Lastly, with regards to our cash flow and capital structure. Operating cash flows were just below breakeven in the first quarter, a $3.5 million improvement from cash outflows of $3.6 million, reflecting lower nonrecurring costs and reduced spending. Our capital expenditures in the quarter totaled $1.8 million, up $0.4 million, reflecting continued investments in manufacturing capabilities, supporting growth in our OA Pain Management product lines. We ended the quarter with $68.6 million in cash and no debt.
Please turn to Slide 5. Now I’d like to review our full year financial outlook for 2024. Based on our progress to date, we are reiterating our guidance for 2024 with total company revenue of $168 million to $173 million, representing growth of 1% to 4%.
In OA Pain Management, we continue to expect revenue to grow to $102 million to $104 million, up 0% to 2%. This reflects continued above-market growth in end-user sales, led by growth of Monovisc globally and Cingal outside the U.S. This year, the impact of the continued above-market growth is offset by unfavorable order timing year-over-year. On a quarterly basis, we also expect ordering patterns to be lumpy as they’ve been historically with higher revenue in the second half of 2024 based on projected timing of transfer shipments compared to quarterly timing last year.
In Joint Preservation and Restoration, we continue to expect revenues to grow to $58 million to $60.5 million, up 6% to 10% as faster growth in our new products led by X-Twist and Integrity is partially offset by lower sales of certain legacy products. We continue to expect that growth to be weighted more towards the second half of the year due both to normal seasonality and the full market release of Integrity, which remains right on schedule.
In Non-Orthopedic, we expect revenues to be $8 million to $8.5 million, a decrease of 14% to 19%.
With regard to gross margin, we continue to expect adjusted gross margin for 2024 of 66% to 66.5%. From a spending perspective, we executed on the planned workforce reduction and other spending reductions in the first quarter and are on track to deliver the $10 million of annualized operating expense savings, as previously announced. As we have said, a partial year impact will be realized this year due to the timing of the actions. In 2024, we plan to use a portion of the savings to fund the filing of the first PMA module for Hyalofast in the United States as well as additional clinical follow-up for our HA-based regenerative products such as Integrity.
We continue to expect our adjusted EBITDA in 2024 to be between $25 million and $30 million, representing an increase of over 75% at the midpoint. This translates to an adjusted EBITDA margin improvement of over 6 points, growing to at least 15% for the year. We continue to be positioned to deliver positive adjusted net income this year and generate positive free cash flow even as we invest in higher capital spending this year focused on our OA Pain Management manufacturing operations, in part reflecting timing from last year.
In summary, the first quarter was a solid start to 2024, demonstrating the strength of our market-leading core OA franchise and growing momentum from our new products like Integrity. And Anika is on track for significant bottom line growth this year.
I will now turn the call back to Cheryl.
Cheryl Blanchard: Thanks, Mike. Please turn to Slide 6. It’s clear that Anika’s renewed focus is proving effective as we accelerate our path to profitability. It’s still early days, and we’re continuing to take the necessary steps to optimize performance. We’ll remain nimble in our approach, and we are confident that Anika is on the right path. With our product portfolio and exciting pipeline, we will continue to improve the lives of the millions of patients in need of early intervention orthopedic care. We appreciate the support of our Anika colleagues, without whom none of this will be possible. And we appreciate the support of our shareholders as we work to deliver value on their investments.
With that, we’ll open up the line for questions.
Operator: [Operator Instructions] Your first question comes from the line of George Sellers from Stephens.
George Sellers: Maybe just to start on guidance. Just curious. The OA Pain Management business continues to outperform. It was pretty strong throughout 2023 with a couple of quarters of double-digit growth and another strong quarter here. I’m just curious. How should we think about sort of the cadence through the remainder of the year to get to your guidance? Or those tough comps, what’s sort of limiting stronger burn increase in that guidance? And then also, how should we think about for the Joint Preservation and Restoration piece some of the new products like the HA-based patch system, how should we think about those contributing more significantly to revenue growth?
Michael Levitz: George, it’s Mike. Thank you for your questions. First, the guidance on OA Pain Management. One of the things that we mentioned last year and we wanted to continue to mention is that the underlying business is growing above market. One of the things that — those that have followed this company know quite well is we do generally have volatile order timing because we deal with big companies like Johnson & Johnson. And so that definitely occurred last year. Q2 last year was very high, and we called that out in the period and said that was not sustainable. That was just timing of how they manage their inventories.
So this year, we have a tough comp as we go into the second quarter because of that. And so the way to think about the cadence this year is, again, our guidance, we reiterated our guidance. There’s no change to our guidance for the year. So 0% to 2% for the year because of the timing of transfer shipments. I do expect the second half to be higher than the first half this year for revenues in our OA Pain Management business just based upon the year-over-year comp. So last year, Q2 was bigger this year, Q3 will be bigger.
So that’s how I would think about the cadence. So you’ll see we guided 0% to 2%, but we grew 7% this quarter. I would expect given the tough comp next quarter, on a year-over-year basis, it will be down. But that’s not any issue or challenge just as because of the timing of last year, frankly.
With regards to the joint preservation cadence, the growth this year, so we reiterated the guidance of 6% to 10%. The growth this year is driven — we said on the last call, it was going to be second half loaded in the sense that we knew we were launching the Integrity product in the middle of the year. And as Cheryl said, we remain right on track to do that. We’re very excited about what we’re seeing in the limited market release, and that product is right on track.
And so as we look at joint preservation, we’ve again reiterated our guidance. We expect the second half to be stronger, both due to Integrity moving into full market release as well as the continued growth and ramp of our new products. We are very pleased this first quarter to have the X-Twist Biocomposite launch, and X-Twist continues to be a really nice product and doing exactly what we expected it to do when we gave our guidance. So I hope that’s helpful, George.
George Sellers: Yes. That’s really helpful color. I appreciate that. And then maybe looking potentially beyond this year. I’m just curious. We’ve seen some announcements of some studies at various other companies. I’m just curious how you all are thinking about the competitive dynamics about potentially some competing offerings in the HA injection market or with what Hyalofast is going to bring to the table when that’s approved. Has there been any change from your perspective on competition in the market as we look beyond this year?
Cheryl Blanchard: George, this is Cheryl. Can I just ask you to clarify what competition you’re referring to, just to make sure I answer your question?
George Sellers: Sure. So one specific example would be Organogenesis announcing the Phase III trial results from their ReNu injection. Just curious if you all view that as a competing offering to Orthovisc and Monovisc. And then also products like CartiHeal gaining momentum in the market, if that’s a competitive concern.
Cheryl Blanchard: Got it. Thank you. I appreciate that. Yes. So Organogenesis did just announce a readout on their first Phase III clinical trial. It’s difficult for me to comment on that because they didn’t provide any data. So I’ll be in a better position to have a thought about that from a competitive perspective once I see their data. But they didn’t put any data out yet.
And then on the cartilage repair side, from a CartiHeal perspective, obviously, CartiHeal will be launching here soon into the space where they’ll be competing with the MACI product with — and CartiHeal’s play is with the situation with a product that has to remove healthy bone to be implanted. So I think it will be going after a smaller segment of the cartilage repair market, that being the osteochondral defect market.
Hyalofast, I’m very excited to bring that to market, and we’ll start filing that modular PMA this year. We’ve got 15 years of data that is likely publishing this year. It is off the shelf, single stage and something that we know how it plays in the market based on our commercial experience OUS and doesn’t require you to take healthy bone, doesn’t require a second surgery. And so we’re very excited to compete with that inside the United States. We just updated that we now sell Hyalofast in over 35 countries outside the United States. So I’m ready to go with Hyalofast, and we’ve got surgeons like waiting for it here in the United States.
Operator: Your next question comes from the line of Jim Sidoti from Sidoti & Company.
James Sidoti: Can you talk a little more about the growth rates for the joint business? It was down from the fourth quarter of ’23, and you talked about some of the mature products that are growing as quickly. Are you deemphasizing sales of those products? I mean will you continue to sell those going forward?
Cheryl Blanchard: Jim, thanks for the question. Yes, I would tell you that our new products are doing really well. I mean we just announced that we’re over 10,000 implantations of X-Twist. Integrity is doing very well even in the limited market release, where our goal there was to get feedback in an LMR, and we’re feeling a real pull from the market with that product. We are facing headwinds with some of our more mature products. And while we have a subset of distributors that are doing very well for us and growing strong double digits, we’ve talked about the fact that, that is an area that we continue to focus on and that we are not happy with currently.
So we continue to focus on commercial execution and on really driving those new products that are differentiated and have great clinical results. And again, I would just say in that business, we have great products that are doing well, and really the new products are driving the growth in the face of some of those headwinds.
James Sidoti: Okay. So it sounds like you’re going to continue to sell those products and maybe step up some of the marketing efforts for those products.
