

Cervical Thoracolumbar Fixation Interbodies Spinal Implants Comprehensive best-in-class spinal implants offering driving rapid market adoption M6-C™ Artificial Cervical Disc Explorer® TO Expandable Interbody Construx™ Mini PTC Spacer System Reef® TO NanoMetalene® with Reef Topography ® Admiral™ Anterior Cervical Plating System Shoreline® Anterior Cervical Standalone System NorthStar® Posterior Cervical Fixation System Forza™ TI Ti Spacer System with Nanovate™ Technology Firebird™ NXG Spinal Fixation System Mariner® Modular Pedicle Screw System Janus™ Fenestrated Screw System Mariner® Deformity Adult Deformity Posterior Fixation System WaveForm™ 3D Interbody WaveForm™ C 3D Interbody ForzaXP™ Expandable Spacer System Meridian™ Spacer System

Demineralized Bone Putty Demineralized Bone Fiber Cellular Allograft Biologics Full spectrum of biologic solutions to enhance the fusion process and promote bone repair and growth Procedural Solutions Traditional Allograft Graft Delivery Synthetic Trinity Elite™ OsteoStrand® Plus Torrent® & Torrent CAccell Evo3® & Evo3® cDynaGraft® II & OrthoBlast® IILegacy™ Opus™ BA Opus™ Mg Set Mozaik™ RAPID® O-Genesis™ OsteoBallast® OsteoBallast MT NorthStar™Facet Fusion FiberFuse™

Bone Growth Therapies Bone Healing Therapy Spine Fusion Therapy Safe and effective treatment and non-surgical alternative to overcome bone healing challenges AccelStim™ Bone Healing Therapy PhysioStim™ Bone Growth Therapy CervicalStim™ Spinal Fusion Therapy SpinalStim™ Spinal Fusion Therapy # 1 Prescribed bone growth stimulator We are proud to be the first to offer a free recycling program so patients can properly dispose of their devices after use. PEMF technology approved Since 1986 Prescribed devices

Enabling Technologies Servicing the full continuum of surgical care FLASH™ Navigation with 7D Technology Machine-vision Navigation System

Diversified & Complementary Business with Broad Commercial Reach ~81% U.S. | ~19% OUS Products distributed in 68 countries $730M TTM Revenue

Commercial Strategy Framework Geographic FootprintDouble digit growth in global commercial reach Focused DistributorsExpanded market penetration with increased dedicated distribution Diverse Sales StrategyCross selling opportunities across direct and distribution-based sales channels Clinical RelevanceProven track record of procedural excellence, backed by compelling clinical evidence, spanning multiple markets Training and Education ProgramsComplementary training and education programs to deliver value to surgeons and distributors Continuum of Care Comprehensive product portfolio from pre-operative planning through post surgical COMMERCIAL STRATEGY FRAMEWORK

Key Growth Drivers Orthopedics HSD growth driven by channel expansion and further products launches expanding our leading TrueLok™ and Fitbone™ franchises Spinal Fixation Industry leading product and procedure launches per year & continued penetration into emerging markets Product Utilization Higher product utilization per procedure from more complete portfolio Spinal Implants & Biologics Continue share taking at >5x market growth, from 45+ product launches since 2018 Higher Revenue Per Case Increased participation in higher revenue complex and deformity procedures from recent full commercialization of Mariner® Adult Deformity Platform BGT Fracture DD growth driven by therecent AccelStim™ launch, future product launches & increasing channel investments Enabling Technologies Growth from recent full commercial launch of MIS module and higher conversion of revenue earnout arrangements Distributor Partners Onboard additional transformative & more focused distributor partners

Q2 2023 Highlights 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. 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 August 8, 2023. See Appendix A for calculation of proforma Adjusted EBITDA and proforma Adjusted Gross Margin for each quarterly period of 2022. Orthofix $53M Q2 2023 BGT Revenue 10% Growth YoY $187M Q2 2023 Revenue 58% Growth YoY at Constant Currency(1) 7% Proforma Growth YoY at Constant Currency(2) $10M Adjusted EBITDA 47% Proforma Growth YoY(2)(3)72% Adjusted Gross Margin(2) $105M Q2 2023 Global Spinal Implants, Biologics and Enabling Technologies Revenue 5% Proforma Growth YoY at Constant Currency(2) $38M Cash & Cash Equivalents, 6/30/2023 $59M of outstanding credit facility borrowings $29M Q2 2023 Global Orthopedics Revenue 5% Growth YoY at Constant Currency (2)

2023 Full Year Guidance $752 – 758M Revenue $42 – 46M Adjusted EBITDA Revenue ranges above represent 7% to 8% proforma growth rates over prior year Guidance information is as of August 8, 2023, based on guidance provided by Orthofix leadership on that date. 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 ay confirmation or update of, that guidance by Orthofix leadership as of any date other than August 8, 2023.

Broader Commercial Reach Accelerated adoption of differentiated technologies Sustainable growth & value creation Strengthened U.S. and international sales channels Rapid product innovation driving market-share taking Complementary Portfolios #1 Prescribed bone growth stimulator portfolio in the U.S. Broadest advanced DBM portfolio and market leading cellular allograft Next generation differentiated artificial cervical disc Meaningful Revenue & Cost Synergies Est. Revenue Synergies: >$25M Est. Cost Synergies: ~$50M* Revenue Risk to Manage: ≈$20M** Working Capital & Capex Synergies Merger Highlights *Cost synergies of ~$50M expected by 2025 with incremental opportunity to reduce stock-based compensation expense **Based on due diligence, including revenue zip code analysis performed by 3rd party

Click to edit Master title style THANK YOU

APPENDIX A

Proforma Non-GAAP Financial Measures On the Company's Q2 2023 earnings call held on August 8, 2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 2nd quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 2nd quarter of 2023. A reconciliation of those pro forma non-GAAP financial measures for the 2nd quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix, as well as a comparison to Adjusted EBITDA and Adjusted Gross Margin for Orthofix for the 2nd quarter of 2023, are presented on this slide.For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate those non-GAAP financial measures, please see the Company’s Current Report on Form 8 K filed on August 8, 2023.

Historical 2022 Quarterly Proforma Adjusted EBITDA On the Company's Q2 2023 earnings call held on August 8, 2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 2nd quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 2nd quarter of 2023. A reconciliation of proforma Adjusted EBITDA for each quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company’s Current Report on Form 8 K filed on August 8, 2023.

Historical 2022 Quarterly Proforma Adjusted Gross Margin On the Company's Q2 2023 earnings call held on August 8, 2023, Orthofix management presented Proforma Adjusted EBITDA and Adjusted Proforma Gross Margin, both of which are non-GAAP financial measures, for the 2nd quarter of 2022. Those proforma non-GAAP financial measures are intended to report the financial impact of the merger with SeaSpine on Adjusted EBITDA and Adjusted Gross Margin as if the merger had occurred on January 1, 2022, in order to assist investors with comparing those proforma results to those same non-GAAP financial measures as reported for the 2nd quarter of 2023. A reconciliation of proforma Adjusted Gross Margin for each quarter of 2022 to the nearest GAAP financial measure for each of SeaSpine and Orthofix is presented on this slide.For further information on the reasons for and nature of non-GAAP disclosures by Orthofix and descriptions of the adjustments used to calculate non-GAAP financial measures, please see the Company’s Current Report on Form 8 K filed on August 8, 2023.