DJO Global Reports 12.7 Percent Spike in Q1 Sales

DJO Global Inc.’s (DJO) first quarter was certainly a profitable one. The company reported a 12.7 percent increase in net sales to $278.9 million — a 13.7 percent rise in constant currency and 7.4 percent spike on a sales per day basis. Adjusted EBITDA increased 5.6 percent to $48.9 million (8 percent in constant currency).
 
“Our first quarter performance shows the underlying strength of our focus on Motion is Medicine paired with rapid new product innovations. We are especially pleased to see the terrific accelerating performance in our Orthopedic Implants and Consumer businesses,” said Mike Mogul, DJO’s President and CEO.
 
Net sales for DJO’s Bracing and Vascular segment were $124.2 million in the first quarter of 2016, reflecting growth of 9.1 percent compared to the first quarter of 2015. Particularly helpful to Bracing in Q1 was the positive impact of the company’s MotionMD system, which automates transactions in the clinic. Executives said the program is bringing in new customers.
 
Net sales for DJO’s Recovery Sciences segment were $36.6 million in the first quarter of 2016 (ended April 1), reflecting an increase of 5.9 percent, compared to the first quarter of 2015. The company’s Compex electrostimulation devices contributed to the increase, as they become a key part of the training equipment for high performance athletes.
 
Net sales for DJO’s International segment were $75.1 million in the first quarter of 2016. Excluding the impact of changes in foreign currency exchange rates from rates in effect in the prior year period of $2.4 million, net sales for the first quarter of 2016 increased 7.4 percent from the first quarter of 2015. DJO France, Canada, and UK, were big contributors in the quarter.

Net sales for the Surgical Implant segment were $43.1 million for the first quarter of 2016, reflecting growth of 59.9 percent over net sales in the first quarter of 2015. All product segments — hips, knees, shoulder and cement — had strong performances in the quarter. The successful reception and uptake in the market of the new Empwr 3D Knee and the recently launched Altivate Shoulder were highlights in the quarter.
 
Adjusted EBITDA for the first quarter of 2016 was $48.9 million, or 17.5 percent of net sales, reflecting 5.6 percent as reported and 8 percent constant currency growth when compared to adjusted EBITDA of $46.3 million, or 18.7 percent of net sales, for the first quarter of 2015. Including cost savings programs currently underway of $7.7 million, adjusted EBITDA for the 12 months ended April 1 was $250.2 million, or 21.8 percent of LTM net sales.
 
For the first quarter of 2016, DJO reported a net loss of $38.3 million, compared to a net loss of $35.5 million for the first quarter of 2015. Executives confirmed the company’s earlier guidance, targeting full-year constant currency revenue growth rates of 6 percent to 8 percent and adjusted EBITDA growth rates of 8 percent to 10 percent, including future cost reductions. Based on year-end foreign currency rates, the Vista, Calif.-based company does not expect full-year sales or adjusted EBITDA to be materially impacted.