UPDATE: Dec. 17, 3:57 p.m.
Orthofix International NV (NSDQ:OFIX) is streamlining its operations, aiming to save up to $7 million a year.
The reorganization is "another key step toward the achievement of our plan to improve our operating profit margin, and was facilitated in part by the recent consolidation of operations into our new facility in Lewisville, Texas," president and CEO Alan Milinazzo said in prepared remarks. It will mean a charge of $4 million, or 13 cents per diluted share, to the company’s fourth-quarter books.
Dan Yarbrough, vice president of investor relations, told MassDevice that "probably less than half" of the employees affected by the layoffs are in the U.S. Yarbrough declined to be more specific about the layoffs.
Orthofix is also shifting a small, 10-person office from Boston to Lewisville, he added, including CEO Alan Millinazzo and CFO Robert Vaters and Yarbrough himself.
"Last summer consolidated a couple of our other business facilities, one in Mass. and one in N.J., and we folded them into an operation we already had in Dallas, and moved it all to a new building there," he told us.
Orthofix also announced the settlement of a patent infringement lawsuit filed against it by NuVasive Inc. (NSDQ:NUVA) and Osiris Therapeutics Inc. (NSDQ:OSIR) in April in the U.S. District court for New Jersey over its Trinity Evolution allograft. The settlement involves a licensing agreement for the tissue graft product that will see Orthofix log another, $2 million (or 7 cents per diluted share) charge on its Q4 books.
As a result, the company lowered its Q4 earnings outlook from 59 cents to 62 cents per share to 39 cents to 42 cents. Revenues are expected to be lower than prior forecasts as well, "primarily due to a slower growth rate in the company’s spine stimulation business." Orthofix said fourth-quarter sales of $142 million to $144 million; full-year sales are pegged at $562.6 million to $564.6 million.
OFIX shares were down 4.2 percent to $28.02 in mid-day activity Dec. 16. Shares closed at $27.26 the next day, down another 1.7 percent.
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