Moody's, S&P upgrade Orthofix

November 19, 2009 by MassDevice staff

The ratings agencies boost the orthopedics maker's rating from negative to stable.

A pair of rating agencies upgraded their views on Orthofix International NV (OFIX) from negative to stable.

The Boston-based orthopedics maker said both Standard & Poor's Rating Services and Moody's Investor Services boosted their ratings for a variety of reasons.

Moody's cited "improvement in the spine implant business, which has contributed to margin expansion and improved free cash flow" and "improved credit metrics and an improved liquidity profile, including an increased cushion under the financial covenants," based on Orthofix paying down its debt ahead of schedule. The agency also cited Orthofix's "relatively smooth transition to its next generation biologics product, Trinity Evolution, as well as the continued positive operating performance of the orthopedic and sports medicine businesses."

For its part, Standard & Poor's noted "recent improvements in the company's operating performance and debt reduction," stemming from "a reorganization that better focused its distribution and the launch of new products, such as a pedicle screw system, interbody device, and stem cell-based allograft; as well as the ongoing growth of its spine stimulation revenues."

Orthofix posted a $6.2 million third-quarter profit on $135.1 million in sales during the three months ended Sept. 30.

The positive earnings reversed a gaping $237.3 million net loss from the year-ago quarter. Third-quarter sales also beat their 2008 benchmark, rising 4 percent.