Orthofix Q3 tops EPS, announces $75m share repurchase plan, shares soar

Orthofix (NSDQ:OFIX) today announced 3rd quarter earnings which topped expectations on Wall Street, as well as plans to repurchase $75 million in common stock, sending shares up in mid-day trading.

Orthofix reported losses of $1.4 million, or 4¢ per share, on sales of $101.2 million for the 3 months ended September 30. That amounts to a massive 403% slide on the bottom line, with sales growth of 0.2% compared to the same period last year.

Adjusted to exclude 1 time items and continuing operations, earnings per share were 30¢, topping analysts who were looking for 22¢ from Orthofix.

The news sent shares soaring, up 16.1% to 41.01 as of 1:07 p.m. EST.

Orthofix said its board of directors approved a share repurchase plan for up to $75 million in the company’s common stock through the end of September 2017. The company said the timing and amount of shares repurchased would “depend on market conditions and other factors.”

“The 3rd quarter was a very good quarter for Orthofix in many respects, led by the financial results, which are at the high end of our expectations. Our 3rd quarter net sales continue to confirm that the plan we are executing will deliver consistent top line growth. With this growth we also anticipate ongoing improvement in our operating leverage. I am also pleased to report that our board of directors has approved a $75 million share repurchase plan. I believe our improving financial performance and significant cash flow generation ability affords us this opportunity to return capital to shareholders while driving profitable growth,” CEO Brad Mason said in a press release.

The company narrowed its Q4 guidance, adjusting net sales outlook from $390 to $395 million to $392 to $395 million, and EBITDA expectations from $57 to $60 million to $58 to $60 million.

In September, Orthofix said results from a study of its Trinity Evolution cellular bone allograft reported joint fusion rates above 85% after 1 year. The study was published online in the Foot & Ankle International journal.

The 92-patient trial is the largest safety and effectiveness trial to date for the graft, according to the Lewisville, Texas-based company.

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