Investor Presentation 2 0 1 4 Exhibit 99.2 |
FORWARD LOOKING STATEMENTS Statements contained in this presentation 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,” “anticipate,” “project,” “intend,” “will,” “may,” “believe,” “could,” “continue,” “estimate,” “outlook,” “plan,” “guidance,” “tomorrow”, “desired state,” other words of similar meaning or the use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause Tornier’s actual results to be materially different than those expressed in or implied by Tornier’s forward-looking statements. For Tornier, such uncertainties and risks include, among others, Tornier’s future operating results and financial performance; the success of and possible disruption from Tornier’s recently completed transition to dedicated upper and lower extremities sales forces; fluctuations in foreign currency exchange rates; the effect of global economic conditions; the timing of regulatory approvals and introduction of new products; physician acceptance, endorsement, and use of new products; and the effect of regulatory actions, changes in and adoption of reimbursement rates, product recalls and competitor activities. More detailed information on these and other factors that could affect Tornier’s actual results are described in Tornier’s filings with the U.S. Securities and Exchange Commission, including its most recent quarterly report on Form 10-Q. Tornier undertakes no obligation to update its forward-looking statements. |
NON GAAP FINANCIAL MEASURES Tornier uses certain non-GAAP financial measures in this presentation, such as adjusted EBITDA, adjusted gross margin and constant currency. Tornier uses non-GAAP financial measures as supplemental measures of performance and believes these measures provide useful information to investors in evaluating Tornier’s operations, period over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for Tornier’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-GAAP financial measure Tornier uses may not be the same non-GAAP financial measure, and may not be calculated in the same manner, as that of other companies. A reconciliation of the non-GAAP financial measures used in the presentation to the most directly comparable GAAP financial measures can be found on Tornier’s website www.tornier.com under the “Non-GAAP Measure Reconciliation Tables” section of “Investor Relations” page |
TORNIER IS… Global Medical Device Company, focusing on providing superior solutions to surgeons treating extremities injuries & disorders |
TORNIER IS WELL-POSITIONED FOR LONG-TERM GROWTH HIGH GROWTH MARKET Robust Drivers Enable Sustained Growth Extremities Extremities $6.5B 8-9% CAGR (’14 – ’18) Based upon management estimates COMPREHENSIVE PRODUCT PORTFOLIO Leader in Innovation, Science & Education FOCUSED FOR EFFICIENT SALES Aligned to the Extremity Call Point FOCUSED ON EXECUTION UPPER EXTREMITIES LOWER EXTREMITIES Upper Extremities Orthopedic Surgeon Lower Extremities Orthopedic Surgeon & Surgical Podiatrist |
TORNIER IS WELL-POSITIONED FOR LONG-TERM GROWTH Robust Drivers Enable Sustained Growth $6.5B 8-9% CAGR (’14 – ’18) Based upon management estimates Leader in Innovation, Science & Education Aligned to the Extremity Call Point FOCUSED ON EXECUTION Upper Extremities Orthopedic Surgeon Lower Extremities Orthopedic Surgeon & Surgical Podiatrist HIGH GROWTH MARKET UPPER EXTREMITIES LOWER EXTREMITIES FOCUSED FOR EFFICIENT SALES COMPREHENSIVE PRODUCT PORTFOLIO Extremities |
Tornier’s Available Market is $6.5B with a 8-9% CAGR $1.7B $2.8B 9-10% CAGR LOWER EXTREMITIES TORNIER IS FOCUSED ON ROBUST, HIGH-GROWTH MARKETS $2.7B $3.7B UPPER EXTREMITIES 8-9% CAGR |
EXTREMITY MARKET DRIVERS PROVIDE OPPORTUNITY FOR SUSTAINED GROWTH • Aging population • Growing awareness (globally) • “Quality of life” expectations • Extremities specific design • Unmet need for early intervention • Growing need for revision TECHNOLOGY PATIENTS OUTCOMES • Improving clinical outcomes • Evidence driven decisions |
TORNIER IS WELL-POSITIONED FOR LONG-TERM GROWTH Based upon management estimates Leader in Innovation, Science & Education Robust Drivers Enable Sustained Growth $6.5B 8-9% CAGR (’14 – ’18) FOCUSED ON EXECUTION Aligned to the Extremity Call Point Upper Extremities Orthopedic Surgeon Lower Extremities Orthopedic Surgeon & Surgical Podiatrist Extremities HIGH GROWTH MARKET COMPREHENSIVE PRODUCT PORTFOLIO FOCUSED FOR EFFICIENT SALES UPPER EXTREMITIES LOWER EXTREMITIES |
COMPREHENSIVE PORTFOLIO PROVIDES FULL-LINE SUPPORT TO THE EXTREMITY SURGEON 96 Distinct Extremities Products Number of Extremities Products: JOINT REPLACEMENTS BONE REPAIR BIOLOGICS SOFT TISSUE REPAIR UPPER Shoulder, Elbow, Hand & Wrist LOWER Foot & Ankle 10 34 33 3 3 13 PROCEDURES |
PORTFOLIO STRATEGY LEVERAGES STRENGTHS TO TAKE SHARE WHILE EXPANDING EXTREMITY MARKETS JOINT REPLACEMENTS BONE REPAIR BIOLOGICS SOFT TISSUE REPAIR UPPER Shoulder, Elbow, Hand & Wrist LOWER Foot & Ankle 1. Take Share through introduction of best-in-class extremity specific solutions 2. Expand arthroplasty markets with early intervention products 3. Create solutions for an Expanding extremity revision segment 4. Take Share with differentiated value products, (“Value” = outcome per healthcare dollar spent) 5. Expand customer base through ease-of-use products, instrumentation & surgical procedures 1 2 3 4 5 1 2 3 4 5 1 2 4 5 4 5 4 5 |
RECENT INTRODUCTIONS REFLECT OUR FOCUSED PORTFOLIO STRATEGY ASCEND FLEX TM Best in Class Arthroplasty PYC HUMERAL HEAD Earlier Intervention / Less Invasive SALTO TALARIS TM XT Revision Options CANNULINK IFS Differentiated Value LATITUDE TM EV Ease-of-use / Expanded Customer Base |
TORNIER IS THE “GO-TO” EXTREMITIES COMPANY WITH INDUSTRY LEADING SCIENCE & EDUCATION PROGRAMS RESPECTED FOR SCIENTIFIC RIGOR SUPPORTING ACTIVE FUNDAMENTAL RESEARCH • Pyrolytic carbon • Advanced kinematic & biomechanical testing capability • Computer aided surgery / 3D operative planning COMMITTED TO “EVIDENCE-BASED” MEDICINE • Aequalis shoulder registry - 20+ years of data • Simpliciti trial – 1st US IDE shoulder arthroplasty study • Salto-Talaris – total ankle replacement survivorship data INVESTED IN PROFESSIONAL EDUCATION & TRAINING • Unique shoulder and ankle master courses • Orthopedic fellowship courses • Cadence of product-specific cadaveric training labs |
TORNIER IS WELL-POSITIONED FOR LONG-TERM GROWTH Robust Drivers Enable Sustained Growth $6.5B 7-9% CAGR (’14 – ’18) Aligned to the Extremity Call Point FOCUSED ON EXECUTION Based upon management estimates Leader in Innovation, Science & Education Upper Extremities Orthopedic Surgeon Lower Extremities Orthopedic Surgeon & Surgical Podiatrist LOWER EXTREMITIES UPPER EXTREMITIES HIGH GROWTH MARKET Extremities FOCUSED FOR EFFICIENT SALES COMPREHENSIVE PRODUCT PORTFOLIO |
TORNIER CONDUCTS INTERNATIONAL SALES OPERATIONS IN 45 DISTINCT COUNTRIES ON 6 CONTINENTS Primarily direct sales Primarily distributor Mixed Model Country Office International revenue $93.3 MM (41% of Total)* * Q3 2013 year to date revenue results |
THREE STRATEGIC INITIATIVES TO STRENGTHEN OUR INTERNATIONAL BUSINESS STRENGTHEN BRAND IN EMERGING MARKETS 3 ACCELERATE REVENUE GROWTH 2 • Aggressively launch new platform products globally (ex. Ascend Flex) • Broaden product offering in direct & distributor markets DRIVE ADOPTION IN DEVELOPED GEOGRAPHIES • Strengthen and further focus our sales forces • Invest in strategic market development activities 1 • Select investments to accelerate presence in Brazil & China • Evaluate targeted expansion plans in other emerging markets (ex. India) |
CONTINUE TO INVEST TO BUILD A SUPERIOR U.S. SALES FORCE Competitively Superior • Exclusive channel • Expanded portfolio • Narrow rep territories • Reps provide “value-add” DESIRED STATE Proficient & Productive • Reps aligned to Upper / Lower • Continue to fill territories • Certify rep training • Track & manage reps Aligned & Committed • Agreements for dedicated Upper / Lower • Hire and fill Territories • Clearly defined coverage • Initial rep training 2013 – PHASE I • Limited access to reps • Rep covered any/all cases • Limited formal training • Inconsistent distributor contracts Limited Standardization and Commitment to Tornier TORNIER 2012 4 4 2014/2015 – PHASE II |
COMPLETED SIGNIFICANT TRANSITIONS WITHIN U.S. SALES CHANNEL IN 2013 EXITING 2012 Distributor Direct US Sales Network • 18 Legacy Tornier distributors selling both UE & LE • 3 Direct Tornier territories • 50 OrthoHelix LE agents in Oct-12 ENTERING 2014 US Sales Network • U.S. revenue $134.2 MM (59% of Total)* • > 85% US revenues – dedicated sales reps UE or LE • > 50% US revenues managed by direct sales reps * Q3 2013 year to date revenue results |
WORK REMAINS TO BUILD A “BEST-IN-CLASS” U.S. SALES FORCE Timing 2012 Desired State Agreements & Alignment Rep Training & Education Performance & Productivity Distributor Negotiation High Uncertainty Strong & Reliable Performance US Sales Channel Transition Territory Staffing Sales Mgmt. & Training Org. 4 4 4 |
EBITDA Leverage Above Market CAGR 2018 2013 2013 2018 Upper Extrm. Lower Extrm. 20% of Rev Projected Extremities Revenues • Driving above-market growth in upper and lower extremity segments • Revenue geographically balanced Revenue Takeaways • Runway to EBITDA >20% of Rev. • GM contributions expand: • Continued insourcing (OrthoHelix) • On-going manufacturing efficiencies • SG&A leverage comes with revenue • Market Cap: ~$925M • FY13 Results: Rev: $310.5 - $311.5M • Q3 ‘13 YTD Results: Revenue: $227.6M Adj. GM: 73.9% * Adj. EBITDA: $21.3M* • Cash (Q3 ‘13): $62.6M Financial Profile PLANS TO DELIVER CONSISTENT ABOVE-MARKET GROWTH AND STRONG FINANCIAL PERFORMANCE EBITDA Takeaways *Represents non-GAAP financial measure. Reconciliation to the closest GAAP measure can be found on Tornier’s website. |
TORNIER IS WELL-POSITIONED FOR LONG-TERM GROWTH FOCUSED ON EXECUTION Based upon management estimates |
THANK YOU |