Tornier Reports Fourth Quarter and Fiscal Year 2013 Results and Provides 2014 Outlook

Tornier Reports Fourth Quarter and Fiscal Year 2013 Results and Provides 2014
Outlook

  oPhase 1 of U.S. distribution channel transition complete; Phase 2
    underway, with focus on sales force optimization and training
  oNew product launches and pipeline on track, led by Aequalis Ascend Flex
    adoption and expected second quarter launch of Aequalis Reversed in Japan

AMSTERDAM, The Netherlands, Feb. 20, 2014 (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 fourth quarter and fiscal year ended December 29, 2013.

Revenue for the fourth quarter of 2013 was $83.4 millioncompared to fourth
quarter 2012 revenue of$79.0 million, an increase of 5.5% as reported and
4.4% in constant currency.Revenue for the fiscal year endedDecember 29,
2013totaled$311.0 million, compared to 2012 revenue of$277.5 million, an
increase of 12.0% as reported and 11.3% in constant currency.

Fourth quarter 2013 revenue ofTornier'sextremities product categories
totaled$68.1 millioncompared to$64.7 milliona year ago, an increase of
5.2% as reported and 4.8% in constant currency. For the fiscal year 2013,
revenue ofTornier'sextremities product categories was$258.0
millioncompared to$224.9 milliona year ago, an increase of 14.7% as
reported and 14.4% 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 full
prior year period, Tornier's2013 fourth quarter constant currency revenue
growth was 4.0%, and extremities products constant currency revenue increased
4.3%. Pro forma constant currency revenue growth for the fiscal year 2013was
3.5%, and pro forma extremities products constant currency revenue increased
4.7%.

Dave Mowry, President and Chief Executive Officer ofTornier, commented, "We
completed the first phase of our U.S. sales force transition during the fourth
quarter, ahead of our original timeline. This now positions us to focus on the
next phase of the transition – training and maximizing rep productivity to
drive both market expansion and penetration."

Mr. Mowry continued, "I am pleased with the progress we are making on
developing and launching new products both in the U.S. and international
markets. We now have over 150 physicians trained and using the Aequalis
Ascend Flex convertible shoulder system, well ahead of our initial launch goal
of 100 by year end 2013.In addition, we have recently received both product
and reimbursement approval for the Aequalis Reversed shoulder in Japan and
look forward to the launch in the second quarter of 2014."

The Company's fourth quarter 2013 adjusted EBITDA, as defined in the GAAP to
non-GAAP reconciliation provided later in this release, was$9.2 million, or
11.0% of reported revenue, compared to$11.0 million, or 13.9% of revenue, in
the same quarter of the prior year. For the fiscal year ended December 29,
2013, adjusted EBITDA decreased to$30.4 million, or 9.8% of reported revenue,
compared to$32.9 million, or 11.9% of revenue in 2012.

Fourth Quarter 2013 Revenue Highlights

Extremities

  oRevenue from the upper extremities joints and trauma category was$48.2
    million, an increase of 4.7% 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
    family of products,which included continued contribution from the third
    quarter 2013 launch of the Aequalis Ascend Flex.
  oRevenue fromTornier'slower extremities joints and trauma category in the
    fourth quarter of 2013 reached$16.2 million, an increase of 9.9% in
    constant currency.Giving pro forma effect to the OrthoHelix acquisition
    to include OrthoHelix revenue for the full fourth quarter of 2012, fourth
    quarter 2013 lower extremities revenue recorded constant currency growth
    of 7.8%. This growth was led by increases across several of the Company's
    foot and ankle product lines, along with continued international expansion
    of our lower extremities portfolio and sales force.
  oRevenue from the sports medicine and biologics product category was$3.7
    millionin the fourth quarter of 2013, a decrease of 11.9% in constant
    currency over the same quarter in 2012, reflecting 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
    its Insite FT bio anchor and unique Phantom Fiber high strength resorbable
    suture.

Large Joints

Revenue of the Company's large joints and other product lines was$15.3
million, an increase of 2.5% in constant currency over the same quarter in
2012. In the fourth quarter of 2013, this product category represented 18.3%
of the Company's reported global revenue compared to 18.1% in the prior year
period.

Geographic Revenue

On a geographic basis as compared to the fourth quarter of 2012,
Tornier'sinternational revenue increased 7.9% as reported and 5.2% in
constant currency, representing 42.6% of reported global revenue. Revenue
inthe United Statesincreased by 3.8% and represented 57.4% of reported
global revenue. Giving pro forma effect to the OrthoHelix acquisition to
include OrthoHelix revenue for the full fourth quarter of 2012, revenue inthe
United States increased by 3.2% during the fourth quarter of 2013 compared to
the prior year quarter. 

First Quarter 2014 Outlook

  *The Company projects first quarter 2014 constant currency revenue to be in
    the range of $78 to $82 million, representing a change in constant
    currency of (5.7%) to (0.8%) over the same period last year.
  *Based on recent currency exchange rates, first quarter 2014 reported
    revenue is projected to be in the range of $78.5 to $82.5 million,
    representing a change of (5.1%) to (0.3%) over the same period last year.
  *Revenue from the Tornier extremities product categories in the first
    quarter of 2014 is expected to be in the range of $63.4 to $66.7 million,
    representing a change in constant currency of(5.9%) to (1.0%) over the
    same period last year.
  *The Company projects first quarter 2014 adjusted EBITDA to be in the range
    of $4.0 to $6.0 million, or 5.1% to 7.3% of reported revenue.

Fiscal Year 2014 Outlook

  *The Company projects 2014 constant currency revenue to be in the range of
    $302 to $317 million, representing a change in constant currency of (2.9%)
    to 1.9% over last year.
  *Based on recent currency exchange rates, 2014 reported revenue is
    projected to be in the range of $304.2 to $319.1 million, representing a
    change of (2.2%) to 2.6% over last year.
  *Revenue from the Tornier's extremities product categories in 2014 is
    expected to be in the range of $252.6 to $265.5 million, representing a
    change in constant currency of (2.1%) to 2.9% over last year.
  *The Company projects 2014 adjusted EBITDA to be in the range of $22.5 to
    $27.5 million, or 7.4% to 8.6% of reported revenue.

Conference Call

Tornierwill host a conference call today at4:30 p.m. eastern timeto discuss
its fourth quarter 2013 financial results and its initial outlook for
2014.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
51024933.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 first quarter and
full year 2014 and the expected timing of the launch of Aequalis Reversed in
Japan. 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; 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; risks associated with Tornier'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 and 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
quarterly report on Form 10-Q and annual report on Form 10-K for the fiscal
year ended December 29, 2013 anticipated to be filed shortly with the
SEC.Tornierundertakes no obligation to update its forward-looking
statements.

AboutTornier

Tornieris 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 regardingTornier,
visitwww.tornier.com.

Tornier®, Aequalis®, Aequalis Ascend®, Aequalis® Reversed™, Aequalis Ascend®
Flex™, BioFiber®, Insite® FT™ and Phantom Fiber™ 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.

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        Year ended
                          (unaudited)               (unaudited)
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
Revenue                    $83,392    $79,033    $310,959   $277,520
Cost of goods sold         20,803      22,435      80,264      76,964
Cost of goods sold -       464         4,539       5,908       4,954
acquisition related
Gross profit               62,125      52,059      224,787     195,602
                          74.5%        65.9%        72.3%        70.5%
Operating expenses                                             
Selling, general and       56,451      46,290      206,851     170,447
administrative
Research and development   5,997       6,195       22,387      22,524
Amortization of intangible 4,288       3,708       15,885      11,721
assets
Special charges            2,729       9,831       3,738       19,244
Total operating expenses   69,465      66,024      248,861     223,936
                                                              
Operating loss             (7,340)     (13,965)    (24,074)    (28,334)
                                                              
Other income (expense)                                         
Interest income            64          34          245         338
Interest expense           (1,502)     (2,303)     (7,256)     (3,733)
Foreign currency           (749)       (278)       (1,820)     (473)
transaction loss
Loss on extinguishment of  --         (593)       (1,127)     (593)
debt
Other non-operating        (228)       62          (45)        116
(expense) income
                                                              
Loss before income taxes   (9,755)     (17,043)    (34,077)    (32,679)
Income tax (expense)       (944)       12,240      (2,349)     10,935
benefit
                                                              
Consolidated net loss      $(10,699)  $(4,803)   $(36,426)  $(21,744)
                                                              
Net loss per share                                             
Basic and diluted          $(0.22)    $(0.12)    $(0.79)    $(0.54)
                                                              
Weighted average ordinary                                      
shares outstanding
Basic and diluted          48,478      41,639      45,826      40,064



Tornier N.V.
Condensed Consolidated Balance Sheets
(in thousands)
                                                           
                                          December 29, 2013 December 30, 2012
                                          (unaudited)       
Assets                                                      
Current assets                                              
Cash and cash equivalents                  $56,784         $31,108
Accounts receivable, net                   55,555           54,192
Inventories                                87,011           86,697
Deferred income taxes and other current    27,175           25,321
assets
Total current assets                       226,525          197,318
                                                           
Instruments, net                           63,055           51,394
Property, plant and equipment, net         43,494           37,151
Goodwill and intangibles, net              369,148          366,398
Deferred income taxes and other assets     3,204            1,966
Total assets                               $705,426        $654,227
                                                           
Liabilities and shareholders' equity                        
Current liabilities                                         
Short-term borrowing and current portion   $1,438          $4,595
of long-term debt
Accounts payable                           17,326           11,526
Accrued liabilities, deferred income taxes 57,552           44,505
and other current liabilities
Total current liabilities                  76,316           60,626
                                                           
Other long-term debt                       67,643           115,457
Deferred income taxes and other long-term  35,659           42,065
liabilities
Total liabilities                          179,618          218,148
                                                           
Shareholders' equity                       525,808          436,079
                                                           
Total liabilities and shareholders' equity $705,426        $654,227



Tornier N.V.
Consolidated Statements of Cash Flow
(in thousands)
                                                              
                          Three months ended        Year ended
                          (unaudited)               (unaudited)
                                                              
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
Cash flows from operating                                      
activities
Consolidated net loss      $(10,699)  $(4,803)   $(36,426)  $(21,744)
                                                              
Adjustments to reconcile
consolidated net loss to                                       
net cash provided by
operating activities
Depreciation and           9,763       8,834       36,566      30,232
amortization
Impairment of fixed assets 140         1,013       140         2,041
Lease termination costs    --         --         --         731
Impairment of intangible   --         4,737       --         4,737
assets
Non-cash foreign currency  750         (278)       1,829       (495)
loss (gain)
Deferred income taxes      1,637       (4,359)     3,566       (4,506)
Tax benefit from reversal  (1,120)     (10,700)    (1,120)     (10,700)
of valuation allowance
Share-based compensation   3,547       1,722       8,300       6,830
Non-cash interest expense  213         524         969         524
and discount amortization
Inventory obsolescence     2,065       5,258       8,447       8,171
Loss on extinguishment of  --         --         1,127       --
debt
Lease incentives           --         1,400       --         1,400
Gain from reversal of
contingent consideration   (193)       --         (5,140)     --
liability
Inventory step up from     464         1,993       5,908       1,993
acquisition
Other non-cash items       476         (308)       1,095       1,836
affecting earnings
                                                             
Changes in operating                                           
assets and liabilities
Accounts receivable        (6,484)     (6,721)     (1,084)     (2,188)
Inventories                (3,344)     417         (9,186)     (3,057)
Accounts payable and       7,110       3,516       7,421       87
accruals
Other current assets and   2,301       (209)       4,704       (1,526)
liabilities
Other non-current assets   35          1,259       (2,134)     65
and liabilities
Net cash provided by       6,661       3,295       24,982      14,431
operating activities
                                                              
Cash flows from investing                                      
activities
Acquisition-related cash   (5,325)     (100,366)   (13,083)    (104,022)
payments
Additions of instruments   (7,240)     (2,754)     (23,805)    (11,999)
Gain on sale of building   --         1,517       --         1,517
Purchases of property,     (3,307)     (3,405)     (10,825)    (11,291)
plant and equipment
Net cash (used in)         (15,872)    (105,008)   (47,713)    (125,795)
investing activities
                                                              
Cash flows from financing                                      
activities
Change in short-term debt  --         (17,359)    (1,000)     (8,009)
Repayments of long-term    (407)       (20,451)    (54,095)    (28,684)
debt
Proceeds from issuance of  1,796       115,873     1,796       121,045
long-term debt
Deferred financing costs   --         (5,396)     (111)       (5,396)
Issuance of ordinary       1,580       602         100,433     7,710
shares
Net cash provided by       2,969       73,269      47,023      86,666
financing activities
                                                              
Effect of currency
exchange rates on cash and 474         1,053       1,384       1,100
cash equivalents
                                                              
(Decrease) increase in     (5,768)     (27,391)    25,676      (23,598)
cash and cash equivalents
                                                              
Cash and cash equivalents  62,552      58,499      31,108      54,706
at beginning of period
                                                              
Cash and cash equivalents  $56,784    $31,108    $56,784    $31,108
at end of period



Tornier N.V.
Selected Revenue Information
(in thousands)
                                                                 
                    Three months ended          Year ended
                    (unaudited)                (unaudited)           
                     December  December  Percent December   December   Percent
                    29,       30,       change  29,        30,        change
                     2013      2012              2013       2012
Revenue by product                                                
category
Upper extremity      $48,199 $45,808 5.2%    $184,457 $175,242 5.3%
joints and trauma
Lower extremity      16,233   14,776   9.9%    58,747    34,109    72.2%
joints and trauma
Sports medicine and  3,701    4,163    -11.1%  14,752    15,526    -5.0%
biologics
Total extremities    68,133   64,747   5.2%    257,956   224,877   14.7%
Large joints and     15,259   14,286   6.8%    53,003    52,643    0.7%
other
Total                $83,392 $79,033 5.5%    $310,959 $277,520 12.0%
                                                                 
Revenue by geography                                              
United States        $47,861 $46,103 3.8%    $182,104 $156,750 16.2%
International        35,531   32,930   7.9%    128,855   120,770   6.7%
Total                $83,392 $79,033 5.5%    $310,959 $277,520 12.0%



Tornier N.V.
Reconciliation of Revenue to Non-GAAP Revenue on a Constant Currency Basis
(in thousands)
                                                                
                      Three months ended                            
                      (unaudited)                                   
                      December 29, 2013                December 30, 
                                                        2012
                                  Foreign    Revenue                 Percent
                       Revenue    exchange   on a       Revenue      change
                      as         impact as  constant   as           on a
                       reported   compared   currency   reported     constant
                                  to prior   basis                   currency
                                  period                             basis
Revenue by product                                               
category
Upper extremity joints $48,199  $(238)   $47,961  $45,808    4.7%
and trauma
Lower extremity joints 16,233    3         16,236    14,776      9.9%
and trauma
Sports medicine and    3,701     (34)      3,667     4,163       -11.9%
biologics
Total extremities      68,133    (269)     67,864    64,747      4.8%
Large joints and other 15,259    (614)     14,645    14,286      2.5%
Total                  $83,392  $(883)   $82,509  $79,033    4.4%
                                                                
Revenue by geography                                             
United States          $47,861  $--     $47,861  $46,103    3.8%
International          35,531    (883)     34,648    32,930      5.2%
Total                  $83,392  $(883)   $82,509  $79,033    4.4%
                                                                
                                                                
                      Year ended                                    
                      (unaudited)                                   
                      December 29, 2013                December 30, 
                                                        2012
                                  Foreign    Revenue                 Percent
                       Revenue    exchange   on a       Revenue      change
                      as         impact as  constant   as           on a
                       reported   compared   currency   reported     constant
                                  to prior   basis                   currency
                                  period                             basis
Revenue by product                                               
category
Upper extremity joints $184,457 $(525)   $183,932 $175,242   5.0%
and trauma
Lower extremity joints 58,747    (18)      58,729    34,109      72.2%
and trauma
Sports medicine and    14,752    (72)      14,680    15,526      -5.4%
biologics
Total extremities      257,956   (615)     257,341   224,877     14.4%
Large joints and other 53,003    (1,513)   51,490    52,643      -2.2%
Total                  $310,959 $(2,128) $308,831 $277,520   11.3%
                                                                
Revenue by geography                                             
United States          $182,104 $--     $182,104 $156,750   16.2%
International          128,855   (2,128)   126,727   120,770     4.9%
Total                  $310,959 $(2,128) $308,831 $277,520   11.3%



Tornier N.V.
Reconciliation of Revenue to Non-GAAP Pro Forma Revenue
(in thousands)

             Three months ended
             (unaudited)
             December 29, 2013                                        December 30, 2012                  
                         Foreign                            Pro forma                          Pro forma  Percent
                         exchange   Revenue on * Pro forma  revenue on            * Pro forma  revenue on change
             Revenue as impact as  a constant adjustment   a constant Revenue as adjustment   a constant on a
              reported   compared   currency   for          currency   reported   for          currency   constant
                         to prior   basis      acquisitions basis                 acquisitions basis      currency
                         period                                                                           basis
Revenue by
product                                                                                           
category
Upper
extremity     $48,199  $(238)   $47,961  $--       $47,961  $45,808  $11        $45,819  4.7%
joints and
trauma
Lower
extremity     16,233    3         16,236    --         16,236    14,776    282         15,058    7.8%
joints and
trauma
Sports
medicine and  3,701     (34)      3,667     --         3,667     4,163     --         4,163     -11.9%
biologics
Total         68,133    (269)     67,864    --         67,864    64,747    293         65,040    4.3%
extremities
Large joints  15,259    (614)     14,645    --         14,645    14,286    --         14,286    2.5%
and other
Total         $83,392  $(883)   $82,509  $--       $82,509  $79,033  $293       $79,326  4.0%
                                                                                                 
Revenue by                                                                                        
geography
United States $47,861  $--     $47,861  $--       $47,861  $46,103  $293       $46,396  3.2%
International 35,531    (883)     34,648    --         34,648    32,930    --         32,930    5.2%
Total         $83,392  $(883)   $82,509  $--       $82,509  $79,033  $293       $79,326  4.0%
                                                                                                 
                                                                                                 
             Year ended
             (unaudited)
             December 29, 2013                                        December 30, 2012                  
                         Foreign                            Pro forma                          Pro forma  Percent
                         exchange   Revenue on * Pro forma  revenue on            * Pro forma  revenue on change
             Revenue as impact as  a constant adjustment   a constant Revenue as adjustment   a constant on a
              reported   compared   currency   for          currency   reported   for          currency   constant
                         to prior   basis      acquisitions basis                 acquisitions basis      currency
                         period                                                                           basis
Revenue by
product                                                                                           
category
Upper
extremity     $184,457 $(525)   $183,932 $--       $183,932 $175,242 $807       $176,049 4.5%
joints and
trauma
Lower
extremity     58,747    (18)      58,729    --         58,729    34,109    20,017      54,126    8.5%
joints and
trauma
Sports
medicine and  14,752    (72)      14,680    --         14,680    15,526    --         15,526    -5.4%
biologics
Total         257,956   (615)     257,341   --         257,341   224,877   20,824      245,701   4.7%
extremities
Large joints  53,003    (1,513)   51,490    --         51,490    52,643    --         52,643    -2.2%
and other
Total         $310,959 $(2,128) $308,831 $--       $308,831 $277,520 $20,824    $298,344 3.5%
                                                                                                 
Revenue by                                                                                        
geography
United States $182,104 $--     $182,104 $--       $182,104 $156,750 $20,824    $177,574 2.6%
International 128,855   (2,128)   126,727   --         126,727   120,770   --         120,770   4.9%
Total         $310,959 $(2,128) $308,831 $--       $308,831 $277,520 $20,824    $298,344 3.5%
                                                                                                 
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        Year ended
                          (unaudited)               (unaudited)
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
Revenue, as reported       $83,392    $79,033    $310,959   $277,520
                                                              
Net loss, as reported      $(10,699)  $(4,803)   $(36,426)  $(21,744)
                                                              
Interest income            (64)        (34)        (245)       (338)
Interest expense           1,502       2,303       7,256       3,733
Income tax expense         944         (12,240)    2,349       (10,935)
(benefit)
Depreciation              5,475       5,126       20,681      18,511
Amortization               4,288       3,708       15,885      11,721
                                                              
Subtotal Non-GAAP EBITDA  1,446       (5,940)     9,500       948
                                                              
Other non-operating        228         (62)        45          (116)
expense (income)
Foreign currency           749         278         1,820       473
transaction loss
Loss on extinguishment of  --         593         1,127       593
debt
Share-based compensation   3,547       1,722       8,300       6,830
Inventory product
rationalization due to     --         2,961       --         2,961
acquisition
Inventory step-up from     464         1,578       5,908       1,993
acquisition
Special charges:                                               
Acquisition, integration
and distribution           2,401       3,122       7,143       4,920
transition costs
Restructuring charges      521         1,111       521         6,357
Reversal of OrthoHelix
contingent consideration   (193)       --         (5,140)     --
liability
Impairment of intangibles  --         4,737       --         4,737
Italy bad debt expense     --         --         --         1,995
Legal settlements          --         --         1,214       --
Management exit costs      --         861         --         1,235
                                                              
Non-GAAP adjusted EBITDA   $9,163     $10,961    $30,438    $32,926
                                                              
Non-GAAP adjusted EBITDA   11.0%        13.9%        9.8%         11.9%
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        Year ended
                          (unaudited)               (unaudited)
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
Net loss, as reported      $(10,699)  $(4,803)   $(36,426)  $(21,744)
                                                              
Inventory step-up from     369         1,534       5,540       1,869
acquisition, net of tax
Tax benefit due to
reversal of valuation      (580)       (10,700)    (1,120)     (10,700)
allowance from acquisition
Loss on extinguishment of  --         479         1,127       479
debt, net of tax
Inventory product
rationalization due to     --         2,916       --         2,916
acquisition, net of tax
Special charges, net of                                        
tax:
Acquisition, integration
and distribution           2,363       3,118       7,048       4,908
transition costs
Restructuring charges      521         1,119       521         6,097
Reversal of OrthoHelix
contingent consideration   (193)       --         (5,140)     --
liability
Italy bad debt expense     --         --         --         1,995
Impairment of intangibles  --         4,737       --         4,737
Legal settlements          --         --         1,214       --
Management exit costs      --         861         --         1,235
                                                              
Non-GAAP adjusted net loss (8,219)     (739)       (27,236)    (8,208)
                                                              
Net loss per share, as                                         
reported
Basic and diluted          $(0.22)    $(0.12)    $(0.79)    $(0.54)
                                                              
Inventory step-up from     0.01        0.04        0.12        0.05
acquisition, net of tax
Tax benefit due to
reversal of valuation      (0.01)      (0.26)      (0.02)      (0.27)
allowance from acquisition
Loss on extinguishment of  --         0.01        0.02        0.01
debt
Inventory product
rationalization due to     --         0.07        --         0.07
acquisition, net of tax
Special charges, net of                                        
tax:
Acquisition, integration
and distribution           0.05        0.08        0.15        0.13
transition costs
Restructuring charges      0.01        0.03        0.01        0.15
Reversal of OrthoHelix
contingent consideration   (0.01)      --         (0.11)      --
liability
Italy bad debt expense     --         --         --         0.05
Impairment of intangibles  --         0.11        --         0.12
Legal settlements          --         --         0.03        --
Management exit costs      --         0.02        --         0.03
                                                              
Non-GAAP adjusted net loss                                     
per share
Basic and diluted          $(0.17)    $(0.02)    $(0.59)    $(0.20)
                                                              
Weighted average ordinary                                      
shares outstanding
Basic and diluted          48,478      41,639      45,826      40,064

  
  
  Tornier N.V.
  Reconciliation of Net Cash Provided by Operating Activities
  to Non-GAAP Adjusted Free Cash Flow
  (in thousands)

                            Three months ended    Year ended
                            (unaudited)           (unaudited)
                                                            
                            December 29, December December 29, December 30,
                               2013         30, 2012 2013         2012
                                                            
    Net cash provided by
  operating activities, as   $6,661     $3,295 $24,982    $14,431
    reported
                                                            
  Adjusted for:                                              
    Cash paid related to
  facilities consolidation   --         2,216   --         4,811
    initiative
  Additions of instruments,  (7,240)     (2,754) (23,805)    (11,999)
    as reported
    Purchases of property,
  plant and equipment, as    (3,307)     (3,405) (10,825)    (11,291)
    reported
    Purchases of property,
  plant and equipment,       --         636     --         2,997
    related to facilities
    consolidation initiative
                                                            
  Non-GAAP adjusted free     $(3,886)   $(12)  $(9,648)   $(1,051)
    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        Year ended
                          (unaudited)               (unaudited)
                                                              
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
                                                              
Revenue, as reported       $83,392    $79,033    $310,959   $277,520
                                                              
Gross margin, as reported  $62,125    $52,059    $224,787   $195,602
Gross margin %, as         74.5%        65.9%        72.3%        70.5%
reported
                                                              
Adjusted for:                                                  
Inventory product
rationalization due to     --         2,961       --         2,961
acquisition
Inventory step-up due to   464         1,578       5,908       1,993
acquisition
                                                              
Non-GAAP adjusted gross    62,589      56,598      230,695     200,556
margin
Non-GAAP adjusted gross    75.1%        71.6%        74.2%        72.3%
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        Year ended
                          (unaudited)               (unaudited)
                          December 29, December 30, December 29, December 30,
                           2013         2012         2013         2012
                                                              
Revenue, as reported       $83,392    $79,033    $310,959   $277,520
                                                              
Operating expenses, as     69,465      66,024      248,861     223,936
reported
Operating expenses as a
percentage of revenue, as  83.3%        83.5%        80.0%        80.7%
reported
                                                              
Adjusted for:                                                  
Amortization of intangible (4,288)     (3,708)     (15,885)    (11,721)
assets
Special charges            (2,729)     (9,831)     (3,738)     (19,244)
Total adjustments          (7,017)     (13,539)    (19,623)    (30,965)
                                                              
Non-GAAP adjusted          $62,448    $52,485    $229,238   $192,971
operating expenses
Non-GAAP adjusted
operating expenses as a    74.9%        66.4%        73.7%        69.5%
percentage of revenue



Tornier N.V.
Reconciliation of Projected 2013 Operating Loss
to Projected Non-GAAP Adjusted EBITDA
(in millions)
                                                               
                                     Three months ended Year ended
                                     (unaudited)        (unaudited)
                                                       
                                     March 30, 2014     December 28, 2014
                                     Low       High     Low       High
                                                               
Revenue                               $78.5   $82.5  $304.2  $319.1
Operating Loss                        $(11.7) $(7.7) $(38.4) $(26.4)
                                                               
Adjusted for:                                                   
Inventory step-up due to acquisition  0.3      0.2     0.7      0.5
Depreciation and amortization expense 10.4     9.8     45.0     42.0
Share-based compensation              2.2      1.8     9.6      7.5
Special charges                       2.8      1.9     5.6      3.9
Total adjustments                     $15.7   $13.7  $60.9   $53.9
                                                               
Non-GAAP adjusted EBITDA              $4.0    $6.0   $22.5   $27.5
Non-GAAP adjusted EBITDA margin       5.1%      7.3%     7.4%      8.6%

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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