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): November 2, 2012
TORNIER N.V.
(Exact name of registrant as specified in its charter)
The Netherlands | 1-35065 | 98-0509600 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Fred. Roeskestraat 123 1076 EE Amsterdam, The Netherlands |
None | |||
(Address of principal executive offices) | (Zip Code) |
(+ 31) 20 675-4002
(Registrants telephone number, including area code)
Not Applicable
(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)) |
Item 2.02. | Results of Operations and Financial Condition. |
On November 5, 2012, Tornier N.V. (Tornier) issued a press release announcing its consolidated financial results for the third fiscal quarter ended September 30, 2012. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and the information set forth therein is incorporated herein by reference and constitutes a part of this report.
To supplement Torniers consolidated financial statements prepared in accordance with United States generally accepted accounting principles (GAAP), Torniers press release includes the following non-GAAP financial measures:
| revenues on a constant currency basis, which remove the impact of changes in foreign currency exchange rates, and are calculated by translating current period results at prior period average foreign currency exchange rates; |
| EBITDA, which represents net loss before interest expense, income tax expense and benefit, depreciation and amortization; |
| adjusted EBITDA, which gives further effect to, among other things, non-operating income and expense, foreign currency transaction gains and losses, share-based compensation, loss on extinguishment of debt, inventory step-up from acquisition and special charges, which special charges include facility consolidation charges, acquisition and integration costs, distribution channel transition costs, management exit costs and certain other items that affect the comparability and trend of Torniers operating results; |
| adjusted EBITDA margin, which represents adjusted EBITDA divided by revenues; |
| adjusted net income (loss), which represents net income (loss) excluding special charges as described above, inventory step-up from acquisition, loss on extinguishment of debt, and certain other items that affect the comparability and trend of Torniers operating results; |
| adjusted net income (loss) per share, which represents net income (loss) per share excluding loss on extinguishment of debt, inventory step-up from acquisition, special charges as described above and certain other items that affect the comparability and trend of Torniers operating results; and |
| free cash flow, which represents net cash provided by (used in) operating activities adjusted for cash paid related to facilities consolidation, less additions for instruments and purchases for property, plant and equipment, and excluding any additions of property, plant and equipment related to facilities consolidation. |
Tornier believes the non-GAAP financial measures described above and used by Tornier provide additional meaningful information for measuring Torniers financial performance and are measures frequently used by Torniers management, as well as securities analysts and investors. Tornier uses the non-GAAP financial measures as supplemental measures of its performance and
believes such measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by charges not related to Torniers regular, ongoing business, including non-cash charges, certain large and unpredictable charges, acquisitions, dispositions, and tax positions. Torniers management uses the non-GAAP financial measures to assess the performance of Torniers core operations, analyze underlying trends in Torniers businesses, establish operational goals and forecasts, and evaluate Torniers performance period over period and in relation to the operating results of its competitors. Torniers management uses the non-GAAP financial measures to help allocate its resources to both ongoing and prospective business initiatives and to help make budgeting and spending decisions, for example, between product development expenses, research and development expenses, and selling, general and administrative expenses. Torniers management is evaluated on the basis of several of these non-GAAP financial measures when determining achievement of performance incentive compensation goals.
Tornier believes that non-GAAP financial measures have limitations as analytical tools since they do not reflect all of the amounts associated with Torniers operating results as determined in accordance with GAAP and should only be used to evaluate Torniers operating results in conjunction with the corresponding GAAP measures. Accordingly, revenue on a constant currency basis should not be used as a substitute for revenue, EBITDA, adjusted EBITDA, adjusted net income (loss) and adjusted net income (loss) per share should not be used as a substitute for net income or net income per share; adjusted EBITDA margin should not be used as a substitute for net margin or operating margin, and free cash flow should not be used as a substitute for cash flows from operations, in each case as determined in accordance with GAAP. Neither EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per share nor free cash flow is necessarily an indication of whether cash flow will be sufficient to fund Torniers cash requirements. Additionally, the calculation of non-GAAP financial measures is not based on any comprehensive or standard set of accounting rules or principles. Accordingly, Torniers definitions of revenue on a constant currency basis, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per share and free cash flow may differ from the definitions of other companies using the same or similar names limiting, to some extent, the usefulness of such measures for comparison purposes.
All of the historical non-GAAP financial measures used in the press release are reconciled to the most directly comparable GAAP measure in the press release. Tornier is furnishing the information contained in this report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the United States Securities and Exchange Commission (the SEC). This information shall not be deemed to be filed with the SEC 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, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, except as expressly set forth by specific reference in such filing. By filing this current report on Form 8-K and furnishing this information, Tornier makes no admission as to the materiality of any information contained in this report, including Exhibit 99.1.
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b) On November 2, 2012, Pascal E.R. Girin resigned as a director of Tornier N.V. effective immediately. Mr. Girin did not resign as a result of any disagreement with Tornier on any matter relating to Torniers operations, policies or practices.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description | |
99.1 | Press Release issued November 5, 2012 (furnished herewith) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 5, 2012 | TORNIER N.V. | |||||
By: | /s/ Kevin M. Klemz | |||||
Name: | Kevin M. Klemz | |||||
Title: | Vice President, Chief Legal Officer and Secretary |
TORNIER N.V.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit No. |
Description |
Method of Filing | ||||
99.1 | Press Release issued November 5, 2012 | Furnished herewith |
Exhibit 99.1
FOR IMMEDIATE RELEASE
TORNIER REPORTS THIRD QUARTER 2012 FINANCIAL RESULTS
Shoulder Products Drive Extremities Constant Currency Growth of 7%
OrthoHelix Acquisition Provides Significant New Growth Opportunity
AMSTERDAM, The Netherlands, November 5, 2012 Tornier N.V. (NASDAQ: TRNX), a global medical device company focused on providing surgical solutions to orthopaedic extremity specialists, today reported its financial results for the third quarter ended September 30, 2012 and updated its fiscal 2012 financial outlook.
Sales for the third quarter of 2012 were $58.0 million, representing increases of 0.8% as reported and 5.5% in constant currency. Sales for the nine months ended September 30, 2012 totaled $198.5 million, compared to sales of $192.1 million for the same period of 2011, an increase of 3.3% as reported and 7.0% in constant currency. Third quarter sales of Torniers extremity product categories increased 3.8% as reported and 6.9% in constant currency year over year and represented 84.0% of reported global sales.
Douglas W. Kohrs, President and Chief Executive Officer of Tornier, commented, We are pleased with the continued growth of our extremities business, led by sales of our reverse shoulder products, which showed strong growth in both our U.S. and international markets. Despite continuous austerity pressures in our European markets, we believe the combined product portfolio of Tornier and OrthoHelix strongly positions Tornier for leadership in both the shoulder and the foot and ankle markets.
The Companys third quarter 2012 adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, totaled $4.8 million, or 8.3% of sales. Increased investments in research and development, which totaled 9.1% of sales in the quarter, resulted in a decline of $0.1 million in adjusted EBITDA versus the third quarter of 2011. For the nine months ended September 30, 2012, adjusted EBITDA increased 8.4% to $22.0 million, or 11.1% of sales, compared to $20.3 million, or 10.5% of sales, in the same period last year.
Mr. Kohrs continued, During the third quarter of 2012, our gross margins improved for the third consecutive quarter and expanded 180 basis points year over year to 72.9%. This increase funded additional research and development investment associated with the pending launch of our Ascend Flex shoulder and additional investment in our U.S. sales organization. Looking towards the remainder of the year, we remain focused on capitalizing on the OrthoHelix acquisition and building value for our shareholders.
Sales and Product Review
Torniers third quarter 2012 constant currency sales growth of 5.5% was led by its extremity product categories, which together posted constant currency growth of 6.9% over the third quarter of 2011. Within the extremity products group, the upper extremity joints and trauma category grew 7.9% in constant currency over the same quarter in 2011. This growth was led by
the Companys shoulder arthroplasty portfolio, including the Aequalis Ascend and the Simpliciti stemless shoulder system, which continued to be highly accepted by surgeons. Torniers lower extremity joints and trauma category grew 0.1% in constant currency, with solid growth in its ankle arthroplasty line, including the market-leading Salto® ankle arthroplasty system and the innovative Stabilis ankle fusion system, which was offset by a decline in fixation and trauma products. The sports medicine and biologics product category posted constant currency sales growth of 8.3% in the third quarter of 2012 year over year, and was led by the Companys Insite®FT bone anchor and newly launched Duo Instability System. Sales of the Companys large joints and other product lines experienced a 1.0% decline on a constant currency basis versus the same quarter last year, primarily as a result of procedure declines in France, Spain and Italy.
On a geographic basis, Torniers third quarter 2012 international constant currency sales increased 6.2% as compared to the third quarter of 2011 and represented 41% of reported global sales. Sales in the United States increased 4.9% and represented 59% of reported global sales.
Outlook
Tornier updated its outlook for the remainder of 2012, taking into account continued U.S. distribution channel initiatives, European market conditions, anticipated new product launch timing and the recently completed acquisition of OrthoHelix. For the fourth quarter of 2012, the Company projects constant currency sales to be in the range of $77 to $80 million, inclusive of anticipated OrthoHelix sales of $7 to $8 million, representing constant currency growth of 11.5% to 15.9% over fourth quarter 2011 sales. Based on recent currency exchange rates, fourth quarter 2012 reported sales are projected to be in the range of $75.8 to $78.8 million, inclusive of anticipated OrthoHelix sales, representing reported growth of 10% to 14% over fourth quarter 2011 sales. Fourth quarter 2012 extremities product category sales, inclusive of anticipated OrthoHelix sales, are expected to grow 16% to 20% in constant currency. The Company projects adjusted EBITDA, as described in the GAAP to non-GAAP reconciliation provided later in this release, inclusive of OrthoHelix operations, for the fourth quarter of 2012 to be in the range of $9 to $11 million, or 12% to 14% of reported sales. OrthoHelix is expected to have a minor impact on adjusted EBITDA in the fourth quarter.
The Company projects 2012 constant currency sales to be in the range of $282.5 to $285.5 million, inclusive of anticipated OrthoHelix sales of $7 to $8 million, representing constant currency growth of 8.2% to 9.3%. Based on recent currency exchange rates, 2012 reported sales are projected to be in the range of $274 to $277 million, inclusive of anticipated OrthoHelix sales, representing reported growth of 5% to 6% over 2011 sales. Sales of the Tornier extremities product categories in 2012, inclusive of anticipated OrthoHelix sales, are expected to grow 10.8% to 11.8% in constant currency. The Company projects 2012 adjusted EBITDA to be in the range of $31 to $33 million, or 11% to 12% of reported sales, inclusive of the anticipated impact of OrthoHelix operations.
Anticipated facilities consolidation charges announced in the Companys press release on April 13, 2012 and anticipated fourth quarter charges relating to the acquisition and integration of OrthoHelix are excluded from projected 2012 adjusted EBITDA. The Company anticipates that substantially all of the facility consolidation charges, estimated to be $6.5 to $7.0 million, will be
recorded in 2012, of which $1.2 to $1.7 million are expected to be recorded in the fourth quarter of 2012. The facility consolidation and acquisition and integration charges will be recorded as special charges within operating expenses and, thereby, excluded from adjusted EBITDA.
Please refer to the current report on Form 8-K filed by Tornier with the Securities and Exchange Commission today for definitions of non-GAAP financial measures used in this release and to the tables provided in this release for reconciliations of our non-GAAP financial measures to the most directly comparable GAAP measure.
Earnings Call Information
Tornier will host a conference call today at 4:30 p.m. eastern time to discuss its third quarter 2012 financial results and its updated outlook for 2012. The conference call will be available to interested parties through a live audio webcast available through the Companys website at www.tornier.com. Those without internet access may join the call from within the U.S. by dialing 1-877-673-5355; outside the U.S., dial +1-760-666-3805.
A telephone replay will be available for two weeks following the call by dialing 1-855-859-2056 for domestic participants and +1-404-537-3406 for international participants. When prompted, please enter the replay pin number 44525161. For those who are not available to listen to the live webcast, the call will be archived for one year on Torniers website.
Forward-Looking Statements
Statements contained in this release that relate to future, not past, events are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations of future events and often can be identified by words such as expect, should, project, anticipate, intend, will, may, believe, could, would, continue, outlook, guidance, future, other words of similar meaning or the use of future dates. Examples of forward-looking statements in this release include Torniers financial guidance for the fourth quarter of 2012 and for the full year 2012, Torniers anticipated leadership in both the shoulder and the foot and ankle markets, anticipated facilities consolidation charges and the timing of such charges, and anticipated fourth quarter charges as a result of Torniers acquisition and integration of OrthoHelix. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause Torniers actual results to be materially different than those expressed in or implied by Torniers forward-looking statements. For Tornier, such uncertainties and risks include, among others, Torniers future operating results and financial performance, fluctuations in foreign currency exchange rates, the effect of global economic conditions, the European sovereign debt crisis, and austerity measures, risks associated with Torniers international operations and expansion, risks associated with Torniers recent acquisition of OrthoHelix and the new credit facility agreement, the timing of regulatory approvals and introduction of new products, physician acceptance, endorsement, and use of new products; the effect of regulatory actions, changes in and adoption of reimbursement rates, potential product recalls, competitor activities, the effect of changes in Torniers distribution channels and the costs and effects of litigation and changes in tax and other legislation. More detailed information on these and other factors that could affect Torniers actual results are described in Torniers filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Tornier undertakes no obligation to update its forward-looking statements.
About Tornier
Tornier is a global medical device company focused on serving extremities specialists who treat orthopaedic conditions of the shoulder, elbow, wrist, hand, ankle and foot. The Companys broad offering of over 100 product lines includes joint replacement, trauma, sports medicine, and biologic products to treat the extremities, as well as joint replacement products for the hip and knee in certain international markets. Since its founding approximately 70 years ago, Torniers Specialists Serving Specialists philosophy has fostered a tradition of innovation, intense focus on surgeon education, and commitment to advancement of orthopaedic technology stemming from its close collaboration with orthopaedic surgeons and thought leaders throughout the world. For more information regarding Tornier, visit www.tornier.com.
Use of Non-GAAP Financial Measures
To supplement Torniers consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), Tornier uses certain non-GAAP financial measures in this release. Reconciliations of the non-GAAP financial measures used in this release to the most comparable U.S. GAAP measures for the respective periods can be found in tables later in this release immediately following the detail of revenue by geography. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for Torniers financial results prepared in accordance with GAAP.
Contact:
Shawn McCormick
Chief Financial Officer
952-426-7646
shawn.mccormick@tornier.com
Doug Kohrs
President and Chief Executive Officer
952-426-7606
dkohrs@tornier.com
Tornier N.V.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
September 30, 2012 | October 2, 2011 | September 30, 2012 | October 2, 2011 | |||||||||||||
Revenue |
$ | 58,015 | $ | 57,556 | $ | 198,487 | $ | 192,149 | ||||||||
Cost of goods sold |
15,730 | 16,650 | 54,944 | 54,708 | ||||||||||||
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Gross profit |
42,285 | 40,906 | 143,543 | 137,441 | ||||||||||||
72.9 | % | 71.1 | % | 72.3 | % | 71.5 | % | |||||||||
Operating expenses |
||||||||||||||||
Selling, general and administrative |
38,524 | 37,937 | 124,157 | 119,895 | ||||||||||||
Research and development |
5,260 | 4,309 | 16,329 | 14,608 | ||||||||||||
Amortization of intangible assets |
2,730 | 2,741 | 8,013 | 8,448 | ||||||||||||
Special charges |
6,503 | 56 | 9,413 | 188 | ||||||||||||
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Total operating expenses |
53,017 | 45,043 | 157,912 | 143,139 | ||||||||||||
Operating (loss) |
(10,732 | ) | (4,137 | ) | (14,369 | ) | (5,698 | ) | ||||||||
Other income (expense) |
||||||||||||||||
Interest income |
70 | 145 | 304 | 415 | ||||||||||||
Interest expense |
(481 | ) | (524 | ) | (1,430 | ) | (3,761 | ) | ||||||||
Foreign currency transaction (loss) |
(326 | ) | (228 | ) | (195 | ) | (81 | ) | ||||||||
Loss on extinguishment of debt |
| | | (29,475 | ) | |||||||||||
Other non-operating income |
56 | 993 | 54 | 1,009 | ||||||||||||
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Loss before income taxes |
(11,413 | ) | (3,751 | ) | (15,636 | ) | (37,591 | ) | ||||||||
Income tax (expense) benefit |
(268 | ) | 2,114 | (1,305 | ) | 9,116 | ||||||||||
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Consolidated net loss |
$ | (11,681 | ) | $ | (1,637 | ) | $ | (16,941 | ) | $ | (28,475 | ) | ||||
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Net loss per share |
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Basic and diluted |
$ | (0.29 | ) | $ | (0.04 | ) | $ | (0.43 | ) | $ | (0.75 | ) | ||||
Weighted average ordinary shares outstanding |
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Basic and diluted |
39,708 | 39,150 | 39,537 | 37,882 |
Tornier N.V.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, 2012 | January 1, 2012 | |||||||
(unaudited) | ||||||||
Assets |
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Current assets |
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Cash and cash equivalents |
$ | 58,499 | $ | 54,706 | ||||
Accounts receivable, net |
42,704 | 45,908 | ||||||
Inventories |
81,368 | 79,883 | ||||||
Deferred income taxes and other current assets |
21,803 | 18,375 | ||||||
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Total current assets |
204,374 | 198,872 | ||||||
Instruments, net |
48,528 | 49,347 | ||||||
Property, plant and equipment, net |
35,893 | 33,353 | ||||||
Goodwill and intangibles, net |
225,800 | 228,209 | ||||||
Deferred income taxes and other assets |
2,148 | 1,919 | ||||||
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Total assets |
$ | 516,743 | $ | 511,700 | ||||
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Liabilities and shareholders equity |
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Current liabilities |
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Short-term borrowing and current portion of long-term debt |
$ | 25,966 | $ | 18,011 | ||||
Accounts payable |
10,044 | 12,020 | ||||||
Accrued liabilities and deferred income taxes |
38,974 | 35,443 | ||||||
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Total current liabilities |
74,984 | 65,474 | ||||||
Other long-term debt |
21,084 | 21,900 | ||||||
Deferred income taxes and other long-term liabilities |
24,016 | 22,866 | ||||||
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Total liabilities |
120,084 | 110,240 | ||||||
Shareholders equity |
396,659 | 401,460 | ||||||
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Total liabilities and shareholders equity |
$ | 516,743 | $ | 511,700 | ||||
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Tornier N.V.
Consolidated Statements of Cash Flow
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
September 30, 2012 | October 2, 2011 | September 30, 2012 | October 2, 2011 | |||||||||||||
Cash flows from operating activities |
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Consolidated net loss |
$ | (11,681 | ) | $ | (1,637 | ) | $ | (16,941 | ) | $ | (28,475 | ) | ||||
Adjustments to reconcile consolidated net loss to net cash provided by (used in) operating activities |
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Depreciation and amortization |
7,051 | 7,147 | 21,398 | 21,038 | ||||||||||||
Impairment of fixed assets |
79 | | 1,028 | | ||||||||||||
Lease termination costs |
731 | | 731 | |||||||||||||
Non-cash foreign currency (gain) loss |
(594 | ) | (216 | ) | (217 | ) | 387 | |||||||||
Deferred income taxes |
305 | (2,828 | ) | (147 | ) | (8,993 | ) | |||||||||
Share-based compensation |
1,712 | 1,831 | 5,108 | 4,741 | ||||||||||||
Non-cash interest expense and discount amortization |
| | | 2,040 | ||||||||||||
Inventory obsolescence |
857 | 1,348 | 2,913 | 3,814 | ||||||||||||
Loss on extinguishment of debt |
| | | 29,475 | ||||||||||||
Incentive related to new facility lease |
703 | | 703 | | ||||||||||||
Other non-cash items affecting earnings |
190 | (683 | ) | 1,441 | (347 | ) | ||||||||||
Changes in operating assets and liabilities |
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Accounts receivable |
4,817 | 3,123 | 4,533 | (534 | ) | |||||||||||
Inventories |
(1,598 | ) | (4,335 | ) | (3,474 | ) | (11,015 | ) | ||||||||
Accounts payable and accruals |
(3,847 | ) | (5,460 | ) | (3,429 | ) | (3,449 | ) | ||||||||
Other current assets and liabilities |
(142 | ) | 261 | (1,317 | ) | 3,556 | ||||||||||
Other non-current assets and liabilities |
(763 | ) | (55 | ) | (1,194 | ) | (1,277 | ) | ||||||||
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Net cash (used in) operating activities |
(2,180 | ) | (1,504 | ) | 11,136 | 10,961 | ||||||||||
Cash flows from investing activities |
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Acquisition-related cash payments |
433 | (418 | ) | (3,656 | ) | (2,053 | ) | |||||||||
Additions of instruments |
(1,474 | ) | (6,586 | ) | (9,245 | ) | (15,042 | ) | ||||||||
Purchases of property, plant, and equipment from lease incentives |
(1,020 | ) | | (1,020 | ) | | ||||||||||
Purchases of property, plant and equipment |
(3,162 | ) | (2,296 | ) | (6,866 | ) | (3,772 | ) | ||||||||
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Net cash provided by investing activities |
(5,223 | ) | (9,300 | ) | (20,787 | ) | (20,867 | ) | ||||||||
Cash flows from financing activities |
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Change in short-term debt |
6,298 | 8,579 | 9,350 | (8,185 | ) | |||||||||||
Repayments of long-term debt |
(4,282 | ) | (2,443 | ) | (8,233 | ) | (6,458 | ) | ||||||||
Proceeds from issuance of long-term debt |
136 | 1,242 | 5,172 | 4,751 | ||||||||||||
Deferred financing costs |
| (102 | ) | | (2,731 | ) | ||||||||||
Repayment of notes payable |
| | | (116,108 | ) | |||||||||||
Issuance of ordinary shares |
937 | 2,907 | 7,108 | 171,215 | ||||||||||||
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Net cash provided by (used in) financing activities |
3,089 | 10,183 | 13,397 | 42,484 | ||||||||||||
Effect of currency exchange rates on cash and cash equivalents |
1,389 | (3,264 | ) | 47 | (1,568 | ) | ||||||||||
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Increase (decrease) in cash and cash equivalents |
(2,925 | ) | (3,885 | ) | 3,793 | 31,010 | ||||||||||
Cash and cash equivalents at beginning of period |
61,424 | 59,733 | 54,706 | 24,838 | ||||||||||||
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Cash and cash equivalents at end of period |
$ | 58,499 | $ | 55,848 | $ | 58,499 | $ | 55,848 | ||||||||
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Tornier N.V.
Selected Revenue Information
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||
September 30, 2012 | October 2, 2011 | Percent change |
September 30, 2012 | October 2, 2011 | Percent change |
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Revenue by product category |
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Upper extremity joints and trauma |
$ | 39,429 | $ | 37,690 | 4.6 | % | $ | 129,434 | $ | 120,640 | 7.3 | % | ||||||||||||
Lower extremity joints and trauma |
5,815 | 5,943 | -2.2 | % | 19,333 | 19,023 | 1.6 | % | ||||||||||||||||
Sports medicine and biologics |
3,487 | 3,329 | 4.7 | % | 11,363 | 10,769 | 5.5 | % | ||||||||||||||||
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|
|
|
|
|
|||||||||||||
Total extremities |
48,731 | 46,962 | 3.8 | % | 160,130 | 150,432 | 6.4 | % | ||||||||||||||||
Large joints and other |
9,284 | 10,594 | -12.4 | % | 38,357 | 41,717 | -8.1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 58,015 | $ | 57,556 | 0.8 | % | $ | 198,487 | $ | 192,149 | 3.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenue by geography |
||||||||||||||||||||||||
United States |
$ | 34,377 | $ | 32,781 | 4.9 | % | $ | 110,647 | $ | 104,197 | 6.2 | % | ||||||||||||
International |
23,638 | 24,775 | -4.6 | % | 87,840 | 87,952 | -0.1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 58,015 | $ | 57,556 | 0.8 | % | $ | 198,487 | $ | 192,149 | 3.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Tornier N.V.
Reconciliation of Revenue to Non-GAAP Revenue on a Constant Currency Basis
(in thousands)
Three Months Ended | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
September 30, 2012 | October 2, 2011 | |||||||||||||||||||
Revenue as reported |
Foreign exchange impact as compared to prior period |
Revenue on a constant currency basis |
Revenue as reported |
Percent change on a constant currency basis |
||||||||||||||||
Revenue by product category |
||||||||||||||||||||
Upper extremity joints and trauma |
$ | 39,429 | $ | 1,225 | $ | 40,654 | $ | 37,690 | 7.9 | % | ||||||||||
Lower extremity joints and trauma |
5,815 | 136 | 5,951 | 5,943 | 0.1 | % | ||||||||||||||
Sports medicine and biologics |
3,487 | 119 | 3,606 | 3,329 | 8.3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total extremities |
48,731 | 1,480 | 50,211 | 46,962 | 6.9 | % | ||||||||||||||
Large joints and other |
9,284 | 1,201 | 10,485 | 10,594 | -1.0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 58,015 | $ | 2,681 | $ | 60,696 | $ | 57,556 | 5.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenue by geography |
||||||||||||||||||||
United States |
$ | 34,377 | $ | | $ | 34,377 | $ | 32,781 | 4.9 | % | ||||||||||
International |
23,638 | 2,681 | 26,319 | 24,775 | 6.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 58,015 | $ | 2,681 | $ | 60,696 | $ | 57,556 | 5.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Nine Months Ended | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
September 30, 2012 | October 2, 2011 | |||||||||||||||||||
Revenue as reported |
Foreign exchange impact as compared to prior period |
Revenue on a constant currency basis |
Revenue as reported |
Percent change on a constant currency basis |
||||||||||||||||
Revenue by product category |
||||||||||||||||||||
Upper extremity joints and trauma |
$ | 129,434 | $ | 3,038 | $ | 132,472 | $ | 120,640 | 9.8 | % | ||||||||||
Lower extremity joints and trauma |
19,333 | 338 | 19,671 | 19,023 | 3.4 | % | ||||||||||||||
Sports medicine and biologics |
11,363 | 276 | 11,639 | 10,769 | 8.1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total extremities |
160,130 | 3,652 | 163,782 | 150,432 | 8.9 | % | ||||||||||||||
Large joints and other |
38,357 | 3,441 | 41,798 | 41,717 | 0.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 198,487 | $ | 7,093 | $ | 205,580 | $ | 192,149 | 7.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenue by geography |
||||||||||||||||||||
United States |
$ | 110,647 | $ | | $ | 110,647 | $ | 104,197 | 6.2 | % | ||||||||||
International |
87,840 | 7,093 | 94,933 | 87,952 | 7.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 198,487 | $ | 7,093 | $ | 205,580 | $ | 192,149 | 7.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Tornier N.V.
Reconciliation of Net Loss to
Non-GAAP Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
September 30, 2012 | October 2, 2011 | September 30, 2012 | October 2, 2011 | |||||||||||||
Revenue, as reported |
$ | 58,015 | $ | 57,556 | $ | 198,487 | $ | 192,149 | ||||||||
Net loss, as reported |
$ | (11,681 | ) | $ | (1,637 | ) | $ | (16,941 | ) | $ | (28,475 | ) | ||||
Interest income |
(70 | ) | (145 | ) | (304 | ) | (415 | ) | ||||||||
Interest expense |
481 | 524 | 1,430 | 3,761 | ||||||||||||
Income tax expense (benefit) |
268 | (2,114 | ) | 1,305 | (9,116 | ) | ||||||||||
Depreciation |
4,321 | 4,406 | 13,385 | 12,590 | ||||||||||||
Amortization |
2,730 | 2,741 | 8,013 | 8,448 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal Non-GAAP EBITDA (Loss) |
(3,951 | ) | 3,775 | 6,888 | (13,207 | ) | ||||||||||
Other non-operating (income) expense |
(56 | ) | (993 | ) | (54 | ) | (1,009 | ) | ||||||||
Foreign currency transaction (gain) loss |
326 | 228 | 195 | 81 | ||||||||||||
Share-based compensation |
1,712 | 1,831 | 5,108 | 4,741 | ||||||||||||
Loss on extinguishment of debt |
| | | 29,475 | ||||||||||||
Inventory step-up from acquisition |
310 | | 415 | | ||||||||||||
Special Charges |
||||||||||||||||
Facilities consolidation |
2,786 | | 5,254 | | ||||||||||||
Acquisition and integration costs |
902 | | 970 | | ||||||||||||
Distribution channel transition costs |
820 | | 820 | | ||||||||||||
Management exit costs |
| | 374 | | ||||||||||||
Italy bad debt expense |
1,995 | | 1,995 | | ||||||||||||
Other |
| 45 | | 188 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Adjusted EBITDA |
$ | 4,844 | $ | 4,886 | $ | 21,965 | $ | 20,269 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Adjusted EBITDA Margin |
8.3 | % | 8.5 | % | 11.1 | % | 10.5 | % | ||||||||
|
|
|
|
|
|
|
|
Tornier N.V.
Reconciliation of Net Income (Loss) and Earnings per Share
to Adjusted Net Income (Loss) and Adjusted Earnings per Share
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
September 30, 2012 | October 2, 2011 | September 30, 2012 | October 2, 2011 | |||||||||||||
Net loss, as reported |
$ | (11,681 | ) | $ | (1,637 | ) | $ | (16,941 | ) | $ | (28,475 | ) | ||||
Loss on extinguishment of debt, net of tax |
| | | 21,990 | ||||||||||||
Gain on resolution of contingent liability |
| (1,000 | ) | | (1,000 | ) | ||||||||||
Inventory step-up from acquisition, net of tax |
250 | | 335 | | ||||||||||||
Special Charges |
||||||||||||||||
Facilities consolidation |
2,727 | | 4,978 | | ||||||||||||
Acquisition and integration costs |
902 | | 970 | | ||||||||||||
Distribution channel transition costs |
820 | | 820 | | ||||||||||||
Management exit costs |
| | 374 | | ||||||||||||
Italy bad debt expense |
1,995 | | 1,995 | | ||||||||||||
Other |
| 45 | | 188 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Adjusted Net loss |
(4,987 | ) | (2,592 | ) | (7,469 | ) | (7,297 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share, as reported |
||||||||||||||||
Basic and diluted |
$ | (0.29 | ) | $ | (0.04 | ) | $ | (0.43 | ) | $ | (0.75 | ) | ||||
Loss on extinguishment of debt, net of tax |
| | | 0.58 | ||||||||||||
Gain on resolution of contingent liability |
| (0.03 | ) | | (0.02 | ) | ||||||||||
Inventory step-up from acquisition, net of tax |
0.01 | | 0.01 | | ||||||||||||
Special Charges |
||||||||||||||||
Facilities consolidation |
0.06 | | 0.13 | | ||||||||||||
Acquisition and integration costs |
0.02 | | 0.02 | | ||||||||||||
Distribution channel transition costs |
0.02 | | 0.02 | | ||||||||||||
Management exit costs |
| | 0.01 | | ||||||||||||
Italy bad debt expense |
0.05 | | 0.05 | | ||||||||||||
Other |
| 0.00 | | 0.00 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Adjusted Net loss per share |
||||||||||||||||
Basic and diluted |
$ | (0.13 | ) | $ | (0.07 | ) | $ | (0.19 | ) | $ | (0.19 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average ordinary shares outstanding |
||||||||||||||||
Basic and diluted |
39,708 | 39,150 | 39,537 | 37,882 |
Tornier N.V.
Reconciliation of Net Cash Provided by (Used in) Operating Activities
to Non-GAAP Free Cash Flow
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
September 30, 2012 | October 2, 2011 | September 30, 2012 | October 2, 2011 | |||||||||||||
Net cash provided by (used in) operating activities, as reported |
$ | (2,180 | ) | $ | (1,504 | ) | $ | 11,136 | $ | 10,961 | ||||||
Adjusted for: |
||||||||||||||||
Cash paid related to Facilities Consolidation |
1,632 | | 2,595 | | ||||||||||||
Additions of instruments, as reported |
(1,474 | ) | (6,586 | ) | (9,245 | ) | (15,042 | ) | ||||||||
Purchases of property, plant and equipment, as reported |
(4,182 | ) | (2,296 | ) | (7,886 | ) | (3,772 | ) | ||||||||
Purchases of property, plant and equipment related to Facilities Consolidation |
2,069 | | 2,361 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Adjusted free cash flow |
$ | (4,135 | ) | $ | (10,386 | ) | $ | (1,039 | ) | $ | (7,853 | ) | ||||
|
|
|
|
|
|
|
|