Orthofix Medical Inc. · NASDAQ:OFIX
Orthofix Medical — Orthofix International — Canaccord Adams Musculoskeletal Conference 2009
26 slides from Orthofix Medical's conference presentation, Feb 25, 2009
Slide 1: Canaccord Adams Musculoskeletal Conference
CANACCORD Adams Musculoskeletal Conference University of Nevada, Las Vegas February 24, 2009 Orthofix International Alan Milinazzo President & CEO
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for historical information contained herein, the statements made in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward l
Slide 3: Orthofix Overview
Orthofix Overview • Global medical device company with an emerging focus on the spine sector, including minimally invasive surgical and non-surgical devices and biologic products. • Total 2008 revenue of $520 million; 74% of total revenue up an average of 16% • Strategy for long term growth includes
Slide 4: Core Businesses
Core Businesses • Spine: Market-leading spinal bone growth stimulators, including only FDA-approved cervical spine stimulator; spine implants & biologics • Orthopedics: Internal and external fixation, deformity correction and long bone stimulation • Sports Medicine : Focus on knee bracing and cold t
Slide 5: U.S. Market- Spine Stimulation
55% 19% 26% U.S. Market- Spine Stimulation 55% 19% 26% Orthofix DJO Biomet l $245-$250 million market; growth rate vs. 2007 = 5%-6% l OFIX ’08 revenue growth YTD = 11% Only FDA approved cervical spine stimulator
Slide 6: Global Markets- Spine Implants & Biologics
$2.3B $775M $1.1B Global Markets- Spine Implants & Biologics • $4.1 billion global spinal fusion market; growing ~ 3.5% • Orthofix current market share ~2% Thoracolumbar Cervical IBD $2.3B $775M $1.1B
Slide 7: U.S. Market- Spine Implants & Biologics
+9% U.S. Market- Spine Implants & Biologics • $1.5 billion U.S. bone graft substitute market; growing ~ 9% • 2008 Trinity ® revenue ~ $20 million $1.76 $1.88 $1.04 $1.19 $1.34 $1.48 2006-2012 Market ($ in billions) GFs DBMs Synthetics Allograft Stem Cells ‘08 ‘09 ‘10 ‘11 ‘12 ‘07 ‘06 $1.63
Slide 8: Global Markets- Spine Implants
$112 $132 $175 Global Markets- Spine Implants • $419 million global non-fusion market; growing >40% $112 $132 IPD Devices Dynamic Stabilization Cervical Discs $175
Slide 9: Global Markets- Orthopedics (Fixation)
Global Markets- Orthopedics (Fixation) Europe U.S. Internal $1,230 $ millions l External fixation market growing 1.0% l Internal fixation market 7.6% l External fixation market growing 2% l Internal fixation market growing 3% OFIX = 44% Market share OFIX < 1% Market share OFIX = 6% Market share OFIX
Slide 10: U.S. Market- Orthopedics (U.S. Stimulation)
38% 30% 21% 11% U.S. Market- Orthopedics (U.S. Stimulation) Smith & Nephew Biomet 38% DJO Orthofix 30% 21% 11% l $240M-$250M U.S. market growing 10% l OFIX 2008 revenue growth = 14%
Slide 11: U.S. Markets- Orthopedics (Biologics)
U.S. Markets- Orthopedics (Biologics) $1.76 $1.88 $1.04 $1.19 $1.34 $1.48 2006-2012 Market ($ in billions) $1.63 GFs DBMs Synthetics Allograft Stem Cells • $1.5 billion U.S. bone graft substitute market; growing ~ 9% • 2008 Trinity ® revenue $3.5 million
Slide 12: U.S. Market- Sports Medicine (Bracing)
$784 $115 $150 $154 U.S. Market- Sports Medicine (Bracing) Knee Back Ankle Walkers Elbow $35 Wrist $51 $784 $115 $150 $154 Shoulder $47 OFIX ’08 growth = 12%
Slide 13: U.S. Market- Sports Medicine (Cold Therapy)
Motorized $75 $26 U.S. Market- Sports Medicine (Cold Therapy) Motorized $75 $26 • Cold therapy market growth = 8% • OFIX 2008 growth = 16% Non-motorized OFIX market share >35%
Slide 14: U.S. Market- Sports Medicine Expansion
$83 $174 $47 $60 $101 $270 $467 $150 $86 U.S. Market- Sports Medicine Expansion $83 $174 $47 $60 $101 $270 $467 $150 $86 Post-Op Bracing Ligament Bracing Shoulder Bracing OA Bracing Cold Therapy Foot & Ankle Soft Bracing Back Bracing Upper Extremity l Total available markets pre ‘08 = $462 million l
Slide 15: Core Business Segments
Spine Sports Medicine Orthopedics ‘08 revenue = $252 million Gross margin of mid to high 70% ‘08 revenue = $129 million Gross margin of ~70% ‘08 revenue = $94 million Gross margin of mid-60% Core Business Segments 2008 revenue growth in 3 core business segments = 7.5% 2008 Vascular and Other revenue
Slide 16: Key Management Changes
Key Management Changes • Brad Mason named Group President, North America and President of Orthofix Spine • Bob Vaters named as Executive Vice President and Chief Financial Officer
Slide 17: Growth Strategy- Orthopedics
Growth Strategy- Orthopedics q New product introductions q Focus on internal fixation/deformity correction devices • Including geographic expansion in LA, Europe & Asia q Focus on long bone stimulation & biologics in U.S. • 2008 stimulation revenue up 14%; market growing 10% • 2008 biologic revenue
Slide 18: Growth Strategy- Sports Medicine
Growth Strategy- Sports Medicine q Leverage strong distribution channels • Well-established distributor partners • Targeted migration to hybrid sales force q Leverage strong market share in high growth areas • Osteoarthritis knee bracing- 16% market share; OFIX revenue growth = 14% • Cold therapy- 3
Slide 19: Growth Strategy- Spine Stimulation
Growth Strategy- Spine Stimulation
Slide 20: Growth Strategy- Spine Implants & Biologics
Growth Strategy- Spine Implants & Biologics Launch accelerated to May 1
Slide 21: Blackstone- Improved U.S. revenue growth 2H08
Blackstone- Improved U.S. revenue growth 2H08
Slide 22: Blackstone- Improved adjusted operating loss
Blackstone- Improved adjusted operating loss
Slide 23: Cash Flow/Operating Results
Cash Flow/Operating Results q Q408 cash balance decreased $1.4 million sequentially from Q308, including impact of Q408 $10 million debt prepayment. q Q408 leverage ratio = 3.4 vs. 4.0 requirement. q Additional $7 million debt prepayment made 2/09. q Leverage ratio at 12/31/09 would be 3.0 based on
Slide 24: Ramius
Ramius q Ramius proposal seeks 40% of Orthofix Board seats with only 5.5% stock ownership q Orthofix has publicly expressed concerns about 2 of 4 Ramius nominees q Orthofix has indicated willingness to interview other 2 nominees; no response from Ramius
Slide 25: Notification of Proxy Statement Filing
Notification of Proxy Statement Filing Important Additional Information Ramius Capital and certain of its affiliates have filed a preliminary proxy statement with the SEC in connection with a special general meeting of shareholders at which Ramius proposes to make changes to the composition of Ortho
Slide 26: Orthofix: One Company | One Direction
o onto IX ne Com pany | One Direction
Orthofix International — Canaccord Adams Musculoskeletal Conference 2009 on 6ix