OFIX - Earnings call transcript Q3 2017

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Operator

Good day ladies and gentlemen, and welcome to the Orthofix Third Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] as a reminder there conference is being recorded. I would like to introduce your host for today's conference, Mr. Business Investor of Director Quick, Development Relations. and Mark proceed. Please

Mark Quick

everyone. the Orthofix Thanks operator, quarter to afternoon, good call. and third Welcome XXXX earnings

on Officer, Brad. statements Mike and are today I’ll start Brad Officer, the pass Safe Chief Finegan. Rice; me Harbor our Doug Strategy Officer, Financial Mason; it President Chief and then with Executive Chief Joining and call over to

statements statements, All historical making will beliefs, The we call, statements statements update call objectives. based that do about forward-looking on such forward-looking October uncertainties. statements as we’ll are to occur. facts to and not today’s of those be is statements any forward-looking are make We undue any XXXX. Investors or we forward-looking statements today, this strategies, our guidance than not as reliance that of During there risks undertake other any expectations or earnings provide such obligation on including beliefs are the involve place XX, cautioned and on expectations, assurance forward-looking and such goals in no plans, matters statements. contained our revise

the include made results us factors forward-looking as SEC the for could XX the as materially on December the XXXX, future. statements in Risk disclosed risks filings Some well different additional our that the from be to Form XX-K under actual cause we call heading the in by Factors year make ended

copies in need of these please Orthofix Lewisville, you If at of my documents, contact any Texas. office

and this of Brad. Please call review GAAP. to At non-GAAP as may to release to GAAP these I’ll properly supplement results U.S. financial reconciliations for announcing turn our with measures. financial over financial matters press refer long-term various short-term financial to results. order measures to believe third call, point, U.S. a the measures quarter We XXXX that will our accordance today’s we In our in refer investors these in determined wish financial trends, today’s to addition, on to understand non-GAAP

Brad Mason

everyone. Thanks, Mark, afternoon, and good

year our As usual, you XXXX I we will performance, after for start line our by before through another of of followup Doug reported year X% results in quarter today. walk then giving Q&A. with which the guidance the of financial for the increase sales prior We million updated an that a third quarter summary the will I had it constant strong opening with this up in you performance remainder net currency. will of $XXX.X top represents over third

the As we two objectives. started year primary we had

rate to have top we into and due accelerate respectively. the growth was this achieve We in constant invested growth our achieved mid-single extremity rates organic of of enhancements restructuring business our sustainably was and line in business. sales non-core Year-to-date in digits. first acceleration. products The force accomplished to X.X%, to This quarterly X.X%, fixation discontinuation headwinds our significant of currency the and spite new X%

objective update will company margin position programs XXXX later call. the on second meaningful a for in I these initiative restructuring The beyond. and to in through provide was expansion an the

to progress of date on our these We with achieving are very pleased both objectives.

or This XXXX. strategic business quarter third the to disruption performance at was hurricanes. looking over by X.X% SBUs business of each Florida of grew with the units the our sales net of Houston starting and Now impacted BioStim, and due

for X% sales impact this excluding that is growth the have period. estimate would Our been approximately

in estimate but back business. the increased period, procedures such to we to normalized on sales for up for to Rico will two impacted that X.X% Puerto next constant base a from are the X.X% in that Rico previously six in during smaller the the on currency since net ramp when begin were XX-month devastated to was time for basis Our Fixation Based four sales Extremity and we constant as quarters. sales for year. of currency impact volumes. planning no discussed QX combination recorded this Puerto including Biologics until be that discontinued considerably our our these business normal quarter quarter this of the business over driver continues this BioStim X.X% little storms per of approximately business. Elite We growth solid business Trinity period non-core those enhancements. force medical the of are another other In $XXX,XXX prior sales year with hurricane the to only three modestly SBUs in geographies restructuring trailing their is

SBU months, in our Spine introduced the Spine delivering exceed uptake our to business third with be approved sales continue it drivers last sales our two force constant in that as new business. spine show our Our SBUs partners investors to report should for and be noted unlike quarter. continued compare legacy of would $XXX.X company of growth businesses making of Fixation engagement eighth XX.X% segment. together we a the XX.X%. Fixation help the XX appropriately reported to and we worldwide year-to-date trailing To us the the growth year-over-year the of growth Products rate for and If largest of currency our peers primary them expectations quarter this XX.X% distribution one year-over-year Biologics peers million separately instead XX-month spine of we these the third our

adjusted flow million XX.X%, metrics adjusted XX, margin was key XXXX. was per as in million the September of XX.X%, was $X.X $XX.X non-sales had our was we to $X.XX, and Adjusted share free cash EBITDA on balance of ROIC Moving earnings quarter. cash

minutes numbers. of quarter were highlights year-to-date. for All roughly operational the review a now these Doug line few with a metrics and will more you in the I'll give few in expectations. detail on

patient in technology have spine improve ultimately most XX this in the compliance space Orthofix for release outcomes. read to our It This was may device Stim one awarded its seen widely potential of honor last publications medical the recognized therapy you one press top week, the As Week of Orthopedist XXXX. for advancements and facilitate Ontrack

follow-up provide daily technology. them they their we to future In the fusion active patients with the protocols help to a with that data parallel this to physicians are the outcomes. Stim adhere help previously includes therapy technology them bone introduced market treatment recovery. to generation patients The great of to personalize of Spinal and BioStim to how recognition and growth are reminder prescribed to mentioned, allowing their making the our and help an usage on stimulators. adjust Cervical-Stim SBU of take a spinal is receive to this commitment This achieve the Orthofix we As and a earlier on real-time treatment feature mobile enables role in first better device [indiscernible] year that calendar latest this a works award app prescription

To treatment end We are finding than Technology we for of the more can which in PEMF feasibility now patients enrolled Field also natural the new have that or study committed of PEMF body's to of in XXX-patient clinical effectiveness knee. ways the Electromagnetic our of the XX healing process. IDE osteoarthritis augment Pulsed

in pivotal for of to adjunct we clinical Additionally begin rotator the treatment expect surgery IDE the cuff through of enrollment our before PEMF. of XXX-patient use end human year the the

surgeons. line and Fixation In the population the U.S. for RIVAL launch from patients. limited We has very are called ankle large of about both potential for this our therapy foot the commercial internal feedback business recent generated full Extremity of benefits our distributors holds system and positive fixation excited

a specific over and and plate may foot universal sterile packed in designed screw RIVAL a the expand a The one with instrument indication system foot external product to all strategy leader our indications fixation is ankle space in and leverage As recall, an the unique and limb system the you as U.S. lower to important ankle RIVAL portfolio XX solutions. implant is our our tray. system set in address element in in the in reputation

this introduction Plate our come. porous the the commercial a this launch the our acceptance of product year interbody contribute we line which proprietary will launched our Spine with full of and strong to our to ramping earlier Anterior significantly along Fixation this and We growth our new portfolio next We technology first when believe up significant of interbody will several quarter titanium our composite product in expandable our PTC released next Cervical to take market addition will FORZA PEEK occur of SBU years process the CETRA are line. year line in XP of we quarters. In expect product in

to like to Rico force. forward. going of and a improvements business some the our the Brazil year-end facility that in will execution I By reduction included business are moving a non-core through and associated expansion Now margin things completed share I'd address from direct the Puerto to transition Italy, we which UK previously sales have closing doing SBU stocking we in Verona, of restructuring distributors the in to the business in mentioned UK, fixation manufacturing extremity

and restructuring our rationalization. focused U.S. initiative and a significantly to expected This plan to contribute well finalized is also We corporate objectives. expansion expenses recently underway on workforce primarily margin

in for address. is in priority remaining is chain supply This set is area us a logistics. and looking effectiveness, opportunity our instrument management, biggest our turns, improvement it high the at spine balance the evident Finally, company and inventory for inventory to fixation

an right to the over that will place numerous benefits. We meaningful for six team have We opportunity have process in benefits have financial improvements the right now these five-year has to and achieve Office item the plan we quarter fully we from believe that eight and the recently General customer received The of is of and its formal the that has agreement corporate integrity to the concluded. agreements the quarters. note for Orthofix notification terms satisfied final Inspector next

to pleased this milestone. are We reach

ethics indicator its rigorous we health behavior a to Orthofix processes company's to ever ethical everything than more ensure and Now in commitment value. program an and and is of do. strong compliance has culture, has implement commitment a controls compliance and to

and within with Not the proud We is years. shaping have very way the quarter Overall, about at goals fostered we the beginning call commitment, year, this over carry over the of out the our over the we've we year that turn are financials. are up. industry I'll are we pleased respect the ourselves for culture to the gained several and last With and we confident the only of but XXXX the momentum our laid Doug Doug? will accelerating into that the we beyond. for outperformed

Doug Rice

some U.S. start The reported primarily measures. Thanks Brad compared when then Total sales with providing a everyone. I'll financial was details the third and afternoon third increase restructuring of Brazil XX.X% basis converting up other results sales in $XXX.X plan the the XXXX. a the X.X% year These the mix, our percentage sales in Fixation in into on period. the X.X% and by Spine expenses by variances, on SBUs. the impact related our results mentioned. operational nonrecurring by our in basis are constant Brad of XX.X% in currency net Extremity Gross good primarily in and driven $XXX,XXX of that and down net quarter and growth Fixation quarter distributors were and discuss driven from million prior earnings margin our Biologics stocking quarter was SBU to

of modestly of XXXX than expect of XX.X% Sales expenses Fixation third well and of Biologics was and in full-year XXXX margins net the commission were to lower gross we of for As due to tax quarter Fixation the to third the XXXX. geographic and from net now and prior marketing sales sales the primarily in year-over-year be higher distributors XX.X% compared year. higher XXXX. from as quarter third sales in mix Spine Extremity This rates as benefits increase in quarter expenses new

continue as offset period. primarily net $X year-over-year due the and with expect sales quarter from margin margin primarily down XX.X% and was was was XX.X% sales net the gross decrease the and to This in net in sales prior of of in and marketing quarter the of that General quarter administrative this third as due a of percent I expenses pleased XX.X% Non-GAAP to expenses the million which of and are second to net our marketing sequential mentioned. just consecutive Research to compensation sales fourth the higher which of and X.X% of quarter. quarter which trend the over sales development expenses net in spending share net improvement reduction in from were increase in in down in XXXX. year to of reductions R&D sales sales quarter percent from XXXX the expense expenses. expect US than increase was be down XXXX sales restructuring a expected. were and year prior year. lower core third the were slightly This in year down which based due of to We prior expenses XX.X% were slightly the compared third sales now from full XXXX We

third reflects margin XX.X% of lower during in After compensation and per primarily of share quarter to improvement $X.XX Adjusted and adjusting for to share net of quarter per for using per continuing quarter from sales line For lower revenue operations margins offset when and general the expenses The XXXX income the reduction gross EBITDA the EBITDA XXXX. long-term $X.XX share XX% growth net XX.X% prior share to expenses we third the normalizing decreased continuing third and due for from net year. reported of administrative marketing during net in to certain the margin a income adjusted from XXXX. by $X.XX share-based detailed. higher just operations sales as and in compared the was tax I per the quarter. as rate third of the was compared expenses sales tax bottom lower $X.XX adjusted This quarter

negative compared accruals quarter income uncertain the related based year. well same compensation a our income rate of quarter of tax as a to one-time of Now for of This did change tax, income of positions had in year-over-year before turning as this taxes income estimate to the quarter was recur period XXXX. to an in in the expense for increase that driven benefit the income income XX% by for before of third XXXX current tax taxes XX% we not benefit in share in as tax tax

balance to up of XX highlights, from or third our DSOs Fixation to end sales days sales. quarter quarter the of the primarily days at increased the at were end sheet the on due the Spine XX Moving XXXX outstanding third XXXX day

of XXXX product in of than and Fixation. quarter slightly the slower prior introductions reflects times times end turns X.X third Fixation X.X year's at were the inventory which the Our the new Extremity Spine

mentioned was the operations compared at for $XX.X prior million increased were higher the third prior during end due focus was to end investments This or of the cash and the improvement million introductions quarter required quarter. defined revenue primarily capital working Brad from drive the compared equivalents As $XX.X to for compared the The to million this flow operations the $XX.X an is and growth. that for cash million primarily Cash as decrease from a cash to at third quarter from $X.X Free XXXX. new quarter opportunity instruments capital us. is expenditures mentioned. million of primarily decrease minus just of was the to million XXXX. during in area during flow $XX to the I the expenditures Cash $XX.X in to Capital inventory was $X.X flow to million that due year quarter the cash operations the year. $X.X in lower million for quarter product due

highest now As fourth we has year. of and generation expect a free flow to quarter back historically our it been will same I our reminder, quarter turn this the cash Brad.

Brad Mason

previous will year-over-year represents foreign I to million range to expect to our range This a year guidance based we with on $XXX Doug. on compared million you to full now $XXX Thanks exchange million. $XXX X.X% now sales, net updated our to X.X% growth update XXXX rate guidance. currency current $XXX rates. between finish million Starting of

expect each Looking continue in to at the we full-year. grow mid-single-digit SBU from the range BioStim for Biologics and growth the contribution to SBUs

the expectation a Fixation decrease currency mid-single-digit low in restructuring end. come year Our sales year single business headwinds XXXX return for as this line an discontinued a with top growth to digit saw Extremity finished is we constant to net to the and

we Fixation XXXX. full expect to continuing year on SBU growth achieve our Spine double-digit for low For based momentum now the

the about momentum full very our top growth of year. consolidated in the performance good organic have ahead mid-single line revenue achieving solid Looking we businesses for digit we to XXXX feel with each

to range XXX we on million adjusted adjusted a next are to margins million by our still each the points updating the for $XX full-year in EBITDA three of and $XX EBITDA Moving adjusted project to improve EBITDA, basis of minimum years. to

$X.XX the average rate to For be long-term expect million XX%. range now a in tax weighted shares adjusted of and of of full this year earnings to per share XX.X $X.XX using we

ready EPS are previous was open lines $X.XX for share. Our for guidance questions. that up we now range With adjusted per to operator, to $X.XX the

Operator

Ryan first you. comes Instructions] from [Operator BTIG. And from Zimmerman Thank our question

Your line is open.

Ryan Zimmerman

Can you. guys you thank Great, hear me?

Brad Mason

hear Ryan. you we Yes, can

Ryan Zimmerman

much be Rico spine taking this follow And the line the – guidance raises and that's in performance, couple Brazilian think you good. bit you right, of questions, quarter certainly Puerto saw the that and distributors stocking I routine, would If to kind All of starting ups. so a have the impact from then top congrats that thank helpful? we a strength little the I could few for on so the become are talk about

Brad Mason

you with the…? for stocking do Doug the start Sure, want to

Doug Rice

saw we distributor in we so a us orders restructuring of had a with had that embarked so model model on distribution the recognize COGS moved party that COGS Extremity of third quarter impacted and and get by sales. benefit Yes, some on direct didn’t we for to Fixation which year the the to more the last from we third large

to the We negatively cash fourth expect impact the revenue quarter and did it in but in QX. come the

Ryan Zimmerman

Understood.

Brad Mason

to we're so development came of get put products of the there the now It we really new is results the was pay now process were and think in kind the quarter four-year of distributors. of the a things in by our into new same engagement in product cycle been Ryan, of products, all and is that the for three momentum distributor uptake you starting our seeing us off. energy really just I legacy XX% One driven from within the can terms sales that effort released to and XX months, spine that. we the then give the or And last have pretty metric time business about, but new talking I've our exciting that the I is revamping

driving So that's what's spine really kind the business.

Ryan Zimmerman

given mean from quarter? you FY-'XX and first? distributor just And then distributor can really up maybe what increased gives about opportunities numbers my that question you the standpoint, guidance it's the that take operator but you I kind on talked will do the of fourth in segment a those low spine that for just you specifically, where classes, the around And followup in confidence opportunist be that see double-digits or geographically

Brad Mason

you and don’t there always changed mean still that so lot I of that's are momentum the of geography spine we we – terms particularly not we're Orthofix our Sure, for in well us are opportunities business is that much I other distributors distributors there the coverage is thing and from out in our a and is have The for as out about looking with current that engagement the is about. looking Orthofix working and as talked word they they the have feelings know now.

a is we to there. out home for that's the a and be, of have us to distributors goals So to of lot coming distributors we what partner independent for preferred one looking our be want long-term that's

to a left there's help as well. of room on continue to we of uptake so still momentum grow the we've And more distributors lot the have to kind there. added for And that continue us

Ryan Zimmerman

kind segment should lot take appreciate away this the provide takes how four you you. I provide and for just color across one we is just of that just thinking a you've year exiting should thoughts, as of I'm 'XX? from be anything segments us on initial I can if puts business anything wondering FY-'XX Thank of that indicative we be the I'll terms and mid-single-digits initial into about a segment sneak FY-'XX the can so mean on we in thinking I standpoint businesses? one businesses given of last these about how maybe and appreciate variation, business your should of there

Brad Mason

Ryan. Sure now great that's

is surprisingly single-digits solid this, Think a but year of X.X about as range, stands we the range the business to for sort to Now 'XX talked think BioStim this expect is the us. where X.X kind such think for number I you of about year think be. the full it at of in business in if we not the also about for mid-single-digits, into it so that we for rock anywhere rest mid that

some be same solidly some mid-single will the the next to mid-single-digits. year good for coming Fixation very to comps thing business. high range got I on got a this lower consolidated Spine Biologics, we've basis. of would mid-single for the we expect expect to the in we've thing, there, we off We be in digits year end Extremity be same say what is opportunity shooting and Fixation,

our to end We The for have out the don't momentum. it. good about spine mid-single-digits get very spine. competitors have there, we of year of I ahead still skis but good next want feel on we too of high lot far

growth So base and a in to perform business all of bit year little the range base next spine is business little Fixation probably the more opportunity we for with lower. and that a smaller are expect our bit where comps the our in because Extremity business

Ryan Zimmerman

guys. I appreciate Thanks questions the for color. taking the

Brad Mason

You take bet care. Ryan,

Operator

question from next our Jefferies. And comes Raj Denhoy from

open. Your is line

Raj Denhoy

Hi good afternoon.

Brad Mason

how Raj, you? Hey are

Raj Denhoy

I Pretty maybe but little lot you in us What detail on about and in the am business where bit expectations on you It footing, of and maybe bit changes a you will are be to give are just appreciating a maybe more are growth that process? mentioned, going overseas efforts if there a there, are sounds challenged remains good, that completely a know as get on but little could better the you that thanks. helpful? trying like the more little [indiscernible]

Brad Mason

us. vast I'm so. sure, Yes happy to Yes, do have behind of really majority that the we

Brazil, we couple year bit $X.X a across little of the bit that's be of to bit significant. little mostly biologics a and that about Puerto a not spine little quarter exit a sales in longer late a but cost issue. per million we to mid that no we fourth quarter the the million that. businesses, but expects direct overcome to was in will in next comp will headwind headwind a quarters this be a in We a a next still non-core have year, strong quarter. first discontinued Ex-Fix so digit As single replace of stocking growth will few our spread getting distributor business the about It We something different us $X.X post think expect spine. still Rico to is were year going

will we forward. to I returning to very but can speak a bit revenue a can from headwind, good Ex-Fix year recognition the customers little unusual our do better strong standards when Doug basis. modified do it are the cash very be that bit going will it And but be recognize feel growth now a changing change So think about of and which business little currently I than we how of that on revenue timing will are a lot of our next today

we'll even that years, past that help out business few into could things, next we very year-over-year, bit little we've about more but over but will even comparing the year. those than going numbers a should feel So had but things good be

Raj Denhoy

assumption Your that recognition? in terms it tighter the revenue is getting of

Doug Rice

Slimmed basis revenue on revenue. time between and cash one over difference too. last Fixation of the invoice seen mostly Fixation it quarters some there up follows over and volatility impacts based Spine more and that businesses. Extremity is the It just a Raj, down several is obviously our we've the

and growing driver U.S. so geography our it fastest the ankle just that and for foot that help the RIVAL more. system that U.S. Fixation the to Extremity now, ankle foot in business even plating screw our significant other for is products Fixation in and that will the year The driver Extremity that's and drive next in business we're launching adding

Raj Denhoy

other then spending. stand was in enough fair out higher the the and just Okay, quarter the

year mean know this investments you spending I elevated similar margin so and You the we a little was is are will and a bit mean kept mix. on I but to bit sort appreciate making that you higher gross hope question in start so the is do come get comfortable sales to year, spending the again you, I But down? that does next but again weaker of and that how the more you're it Mike right leverage do it marketing how

Doug Rice

Raj. right exactly you’re So

down, year. increase We we've spending line this to spending did growth will won't. are spending top of some it rate We some accomplished, our of come that some which

expenses general don't did significantly I our right if range. and businesses if in commissions in So appropriately that some and think down expect XX so, those marketing you, increase our mid were going the to to next an sales in example, range come is we thinking We year. that as of be back our we

of on have that will getting a this very to into top as area an now we not sales but next year, That's don't XX% we beyond growth. we lot into bring have on it leverage a but some down in from we improvement We possibility year that QX there. range-ish going the of back year where our about what increase we've want some in our be I accomplished spending careful disrupt the line so that on started

the ago. have to already, some We've there. feel spend and R&D is It's had where we years have there lot to We're but we a accomplished really we opportunity. In drive R&D, business most continue I'm not terms going more there. goods in of a less of G&A to we going touch. few opportunity than have cost our then do to we

particularly the good and opportunity through to cost - drive going And that changes going structural very that are in and of have and continue issues and focus primary the process new think with some inventory capital, area. will inventory focus we the of goods see on addressing place COGS in to that working we We we're be on that year. you that we we're the to

Brad Mason

talked overall at of EBITDA year per least kind basis about adjusted XXX the our looking improvement for next just points Raj at in we margin. three years

Raj Denhoy

think G&A, XXX with sales so some driven at out of perhaps marketing point basis like sounds getting always it's and its gross that if any. much Yes, we R&D about margin coming primarily and but shouldn't

Brad Mason

from have it's year. get we to how up get going out – think we're opportunity breaks it it all - I think how three out fair, that's that have we'll be next the from, I rolls going see to to to we'll

Raj Denhoy

times balance at you'll cash and Great, acquisitions? on focus good just potential updates and any the much, one talked on so where one it us just for pretty about I on does maybe that remains in acquisition give you've shape generating he being a doubt stand last but

Brad Mason

Yes, you we're declined units of couple be. there's for active, we and spending we relative you units about quarter business disciplined near others for be fit. our opportunities third and strategic very to still active we've first passed for EPS opportunities criteria quarters ROIC, to certain that but all the in meet looking more initiatives, very our can and a bit see in didn't a and active, our the we've just that relative continue see lot the activity And business that and all our that by talked very and of limited deals at of term there opportunities see will and again strategic accretion that are going to on we're some

to So we're add fourth on a looking not currently stool. leg the

have. grow we on We businesses competencies how focusing are leverage and existing our we the that can core

Raj Denhoy

the Great, I you. updates. Thank appreciate

Brad Mason

Thank you, Raj.

Operator

And from our comes next Thalmann. from question Jeffrey Cohen Ladenburg

is line Your open.

Jeffrey Cohen

question on nice for thanks taking guys quarter. the and congratulations Hi, a

Brad Mason

Jeff. Thanks,

Jeffrey Cohen

of that discussion and if us just is color out now I there three run numbers your thirdly expendables sets number and any you then as of through the before assure of you use and you of color the or way appreciated? what sets this expect? just to be updates penetration, a little move would and the far wanted If And kind could the is and as on give status items JuniOrtho RIVAL bit two you on and could because service

Brad Mason

our as those talked business Absolutely, is order orthopedics, our a over Fixation of we've about JuniOrtho Extremity I’ll then. pediatric in focused on in take business. third

who the in in a and the connects physicians perspective them treated families all well way are initiative very a much and from well. children it's our being JuniOrtho also very that and engaging doing in is it's of we’re still branding that different are We doing so very the process business.

into the of Our sales designed Getting continue be we immediately. over today. field in everything is have necessarily doesn't good there. field will steps steps say RIVAL the the translate X,XXX a so U.S we in to to the sales are in I orthopedics, we number working strong pediatric for expect products and strong still and new them are specifically that on are

You those trained get get still of sorts have the approvals, hospital physicians and have to things. you to

a to into U.S. bit be next have going do in next year, the we slow it's but year. a the strong ramp for year then of remainder expectations for And little the So of RIVAL

behind bit started wanted so as our on be, spite a we in a but behind company. quarter to, line well little a obviously still had so top little where where about of doing very And we're we that we overall a expected to we're

going that physicians happy with far cases very satisfied the doing. and the it's so well. very instruments product with So, and the very are they're The

year. there market first XP concerns next of on in no a of interbody, we're quarter then first limited beyond. the to which finally be release that And and about FORZA RIVAL we in and is So XXXX bullish the out expandable our expect part

that we're gap. So biggest days be excited so to in and in within should have for fill portfolio single the we Spine that XX or about that probably the we're and gap one Fixation excited market that's today our

contribute So we're well. next to looking that seeing can forward year as how

Jeffrey Cohen

you just and like a it share, few the and if force front, hearing about field, Spine very from provide then taking momentum generally physicians? how up feedback particular in far and doing commercial you on speaking a and some it talk looks of from you're could that your as little as are businesses from feels color Okay the could well your

Brad Mason

make let So I've right your me question got sure in Jeff. general

physicians Just business Spine the in getting distributors feedback about we're from general? our our and

Jeffrey Cohen

feeling momentum Yes, the forward. and carrying how you're about

Brad Mason

to easy it backwards not hard an backwards get stop. It we like moving stopped but train. business Well it's moving keeps We Once to keeps and moving forwards. we moving, is It's was and moving a that you like if feel to it got it's else. and it it it's terrific it about get where anything have it. moving turn

This orthotics, this not business or even are differently, new years orthotics products. different Now as good Spine more we if equally different they you five have distributors have not or talking a from from just feedback the is business. We good just saying engaged is They the is they're very eight important four our The important distributors. three is that knew physicians momentum. this that were to feedback and and ago. know excited; our a they as is or

products question pipeline Jeff, and in from in of released on XX% the sales in that have As the came I've QX mentioned that XX continues. of our business months products last been earlier our the

a and more couldn't And so lot it's in working energy of anything that got good today, momentum, I ask very of people for of business lot a lot hard.

Jeffrey Cohen

Perfect. Thanks for taking the questions.

Brad Mason

bet. You Take care.

Operator

Jim And our from from Sidoti & comes question Company. Sidoti next

open. line is Your

Jim Sidoti

Can hear afternoon. Good you me?

Brad Mason

today? I How you can Jim. are

Jim Sidoti

Jim. Hi

Jim Sidoti

taking thanks good the for Good, questions.

said U.S. in you is accruals in tax uncertain the that rate the on quarter were because one benefits the outside of or tax taxes for up the First U.S.

Brad Mason

announced for estimated tax amounts and that take the U.S. the it recognized XXXX out could and resolve those XXXX quarter were this in We've previously and a go years we that matters. position that in to ahead in to we were It's audit

Jim Sidoti

then that about preparation fourth and the prompt that quarter, in restructuring and for of up earlier the to on a June the strong that the some inventory you went in compared talked Okay quarter did quarter is call?

Brad Mason

products, stocking increase and the And new with had to was was products. do releasing to most particularly our new those of up that to addition Jim, RIVAL that inventory biggest products the

Jim Sidoti

Okay look just but relatively kind bottom the we and now. where you the takes? the are is $X.XX puts the on line about year It's last my really the fourth question, which for million and the line $X quarter then about on guidance top at the tied can of of talk

Doug Rice

be little bit a a just some we sorts bottom get little yearend, more can can line QX be those to due Yes. the here. I'll of QX bit tell into on as things. adjustments yearend more and you volatile

our there. for bottoming bit see some the EBITDA the where end EPS well range But that's of came you're been those things up we we that's QXs the process to EPS through as the for lot why careful reason top $XX expected of a leave year the I've weren't to be do as both increased on and that adjusted the we want both QX. the of the a where upside as at closing million EBITDA also through are. some as year. go We into going chose so little and adjusted end of at we to your end of on keep we at the So range and bottom range

Jim Sidoti

Okay, all right. Thank you.

Brad Mason

Thanks Jim.

Doug Rice

Thank you.

Operator

time And questions. further showing I'm no at this

Brad Mason

and Thank forward everybody appreciate you, to Operator. Take you and evening. in will very I appreciate calling talking help soon. care. look we to again today your Have good a

Operator

the Ladies participation you concludes and for your in conference. thank today's program. gentlemen This

You may Everyone now day. great have disconnect. a

Orthofix Medical (OFIX) 30 Oct 172017 Q3 Earnings call transcript