T
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Netherlands Antilles
|
N/A
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
7 Abraham de Veerstraat
Curaçao
Netherlands Antilles
|
N/A
|
|
(Address of principal executive offices)
|
(Zip Code)
|
599-9-4658525
|
||
(Registrant’s telephone number, including area code)
|
PART I FINANCIAL INFORMATION
|
||
3
|
||
21
|
||
34
|
||
35
|
||
PART II OTHER INFORMATION
|
||
36
|
||
38
|
||
39
|
||
40
|
||
44
|
(US Dollars, in thousands except share data)
|
June 30,
|
December 31,
|
||||||
2009
|
2008
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 5,918 | $ | 14,594 | ||||
Restricted cash
|
15,617 | 10,998 | ||||||
Trade accounts receivable, less allowance for doubtful accounts of $7,141 and $6,473 at June 30, 2009 and December 31, 2008, respectively
|
119,714 | 110,720 | ||||||
Inventories, net
|
94,172 | 91,185 | ||||||
Deferred income taxes
|
19,571 | 17,543 | ||||||
Prepaid expenses and other current assets
|
32,075 | 29,610 | ||||||
Total current assets
|
287,067 | 274,650 | ||||||
Investments, at cost
|
2,095 | 2,095 | ||||||
Property, plant and equipment, net
|
34,226 | 32,660 | ||||||
Patents and other intangible assets, net
|
50,893 | 53,546 | ||||||
Goodwill
|
185,270 | 182,581 | ||||||
Deferred taxes and other long-term assets
|
12,235 | 15,683 | ||||||
Total assets
|
$ | 571,786 | $ | 561,215 | ||||
Liabilities and shareholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Bank borrowings
|
$ | 3,080 | $ | 1,907 | ||||
Current portion of long-term debt
|
3,333 | 3,329 | ||||||
Trade accounts payable
|
23,749 | 23,865 | ||||||
Other current liabilities
|
54,442 | 45,894 | ||||||
Total current liabilities
|
84,604 | 74,995 | ||||||
Long-term debt
|
260,910 | 277,533 | ||||||
Deferred income taxes
|
3,940 | 4,509 | ||||||
Other long-term liabilities
|
4,680 | 2,117 | ||||||
Total liabilities
|
354,134 | 359,154 | ||||||
Contingencies (Note 19)
|
||||||||
Shareholders’ equity:
|
||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 17,129,619 and 17,103,142 issued and outstanding as of June 30, 2009 and December 31, 2008, respectively
|
1,713 | 1,710 | ||||||
Additional paid-in capital
|
171,947 | 167,818 | ||||||
Retained earnings
|
38,470 | 29,647 | ||||||
Accumulated other comprehensive income
|
5,522 | 2,886 | ||||||
Total shareholders’ equity
|
217,652 | 202,061 | ||||||
Total liabilities and shareholders’ equity
|
$ | 571,786 | $ | 561,215 |
(Unaudited, US Dollars, in thousands except share and per share data)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net sales
|
$ | 137,546 | $ | 130,039 | $ | 266,520 | $ | 258,071 | ||||||||
Cost of sales
|
36,909 | 35,048 | 69,715 | 69,286 | ||||||||||||
Gross profit
|
100,637 | 94,991 | 196,805 | 188,785 | ||||||||||||
Operating expenses
|
||||||||||||||||
Sales and marketing
|
55,272 | 53,246 | 107,536 | 103,442 | ||||||||||||
General and administrative
|
21,191 | 18,779 | 43,875 | 40,959 | ||||||||||||
Research and development
|
8,886 | 6,599 | 17,973 | 12,953 | ||||||||||||
Amortization of intangible assets
|
1,643 | 4,830 | 3,276 | 9,873 | ||||||||||||
Gain on sale of Pain Care® operations
|
- | - | - | (1,570 | ) | |||||||||||
86,992 | 83,454 | 172,660 | 165,657 | |||||||||||||
Operating income
|
13,645 | 11,537 | 24,145 | 23,128 | ||||||||||||
Other income (expense), net
|
||||||||||||||||
Interest expense, net
|
(5,831 | ) | (4,069 | ) | (11,948 | ) | (9,459 | ) | ||||||||
Unrealized non-cash gain on interest rate swap
|
1,036 | - | 1,275 | - | ||||||||||||
Other income
|
425 | 591 | 102 | 1,085 | ||||||||||||
(4,370 | ) | (3,478 | ) | (10,571 | ) | (8,374 | ) | |||||||||
Income before income taxes
|
9,275 | 8,059 | 13,574 | 14,754 | ||||||||||||
Income tax expense
|
(3,331 | ) | (2,251 | ) | (4,751 | ) | (5,340 | ) | ||||||||
Net income
|
$ | 5,944 | $ | 5,808 | $ | 8,823 | $ | 9,414 | ||||||||
Net income per common share - basic
|
$ | 0.35 | $ | 0.34 | $ | 0.52 | $ | 0.55 | ||||||||
Net income per common share - diluted
|
$ | 0.35 | $ | 0.34 | $ | 0.51 | $ | 0.55 | ||||||||
Weighted average number of common shares - basic
|
17,107,084 | 17,090,217 | 17,105,323 | 17,088,735 | ||||||||||||
Weighted average number of common shares - diluted
|
17,172,557 | 17,116,015 | 17,139,789 | 17,240,004 |
(Unaudited, US Dollars, in thousands)
|
2009
|
2008
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 8,823 | $ | 9,414 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
10,614 | 14,777 | ||||||
Amortization of debt costs
|
99 | 632 | ||||||
Provision for doubtful accounts
|
3,487 | 3,019 | ||||||
Provision for inventory obsolescence
|
5,055 | - | ||||||
Deferred taxes
|
(1,505 | ) | - | |||||
Share-based compensation
|
5,316 | 4,657 | ||||||
Minority interest
|
28 | 235 | ||||||
Amortization of step up of fair value in inventory
|
- | 242 | ||||||
Gain on sale of Pain Care® operations
|
- | (1,570 | ) | |||||
Other
|
938 | 515 | ||||||
Change in operating assets and liabilities:
|
||||||||
Restricted cash
|
(4,592 | ) | 4,772 | |||||
Accounts receivable
|
(10,741 | ) | (10,630 | ) | ||||
Inventories
|
(5,655 | ) | (16,734 | ) | ||||
Prepaid expenses and other current assets
|
(2,261 | ) | (4,486 | ) | ||||
Accounts payable
|
(577 | ) | 3,250 | |||||
Current liabilities
|
7,954 | (5,839 | ) | |||||
Net cash provided by operating activities
|
16,983 | 2,254 | ||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(9,153 | ) | (12,150 | ) | ||||
Proceeds from sale of Pain Care® operations
|
- | 5,980 | ||||||
Net cash used in investing activities
|
(9,153 | ) | (6,170 | ) | ||||
Cash flows from financing activities:
|
||||||||
Net proceeds from issuance of common shares
|
7 | 1,922 | ||||||
Repayments of long-term debt
|
(16,618 | ) | (5,351 | ) | ||||
Proceeds from (repayments of) bank borrowings, net
|
1,107 | (1,131 | ) | |||||
Cash payment for purchase of minority interest in subsidiary
|
(1,143 | ) | - | |||||
Tax benefit on non-qualified stock options
|
2 | 22 | ||||||
Net cash used in financing activities
|
(16,645 | ) | (4,538 | ) | ||||
Effect of exchange rate changes on cash
|
139 | 235 | ||||||
Net decrease in cash and cash equivalents
|
(8,676 | ) | (8,219 | ) | ||||
Cash and cash equivalents at the beginning of the year
|
14,594 | 25,064 | ||||||
Cash and cash equivalents at the end of the period
|
$ | 5,918 | $ | 16,845 |
NOTE 1:
|
BUSINESS
|
NOTE 2:
|
BASIS OF PRESENTATION
|
NOTE 3:
|
RECENTLY ISSUED ACCOUNTING STANDARDS
|
NOTE 4:
|
SHARE-BASED COMPENSATION
|
(US$ in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Cost of sales
|
$ | 142 | $ | 79 | $ | 339 | $ | 192 | ||||||||
Sales and marketing
|
773 | 590 | 1,665 | 774 | ||||||||||||
General and administrative
|
1,470 | 1,720 | 3,024 | 3,284 | ||||||||||||
Research and development
|
107 | 174 | 288 | 407 | ||||||||||||
Total
|
$ | 2,492 | $ | 2,563 | $ | 5,316 | $ | 4,657 |
NOTE 5:
|
RECLASSIFICATIONS
|
NOTE 6:
|
INVENTORIES
|
June 30,
|
December 31,
|
|||||||
(US$ in thousands)
|
2009
|
2008
|
||||||
Raw materials
|
$ | 9,431 | $ | 9,314 | ||||
Work-in-process
|
8,497 | 8,829 | ||||||
Finished products
|
60,263 | 57,151 | ||||||
Field inventory
|
15,521 | 13,633 | ||||||
Consignment inventory
|
24,820 | 23,426 | ||||||
118,532 | 112,353 | |||||||
Less reserve for obsolescence
|
(24,360 | ) | (21,168 | ) | ||||
$ | 94,172 | $ | 91,185 |
NOTE 7:
|
GOODWILL
|
(US$ in thousands)
|
Domestic
|
Spinal Implants and Biologics
|
Breg
|
International
|
Total
|
|||||||||||||||
At December 31, 2008
|
$ | 31,793 | $ | 9,367 | $ | 99,295 | $ | 42,126 | $ | 182,581 | ||||||||||
Foreign currency
|
- | - | - | 2,689 | 2,689 | |||||||||||||||
At June 30, 2009
|
$ | 31,793 | $ | 9,367 | $ | 99,295 | $ | 44,815 | $ | 185,270 |
NOTE 8:
|
PATENTS AND OTHER INTANGIBLE ASSETS
|
(US$ in thousands)
Cost
|
June 30,
2009
|
December 31,
2008
|
||||||
Patents and developed technologies
|
$ | 29,599 | $ | 25,602 | ||||
Trademarks – definite lived (subject to amortization)
|
119 | 105 | ||||||
Trademarks – indefinite lived (not subject to amortization)
|
23,460 | 23,382 | ||||||
Distribution networks
|
44,586 | 44,586 | ||||||
97,764 | 93,675 | |||||||
Accumulated amortization
|
||||||||
Patents and developed technologies
|
(17,850 | ) | (13,194 | ) | ||||
Trademarks – definite lived (subject to amortization)
|
(119 | ) | (105 | ) | ||||
Distribution networks
|
(28,902 | ) | (26,830 | ) | ||||
Patents and other intangible assets, net
|
$ | 50,893 | $ | 53,546 |
NOTE 9:
|
BANK BORROWINGS
|
(US$ in thousands)
|
June 30,
2009
|
December 31,
2008
|
||||||
Borrowings under line of credit
|
$ | 3,080 | $ | 1,907 |
NOTE 10:
|
LONG-TERM DEBT
|
(US$ in thousands)
|
June 30,
2009
|
December 31,
2008
|
||||||
Long-term obligations
|
$ | 264,050 | $ | 280,700 | ||||
Other loans
|
193 | 162 | ||||||
264,243 | 280,862 | |||||||
Less current portion
|
(3,333 | ) | (3,329 | ) | ||||
$ | 260,910 | $ | 277,533 |
NOTE 11:
|
COMMON SHARES
|
NOTE 12:
|
COMPREHENSIVE INCOME (LOSS)
|
(US$ in thousands)
|
Foreign Currency Translation Adjustments
|
Fair Value of Derivative
|
Accumulated Other Comprehensive Income/(Loss)
|
|||||||||
Balance at December 31, 2008
|
$ | (211 | ) | $ | 3,097 | $ | 2,886 | |||||
Unrealized loss on derivative instruments, net of tax of $(1,004)
|
- | (2,585 | ) | (2,585 | ) | |||||||
Foreign currency translation adjustment
|
5,221 | - | 5,221 | |||||||||
Balance at June 30, 2009
|
$ | 5,010 | $ | 512 | $ | 5,522 |
(US$ in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net income
|
$ | 5,944 | $ | 5,808 | $ | 8,823 | $ | 9,414 | ||||||||
Other comprehensive income:
|
||||||||||||||||
Unrealized gain (loss) on derivative instrument, net of tax
|
(696 | ) | (903 | ) | (2,585 | ) | 1,921 | |||||||||
Foreign currency translation adjustment
|
6,147 | 1,798 | 5,221 | 171 | ||||||||||||
Total comprehensive income
|
$ | 11,395 | $ | 6,703 | $ | 11,459 | $ | 11,506 |
NOTE 13:
|
BUSINESS SEGMENT INFORMATION
|
External Sales
|
Intersegment Sales
|
|||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Domestic
|
$ | 53,635 | $ | 47,205 | $ | 2,128 | $ | 1,683 | ||||||||
Spinal Implants & Biologics
|
30,025 | 26,924 | 1,308 | 1,064 | ||||||||||||
Breg
|
23,342 | 21,901 | 1,383 | 1,118 | ||||||||||||
International
|
30,544 | 34,009 | 5,788 | 7,935 | ||||||||||||
Total
|
$ | 137,546 | $ | 130,039 | $ | 10,607 | $ | 11,800 |
External Sales
|
Intersegment Sales
|
|||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Domestic
|
$ | 103,432 | $ | 91,332 | $ | 3,708 | $ | 3,304 | ||||||||
Spinal Implants & Biologics
|
58,544 | 55,755 | 1,674 | 2,589 | ||||||||||||
Breg
|
46,452 | 43,964 | 2,893 | 2,656 | ||||||||||||
International
|
58,092 | 67,020 | 10,427 | 13,433 | ||||||||||||
Total
|
$ | 266,520 | $ | 258,071 | $ | 18,702 | $ | 21,982 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Domestic
|
$ | 17,853 | $ | 15,947 | $ | 34,505 | $ | 30,080 | ||||||||
Spinal Implants and Biologics
|
(6,735 | ) (1) | (6,985 | ) | (14,468 | ) (2) | (10,792 | ) | ||||||||
Breg
|
2,987 | 2,696 | 6,017 | 7,067 | ||||||||||||
International
|
3,776 | 5,147 | 7,450 | 9,710 | ||||||||||||
Group Activities
|
(4,685 | ) | (4,401 | ) | (10,157 | ) | (12,216 | ) | ||||||||
Eliminations
|
449 | (867 | ) | 798 | (721 | ) | ||||||||||
Total
|
$ | 13,645 | $ | 11,537 | $ | 24,145 | $ | 23,128 |
|
(1)
|
Includes $2.1 million of research and development expense from collaborative arrangements and $1.7 million of restructuring charges.
|
|
(2)
|
Includes $4.9 million of research and development expense from collaborative arrangements and $3.0 million of restructuring charges.
|
Sales by Market Sector
for the three month period ended June 30, 2009
|
||||||||||||||||||||
(US$ in thousands)
|
Domestic
|
Spinal Implants & Biologics
|
Breg
|
International
|
Total
|
|||||||||||||||
Spine
|
$ | 40,142 | $ | 30,025 | $ | - | $ | 565 | $ | 70,732 | ||||||||||
Orthopedics
|
13,493 | - | - | 19,133 | 32,626 | |||||||||||||||
Sports Medicine
|
- | - | 23,342 | 1,118 | 24,460 | |||||||||||||||
Vascular
|
- | - | - | 4,262 | 4,262 | |||||||||||||||
Other
|
- | - | - | 5,466 | 5,466 | |||||||||||||||
Total
|
$ | 53,635 | $ | 30,025 | $ | 23,342 | $ | 30,544 | $ | 137,546 |
Sales by Market Sector
for the three month period ended June 30, 2008
|
||||||||||||||||||||
(US$ in thousands)
|
Domestic
|
Spinal Implants & Biologics
|
Breg
|
International
|
Total
|
|||||||||||||||
Spine
|
$ | 35,430 | $ | 26,924 | $ | - | $ | 358 | $ | 62,712 | ||||||||||
Orthopedics
|
11,775 | - | - | 21,559 | 33,334 | |||||||||||||||
Sports Medicine
|
- | - | 21,901 | 1,288 | 23,189 | |||||||||||||||
Vascular
|
- | - | - | 3,741 | 3,741 | |||||||||||||||
Other
|
- | - | - | 7,063 | 7,063 | |||||||||||||||
Total
|
$ | 47,205 | $ | 26,924 | $ | 21,901 | $ | 34,009 | $ | 130,039 |
Sales by Market Sector
for the six month period ended June 30, 2009
|
||||||||||||||||||||
(US$ in thousands)
|
Domestic
|
Spinal Implants & Biologics
|
Breg
|
International
|
Total
|
|||||||||||||||
Spine
|
$ | 77,425 | $ | 58,544 | $ | - | $ | 891 | $ | 136,860 | ||||||||||
Orthopedics
|
26,007 | - | - | 36,212 | 62,219 | |||||||||||||||
Sports Medicine
|
- | - | 46,452 | 2,254 | 48,706 | |||||||||||||||
Vascular
|
- | - | - | 8,670 | 8,670 | |||||||||||||||
Other
|
- | - | - | 10,065 | 10,065 | |||||||||||||||
Total
|
$ | 103,432 | $ | 58,544 | $ | 46,452 | $ | 58,092 | $ | 266,520 |
Sales by Market Sector
for the six month period ended June 30, 2008
|
||||||||||||||||||||
(US$ in thousands)
|
Domestic
|
Spinal Implants & Biologics
|
Breg
|
International
|
Total
|
|||||||||||||||
Spine
|
$ | 68,803 | $ | 55,755 | $ | - | $ | 612 | $ | 125,170 | ||||||||||
Orthopedics
|
22,529 | - | - | 40,566 | 63,095 | |||||||||||||||
Sports Medicine
|
- | - | 43,964 | 2,548 | 46,512 | |||||||||||||||
Vascular
|
- | - | - | 9,117 | 9,117 | |||||||||||||||
Other
|
- | - | - | 14,177 | 14,177 | |||||||||||||||
Total
|
$ | 91,332 | $ | 55,755 | $ | 43,964 | $ | 67,020 | $ | 258,071 |
NOTE 14:
|
RESTRUCTURING CHARGES
|
NOTE 15:
|
INCOME TAXES
|
NOTE 16:
|
EARNINGS PER SHARE
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Weighted average common shares - basic
|
17,107,084 | 17,090,217 | 17,105,323 | 17,088,735 | ||||||||||||
Effect of dilutive securities
|
65,473 | 25,798 | 34,466 | 151,269 | ||||||||||||
Weighted average common shares – diluted
|
17,172,557 | 17,116,015 | 17,139,789 | 17,240,004 |
NOTE 17:
|
DERIVATIVE INSTRUMENTS
|
As of June 30, 2009
|
Fair value: favorable (unfavorable)
|
Balance sheet location
|
Amount of gain (loss) recognized in OCI
|
||||||
Cross-currency swap
|
$ | (3,200 | ) |
Other long-term liabilities
|
$ | (2,585 | ) | ||
Interest rate swap
|
$ | (6,700 | ) |
Other current liabilities
|
$ | - |
As of June 30, 2008
|
Fair value: favorable (unfavorable)
|
Balance sheet location
|
Amount of gain (loss) recognized in OCI
|
||||||
Cross-currency swap
|
$ | (8,270 | ) |
Other long-term liabilities
|
$ | 1,921 | |||
Interest rate swap
|
$ | 1,047 |
Other current assets
|
$ | 681 |
For the three months ended June 30,
|
For the six months ended June 30,
|
|||||||||||||||
Amount of gain (loss) recognized in income
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Interest rate swap
|
$ | 1,036 | $ | - | $ | 1,275 | $ | - |
NOTE 18:
|
FAIR VALUE MEASUREMENTS
|
Balance
June 30,
2009
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative Financial Instruments
(1)
|
||||||||||||||||
Cash Flow Hedges
|
||||||||||||||||
Interest rate hedge
|
$ | (6,700 | ) | $ | - | $ | (6,700 | ) | $ | - | ||||||
Cross currency hedge
|
$ | (3,200 | ) | $ | - | $ | (3,200 | ) | $ | - |
NOTE 19:
|
CONTINGENCIES
|
Three Months Ended June 30,
|
||||||||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
||||||||||||||||||
Net Sales
|
Percent of Total Net Sales
|
Net Sales
|
Percent of Total Net Sales
|
Growth
|
||||||||||||||||
Domestic
|
$ | 53,635 | 39 | % | $ | 47,205 | 36 | % | 14 | % | ||||||||||
Spinal Implants and Biologics
|
30,025 | 22 | % | 26,924 | 21 | % | 12 | % | ||||||||||||
Breg
|
23,342 | 17 | % | 21,901 | 17 | % | 7 | % | ||||||||||||
International
|
30,544 | 22 | % | 34,009 | 26 | % | -10 | % | ||||||||||||
Total
|
$ | 137,546 | 100 | % | $ | 130,039 | 100 | % | 6 | % |
Six Months Ended June 30,
|
||||||||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
||||||||||||||||||
Net Sales
|
Percent of Total Net Sales
|
Net Sales
|
Percent of Total Net Sales
|
Growth
|
||||||||||||||||
Domestic
|
$ | 103,432 | 39 | % | $ | 91,332 | 35 | % | 13 | % | ||||||||||
Spinal Implants and Biologics
|
58,544 | 22 | % | 55,755 | 22 | % | 5 | % | ||||||||||||
Breg
|
46,452 | 17 | % | 43,964 | 17 | % | 6 | % | ||||||||||||
International
|
58,092 | 22 | % | 67,020 | 26 | % | -13 | % | ||||||||||||
Total
|
$ | 266,520 | 100 | % | $ | 258,071 | 100 | % | 3 | % |
(US$ in thousands)
|
Three Months Ended June 30,
|
|||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
Net Sales
|
Percent of Total Net Sales
|
Net Sales
|
Percent of Total Net Sales
|
Reported Growth
|
Constant Currency Growth
|
|||||||||||||||||||
Spine
|
$ | 70,732 | 51 | % | $ | 62,712 | 48 | % | 13 | % | 13 | % | ||||||||||||
Orthopedics
|
32,626 | 24 | % | 33,334 | 26 | % | -2 | % | 9 | % | ||||||||||||||
Sports Medicine
|
24,460 | 18 | % | 23,189 | 18 | % | 5 | % | 6 | % | ||||||||||||||
Vascular
|
4,262 | 3 | % | 3,741 | 3 | % | 14 | % | 20 | % | ||||||||||||||
Other
|
5,466 | 4 | % | 7,063 | 5 | % | -23 | % | -4 | % | ||||||||||||||
Total
|
$ | 137,546 | 100 | % | $ | 130,039 | 100 | % | 6 | % | 10 | % |
(US$ in thousands)
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2009
|
2008
|
|||||||||||||||||||||||
Net Sales
|
Percent of Total Net Sales
|
Net Sales
|
Percent of Total Net Sales
|
Reported Growth
|
Constant Currency Growth
|
|||||||||||||||||||
Spine
|
$ | 136,860 | 52 | % | $ | 125,170 | 49 | % | 9 | % | 10 | % | ||||||||||||
Orthopedics
|
62,219 | 23 | % | 63,095 | 24 | % | -1 | % | 9 | % | ||||||||||||||
Sports Medicine
|
48,706 | 18 | % | 46,512 | 18 | % | 5 | % | 6 | % | ||||||||||||||
Vascular
|
8,670 | 3 | % | 9,117 | 4 | % | -5 | % | 1 | % | ||||||||||||||
Other
|
10,065 | 4 | % | 14,177 | 5 | % | -29 | % | -10 | % | ||||||||||||||
Total
|
$ | 266,520 | 100 | % | $ | 258,071 | 100 | % | 3 | % | 7 | % |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2009
(%)
|
2008
(%)
|
2009
(%)
|
2008
(%)
|
|||||||||||||
Net sales
|
100 | 100 | 100 | 100 | ||||||||||||
Cost of sales
|
27 | 27 | 26 | 27 | ||||||||||||
Gross profit
|
73 | 73 | 74 | 73 | ||||||||||||
Operating expenses
|
||||||||||||||||
Sales and marketing
|
40 | 41 | 40 | 40 | ||||||||||||
General and administrative
|
15 | 14 | 17 | 16 | ||||||||||||
Research and development
|
7 | 5 | 7 | 5 | ||||||||||||
Amortization of intangible assets
|
1 | 4 | 1 | 4 | ||||||||||||
Gain on sale of Pain Care® operations
|
- | - | - | (1 | ) | |||||||||||
Total operating income
|
10 | 9 | 9 | 9 | ||||||||||||
Net income
|
4 | 4 | 3 | 4 |
Net Sales for the
Three Months Ended June 30,
|
||||||||||||
(US$ in thousands)
|
2009
|
2008
|
Growth
|
|||||||||
Spine
|
$ | 40,142 | $ | 35,430 | 13 | % | ||||||
Orthopedics
|
13,493 | 11,775 | 15 | % | ||||||||
|
||||||||||||
Total
|
$ | 53,635 | $ | 47,205 | 14 | % |
Net Sales for the
Three Months Ended June 30,
|
||||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
Reported Growth
|
Constant Currency Growth
|
||||||||||||
Spine
|
$ | 565 | $ | 358 | 58 | % | 60 | % | ||||||||
Orthopedics
|
19,133 | 21,559 | -11 | % | 5 | % | ||||||||||
Sports Medicine
|
1,118 | 1,288 | -13 | % | 4 | % | ||||||||||
Vascular
|
4,262 | 3,741 | 14 | % | 20 | % | ||||||||||
Other
|
5,466 | 7,063 | -23 | % | -4 | % | ||||||||||
Total
|
$ | 30,544 | $ | 34,009 | -10 | % | 6 | % |
Net Sales for the
Six Months Ended June 30,
|
||||||||||||
(US$ in thousands)
|
2009
|
2008
|
Growth
|
|||||||||
Spine
|
$ | 77,425 | $ | 68,803 | 13 | % | ||||||
Orthopedics
|
26,007 | 22,529 | 15 | % | ||||||||
|
||||||||||||
Total
|
$ | 103,432 | $ | 91,332 | 13 | % |
Net Sales for the
Six Months Ended June 30,
|
||||||||||||||||
(US$ in thousands)
|
2009
|
2008
|
Reported Growth
|
Constant Currency Growth
|
||||||||||||
Spine
|
$ | 891 | $ | 612 | 46 | % | 47 | % | ||||||||
Orthopedics
|
36,212 | 40,566 | -11 | % | 6 | % | ||||||||||
Sports Medicine
|
2,254 | 2,548 | -12 | % | 6 | % | ||||||||||
Vascular
|
8,670 | 9,117 | -5 | % | 1 | % | ||||||||||
Other
|
10,065 | 14,177 | -29 | % | -10 | % | ||||||||||
Total
|
$ | 58,092 | $ | 67,020 | -13 | % | 2 | % |
PART II
|
OTHER INFORMATION
|
|
1.
|
The following persons were elected by a plurality of the votes cast at the meeting as Directors of the Company for a one year term expiring at the Annual General Meeting in 2010:
|
Name
|
Votes For
|
Votes Withheld
|
||
Jerry C. Benjamin
|
15,022,668
|
948,018
|
||
Charles W. Federico
|
14,696,948
|
1,271,738
|
||
James F. Gero
|
14,937,477
|
1,033,209
|
||
Guy J. Jordan
|
15,463,368
|
507,318
|
||
Thomas J. Kester
|
15,461,868
|
508,818
|
||
Alan W. Milinazzo
|
15,050,557
|
920,129
|
||
Maria Sainz
|
15,467,116
|
503,570
|
||
Walter P. Von Wartburg
|
14,594,786
|
1,375,900
|
||
Kenneth R. Weisshaar
|
15,461,616
|
509,070
|
|
2.
|
A further Amendment and Restatement to the Company’s Amended and Restated 2004 Long-Term Incentive Plan was not approved by a vote of 10,688,412 against, 3,971,584 in favor and 337,410 abstaining; and
|
|
3.
|
Amendment No. 1 to the Company’s Amended and Restated Stock Purchase Plan was approved by a vote of 13,759,688 in favor 894,237 against, and 343,481 abstaining; and
|
|
4.
|
A proposal to approve the material terms for the payment of certain incentive compensation to the Company’s most highly compensated executive officers under the Company’s annual incentive program was approved by a vote of 14,185,107 in favor, 478,047 against and 334,252 abstaining; and
|
|
5.
|
The Company’s balance sheet and income statement at and for the year ended December 31, 2008 were approved by a vote of 15,067,592 in favor, 19,270 against and 883,824 abstaining; and
|
|
6.
|
The selection of Ernst & Young LLP to act as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31, 2009 was ratified by a vote of 15,069,538 in favor, 565,595 against and 335,553 abstaining.
|
|
(a)
|
Exhibits
|
Exhibit
Number
|
Description
|
|
3.1
|
Certificate of Incorporation of the Company (filed as an exhibit to the Company’s annual report on Form 20-F dated June 29, 2001 and incorporated herein by reference).
|
|
3.2
|
Articles of Association of the Company as amended (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference).
|
|
Orthofix International N.V. Amended and Restated Stock Purchase Plan, as amended.
|
||
Orthofix International N.V. Amended and Restated 2004 Long Term Incentive Plan.
|
||
10.3
|
Orthofix International N.V. Staff Share Option Plan, as amended through April 22, 2003 (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007 and incorporated herein by reference).
|
|
10.4
|
Form of Employee Non-Qualified Stock Option Agreement (post-2008 grants) (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.5
|
Form of Non-Employee Director Non-Qualified Stock Option Agreement (post-2008 grants) (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.6
|
Form of Nonqualified Stock Option Agreement under the Orthofix International N.V. Amended and Restated 2004 Long Term Incentive Plan (pre-2009 grants -- vesting over 3 years) (filed as an exhibit to the Company's current report on Form 8-K filed June 20, 2008 and incorporated herein by reference).
|
|
10.7
|
Form of Nonqualified Stock Option Agreement under the Orthofix International N.V. Amended and Restated 2004 Long Term Incentive Plan (pre-2009 grants -- 3 year cliff vesting) (filed as an exhibit to the Company's current report on Form 8-K filed June 20, 2008 and incorporated herein by reference).
|
|
10.8
|
Form of Restricted Stock Grant Agreement under the Orthofix International N.V. Amended and Restated 2004 Long Term Incentive Plan (vesting over 3 years) (filed as an exhibit to the Company's current report on Form 8-K filed June 20, 2008 and incorporated herein by reference).
|
|
10.9
|
Form of Restricted Stock Grant Agreement under the Orthofix International N.V. Amended and Restated 2004 Long Term Incentive Plan (3 year cliff vesting) (filed as an exhibit to the Company's current report on Form 8-K filed June 20, 2008 and incorporated herein by reference).
|
|
10.10
|
Amended and Restated Orthofix Deferred Compensation Plan (filed as an exhibit to the Company’s current report on Form 8-K filed January 7, 2009, and incorporated herein by reference).
|
10.11
|
Acquisition Agreement dated as of November 20, 2003, among Orthofix International N.V., Trevor Acquisition, Inc., Breg, Inc. and Bradley R. Mason, as shareholders’ representative (filed as an exhibit to the Company’s current report on Form 8-K filed January 8, 2004 and incorporated herein by reference).
|
|
10.12
|
Amended and Restated Voting and Subscription Agreement dated as of December 22, 2003, among Orthofix International N.V. and the significant shareholders of Breg, Inc. identified on the signature pages thereto (filed as an exhibit to the Company’s current report on Form 8-K filed on January 8, 2004 and incorporated herein by reference).
|
|
10.13
|
Amendment to Employment Agreement dated December 29, 2005 between Orthofix Inc. and Charles W. Federico (filed as an exhibit to the Company’s current report on Form 8-K filed December 30, 2005 and incorporated herein by reference).
|
|
10.14
|
Form of Indemnity Agreement (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2008 and incorporated herein by reference).
|
|
10.15
|
Settlement Agreement dated February 23, 2006, between Intavent Orthofix Limited, a wholly-owed subsidiary of Orthofix International N.V. and Galvin Mould (filed as an exhibit to the Company’s annual report on Form 8-K filed on April 17, 2006 and incorporated herein by reference).
|
|
10.16
|
Amended and Restated Employment Agreement, dated December 6, 2007, between Orthofix Inc. and Raymond C. Kolls (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and incorporated herein by reference).
|
|
10.17
|
Credit Agreement, dated as of September 22, 2006, among Orthofix Holdings, Inc., Orthofix International N.V., certain domestic subsidiaries of Orthofix International N.V., Colgate Medical Limited, Victory Medical Limited, Swiftsure Medical Limited, Orthofix UK Ltd, the several banks and other financial institutions as may from time to time
become parties thereunder, and Wachovia Bank, National Association (filed as an exhibit to the Company’s current report on Form 8-K filed September 27, 2006 and incorporated herein by reference).
|
|
10.18
|
First Amendment to Credit Agreement, dated September 29, 2008, by and among Orthofix Holdings, Inc., Orthofix International N.V., certain domestic subsidiaries of Orthofix International N.V., Colgate Medical Limited, Victory Medical Limited, Swiftsure Medical Limited, Orthofix UK Ltd, and Wachovia Bank, National Association, as administrative
agent on behalf of the Lenders under the Credit Agreement (filed as an exhibit to the Company’s current report on Form 8-K filed September 29, 2008 and incorporated herein by reference).
|
|
10.19
|
Agreement and Plan of Merger, dated as of August 4, 2006, among Orthofix International N.V., Orthofix Holdings, Inc., New Era Medical Limited, Blackstone Medical, Inc. and William G. Lyons, III, as Equityholders’ Representative (filed as an exhibit to the Company's current report on Form 8-K filed August 7, 2006 and incorporated herein
by reference).
|
|
10.20
|
Employment Agreement, dated as of September 22, 2006, between Blackstone Medical, Inc. and Matthew V. Lyons (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2006, as amended, and incorporated herein by reference).
|
10.21
|
Amended and Restated Employment Agreement dated December 6, 2007 between Orthofix Inc. and Timothy M. Adams (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and incorporated herein by reference).
|
|
10.22
|
Nonqualified Stock Option Agreement between Timothy M. Adams and Orthofix International N.V. dated November 19, 2007 (filed as an exhibit to the Company’s current report on Form 8-K filed November 21, 2007 and incorporated herein by reference).
|
|
10.23
|
Employment Agreement between Orthofix Inc. and Scott Dodson, dated as of December 10, 2007 (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and incorporated herein by reference).
|
|
10.24
|
Employment Agreement between Orthofix Inc. and Michael Simpson, dated as of December 6, 2007 (filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and incorporated herein by reference).
|
|
10.25
|
Description of Director Fee Policy (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference).
|
|
10.26
|
Summary of Orthofix International N.V. Annual Incentive Program (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference).
|
|
10.27
|
Employment Agreement between Orthofix Inc. and Thomas Hein dated as of April 11, 2008 (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference).
|
|
10.28
|
Nonqualified Stock Option Agreement under the Orthofix International N.V. Amended and Restated 2004 Long-Term Incentive Plan, dated April 11, 2008, between Orthofix International N.V. and Thomas Hein (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference).
|
|
10.29
|
Summary of Consulting Arrangement between Orthofix International N.V. and Peter Hewett (filed as an exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference).
|
|
10.30
|
Employment Agreement between Orthofix Inc. and Denise E. Pedulla dated as of June 9, 2008 (filed as an exhibit to the company’s quarterly report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference).
|
|
10.31
|
Form of Inducement Grant Nonqualified Stock Option Agreement between Orthofix International N.V. and Robert S. Vaters (filed as an exhibit to the current report on Form 8-K of Orthofix International N.V dated September 10, 2008 and incorporated herein by reference).
|
|
10.32+
|
Letter Agreement between Orthofix Inc. and Oliver Burckhardt dated August 28, 2008 (filed as an exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference).
|
|
10.33
|
Notice of Termination from Orthofix Inc. to Oliver Burckhardt dated August 27, 2008 (filed as an exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference).
|
10.34
|
Second Amended and Restated Performance Accelerated Stock Options Agreement between Orthofix International N.V. and Bradley R. Mason dated October 14, 2008 (filed as an exhibit to the Company’s current report on Form 8-K filed October 15, 2008 and incorporated herein by reference).
|
|
10.35
|
Nonqualified Stock Option Agreement between Orthofix International N.V. and Bradley R. Mason dated October 14, 2008 (filed as an exhibit to the Company’s current report on Form 8-K filed October 15, 2008 and incorporated herein by reference).
|
|
10.36
|
Amended and Restated Employment Agreement, entered into and effective as of July 1, 2009, by and between Orthofix Inc. and Alan W. Milinazzo (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.37
|
Amended and Restated Employment Agreement, entered into and effective as of July 1, 2009, by and between Orthofix Inc. and Robert S. Vaters (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.38
|
Amended and Restated Employment Agreement, entered into and effective as of July 1, 2009, by and between Orthofix Inc. and Bradley R. Mason (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.39
|
Amended and Restated Employment Agreement, entered into and effective as of July 1, 2009, by and between Orthofix Inc. and Michael M. Finegan (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
10.40
|
Form of Amendment to Stock Option Agreements (for Alan W. Milinazzo, Robert S. Vaters, Bradley R. Mason, and Michael M. Finegan) (filed as an exhibit to the Company's current report on Form 8-K filed July 7, 2009 and incorporated herein by reference).
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
||
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
||
Section 1350 Certification of Chief Executive Officer.
|
||
Section 1350 Certification of Chief Financial Officer.
|
*
|
Filed herewith.
|
ORTHOFIX INTERNATIONAL N.V.
|
||
Date: July 31, 2009
|
By:
|
/s/ Alan W. Milinazzo
|
Name: Alan W. Milinazzo
|
||
Title: Chief Executive Officer and President
|
||
Date: July 31, 2009
|
By:
|
/s/ Robert S. Vaters
|
Name: Robert S. Vaters
|
||
Title: Executive Vice President and Chief Financial Officer
|
|
(a)
|
If the Common Shares are then listed or admitted to trading on a stock exchange which reports closing sale prices, the Fair Market Value shall be the closing sale price on such date on such principal stock exchange on which the Common Share is then listed or admitted to trading, or, if no closing sale price is quoted on such day, then the Fair Market Value shall be the closing sale price of the Common Share on such
exchange on the next preceding day on which a closing sale price is reported;
|
|
(b)
|
If the Common Shares are not then listed or admitted to trading on a stock exchange which reports closing sale prices, the Fair Market Value shall be the average of the closing bid and asked prices of the Common Share in the over-the-counter market on such date; or
|
|
(c)
|
If neither (a) nor (b) is applicable as of such date, then the Fair Market Value shall be determined by the Committee in good faith using any reasonable method of evaluation, which determination shall be conclusive and binding on all interested parties.
|
|
(i)
|
select the Participants from the Eligible Individuals;
|
|
(ii)
|
grant Awards in accordance with the Plan;
|
|
(iii)
|
determine the number of Common Shares subject to each Award or the cash amount payable in connection with an Award;
|
|
(iv)
|
determine the terms and conditions of each Award, including, without limitation, those related to term, vesting, forfeiture, payment, settlement, exercisability, Performance Periods, Performance Targets, Target Numbers, and the effect, if any, of a Participant’s termination of employment with the Company or any of its Subsidiaries or a change in control of the Company, and including the authority to amend the
terms and conditions of an Award after the granting thereof to a Participant in a manner that is not, without the consent of the Participant, prejudicial to the rights of such Participant in such Award;
|
|
(v)
|
specify and approve the provisions of the Award Documents delivered to Participants in connection with their Awards;
|
|
(vi)
|
construe and interpret any Award Document delivered under the Plan;
|
|
(vii)
|
prescribe, amend and rescind rules and procedures relating to the Plan;
|
|
(viii)
|
employ such legal counsel, independent auditors and consultants as it deems desirable for the administration of the Plan and to rely upon any opinion or computation received therefrom;
|
|
(ix)
|
vary the terms of Awards to take account of tax, securities law and other regulatory requirements of foreign jurisdictions; and
|
|
(x)
|
make all other determinations and take any other action desirable or necessary to interpret, construe or implement properly the provisions of the Plan or any Award Document.
|
|
(i)
|
3,100,000 shares;
|
|
(ii)
|
the number of shares available for future awards under the Prior Plan as of the Effective Date of original shareholder approval on June 29, 2004; and
|
|
(iii)
|
any shares corresponding to an award, or portion thereof, under the Prior Plan that is forfeited or expires for any reason without having been exercised or settled after the Effective Date of original shareholder approval on June 29, 2004 (collectively, the “
Plan Limit
”).
|
|
(i)
|
the maximum number of Common Shares that, in the aggregate, may be subject to Restricted Share Units payable in Common Shares, Performance Share Units payable in Common Shares, Restricted Stock, and Other Awards payable in Common Shares shall equal 400,000 shares;
provided, however
, that following June 19, 2008, in no event shall the number of Common Shares
that may thereafter be awarded as Restricted Share Units payable in Common
Shares
, Performance Share Units payable in Common Shares, Restricted Stock, and Other Awards payable in Common Shares exceed 100,000 shares (but, for the avoidance of doubt, nothing in this proviso shall in any way affect or limit the number of Restricted Share Units payable in Common Shares, Performance Share Units payable in Common Shares, Restricted Stock, and Other Awards
payable in Common Shares granted prior to such date, all of which may and shall remain outstanding in accordance with their terms, in addition to the 100,000 shares of such Awards that may be awarded hereby);
|
|
(ii)
|
the maximum number of Common Shares that may be subject to Options or Stock Appreciation Rights granted to any Eligible Individual in any calendar year shall equal 200,000 shares, plus any shares which were available under this Section 5(c)(ii) for Awards to such Eligible Individual in any prior calendar year but which were not covered by such Awards; and
|
|
(iii)
|
the maximum number of Common Shares that may be subject to Restricted Share Units, Performance Share Units, Restricted Stock, or Other Awards granted to any Eligible Individual in any calendar year shall equal 200,000 shares, plus any shares which were available under this Section 5(c)(iii) for Awards to such Eligible Individual in any prior calendar year but which were not covered by such Awards.
|
|
(i)
|
An Award that is not intended to be “performance-based compensation” (as described below in Section 6(g)) shall vest or the restrictions applicable to such Award shall lapse, as the case may be, no sooner than a rate of thirty three and one-third percent (33 1/3%) per year on each of the first (1st), second (2nd) and third (3rd) anniversaries of the date of grant; provided, however, that the exercisability
of any portion of an Award relating to a fractional share shall be deferred until such time, if any, that such portion can be exercised as a whole Common Share.
|
|
(ii)
|
An Award that is intended to be “performance-based compensation” (as described below in Section 6(g)) shall vest or the restrictions applicable to such Award shall lapse, as the case may be, no sooner than twelve (12) months following the date of grant.
|
|
(i)
|
an Award of 30,000 Options on the date of such director’s first election to the Board, which Award shall vest or the restrictions applicable to such Award shall lapse, as the case may be, at the rate of 6,000 Common Shares per year on each of the first five (5) anniversaries of the date of grant, provided that the director is still a member of the Board on each such anniversary; and
|
|
(ii)
|
an annual Award of 5,000 Options on the date of such director’s re-election or re-appointment to the Board, which Award shall vest or the restrictions applicable to such Award shall lapse, as the case may be, in accordance with Section 6(c) above, provided that the director is still a member of the Board on the date(s) referenced in Section 6(c).
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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July 31, 2009
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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July 31, 2009
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orthofix.
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Dated: July 31, 2009
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/s/ Alan W. Milinazzo
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Name: Alan W. Milinazzo
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Title: Chief Executive Officer and President
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orthofix.
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Dated: July 31, 2009
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/s/ Robert S. Vaters
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Name: Robert S. Vaters
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Title: Executive Vice President and Chief Financial Officer
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