Össur, Reykjavik, Iceland, reported that its first quarter (1Q) 2013 sales were US $97 million compared to US $100 million in 1Q 2012, a decline of 3 percent measured in Icelandic currency. Bracing and supports sales declined by 2 percent while prosthetics sales declined by 3 percent, also measured in Icelandic currency. According to Össur, the quarter was affected by fewer sales days compared to same quarter last year due to the Easter holidays, and when adjusted for this effect, overall sales declined by 1 percent, sales of bracing and supports were flat, and prosthetics sales declined by 1 percent.
Performance in Europe, the Middle East, and Africa (EMEA) varied between countries, but showed growth in Eastern Europe and continued growth in bionics.
Gross profit was US $60 million or 62 percent of sales, the same ratio as in 1Q 2012. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were US $14 million corresponding to a 14 percent margin compared to 18 percent in 1Q 2012.
Net profit was US $5.8 million or 6 percent of sales, compared to US $9.8 million and 10 percent of sales in 1Q 2012. Cash generated by operations was 9 percent of sales, the same as in 1Q 2012.
Because of Medicare’s 2 percent sequestration-related reimbursement reduction that began on April 1, 2013, Össur said it is considering broader product offerings and has initiated a program to reduce costs by US $5 million for the remainder of the year. The company also expects 2013 results to be in the lower end of the guided range, both in terms of sales and EBITDA. The 2013 sales growth estimate ranges from 2-4 percent while the EBITDA margin is expected to range from 18-19 percent, measured in Icelandic currency.
“The first quarter has been challenging,” said Jón Sigurðsson, president and CEO. “Effects from the turbulent U.S. reimbursement environment have had a more profound impact than we anticipated and will continue throughout this year. We have taken measures to react, however it will take some time to adjust to these changes in the market and get back on track.”
On Thursday, April 25, Össur will host a conference call where Sigurðsson and Sveinn Sölvason, CFO, will present and discuss 1Q results. The conference call, scheduled to begin at 6 a.m. ET, will be conducted in English. Those wishing to participate should call 866.458.4087, or access the webcast at www.ossur.com/investors.
