Tornier Reports Third Quarter 2013 Results

Tornier Reports Third Quarter 2013 Results

  oU.S. distribution channel transition accelerates with agreements covering
    61% of U.S. revenue
  oNon-GAAP gross margin improved to 74.2%
  oAequalis Ascend Flex™ launch tracking to plan; over 120 trained surgeon
    users

AMSTERDAM, The Netherlands, Nov. 5, 2013 (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 third quarter ended September 29, 2013.

Revenue for the third quarter of 2013 was $66.7 million compared to third
quarter 2012 revenue of $58.0 million, an increase of 15.1% as reported and
13.4% in constant currency. Revenue for the nine months ended September 29,
2013 totaled$227.6 million, compared to revenue of$198.5 millionfor the
same period of 2012, an increase of 14.7% as reported and 14.0% in constant
currency.

Third quarter 2013 revenue ofTornier'sextremities product categories
totaled$56.9 millioncompared to$48.7 millionfor the prior year period, an
increase of 16.8% as reported and 16.2% in constant currency. For the nine
months endedSeptember 29, 2013, revenue ofTornier'sextremities product
categories was$189.8 millioncompared to$160.1 millionfor the prior year
period, an increase of 18.5% as reported and 18.3% in constant currency.

Giving pro forma effect to Tornier's fourth quarter 2012 acquisition of
OrthoHelix Surgical Designs, Inc. to include OrthoHelix revenue in the prior
year period, Tornier's2013 third quarter constant currency revenue growth was
1.1%, and extremities product constant currency revenue increased 1.5%. Pro
forma constant currency revenue growth for the nine months endedSeptember 29,
2013was 3.3%, and pro forma extremities product constant currency revenue
increased 4.9%.

Dave Mowry, President and Chief Executive Officer ofTornier, commented, "We
believe the U.S. sales force transition is integral to positioning Tornier for
achieving consistent above market revenue growth and margin expansion. During
the third quarter, we made the strategic decision to accelerate this process
of moving to a distribution channel with both upper and lower extremities
focused sales representatives.At the end of the third quarter, agreements
associated with this transition process represented approximately 61% of our
U.S. revenue compared to 40% at the end of the second quarter.We expect to
complete the transition agreement negotiation process by year end.While we
believe the acceleration is in the best interest of the company, it has led to
disruption in our current U.S. sales performance.

The transition also resulted in the expansion of our direct sales
representation, which accounted for approximately one-third of our U.S.
revenue at the end of the third quarter and is expected to increase to nearly
50% of U.S. revenue by year end.Our confidence in our U.S. sales channel
strategy is underscored by the double-digit revenue growth during the quarter
achieved by the more mature territories where transition agreements were
completed early in this process."

The Company's third quarter 2013 adjusted EBITDA, as defined in the GAAP to
non-GAAP reconciliation provided later in this release, was$4.8 million, or
7.2% of reported revenue, compared to$4.8 million, or 8.3% of revenue, in the
same quarter of the prior year. For the nine months ended September 29, 2013,
adjusted EBITDA decreased 3.1% to$21.3 million, or 9.3% of reported revenue,
compared to$22.0 million, or 11.1% of revenue for the prior year period.

Mr. Mowryadded, "We delivered adjusted EBITDA within our guidance range
despite the lower than expected revenue. This was driven by an improvement in
non-GAAP gross margin and prudent management of operating expenses. We believe
we have the infrastructure in place to support our double-digit constant
currency revenue growth and enhanced operating leverage expectations."

Third Quarter 2013 Revenue Highlights

Extremities

  oRevenue from the upper extremities joints and trauma category was$40.3
    million, an increase of 1.5% in constant currency over the same quarter in
    2012.This growth was primarily led by the Company's shoulder arthroplasty
    portfolio, including theAequalis™ Reversed Shoulderand Aequalis™
    Ascend™,which includes contribution from the third quarter 2013 launch of
    theAequalis Ascend Flex™.
  oRevenue fromTornier'slower extremities joints and trauma category in the
    third quarter of 2013 reached$13.5 million, an increase of 132.5% in
    constant currency.Giving pro forma effect to the OrthoHelix acquisition
    to include OrthoHelix revenue in the third quarter of 2012, third quarter
    2013 lower extremities revenue recorded constant currency growth of
    7.7%.The Company's international roll-out of the OrthoHelix product line
    started with its first sale in the second quarter and first clinical case
    in the third quarter 2013.
  oRevenue from the sports medicine and biologics product category was$3.1
    millionin the third quarter of 2013, a decrease of 11.6% in constant
    currency over the same quarter in 2012 driven by a decline in the
    Company's anchor products, partially offset by growth in the Company's
    suture and BioFiber® products.The Company is in the early launch stage of
    itsInsite™bio anchor and uniquePhantom™ high strength resorbable
    suture.

Large Joints

Revenue of the Company's large joints and other product lines was$9.8
million, a decrease of 0.9% over the same quarter in 2012 on a constant
currency basis.In the third quarter of 2013, this product category decreased
to 14.7% of the Company's reported global revenue, compared to 16.0% during
the prior year period.

Geographic Revenue

On a geographic basis as compared to the third quarter of
2012,Tornier'sinternational revenue increased 10.3% as reported and 6.3% in
constant currency, representing 39% of reported global revenue. Revenue
inthe United Statesincreased by 18.3% and represented 61% of reported global
revenue. Giving pro forma effect to the OrthoHelix acquisition to include
OrthoHelix revenue in the third quarter of 2012, revenue inthe United States
decreased by 1.8% during the third quarter of 2013 compared to the prior year
quarter. 

Fourth Quarter 2013 Outlook

  oFor the fourth quarter of 2013, the Company projects constant currency
    revenue to be in the range of$73to$77 million, representing constant
    currency growth of negative 7.6% to negative 2.6% over fourth quarter 2012
    revenue.
  oBased on recent currency exchange rates, fourth quarter 2013 reported
    revenue is projected to be in the range of$74.4to$78.3 million,
    representing reported growth of negative 5.9% to negative 0.9% over fourth
    quarter 2012 revenue.
  oFourth quarter 2013 extremities product categories revenue is expected to
    grow negative 7.9% to negative 2.6% in constant currency. The Company
    projects adjusted EBITDA, as described in the GAAP to non-GAAP
    reconciliation provided later in this release, for the fourth quarter of
    2013 to be in the range of$4.0to$6.0 million, or 5.4% to 7.7% of
    reported revenue.

Fiscal Year 2013 Outlook

  oBased on the year-to-date performance and current business trends, the
    Company is updating its previous revenue guidance. Fiscal year 2013
    constant currency revenue is now expected to be in the range
    of$299.2to$303.2 million, representing constant currency growth of 7.8%
    to 9.3%.
  oBased on recent currency exchange rates, 2013 reported revenue is
    projected to be in the range of$301.9to$305.9 million, representing
    reported growth of 8.8% to 10.2% over 2012 revenue.
  oRevenue of theTornierextremities product categories in 2013 is expected
    to grow 10.7% to 12.3% in constant currency. Giving pro forma effect to
    the OrthoHelix acquisition to include OrthoHelix revenue in the full year
    2012, extremities product categories revenue is expected to grow 1.4% to
    2.7% in constant currency.
  oThe Company projects 2013 adjusted EBITDA in the range of$25.3to$27.3
    million, or 8.4% to 8.9% of reported revenue.

Conference Call

Tornierwill host a conference call today at4:30 p.m. eastern timeto discuss
its third quarter 2013 financial results and its outlook for the fourth
quarter and full year of 2013.The conference call will be available to
interested parties through a live audio webcast available through the
Company's website at www.tornier.com.Those without internet access may join
the call from within the U.S. by dialing (877) 673-5355; outside the U.S.,
dial (760) 666-3805.

A telephone replay will be available for ten days following the call by
dialing (855) 859-2056 for domestic participants and (404) 537-3406 for
international participants. When prompted, please enter the replay pin number
75043752.For those who are not available to listen to the live webcast, the
call will be archived for one year onTornier'swebsite.

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 "expect," "should,"
"project," "anticipate," "intend," "will," "can," "may," "believe," "could,"
"should," "continue," "outlook," "guidance," "future," other words of similar
meaning or the use of future dates. Examples of forward-looking statements in
this release includeTornier'sfinancial guidance for the fourth quarter and
full year 2013, Tornier's financial goal to achieve above market revenue
growth and margin expansion and return to double-digit constant currency
revenue growth;Tornier'sstrategy to separate its U.S. sales channel to focus
on either upper or lower extremities products, transitions in Tornier's U.S.
sales channel to do so, and the scope, timing and impact on revenues of such
transitions; Tornier's expectations that direct sales representatives will
account for 50% of U.S. revenue by the end of 2013, Tornier's infrastructure
and its ability to support business growth and operating leverage and the
launch and market acceptance of the Aequalis Ascend Flex™ . Forward-looking
statements by their nature address matters that are, to different degrees,
uncertain. Uncertainties and risks may cause Tornier'sactual results to be
materially different than those expressed in or implied
byTornier'sforward-looking statements. For Tornier, such uncertainties and
risks include, among others, Tornier'sfuture operating results and financial
performance; changes inTornier'sarrangements with its distributors and
independent sales agencies, including the alignment for either dedicated upper
or lower extremities sales representatives, and transition to direct selling
models in certain geographies and territories; risks associated
withTornier'sacquisition of OrthoHelix and subsequent integration
activities; fluctuations in foreign currency exchange rates; the effect of
global economic conditions; the European sovereign debt crisis and austerity
measures; risks associated withTornier'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,
product recalls; competitor activities; Tornier'sleverage 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
affectTornier'sactual results are described inTornier'sfilings with
theU.S. Securities and Exchange Commission, including its most recent annual
report on Form 10-K and subsequent quarterly reports on Form 10-Q. Tornier
undertakes no obligation to update its forward-looking statements.

AboutTornier

Tornieris a global medical device company focused on serving extremities
specialists who treat orthopaedic conditions of the shoulder, elbow, wrist,
hand, ankle and foot.The Company's broad offering of over 100 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 regardingTornier, visitwww.tornier.com.

Use of Non-GAAP Financial Measures

To supplementTornier'sconsolidated financial statements prepared in
accordance with U.S. generally accepted accounting principles (GAAP),Tornier
uses certain non-GAAP financial measures in this release.Reconciliations of
the non-GAAP financial measures used in this release to the most comparable
U.S. GAAP measures for the respective periods can be found in tables later in
this release immediately following the detail of revenue by
geography.Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as a substitute forTornier's
financial results prepared in accordance with GAAP.

Tornier N.V.
Consolidated Statements of Operations
(in thousands, except per share data)
                                                             
                      Three months ended          Nine months ended
                      (unaudited)                 (unaudited)
                      September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
Revenue                $66,747     $58,015     $227,567    $198,487
Cost of goods sold     17,204       15,420       59,461       54,529
Cost of goods sold -   1,768        310          5,444        415
acquisition related
Gross profit           47,775       42,285       162,662      143,543
                      71.6%         72.9%         71.5%         72.3%
Operating expenses                                            
Selling, general and   46,797       38,524       150,400      124,157
administrative
Research and           4,665        5,260        16,390       16,329
development
Amortization of        3,976        2,730        11,597       8,013
intangible assets
Special charges        (3,918)      6,503        1,009        9,413
Total operating        51,520       53,017       179,396      157,912
expenses
                                                             
Operating (loss)       (3,745)      (10,732)     (16,734)     (14,369)
income
                                                             
Other income (expense)                                        
Interest income        85           70           181          304
Interest expense       (1,499)      (481)        (5,754)      (1,430)
Foreign currency
transaction (loss)     (285)        (326)        (1,071)      (195)
gain
Loss on extinguishment --          --          (1,127)      --
of debt
Other non-operating    95           56           183          54
income
                                                             
(Loss) income before   (5,349)      (11,413)     (24,322)     (15,636)
income taxes
Income tax expense     (943)        (268)        (1,405)      (1,305)
                                                             
Consolidated net loss  $(6,292)    $(11,681)   $(25,727)   $(16,941)
                                                             
Net loss per share                                            
Basic and diluted      $(0.13)     $(0.29)     $(0.57)     $(0.43)
                                                             
Weighted average
ordinary shares                                               
outstanding
Basic and diluted      48,068       39,708       44,942       39,537



Tornier N.V.
Condensed Consolidated Balance Sheets
(in thousands)
                                                           
                                         September 29, 2013 December 30, 2012
                                         (unaudited)        
Assets                                                      
Current assets                                              
Cash and cash equivalents                 $62,552          $31,108
Accounts receivable, net                  48,633            54,192
Inventories                               84,584            86,697
Deferred income taxes and other current   24,456            25,321
assets
Total current assets                      220,225           197,318
                                                           
Instruments, net                          58,657            51,394
Property, plant and equipment, net        41,797            37,151
Goodwill and intangibles, net             367,405           366,398
Deferred income taxes and other assets    2,647             1,966
Total assets                              $690,731         $654,227
                                                           
Liabilities and shareholders' equity                        
Current liabilities                                         
Short-term borrowing and current portion  $1,229           $4,595
of long-term debt
Accounts payable                          13,862            11,526
Accrued liabilities, deferred income      54,896            44,505
taxes and other current liabilities
Total current liabilities                 69,987            60,626
                                                           
Other long-term debt                      66,070            115,457
Deferred income taxes and other long-term 31,337            42,065
liabilities
Total liabilities                         167,394           218,148
                                                           
Shareholders' equity                      523,337           436,079
                                                           
Total liabilities and shareholders'       $690,731         $654,227
equity



Tornier N.V.
Consolidated Statements of Cash Flow
(in thousands)
                                                               
                           Three months ended       Nine months ended
                           (unaudited)              (unaudited)
                                                               
                           September  September 30, September 29, September
                            29, 2013   2012          2013          30, 2012
Cash flows from operating                                       
activities
Consolidated net loss       $(6,292) $(11,681)   $(25,727)   $(16,941)
                                                               
Adjustments to reconcile
consolidated net loss to              
net cash provided by (used
in) operating activities
Depreciation and            9,022     7,051        26,803       21,398
amortization
Impairment of fixed assets  --       79           --          1,028
Lease termination costs     --       731          --          731
Non-cash foreign currency   293       (594)        1,079        (217)
(gain) loss
Deferred income taxes       141       305          1,929        (147)
Share-based compensation    1,684     1,712        4,753        5,108
Non-cash interest expense   190       --          756          --
and discount amortization
Inventory obsolescence      2,203     857          6,382        2,913
Loss on extinguishment of   --       --          1,127        --
debt
Gain from reversal of
contingent consideration    (4,947)   --          (4,947)      --
liability
Inventory step up from      1,768     --          5,444        --
acquisition
Other non-cash items        (687)     893          619          2,144
affecting earnings
                                                              
Changes in operating assets                                    
and liabilities
Accounts receivable         4,055     4,817        5,400        4,533
Inventories                 (3,782)   (1,598)      (5,842)      (3,474)
Accounts payable and        (5,235)   (3,847)      311          (3,429)
accruals
Other current assets and    4,464     (142)        2,403        (1,317)
liabilities
Other non-current assets    (2,297)   (763)        (2,169)      (1,194)
and liabilities
Net cash provided by (used  580       (2,180)      18,321       11,136
in) operating activities
                                                               
Cash flows from investing                                       
activities
Acquisition-related cash    (1,635)   433          (7,758)      (3,656)
payments
Additions of instruments    (4,115)   (1,474)      (16,565)     (9,245)
Purchases of property,      (2,740)   (4,182)      (7,518)      (7,886)
plant and equipment
Net cash (used in)          (8,490)   (5,223)      (31,841)     (20,787)
investing activities
                                                               
Cash flows from financing                                       
activities
Change in short-term debt   --       6,298        (1,000)      9,350
Repayments of long-term     (359)     (4,282)      (53,688)     (8,233)
debt
Proceeds from issuance of   --       136          --          5,172
long-term debt
Deferred financing costs    (58)      --          (111)        --
Issuance of ordinary shares 10,597    937          98,853       7,108
Net cash provided by        10,180    3,089        44,054       13,397
financing activities
                                                               
Effect of currency exchange
rates on cash and cash      1,567     1,389        910          47
equivalents
                                                               
Increase in cash and cash   3,837     (2,925)      31,444       3,793
equivalents
                                                               
Cash and cash equivalents   58,715    61,424       31,108       54,706
at beginning of period
                                                               
Cash and cash equivalents   $62,552  $58,499     $62,552     $58,499
at end of period



Tornier N.V.
Selected Revenue Information
(in thousands)
                                                                 
                    Three months ended          Nine months ended
                    (unaudited)                (unaudited)           
                     September September Percent September  September  Percent
                    29,       30,       change  29,        30,        change
                     2013      2012              2013       2012
Revenue by product                                                
category
Upper extremity      $40,293 $39,429 2.2%    $136,258 $129,434 5.3%
joints and trauma
Lower extremity      13,530   5,815    132.7%  42,514    19,333    119.9%
joints and trauma
Sports medicine and  3,117    3,487    -10.6%  11,051    11,363    -2.7%
biologics
Total extremities    56,940   48,731   16.8%   189,823   160,130   18.5%
Large joints and     9,807    9,284    5.6%    37,744    38,357    -1.6%
other
Total                $66,747 $58,015 15.1%   $227,567 $198,487 14.7%
                                                                 
Revenue by geography                                              
United States        $40,678 $34,377 18.3%   $134,244 $110,647 21.3%
International        26,069   23,638   10.3%   93,323    87,840    6.2%
Total                $66,747 $58,015 15.1%   $227,567 $198,487 14.7%



Tornier N.V.
Reconciliation of Revenue to Non-GAAP Revenue on a Constant Currency Basis
(in thousands)
                                                                
                    Three months ended                              
                    (unaudited)                                     
                     September 29,                       September
                    2013                                30,         
                                                         2012
                                 Foreign      Revenue                Percent
                                 exchange     on a                   change
                    Revenue     impact as    constant   Revenue     on a
                     as reported compared to  currency   as reported constant
                                 prior period basis                  currency
                                                                     basis
Revenue by product                                               
category
Upper extremity      $40,293   $(287)     $40,006  $39,429   1.5%
joints and trauma
Lower extremity      13,530     (10)        13,520    5,815      132.5%
joints and trauma
Sports medicine and  3,117      (36)        3,081     3,487      -11.6%
biologics
Total extremities    56,940     (333)       56,607    48,731     16.2%
Large joints and     9,807      (607)       9,200     9,284      -0.9%
other
Total                $66,747   $(940)     $65,807  $58,015   13.4%
                                                                
Revenue by geography                                             
United States        $40,678   $--       $40,678  $34,377   18.3%
International        26,069     (940)       25,129    23,638     6.3%
Total                $66,747   $(940)     $65,807  $58,015   13.4%
                                                                
                                                                
                    Nine months ended                               
                    (unaudited)                                     
                     September 29,                       September
                    2013                                30,         
                                                         2012
                                 Foreign      Revenue                Percent
                                 exchange     on a                   change
                    Revenue     impact as   constant   Revenue     on a
                     as reported compared to  currency   as reported constant
                                 prior period basis                  currency
                                                                     basis
Revenue by product                                               
category
Upper extremity      $136,258  $(290)     $135,968 $129,434  5.0%
joints and trauma
Lower extremity      42,514     (18)        42,496    19,333     119.8%
joints and trauma
Sports medicine and  11,051     (39)        11,012    11,363     -3.1%
biologics
Total extremities    189,823    (347)       189,476   160,130    18.3%
Large joints and     37,744     (894)       36,850    38,357     -3.9%
other
Total                $227,567  $(1,241)   $226,326 $198,487  14.0%
                                                                
Revenue by geography                                             
United States        $134,244  $--       $134,244 $110,647  21.3%
International        93,323     (1,241)     92,082    87,840     4.8%
Total                $227,567  $(1,241)   $226,326 $198,487  14.0%



Tornier N.V.
Reconciliation of Revenue to Non-GAAP Pro Forma Revenue
(in thousands)
                                                                                                 
             Three months ended
             (unaudited)
             September 29, 2013                                       September 30, 2012                 
                         Foreign    Revenue                 Proforma                           Proforma   Percent
              Revenue    exchange   on a       * Proforma   Revenue    Revenue    * Proforma   Revenue    change
             as         impact as  constant   adjustment   on a       as         adjustment   on a       on a
              reported   compared   currency   for          constant   reported   for          constant   constant
                         to prior   basis      acquisitions currency              acquisitions currency   currency
                         period                             basis                              basis      basis
Revenue by
product                                                                                           
category
Upper
extremity     $40,293  $(287)   $40,006  $--       $40,006  $39,429  $304       $39,733  0.7%
joints and
trauma
Lower
extremity     13,530    (10)      13,520    --         13,520    5,815     6,742       12,557    7.7%
joints and
trauma
Sports
medicine and  3,117     (36)      3,081     --         3,081     3,487     --         3,487     -11.6%
biologics
Total         56,940    (333)     56,607    --         56,607    48,731    7,046       55,777    1.5%
extremities
Large joints  9,807     (607)     9,200     --         9,200     9,284     --         9,284     -0.9%
and other
Total         $66,747  $(940)   $65,807  $--       $65,807  $58,015  $7,046     $65,061  1.1%
                                                                                                 
Revenue by                                                                                        
geography
United States $40,678  $--     $40,678  $--       $40,678  $34,377  $7,046     $41,423  -1.8%
International 26,069    (940)     25,129    --         25,129    23,638    --         23,638    6.3%
Total         $66,747  $(940)   $65,807  $--       $65,807  $58,015  $7,046     $65,061  1.1%
                                                                                                 
                                                                                                 
             Nine months ended
             (unaudited)
             September 29, 2013                                       September 30, 2012                 
                         Foreign    Revenue                 Proforma                           Proforma   Percent
              Revenue    exchange   on a       * Proforma   Revenue    Revenue    * Proforma   Revenue    change
             as         impact as  constant   adjustment   on a       as         adjustment   on a       on a
              reported   compared   currency   for          constant   reported   for          constant   constant
                         to prior   basis      acquisitions currency              acquisitions currency   currency
                         period                             basis                              basis      basis
Revenue by
product                                                                                           
category
Upper
extremity     $136,258 $(290)   $135,968 $--       $135,968 $129,434 $795       $130,229 4.4%
joints and
trauma
Lower
extremity     42,514    (18)      42,496    --         42,496    19,333    19,735      39,068    8.8%
joints and
trauma
Sports
medicine and  11,051    (39)      11,012    --         11,012    11,363    --         11,363    -3.1%
biologics
Total         189,823   (347)     189,476   --         189,476   160,130   20,530      180,660   4.9%
extremities
Large joints  37,744    (894)     36,850    --         36,850    38,357    --         38,357    -3.9%
and other
Total         $227,567 $(1,241) $226,326 $--       $226,326 $198,487 $20,530    $219,017 3.3%
                                                                                                 
Revenue by                                                                                        
geography
United States $134,244 $--     $134,244 $--       $134,244 $110,647 $20,530    $131,177 2.3%
International 93,323    (1,241)   92,082    --         92,082    87,840    --         87,840    4.8%
Total         $227,567 $(1,241) $226,326 $--       $226,326 $198,487 $20,530    $219,017 3.3%
                                                                                                 
Notes:                                                                                            
* -- Represents Pro forma Revenue adjustment for OrthoHelix acquisition related to the respective period.



Tornier N.V.
Reconciliation of Net Loss to
Non-GAAP Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
(in thousands)
                                                             
                      Three months ended          Nine months ended
                      (unaudited)                 (unaudited)
                      September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
Revenue, as reported   $66,747     $58,015     $227,567    $198,487
                                                             
Net loss, as reported  $(6,292)    $(11,681)   $(25,727)   $(16,941)
                                                             
Interest income        (85)         (70)         (181)        (304)
Interest expense       1,499        481          5,754        1,430
Income tax expense     943          268          1,405        1,305
(benefit)
Depreciation          5,046        4,321        15,206       13,385
Amortization           3,976        2,730        11,597       8,013
                                                             
Subtotal Non-GAAP      5,087        (3,951)      8,054        6,888
EBITDA
                                                             
Other non-operating    (95)         (56)         (183)        (54)
(income) expense
Foreign currency
transaction loss       285          326          1,071        195
(gain)
Loss on extinguishment --          --          1,127        --
of debt
Share-based            1,684        1,712        4,753        5,108
compensation
Inventory step-up from 1,768        310          5,444        415
acquisition
Special Charges:                                              
Acquisition,
integration and        1,029        1,722        4,742        1,790
distribution
transition costs
Facilities
consolidation          --          2,786        --          5,254
initiative
Reversal of OrthoHelix
contingent             (4,947)                   (4,947)      
consideration
liability
Italy bad debt expense --          1,995        --          1,995
Legal settlements      --          --          1,214        --
Management Exit Costs  --          --          --          374
                                                             
Non-GAAP adjusted      $4,811      $4,844      $21,275     $21,965
EBITDA
                                                             
Non-GAAP adjusted      7.2%          8.3%          9.3%          11.1%
EBITDA margin



Tornier N.V.
Reconciliation of Net Loss and Net Loss per Share
to Non-GAAP Adjusted Net Loss and Non-GAAP Adjusted Net Loss per Share
(in thousands)
                                                             
                      Three months ended          Nine months ended
                      (unaudited)                 (unaudited)
                      September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
Net loss, as reported  $(6,292)    $(11,681)   $(25,727)   $(16,941)
                                                             
Inventory step-up from
acquisition, net of    1,518        250          5,171        335
tax
Reversal of valuation
allowance from         --          --          (540)        --
acquisition
Loss on extinguishment --          --          1,127        --
of debt
Special charges, net                                          
of tax:
Acquisition,
integration and        978          1,722        4,685        1,790
distribution
transition costs
Facilities
consolidation          --          2,727        --          4,978
initiative
Reversal of OrthoHelix
contingent             (4,947)      --          (4,947)      --
consideration
liability
Italy bad debt expense --          1,995        --          1,995
Legal settlements      --          --          1,214        --
Management Exit Costs  --          --          --          374
                                                             
Non-GAAP adjusted net  (8,743)      (4,987)      (19,017)     (7,469)
loss
                                                             
Net loss per share, as                                        
reported
Basic and diluted      $(0.13)     $(0.29)     $(0.57)     $(0.43)
                                                             
Inventory step-up from
acquisition, net of    0.03         0.01         0.12         0.01
tax
Reversal of valuation
allowance from         --          --          (0.01)       --
acquisition
Loss on extinguishment --          --          0.02         --
of debt
Special charges, net                                          
of tax:
Acquisition,
integration and        0.02         0.04         0.10         0.04
distribution
transition costs
Facilities
consolidation          --          0.06         --          0.13
initiative
Reversal of OrthoHelix
contingent             (0.10)       --          (0.11)       --
consideration
liability
Italy bad debt expense              0.05                      0.05
Legal settlements      --          --          0.03         --
Management Exit Costs  --          --          --          0.01
                                                             
Non-GAAP adjusted net                                         
loss per share
Basic and diluted      $(0.18)     $(0.13)     $(0.42)     $(0.19)
                                                             
Weighted average
ordinary shares                                               
outstanding
Basic and diluted      48,068       39,708       44,942       39,537



Tornier N.V.
Reconciliation of Net Cash Provided by Operating Activities
to Non-GAAP Adjusted Free Cash Flow
(in thousands)
                                                             
                      Three months ended          Nine months ended
                      (unaudited)                 (unaudited)
                                                             
                      September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
                                                             
Net cash provided by
operating activities,  $580        $(2,180)    $18,321     $11,136
as reported
                                                             
Adjusted for:                                                 
Cash paid related to
Facilities             --          1,632        --          2,595
Consolidation
Additions of
instruments, as        (4,115)      (1,474)      (16,565)     (9,245)
reported
Purchases of property,
plant and equipment,   (2,740)      (4,182)      (7,518)      (7,886)
as reported
Purchases of property,
plant and equipment,   --          2,069        --          2,361
related to Facilities
Consolidation
                                                             
Non-GAAP adjusted free $(6,275)    $(4,135)    $(5,762)    $(1,039)
cash flow

  
  
  Tornier N.V.
  Reconciliation of Gross Margin and Gross Margin %
  to Non-GAAP Adjusted Gross Margin and Gross Margin %
  (in thousands)

                    Three months ended          Nine months ended
                    (unaudited)                 (unaudited)
                                                           
                    September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
                                                           
  Revenue, as        $66,747     $58,015     $227,567    $198,487
    reported
                                                           
  Gross margin, as   $47,775     $42,285     $162,662    $143,543
    reported
  Gross margin %, as 71.6%         72.9%         71.5%         72.3%
    reported
                                                           
  Adjusted for:                                             
  Inventory step-up  1,768        310          5,444        415
    due to acquisition
                                                           
  Non-GAAP adjusted  49,543       42,595       168,106      143,958
    gross margin
  Non-GAAP adjusted  74.2%         73.4%         73.9%         72.5%
    gross margin %



Tornier N.V.
Reconciliation of Operating Expensesand Operating Expenses as a % of Revenue
to
Non-GAAP Adjusted Operating Expenses and Non-GAAP Adjusted Operating Expenses
as a % of Revenue
                                                             
                      Three Months Ended          Nine Months ended
                      (unaudited)                 (unaudited)
                      September 29, September 30, September 29, September 30,
                       2013          2012          2013          2012
                                                             
Revenue, as reported   $66,747     $58,015     $227,567    $198,487
                                                             
Operating Expenses, as 51,520       53,017       179,396      157,912
reported
Operating expenses as
a percentage of        77.2%         91.4%         78.8%         79.6%
revenue, as reported
                                                             
Adjusted for:                                                 
Amortization of        (3,976)      (2,730)      (11,597)     (8,013)
intangible assets
Special charges        3,918        (6,503)      (1,009)      (9,413)
Total adjustments      (58)         (9,233)      (12,606)     (17,426)
                                                             
Non-GAAP adjusted      $51,462     $43,784     $166,790    $140,486
operating expenses
Non-GAAP adjusted
operating expenses as  77.1%         75.5%         73.3%         70.8%
a percentage of
revenue

 
 
 Tornier N.V.
 Reconciliation of Projected 2013 Operating Loss
 to Projected Non-GAAP Adjusted EBITDA
 (in millions)

                                      Three months ended Twelve months ended
                                      (unaudited)        (unaudited)
                                                        
                                      December 29, 2013  December 29, 2013
                                      Low       High     Low       High
                                                                
 Revenue                               $74.4   $78.3  $301.9  $305.9
 Operating Loss                        $(10.7) $(6.5) $(27.4) $(23.2)
                                                                
 Adjusted for:                                                   
 Inventory step-up due to acquisition  0.6      0.4     6.0      5.8
 Depreciation and amortization expense 10.1     9.5     36.9     36.3
 Share-based compensation              2.2      1.8     7.0      6.6
 Special charges                       1.8      0.8     2.8      1.8
 Total adjustments                     $14.7   $12.5  $52.7   $50.5
                                                                
 Non-GAAP adjusted EBITDA              $4.0    $6.0   $25.3   $27.3
 Non-GAAP adjusted EBITDA margin       5.4%      7.7%     8.4%      8.9%

Tornierbelieves the non-GAAP financial measures presented above provide
additional meaningful information for measuringTornier'sfinancial
performance and are measures frequently used byTornier'smanagement, as well
as securities analysts and investors.Tornieruses the non-GAAP financial
measures as supplemental measures of its performance and believes such
measures facilitate operating performance comparisons from period to period
and company to company by factoring out potential differences caused by
charges not related toTornier'sregular, ongoing business, including non-cash
charges, certain large and unpredictable charges, acquisitions, dispositions,
litigation settlements and tax positions.Tornier's management uses the
non-GAAP financial measures to assess the performance ofTornier'score
operations, analyze underlying trends inTornier's businesses, establish
operational goals and forecasts, and evaluate Tornier's performance period
over period and in relation to the operating results of its
competitors.Tornier'smanagement uses the non-GAAP financial measures to help
allocate its resources to both ongoing and prospective business initiatives
and to help make budgeting and spending decisions, for example, between
product development expenses, research and development expenses, and selling,
general and administrative expenses.Tornier'smanagement is evaluated on the
basis of several of these non-GAAP financial measures when determining
achievement of performance incentive compensation goals.

Tornierbelieves that non-GAAP financial measures have limitations as
analytical tools since they do not reflect all of the amounts associated with
Tornier's operating results as determined in accordance with GAAP and should
only be used to evaluateTornier'soperating results in conjunction with the
corresponding GAAP measures.Accordingly, revenue on a constant currency basis
should not be used as a substitute for revenue, EBITDA, adjusted EBITDA,
adjusted net income (loss) and adjusted net income (loss) per share should not
be used as a substitute for net income or net income per share; adjusted
EBITDA margin should not be used as a substitute for net margin or operating
margin; free cash flow should not be used as a substitute for cash flows from
operations; and adjusted gross margin and gross margin percentage should not
be used as a substitute for gross margin or gross margin as a percentage of
revenue, in each case as determined in accordance with GAAP.Neither EBITDA,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted
net income (loss) per share, free cash flow, adjusted gross margin and gross
margin as a percentage of revenue, should be an indication of whether cash
flow will be sufficient to fund Tornier's cash requirements.Additionally, the
calculation of non-GAAP financial measures is not based on any comprehensive
or standard set of accounting rules or principles. Accordingly,
Tornier'sdefinitions of revenue on a constant currency basis, EBITDA,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted
net income (loss) per share, free cash flow, adjusted gross margin and gross
margin as a percentage of revenue, may differ from the definitions of other
companies using the same or similar names limiting, to some extent, the
usefulness of such measures for comparison purposes.

For further information regarding whyTornierbelieves that these non-GAAP
financial measures provide useful information to investors, the specific
manner in which management uses these measures, and some of the limitations
associated with the use of these measures, please refer to Tornier'scurrent
report on Form 8-K filed today with theSecurities and Exchange
Commissionwhich attaches this release as an exhibit. This current report on
Form 8-K is available on theSEC'swebsite atwww.sec.govor
onTornier'swebsite atwww.tornier.com.

CONTACT: Tornier N.V.
         Shawn McCormick
         Chief Financial Officer
         (952) 426-7646
         shawn.mccormick@tornier.com
 
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