Second-Quarter Sales Rise 23 Percent at Ossur

The second quarter of 2014 was a lucrative one for Össur, as sales jumped 23 percent to $133 million and net profit more than doubled to $17 million in the three months ended June 30. Gross profit amounted to $85 million and 64 percent of sales, compared to $65 million and 61 percent of sales in Q2 2013.

EBITDA (earnings before interest, taxes, depreciation and amortization) and cash generated by operations also were up in the quarter. EBITDA was $29 million, or 22 percent of sales, compared to $15 million, or 14 percent of sales in the comparable period of 2013. Cash generated by operations amounted to $25 million, or 19 percent of sales, compared to $11 million, or 11 percent of sales in the second quarter of last year.

“I’m pleased to present a strong performance in the first half of 2014,” President/CEO Jon Sigurdsson said. “We have built on the good start of the year by delivering robust profits in this quarter. Our cash flow from operations also continues to be solid. Sales in EMEA continues to be good and the performance of our recently acquired companies is in line with our expectations. Prosthetics sales growth in the quarter is excellent, primarily driven by bionic products.”

Bracing and supports revenue soared 30 percent to $77.9 million, though organic growth slid 1 percent compared to Q2 2013. Prosthetics proceeds climbed 15 percent and 8 percent (organic) to $54.3 million, both measured in local currency (krona).

EMEA (Europe, Middle East and Africa) sales grew 46 percent (3 percent organic) to $72.1 million, driven mainly by the company’s recent acquisitions in Scandinavia. Revenues in the Americas climbed 2 percent (2 percent organic) to $53 million, while Asia sales jumped 23 percent (10 percent organic) to $7.4 million. Executives attributed the higher sales to a pair of acquisitions — one in the first quarter and one at the beginning of the third quarter.

Sales of bionic products accounted for 16 percent of prosthetic sales in Q2, compared to 14 percent in the second quarter of 2013.

The company launched nine new products between April and July — five bracing/support products and four prosthetic devices, including the Rebound Diabetic walker and Seal-in XTF liner. The Rebound walker is designed to treat plantar foot diabetic ulcers and enables easy access and refitting during wound care while improving the patient’s mobility during healing, the company claims. The Seal-in liner features a separate and moveable seal to suit patients with above-knee amputations.

Össur’s robust Q2 performance has prompted bigwigs to revise the firm’s guidance for 2014. Executives now expect total sales growth to range between 16 percent and 18 percent, with organic sales growth falling between 3 percent and 4 percent. EBITDA margins should come in between 19 percent and 20 percent of total sales and the effective tax rate should come to 2.5 percent to 3.5 percent of sales.

Based in Reykjavik, Iceland, Össur develops, manufactures and sells bracing and support products, compression therapy devices and prosthetics.