INSERTING and REPLACING Tornier Reports First Quarter 2011 Financial Results

Sales Growth of 12% Drives Adjusted EBITDA Increase of 94%

Company Raises Guidance for 2011 Sales and Adjusted EBITDA

AMSTERDAM--(BUSINESS WIRE)--Insert "Consolidated Statements of Operations" table before "Condensed Consolidated Balance Sheets" table previously omitted by Business Wire.

The corrected release reads:

TORNIER REPORTS FIRST QUARTER 2011 FINANCIAL RESULTS

Sales Growth of 12% Drives Adjusted EBITDA Increase of 94%

Company Raises Guidance for 2011 Sales and Adjusted EBITDA

Tornier N.V. (NASDAQ: TRNX), a global medical device company focused on providing surgical solutions to orthopaedic extremity specialists, reported sales of $69.4 million for the first quarter of 2011 compared to sales of $61.8 million in first quarter 2010, an increase of 12%. First quarter 2011 sales of Tornier’s extremity product categories increased 14% to $52.6 million, representing 76% of company sales. Tornier’s U.S. and international businesses each contributed to first quarter sales growth, as did each of the Company’s major product categories. As compared to the first quarter of 2010, Tornier’s 12% sales growth in the first quarter of 2011 was achieved with four fewer selling days and with negligible effect from changes in currency exchange rates.

Douglas W. Kohrs, President and Chief Executive Officer of Tornier, commented, “We are pleased to have started the 2011 year with a sales gain that exceeded our expectations. Our strong first quarter sales gain was led by our upper extremity product category. The enthusiastic market penetration driven by our new ASCEND™ shoulder arthroplasty system complemented a strong quarter across our shoulder portfolio. We also are encouraged by the prospects for several new products in our lower extremity and sports medicine/biologics categories that bode well for our full year 2011.”

The Company’s first quarter 2011 adjusted EBITDA, as defined in the GAAP to non-GAAP reconciliation provided later in this release, was $9.1 million or 13.2% of sales, an increase of 94% compared to $4.7 million, or 7.6% of sales, in the first quarter of 2010.

Mr. Kohrs continued, “We are encouraged by the gain in adjusted EBITDA in the first quarter of 2011. Although we plan to increase R&D spending during the balance of the year to support our commitment to innovation, we remain focused on obtaining leverage from our cost structure. The investments we will continue to make in 2011 will support our commitment to product innovation while simultaneously focusing on leveraging our business model.”

Sales and Product Review

First quarter 2011 sales of Tornier’s extremity products increased by 14% to $52.6 million. The upper extremity product category was Tornier’s fastest growing category in the quarter with growth of 15% benefitting from strong demand for its new ASCEND™ shoulder arthroplasty system and the continued growth of its flagship Aequalis® line of shoulder arthroplasty systems. Although Tornier’s lower extremity and sports medicine and biologics product categories recorded sales growth below the overall corporate rate in the first quarter of 2011, the growth in these categories is expected to increase during the balance of 2011. The lower extremity product category will benefit from the expanded instrument set availability for key products such as the Stabilis™ ankle fusion system. Tornier’s sports medicine and biologics product category is expected to benefit from new product contribution including the recently launched BioFiber® surgical mesh. Tornier’s large joint product category continued to record above market growth in the first quarter of 2011 aided by the continued favorable reception to the Company’s total hip arthroplasty systems.

On a geographic basis, Tornier’s first quarter 2011 sales in the United States increased by 10% and represented 53% of global sales. International sales increased 16% in the quarter as reported and 15% in constant currency, representing 47% of global sales.

Outlook

The Company projects 2011 sales in the range of $259 to $266 million, representing growth of 14% to 17% as reported, and 12% to 15% in constant currency. The Company projects 2011 adjusted EBITDA, as described in the GAAP to non-GAAP reconciliation provided later in this release, of $29 to $32 million or 11% to 12% of total sales. This would represent an increase in adjusted EBITDA of 56% to 72% over the adjusted EBITDA reported for 2010.

For the second quarter of 2011, the Company projects sales in the range of $65 to $66 million, representing growth of 19% to 21%, based on recent currency exchange rates, and 13% to 15% in constant currency. The Company projects adjusted EBITDA for the second quarter of 2011 of $5.5 to $6.5 million, representing 8.5% to 10% of sales.

Earnings Call Information

Tornier will host a conference call today at 5:00 p.m. eastern time to discuss its first quarter 2011 financial results. The conference call will be available to interested parties through a live audio webcast available through the Company’s website at www.tornier.com where it will be available for replay beginning two hours after completion of the call and archived and accessible for approximately 12 months. Those without internet access may join the call from within the U.S. by dialing 877-673-5355; outside the U.S., dial [phone]

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,” “may,” “believe,” “could,” “would,” “continue,” “outlook,” “guidance,” other words of similar meaning or the use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause Tornier’s actual results to be materially different than those expressed in or implied by Tornier’s forward-looking statements. For Tornier, such uncertainties and risks include, among others, Tornier’s future operating results and financial performance, fluctuations in foreign currency exchange rates, the effect of global economic conditions, 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, potential product recalls, competitor activities and the costs and effects of litigation and changes in tax and other legislation. More detailed information on these and other factors that could affect Tornier’s actual results are described in Tornier’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K. Tornier undertakes no obligation to update its forward-looking statements.

About Tornier

Tornier is 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 80 product lines includes joint replacement, trauma, sports medicine, and biologic products to treat the extremities, as well as joint replacement products for the hip and knee in certain international markets. Since its founding approximately 70 years ago, Tornier’s “Specialists Serving Specialists” philosophy has fostered a tradition of innovation, intense focus on surgeon education, and commitment to advancement of orthopaedic technology stemming from its close collaboration with orthopaedic surgeons and thought leaders throughout the world. For more information regarding Tornier, visit www.tornier.com.

Use of Non-GAAP Financial Measures

To supplement Tornier’s consolidated 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 for Tornier’s financial results prepared in accordance with GAAP.

Tornier N.V.
Consolidated Statements of Operations
(in thousands, except per share data)
	Three Months Ended
	(unaudited)
	April 3, 2011			April 4, 2010
Revenue	$	69,435		$	61,843
Cost of goods sold		20,041			17,276
Gross profit		49,394			44,567
Operating expenses
Sales and marketing		34,699			34,470
General and administrative		6,025			6,526
Research and development		5,110			4,813
Amortization of intangible assets		2,810			2,997
Special charges		-			224
Total operating expenses		48,644			49,030
Operating income (loss)		750			(4,463	)
Other income (expense)
Interest expense		(2,478	)		(5,830	)
Foreign currency transaction gain (loss)		(79	)		(2,294	)
Loss on extinguishment of debt		(29,475	)		-
Other non-operating income (expense)		(19	)		214
Loss before income taxes		(31,301	)		(12,373	)
Income tax (expense) benefit		7,332			2,322
Consolidated net loss		(23,969	)		(10,051	)
Net loss attributable to non-controlling interest		-			(695	)
Net loss attributable to Tornier N.V.		(23,969	)		(9,356	)
Accretion of non-controlling interest		-			(679	)
Net loss attributable to ordinary shareholders	$	(23,969	)	$	(10,035	)
Net loss per share
Basic and diluted	$	(0.68	)	$	(0.41	)
Weighted average ordinary shares outstanding
Basic and diluted		35,456			24,764

Tornier N.V.
Condensed Consolidated Balance Sheets
(in thousands)
			April 3, 2011		January 2, 2011
			(unaudited)
Assets
	Current assets
		Cash and cash equivalents	$	64,114	$	24,838
		Accounts receivable, net		50,081		42,758
		Inventories		80,405		77,525
		Deferred income taxes and other current assets		20,658		28,093
		Total current assets		215,258		173,214
	Instruments, net			43,824		42,378
	Property, plant and equipment, net			34,907		33,680
	Goodwill and intangibles, net			247,509		240,854
	Deferred income taxes and other assets			984		1,052
	Total assets		$	542,482	$	491,178
Liabilities and shareholders' equity
	Current liabilities
		Short-term borrowing and current portion of long term debt	$	16,367	$	28,392
		Accounts payable		13,180		12,890
		Accrued liabilities and deferred income taxes		38,249		34,967
		Total current liabilities		67,796		76,249
	Notes payable			-		84,261
	Other long-term debt			25,562		25,467
	Deferred income taxes and other long-term liabilities			27,537		34,962
	Total liabilities			120,895		220,939
	Shareholders' equity			421,587		270,239
	Total liabilities and shareholders' equity		$	542,482	$	491,178

Tornier N.V.
Consolidated Statements of Cash Flow
(in thousands)
			Three Months Ended
			(unaudited)
			April 3, 2011			April 4, 2010
Cash flows from operating activities
	Net loss		$	(23,969	)	$	(10,051	)
	Adjustments to reconcile net loss to net cash provided by operating activities
		Depreciation and amortization		7,093			6,809
		Non-cash foreign currency (gain) loss		633			1,677
		Deferred income taxes		(8,069	)		(2,143	)
		Share-based compensation		1,295			1,559
		Non-cash interest expense and discount amortization		2,040			5,197
		Inventory obsolescence		1,596			1,482
		Change in fair value of warrant liability		-			(147	)
		Loss on extinguishment of debt		29,475			-
		Other non-cash items affecting earnings		105			285
	Changes in operating assets and liabilities
		Accounts receivable		(5,892	)		(1,438	)
		Inventories		(2,035	)		(4,732	)
		Accounts payable and accruals		1,674			5,660
		Other current assets and liabilities		3,494			(1,196	)
		Other non-current assets and liabilities		(488	)		794
	Net cash provided by (used in) operating activities			6,952			3,756
Cash flows from investing activities
	Acquisition-related cash payments			(481	)		(1,061	)
	Additions of instruments			(2,874	)		(3,169	)
	Purchases of property, plant and equipment			(714	)		(4,579	)
	Net cash provided by (used in) investing activities			(4,069	)		(8,809	)
Cash flows from financing activities
	Change in short-term debt			(12,932	)		3,536
	Repayments of long-term debt			(2,070	)		(2,609	)
	Proceeds from issuance of long-term debt			-			3,364
	Deferred financing costs			(2,414	)		-
	Repayment of notes payable			(116,108	)		-
	Issuance of ordinary shares			168,257			541
	Net cash provided by (used in) financing activities			34,733			4,832
Effect of currency exchange rates on cash				1,660			563
Increase (decrease) in cash and cash equivalents				39,276			342
Cash and cash equivalents at beginning of period				24,838			37,969
Cash and cash equivalents at end of period			$	64,114		$	38,311

Tornier N.V.
Selected Revenue Information
(in thousands)
			Three Months Ended
			(unaudited)
			April 3, 2011		April 4, 2010		Percent change
Revenue by product category
	Upper extremity joints and trauma		$	42,155	$	36,647	15.0	%
	Lower extremity joints and trauma			6,632		6,256	6.0	%
	Sports medicine and biologics			3,857		3,441	12.1	%
		Total extremities		52,644		46,344	13.6	%
	Large joints and other			16,791		15,499	8.3	%
	Total		$	69,435	$	61,843	12.3	%
Revenue by geography
	United States		$	37,021	$	33,796	9.5	%
	International			32,414		28,047	15.6	%
	Total		$	69,435	$	61,843	12.3	%

Tornier N.V.
Reconciliation of Revenue to Non-GAAP Revenue on a Constant Currency Basis
(in thousands)
			Three Months Ended
			(unaudited)
			April 3, 2011							April 4, 2010
			Revenue as reported		Foreign exchange impact as compared to prior period			Revenue on a constant currency basis		Revenue as reported		Percent change on a constant currency basis
Revenue by product category
	Upper extremity joints and trauma		$	42,155	$	(195	)	$	41,960	$	36,647	14.5	%
	Lower extremity joints and trauma			6,632		(30	)		6,602		6,256	5.5	%
	Sports medicine and biologics			3,857		(21	)		3,836		3,441	11.5	%
		Total extremities		52,644		(246	)		52,398		46,344	13.1	%
	Large joints and other			16,791		125			16,916		15,499	9.1	%
	Total		$	69,435	$	(121	)	$	69,314	$	61,843	12.1	%
Revenue by geography
	United States		$	37,021	$	-		$	37,021	$	33,796	9.5	%
	International			32,414		(121	)		32,293		28,047	15.1	%
	Total		$	69,435	$	(121	)	$	69,314	$	61,843	12.1	%

Tornier N.V.
Reconciliation of Net Loss to
Non-GAAP Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
(in thousands)
		Three Months Ended
		(unaudited)
		April 3, 2011			April 4, 2010
Net loss, as reported		$	(23,969	)	$	(10,051	)
	Interest expense		2,478			5,830
	Income tax benefit		(7,332	)		(2,322	)
	Depreciation		4,283			3,812
	Amortization		2,810			2,997
	Subtotal Non-GAAP EBITDA (Loss)		(21,730	)		266
	Non-operating (income) expense		19			(214	)
	Foreign currency transaction (gain) loss		79			2,294
	Share-based compensation		1,295			1,559
	Loss on extinguishment of debt		29,475			-
	Special charges		-			224
	Operating expenses from consolidated VIE		-			594
Non-GAAP Adjusted EBITDA		$	9,138		$	4,723