Brady R. Shirley, President, CEO & Director; Manager of DJOFL
Michael C. Eklund, CFO and COO
Steven Ingel, President, Global Bracing and Vascular
Jeanine Kestler, Exec. VP, Global Human Resources
Stephen J. Murphy, President, International Commercial Business
Bradley J. Tandy, Exec. VP, General Counsel and Secretary; Manager of DJOFL
Mike S. Zafirovski, Board Chairman
NO. OF EMPLOYEES: 4,980
GLOBAL HEADQUARTERS: Vista, Calif.
“Sometimes the most scenic roads in life are the detours you didn’t mean to take.”
— Angela N. Blount, “Once Upon an Ever After”
As a professional surfer, Garrett McNamara should be used to the unexpected.
He confronts the unknown every time he leaves dry land, with each paddle stroke, each yard gained against unforgiving whitewater and large, punishing breakers. With each wave crest he clears, McNamara ventures deeper into the unfamiliar, relinquishing his trust to the sea’s indomitable power and unbridled energy.
Every now and then, McNamara—known as “Gmac” in surfing circles—will take a well-deserved break from his maritime escapades to watch from the sidelines (or beach, as Mother Nature dictates). Such was the case on Nov. 1, 2011, in a break off the coast of Nazaré, Portugal, where some of the world’s biggest waves collapse dangerously close to the shoreline.
McNamara wasn’t planning to surf that day, but agreed to tow his friend and fellow big wave surfer Andrew Cotton on his jetski. “We went round and I just wasn’t feeling it that much,” he told The Guardian. “When we got round to the break it did seem big but I was just going to tow Andrew. But we still weren’t expecting much. I didn’t feel so good. Then the other guys were saying, ‘you’ve got to go. You’ve got to go’ and—boom! I was on the rope and on a giant wave.”
More like monstrous, actually.
The wave McNamara’s surfing buddies persuaded him to take was a record-setter, officially measuring 78 feet, according to the Guinness Book of World Records, though media accounts at the time sized the swell at 90 feet.
“Even then I just didn’t realize how big it was. So I started and I kept going down and down and the drop seemed like forever,” McNamara recalled. “And I thought—wow! I started making the bottom turn and I felt the lip hit me. Usually I don’t have time to look around but you see me look round twice and then I get hit by the white water...I’ve been hit like that before and I’m thinking: I’ve got to make this. I’ve never been held down by a wave that size and I’ve ridden big waves. I’ve seen waves rip a guy’s arms off so there is nothing holding them on but skin and I’m thinking this could tear my head off. That’s when I knew that it was pretty damn big. It’s only when I got in that I saw the footage. I was in awe. I mean, I felt it was a decent size. But you can see it then pops up 10, 20, 30 feet higher. It just supersizes.”
Fortunately, McNamara had some supersized help that day to minimize the risk of injury from his seven-story aquatic descent. Besides the basic feet straps on his board, McNamara had with him a buoyancy aid (most likely an inflatable life vest activated by ripcord) and knee braces to protect his joints from the battering they withstand while bouncing down huge wave faces, an experience Gmac likens to ski mogul jounces.
McNamara’s knees were well-protected during his encounter with the colossal wave, having been encased in the Defiance III brace from DJO Global Inc. Marketed as the world’s most popular custom knee brace, the Defiance III is used by dozens of professional athletes and is recommended for both high-collision sports (football, motorcross, skiing) and water activities (surfing, wakeboarding, kite surfing). The product is also ideal for patients recovering from ACL and other knee ligament surgeries, as it features DJO’s proprietary four-points-of-leverage technology, an innovation that puts a posterior load on the tibia and helps reduce ACL strain by 50 percent.
“I was so blessed to be wearing my @donjoyperformance braces, which you can see if you look close [at this frame grab from the 2011 world record wave],” McNamara wrote on his Facebook page last spring as he recovered from a gnarly winter wipeout in Mavericks (a break off northern California) that fractured his left humerus bone in four places. “Right then the white water landed on me like a ton of bricks. Without the [braces] it most likely would have buckled my knee. So grateful for the support no pun intended.”
That feeling likely is mutual, as DJO depends partly on professional endorsements to maintain its edge in the global bracing sector and grow sales in the company’s largest moneymaking segment, Bracing and Vascular. Despite a long list of well-known users, McNamara was really the only big-name athlete to faithfully promote DonJoy braces last year, albeit the company did maintain a steady crop of Facebook testimonials from bullfighters and rookie participants of college softball, lacrosse, and football.
While it is virtually impossible to gauge the fiscal benefit of professional sports endorsements on DJO’s overall sales, it is equally impractical to dismiss as coincidental the Bracing and Vascular division’s flat revenue last year. The segment posted a 0.7 percent ($3.69 million) loss from 2015, slipping to $522.6 million in fiscal 2016 (year ended Dec. 31).
DJO’s official explanation for the loss was market pressure and fewer Dr. Comfort footwear sales due to an enterprise resource planning software switch. Not surprisingly, the company ignored last year’s drought in product testimonials, choosing instead to note the Bracing and Vascular segment’s loss was offset by growth in its OfficeCare channel and direct consumer devices.
Bracing and Vascular’s 2016 deficit was also offset in part by a miniscule 0.4 percent increase in Recovery Sciences revenue. Proceeds rose $800,000 to $157 million on strong sales of Complex muscle stimulator devices, though further growth was inhibited by a decline in CMF bone growth stimulators.
Surgical Implant revenue hikes more than compensated for its two struggling brethren—sales blossomed 29.4 percent last year to $174.5 million due to strong demand for new hip, knee, and shoulder products. The segment also benefited from the 2015 purchase of Biomet Cobalt Bone Cement, Optivac Cement Mixing Accessories, and the Discovery Elbow System from Zimmer Biomet (the latter device marked the company’s first foray into the global elbow sector). DJO earned $6.3 million from former Zimmer Biomet products in 2016.
International segment sales neutralized sagging Bracing/Vascular revenue as well. Proceeds rose 1.7 percent to $301.2 million, though the increase swelled to 3.4 percent in constant currency when $5.2 million in foreign exchange rates is excluded from the total. DJO attributed the growth in this division to strong direct market sales in France, Australia, and Spain, along with better sales penetration in emerging markets.
Regardless of size, the gains sustained by three of DJO’s four reporting segments in 2016 helped boost overall company revenue 4.2 percent to $1.15 billion. The solid performance served as a fitting end to president and CEO Mike Mogul’s five-year tenure with the firm: In mid-November, he handed the reigns of leadership over to Brady Shirley and new COO/CFO Mike Eklund.
DJO recruited Eklund from Dell, where he most recently was senior vice president, Dell/EMC Value Creation and Integration Management Office. In that role, he led the value creation and integration function for the $67 billion combination of Dell and business technology giant EMC Corporation. Before that, Eklund was CFO of Dell’s $40 billion Client Solutions Business Unit and Global Operations organization. In this role, he also led Dell’s Global Productivity Transformation Office, where he developed an affordability framework to define the core business model, identifying $3 billion of productivity improvements and executing structural and quality savings of more than $300 million.
Previously, Eklund served as vice president of strategy, business planning, and operations for Dell’s $10 billion Enterprise Solutions Group. In addition, he completed a three-year international assignment based in the United Kingdom, as finance director for Dell’s Emerging Markets business. Eklund began his career in public accounting as a staff accountant in tax and audit, followed by a two-year stint in the oil and gas industry in various staff accounting and finance roles.
Shirley most recently served as president of DJO’s Surgical business (he was appointed in March 2014). From 2009-2013, Shirley was CEO and director of Innovative Medical Device Solutions (IMDS), a company that provides product development, manufacturing, and supply chain management solutions for orthopedic device companies. At IMDS, Shirley managed the integration of four companies, consolidated the capital structure, and led a successful sale of the business in 2013.
“I am honored and excited to lead DJO through what I would consider to be a unique evolution. Our fast growing surgical business, our bracing and vascular business, and rapidly expanding consumer business create a broad base for expansive revenue growth and operational productivity today and tomorrow,” Shirley said upon his appointment as Mogul’s successor.
From December 1992 to August 2009, Shirley had several key leadership positions with Stryker Corporation, including president of Stryker Communications and senior vice president of Stryker Endoscopy. At Stryker, Shirley was responsible for all domestic operations and profit and loss for the Communications division and was responsible for global product development and sales and marketing for the Endoscopy division.
“We would like to take this opportunity to thank Mike for his many contributions over the past five years,” DJO Board Chairman Mike Zafirovski said. “Under his leadership, DJO has grown significantly faster than our competitors, and our new product innovation has increased four-fold.”
That innovation continued even in the twilight of Mogul’s DJO career, as the company introduced three new products to its lineup last year. The first was MotionMD, an intuitive, Web-based point-of-care solution designed to streamline claims management and inventory dispensing. The paperless software solution helps orthopedic clinics improve patient satisfaction, increase billing compliance and streamline workflow by providing seamless interoperability with clinic records.
MotionMD supports a continuous workflow for physician approvals, flagging inaccurate or missing information throughout the process. The software serves as a checkpoint to promote the creation of clean and timely billing documentation.
About a month after debuting MotionMD in June 2016, the company released two braces to the market: The Clima-Flex OA Knee Brace and Protection On Demand Ankle Brace (POD).
Clima-Flex OA uses new DonJoy C-6 material technology to deliver breathable, moisture-wicking comfort that is soft to the touch, temperature controlled, and incorporates all-natural antimicrobial features. Keyless offloading empowers patients with on-the-fly adjustment for relief from osteoarthritis knee pain.
The POD brace, meanwhile, is designed to engage specifically when needed to proactively resist ankle roll and other common ankle injuries. The brace can be used by athletes of all sports and be worn to support one weak ankle or on both joints to help prevent sports enthusiasts from rolling their ankles during aggressive plays. POD is also 30 percent lighter than the average ankle brace, and features soft EVA lining, low profile cuff, and adjustable underfoot closure.