DJO’s Q2 Sales Take a Slight Dip

San Diego, Calif.-based DJO Global Inc. has released financial results for its second quarter, which ended June 27.

The quarter achieved net sales for the second quarter of 2015 of $310.8 million, reflecting a decline of 1 percent, compared with net sales of $313.9 million for the second quarter of 2014. Net sales for the second quarter of 2015 were unfavorably impacted by $14 million related to changes in foreign currency exchange rates compared to the rates in effect in the second quarter of 2014, the company reported. Excluding the constant currency impacts, net sales for the second quarter of 2015 increased 3.5 percent compared to net sales for the second quarter of 2014.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the second quarter of 2015 was $73.7 million, or 23.7 percent of net sales, reflecting 5.0 percent growth when compared with adjusted EBITDA of $70.2 million, or 22.4 percent of net sales, for the second quarter of 2014. On a constant currency basis, adjusted EBITDA grew 9.1 percent in the second quarter of 2015.

For the second quarter of 2015, DJO reported a net loss of $78 million, compared to a net loss of $25.4 million for the second quarter of 2014. The results for the current and prior year second quarter periods were impacted by significant non-cash items, non-recurring items and other adjustments.

“We are pleased to report strong top and bottom line performance, in line with expectations,” said Mike Mogul, DJO’s president and CEO. “I want to especially highlight the launch of Donjoy performance in the consumer sports channel, the first time the world’s leading sports medicine products have been available to consumers. That launch coupled with strong organic sales growth and solid margin enhancement delivered a very good quarter in Q2.”

“We continue to be very optimistic about the new products that we have and are launching in 2015, as well as the building momentum of providing Motioncare products in order to keep arthritis sufferers moving,” Mogul continued. “We also completed the acquisition of Cobalt Bone Cement and the Discovery Elbow, both products which will enhance our already industry leading orthopedic implant growth. We are reconfirming our 2015 guidance of mid-single digit revenue growth and updating Adjusted EBITDA growth rates to high-single digits. Based on current foreign currency rates, we expect sales and sdjusted EBITDA for the full year of 2015 to be negatively impacted by approximately 400-500 basis points.”

Sales by Business Segment

Net sales for DJO’s Bracing and Vascular segment were $136.2 million in the second quarter of 2015, reflecting growth of 6.2 percent, compared to the second quarter of 2014, driven by strong contribution from the sales of new products.

Net sales for DJO’s Recovery Sciences segment were $71.0 million in the second quarter of 2015, reflecting a decrease of 6.4 percent, compared to the second quarter of 2014, primarily due to the slower than anticipated sales in the Empi (the company’s neurostimulator product) and Regeneration business units.

Second quarter net sales within the International segment were $75.6 million. Excluding the impact of changes in foreign currency exchange rates from rates in effect in the prior year period, net sales for the second quarter of 2015 increased 5.9 percent from the second quarter of 2014.
Net sales for the Surgical Implant segment were $28.1 million for the second quarter of 2015, reflecting growth of 11.9 percent over net sales in the second quarter of 2014, driven by strong sales in hips and shoulders.

As of June 27, 2015, the Company had cash balances of $48.4 million and available liquidity of $111.5 million under its $150 million revolving credit facility.