Tornier Reports Second Quarter 2015 Results

Upper Extremity Constant Currency Growth of 11.9% Led by the Aequalis Ascend™ Flex

AMSTERDAM, Netherlands, Aug. 5, 2015 (GLOBE NEWSWIRE) -- Tornier N.V. (NASDAQ:TRNX), a global medical device company focused on providing surgical solutions to orthopaedic extremity specialists, reported today its financial results for the second quarter ended June 28, 2015.

Revenue for the second quarter of 2015 was $83.2 million compared to second quarter 2014 revenue of $86.9 million, a decrease of 4.2% as reported and an increase of 4.0% in constant currency. Foreign currency exchange rates negatively impacted second quarter 2015 reported revenue by $7.1 million.

Second quarter 2015 revenue of Tornier's extremities product categories totaled $71.8 million compared to $71.9 million during the prior year period, a decrease of 0.2% as reported and an increase of 6.0% in constant currency.

Dave Mowry, President and Chief Executive Officer of Tornier, commented, "Our second quarter performance highlights the strong momentum in our upper extremities business, driven by our innovative product portfolio and clinically superior sales team. The Aequalis Ascend™ Flex shoulder system delivered another quarter of above-market growth and we made good progress in our commercial preparations for the recently FDA cleared Simpliciti™ shoulder system. This includes working with key opinion leaders and developing Centers of Excellence for Simpliciti, laying the foundation for the next leg of growth in our upper extremities business as we enter 2016."

Mr. Mowry continued, "As expected, our lower extremities business experienced distractions related to our pending merger with Wright Medical Group, Inc. However, we have been able to retain a high quality sales team and believe we have a very attractive combination of products and people to drive long-term growth for the future combined business. We are confident that the pending merger with Wright will leverage the strengths of both companies to create the premier high growth extremities and biologics company. Subject to FTC clearance, we expect the merger to close in the third quarter and are enthusiastic about the growth and profitability prospects for the combined organization."

The Company's second quarter 2015 adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, was $8.3 million, or 9.9% of reported revenue, compared to $6.1 million, or 7.0% of revenue, in the same quarter of the prior year.

Second Quarter 2015 Revenue Highlights

Extremities

• Revenue from the upper extremities joints and trauma category was $56.6 million, an increase of 11.9% in constant currency over the same quarter in 2014. Growth was led by the Aequalis Ascend family of shoulder joint replacement products, which continued to gain global surgeon acceptance. The consistent performance of our upper extremities joints and trauma category demonstrates the success of the Company's strategy to deliver superior products with a differentiated sales force.
    
• Revenue from Tornier's lower extremities joints and trauma category in the second quarter of 2015 reached $12.0 million, a decrease of 13.8% in constant currency. As anticipated, distractions from the Company's pending merger with Wright have impacted results in all segments of the Company's lower extremities business.
    
• Revenue from the sports medicine and biologics product category was $3.2 million in the second quarter of 2015, a decrease of 3.0% in constant currency over the same quarter in 2014, reflecting a decline in the Company's soft tissue anchor and biologics products.

Large Joints

Constant currency revenue from large joints and other products decreased 5.7% in the second quarter of 2015, reflecting anticipated deceleration in Europe and a challenging comparison to the prior year period, which benefitted from the launch of new minimally invasive hip instrumentation.

Geographic Revenue

On a geographic basis as compared to the second quarter of 2014, Tornier's international revenue decreased 12.9% as reported and increased 5.7% in constant currency, representing 39.8% of reported global revenue.  Revenue in the United States increased by 2.6% and represented 60.2% of reported global revenue.  

Fiscal Year 2015 Outlook

Due to the anticipated closing of the Wright merger, which is expected to take place in the third quarter, Tornier will no longer be providing financial guidance. Tornier expects that its upper extremities joints and trauma category will continue to make strong and consistent contributions to the anticipated combined business and that its lower extremities joints and trauma category will enhance the already robust Wright lower extremities business over the long term.

Forward-Looking Statements

Statements contained in this release 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 "believe," "expect," "should," "anticipate," "intend," "will," "can," "may," "could," "continue," "outlook," "future,  other words of similar meaning or the use of future dates.  Examples of forward-looking statements in this release include Tornier's expectations for the timing of the Wright merger, the future contributions of its upper and lower extremities joint and trauma businesses to the combined company and the growth and profitability prospects for the combined company.   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,  risks relating to Tornier's pending merger with Wright Medical Group, Inc., including the timing of the transaction; the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction, or the terms of such approval; the negative impact of the transaction on Tornier's lower extremities joints and trauma revenue and business; the effects of disruption from the transaction making it more difficult to maintain relationships with employees, customers, vendors and other business partners; other business effects, including the effects of industry, economic or political conditions outside of Wright's or Tornier's control; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of Wright and Tornier may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; operating costs and business disruption following completion of the transaction, including adverse effects on employee retention and on Wright's and Tornier's respective business relationships with third parties; transaction costs; actual or contingent liabilities; the adequacy of the combined company's capital resources; and other risks and uncertainties, including Tornier's future operating results and financial performance; Tornier's reliance on its independent sales agencies and distributors to sell its products and the effect on its business and operating results of agency and distributor changes, transitions to direct selling models in certain geographies and the recent transition of its U.S. sales channel towards focusing separately on upper and lower extremity products; fluctuations in foreign currency exchange rates; the effect of global economic conditions; the European sovereign debt crisis and austerity measures; risks associated with Tornier's international operations and expansion; the timing of regulatory approvals and introduction of new products; physician acceptance, endorsement, and use of new products; the effect of regulatory actions, changes in and adoption of reimbursement rates and product recalls; competitor activities; Tornier's manufacturing capacity; Tornier's leverage and access to credit under its credit agreement; and changes in tax and other legislation. 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 recently filed annual report on Form 10-K for the fiscal year ended December 28, 2014 and subsequent quarterly reports on Form 10-Q.  Tornier undertakes no obligation to update its forward-looking statements.

About Tornier

Tornier is a global medical device company focused on providing solutions to surgeons who treat musculoskeletal injuries and disorders of the shoulder, elbow, wrist, hand, ankle and foot. The Company's broad offering of over 95 product lines includes joint replacement, trauma, sports medicine, and biologic products to treat the extremities, as well as joint replacement products for the hip and knee in certain international markets. Since its founding approximately 70 years ago, Tornier's "Specialists Serving Specialists" philosophy has fostered a tradition of innovation, intense focus on surgeon education, and commitment to advancement of orthopaedic technology stemming from its close collaboration with orthopaedic surgeons and thought leaders throughout the world. For more information regarding Tornier, visit www.tornier.com.

Tornier®, Aequalis®, Aequalis Ascend®, Aequalis Ascend® Flex™, and Simpliciti® are trademarks of Tornier N.V and its subsidiaries, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.