Business Wire07.28.16
DJO Global Inc. today announced financial results for its public reporting subsidiary, DJO Finance LLC (“DJOFL”), for the second quarter ended July 1, 2016.
Second Quarter Highlights
Sales Results
DJOFL achieved net sales for the second quarter of 2016 of $292.9 million, reflecting growth of 4.6%, compared with net sales of $279.9 million for the second quarter of 2015. Changes in foreign currency exchange rates did not have a material impact on the second quarter results.
Net sales for DJO’s Bracing and Vascular segment were $131.8 million in the second quarter of 2016, reflecting a decrease of 3.3%, compared to the second quarter of 2015, due to delayed customer delivery issues in transitioning the Dr. Comfort businesses to the company’s Oracle ERP system. Dr. Comfort has been actively clearing those orders in July as it catches up and services its customers.
Net sales for DJO’s Recovery Sciences segment were $38.4 million in the second quarter of 2016, reflecting a decrease of 4.1%, compared to the second quarter of 2015, driven by slower sales of CMF devices and Chattanooga rehabilitation equipment.
Net sales for DJO’s International segment were $80.1 million in the second quarter of 2016, reflecting an increase of 6.0% from the second quarter of 2015, primarily driven by stronger sales in direct markets, especially in France, Canada, Italy, Spain and Australia, and increased sales penetration in emerging markets.
Net sales for the Surgical Implant segment were $42.6 million for the second quarter of 2016, reflecting growth of 51.7% over net sales in the second quarter of 2015, driven by strong sales of each of the Company’s shoulder (32% over prior year quarter), knee (41% over prior year quarter) and hip (24% over prior year quarter) product lines.
Earnings Results
For the second quarter of 2016, DJOFL reported a net loss attributable to DJOFL of $23.3 million, compared to a net loss of $78.0 million for the second quarter of 2015. As detailed in the attached financial tables, the results for the current and prior year second quarter periods and the current and prior year six month periods were impacted by significant non-cash items, non-recurring items and other adjustments.
Adjusted EBITDA for the second quarter of 2016 was $63.6 million, or 21.7% of net sales, reflecting 3.7% as reported when compared with Adjusted EBITDA of $61.3 million, or 21.9% of net sales, for the second quarter of 2015. Including cost savings programs currently underway of $5.6 million, Adjusted EBITDA for the twelve months ended July 1, 2016 was $250.3 million, or 21.6 percent of LTM net sales.
The Company defines Adjusted EBITDA as net (loss) income attributable to DJOFL plus interest expense, net, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance under the Company’s senior secured credit facilities (“Senior Credit Facilities”) and the indentures governing its 8.125% second lien notes, and its 10.75% third lien notes. Reconciliation between net loss and Adjusted EBITDA is included in the attached financial tables.
As of July 1, 2016, the Company had cash balances of $41.7 million and available liquidity of $67.5 million under its $150 million revolving credit facility.
2016 Outlook
The Company continues to expect its market and new products performance and other ongoing commercial initiatives to drive top line growth and we expect constant currency revenue growth rates of closer to 6%, with adjusted EBITDA growth rates of 8%-10% for the full year of 2016, inclusive of future cost savings. Based on year-end foreign currency exchange rates, DJO does not expect sales or Adjusted EBITDA for the full year of 2016 to be materially impacted.
Second Quarter Highlights
- Net sales grew 4.6% to $292.9 million
- Adjusted EBITDA increased 3.7% to $63.6 million
Sales Results
DJOFL achieved net sales for the second quarter of 2016 of $292.9 million, reflecting growth of 4.6%, compared with net sales of $279.9 million for the second quarter of 2015. Changes in foreign currency exchange rates did not have a material impact on the second quarter results.
Net sales for DJO’s Bracing and Vascular segment were $131.8 million in the second quarter of 2016, reflecting a decrease of 3.3%, compared to the second quarter of 2015, due to delayed customer delivery issues in transitioning the Dr. Comfort businesses to the company’s Oracle ERP system. Dr. Comfort has been actively clearing those orders in July as it catches up and services its customers.
Net sales for DJO’s Recovery Sciences segment were $38.4 million in the second quarter of 2016, reflecting a decrease of 4.1%, compared to the second quarter of 2015, driven by slower sales of CMF devices and Chattanooga rehabilitation equipment.
Net sales for DJO’s International segment were $80.1 million in the second quarter of 2016, reflecting an increase of 6.0% from the second quarter of 2015, primarily driven by stronger sales in direct markets, especially in France, Canada, Italy, Spain and Australia, and increased sales penetration in emerging markets.
Net sales for the Surgical Implant segment were $42.6 million for the second quarter of 2016, reflecting growth of 51.7% over net sales in the second quarter of 2015, driven by strong sales of each of the Company’s shoulder (32% over prior year quarter), knee (41% over prior year quarter) and hip (24% over prior year quarter) product lines.
Earnings Results
For the second quarter of 2016, DJOFL reported a net loss attributable to DJOFL of $23.3 million, compared to a net loss of $78.0 million for the second quarter of 2015. As detailed in the attached financial tables, the results for the current and prior year second quarter periods and the current and prior year six month periods were impacted by significant non-cash items, non-recurring items and other adjustments.
Adjusted EBITDA for the second quarter of 2016 was $63.6 million, or 21.7% of net sales, reflecting 3.7% as reported when compared with Adjusted EBITDA of $61.3 million, or 21.9% of net sales, for the second quarter of 2015. Including cost savings programs currently underway of $5.6 million, Adjusted EBITDA for the twelve months ended July 1, 2016 was $250.3 million, or 21.6 percent of LTM net sales.
The Company defines Adjusted EBITDA as net (loss) income attributable to DJOFL plus interest expense, net, income tax provision (benefit), and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items as permitted in calculating covenant compliance under the Company’s senior secured credit facilities (“Senior Credit Facilities”) and the indentures governing its 8.125% second lien notes, and its 10.75% third lien notes. Reconciliation between net loss and Adjusted EBITDA is included in the attached financial tables.
As of July 1, 2016, the Company had cash balances of $41.7 million and available liquidity of $67.5 million under its $150 million revolving credit facility.
2016 Outlook
The Company continues to expect its market and new products performance and other ongoing commercial initiatives to drive top line growth and we expect constant currency revenue growth rates of closer to 6%, with adjusted EBITDA growth rates of 8%-10% for the full year of 2016, inclusive of future cost savings. Based on year-end foreign currency exchange rates, DJO does not expect sales or Adjusted EBITDA for the full year of 2016 to be materially impacted.