DJO Global (DJO), San Diego, California, announced financial results for its public reporting subsidiary, DJO Finance LLC (DJOFL), for the first quarter (1Q) ended March 29. DJOFL achieved net sales of $282.7 for 1Q 2014 million, reflecting growth of 1.3 percent, compared with net sales of $279.1 million for 1Q 2013.
Net sales for 1Q 2014 were favorably impacted by $0.9 million related to changes in foreign currency exchange rates compared to the rates in effect in the 1Q 2013. Excluding the impact of changes in foreign currency exchange rates from rates in effect in the prior year period (constant currency), net sales for 1Q 2014 increased 2.5 percent on a sales per day basis compared to net sales for 1Q 2013. 1Q 2014 included 62 shipping days in the United States and 61 shipping days in most international markets, while the comparable 2013 period included 63 days. For 1Q 2014, DJOFL reported a net loss attributable to DJOFL of $36.5 million, compared to a net loss of $32.4 million for 1Q 2013. The results for the current and prior year first quarter periods were impacted by significant non-cash items, non-recurring items, and other adjustments.
DJO defines adjusted earnings before interest, taxes, depreciation, and amortization (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 DJO’s amended senior secured credit facility and the indentures governing its 8.75 percent second priority senior secured notes, its 9.875 percent and 7.75 percent senior notes and its 9.75 percent senior subordinated notes. Adjusted EBITDA for 1Q 2014 was $59.6 million, or 21.1 percent of net sales, remaining flat when compared with adjusted EBITDA of $59.8 million, or 21.4 percent of net sales, for 1Q 2013.
As of March 29, 2014, the company had cash balances of $47.0 million and available liquidity of $61.5 million under its $100 million revolving line of credit. “We were pleased to see all of our business segments, except for recovery sciences, continue to deliver good sales growth in the first quarter with approximately 2.5 percent growth on a constant currency basis compared to the first quarter of 2013…,” said Mike Mogul, DJO’s president and CEO. “Our recovery sciences business continues to be impacted by Medicare’s 2012 non-coverage decision related to transcutaneous electrical nerve stimulation (TENS) for chronic low back pain and slow market conditions for capital equipment purchasing, which is impacting our Chattanooga [Tennessee] business. Excluding recovery sciences, aggregate net sales from our other business segments for the first quarter of 2014 increased by 5.1 percent compared to the prior year period.”
A telephone replay of the conference call discussing these results will be available through May 1 and can be accessed by calling 855.859.2056, and using reservation code 22322226.
