Össur, Reykjavik, Iceland, reported that its second quarter (2Q) 2013 sales were US $106 million compared to US $103 million in the same quarter last year. Bracing and supports sales were flat while prosthetics sales grew by 6 percent, measured in Icelandic currency. Performance in Europe, the Middle East, and Africa (EMEA) showed strong growth across all markets and segments. Performance in the United States was mixed and continued to be impacted by the U.S. reimbursement environment.
The company said its cost reduction initiative is on track and expected to reduce costs by US $5 million in 2013 and by US $8 million in 2014. One-time expenses relating to these initiatives amounted to US $4.5 million in 2Q 2013.
Gross profit was US $65 million, or 61 percent of sales. Adjusted for one-time expenses, the gross profit was US $66 million or 62 percent of sales, the same ratio as 2Q 2012. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was US $15 million, or 14 percent of sales. Adjusted for one-time expenses, EBITDA was US $20 million, corresponding to a 19 percent margin similar to 2Q 2012.
Net profit was US $8 million, or 8 percent of sales. Adjusted for one-time expenses, net profit was US $12 million, or 11 percent of sales as compared to net profit in 2Q 2012 which was US $10 million, or 10 percent of sales. Cash generated by operations was 11 percent of sales, compared to 19 percent in 2Q 2012. Affecting cash generation is the payment of one-time expenses as well as an increase in working capital.
In May, Össur signed an agreement to acquire Jönköping, Sweden-based O&P provider TeamOlmed for US $47 million. The acquisition is expected to close in the third quarter of 2013.
Össur’s management reiterated its previous guidance for 2013: Sales growth is expected to be in the 2-4 percent range while the adjusted EBITDA margin is expected to be 18-19 percent, measured in Icelandic currency.
“The results of the second quarter are in line with our expectations,” said Jón Sigurðsson, president and CEO. “Performance in EMEA is excellent, delivering growth in all product segments and markets. Challenges in Americas continue as previously communicated. Cost reduction initiatives already executed are on track and we are confident that they will yield the expected results….”
