Annual Financial Statement of Össur hf. for the Year 2000.
Profits after taxes and before extraordinary items more than triple to ISK 409 million<br>
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The financial statement of Össur hf. for the year 2000 has been prepared and approved by the Board of Directors of the company. The consolidated accounts of Össur hf. include the results of the last nine months of 2000 for Flex-Foot Inc., the last three months for Karlsson and Bergström AB and Pi Medical AB, and the last month for Century XXII Innovation Inc. The financial statement in Icelandic is published in its entirety on the Össur hf. websites, fjarmal.ossur.is and www.ossur.is <br>
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Key figures from the operation and finances of the Össur Group<br>
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Profit and Loss Account 2000 1999 Change<br>
Operating income 3.614 1.303 177%<br>
Operating expenses 3.018 1.094 176%<br>
Operating profit 596 209 185%<br>
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Financial income and<br>
expenses -131 6,4<br>
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Profit before income tax<br>
and net worth tax 465 216 115%<br>
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Other income and expenses - -1<br>
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Income tax and net worth tax -56 -76<br>
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Profit before<br>
extraordinary items 409 139 194%<br>
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Extraordinary items 7.088 -<br>
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Net loss/profit<br>
over the year -6.679 139<br>
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Balance Sheet 2000 1999 Change<br>
Fixed assets 2.614 1.288 103%<br>
Current assets 2.201 475 363%<br>
Total assets 4.815 1.764 173%<br>
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Equity 2.146 1.387 55%<br>
Long-term liabilities 1.172 162<br>
Current liabilities 1.498 214<br>
Equity and liabilities 4.815 1.763 173%<br>
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The profit of the company after taxes and before extraordinary items <br>tripled to ISK 409 million from ISK 139 million in 1999.<br>
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Operating revenues amounted to ISK 3.614 million, an increase of 177% from the previous year. Operating expenses amounted to ISK 3.018 million. Research and development costs amounted to ISK 277 million, compared to ISK 89 million in 1999. As before, all development costs have been charged to the accounts. <br>
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Operating profits before financial costs amounted to ISK 596 million, or 16.5% of revenues, compared to ISK 209 million in 1999. The contribution margin increased from 16% in 1999 to 16.5% in 2000.Financial income was negative by ISK 131 million; financial income amounted to ISK 84 million while financial expenses and currency losses amounted to ISK 233 million. <br>
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Extraordinary items comprise depreciation of goodwill in the amount of ISK 7.088 million as a result of the acquisition of Flex-Foot Inc., Karlsson & Bergström AB, Pi Medical AB, and Century XXII Innovations Inc. <br>
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Losses of Össur hf. for the year 2000 after extraordinary items thus amount to ISK 6.679 million.<br>
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Fixed assets increased by ISK 1.325 million, amounting to ISK 2.614 million at year-end. The increase is primarily a result of capitalized goodwill in the amount of ISK 1.752 million, which will be written off over the next fourteen years. Permanent operating assets increased from ISK 122 million in 1999 to ISK 671 million at year-end 2000. The increase is related to the acquisitions during the year 2000 . <br>
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Current assets increased by ISK 1.726 million over the year and stood at ISK 2.201 million at year-end. Receivables and inventory increased as a result of the acquisition in excess of the proportional increase in turnover, as the merger with Century XXII Innovation Inc. and the two Swedish companies took place in the final quarter of the year 2000. Assets at year-end amounted to ISK 4.815 million.<br>
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The share capital of the company increased over the year by a total of ISK 116.5 million, bringing the total issued and paid-in share capital of the company at year-end to ISK 328.4 million. Equity amounted to ISK 2.146 million at year-end 2000.<br>
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The debt of the company increased by ISK 2.294 million over the year 2000, mostly as a result of borrowings relating to the acquisition of Flex-Foot Inc. and earn-out payments to the former owners of Flex-Foot Inc., Century XXII Innovations Inc., Karlsson & Bergström AB, and Pi Medical AB.<br>
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Total assets at year-end amounted to ISK 4,815 million, an increase of ISK 3.052 on 1999.<br>
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Working capital from operating activities at year-end quadrupled to ISK 695 million, from ISK 188 million at year-end 1999. Net cash from operating activities amounted to ISK 457 million, as compared to ISK 235 million over the preceding year. <br>
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Key Indicators<br>
2000 1999<br>
Turnover at 2000 price levels 3.614 1.371<br>
Employees 327 122<br>
Current ratio 1,5 2,2<br>
Equity ratio 44,60% 78,60%<br>
Net cash from operations at 2000 proce 457,2 247<br>
As a proportion of total liabilities 30 67<br>
In proportion to profits 1,1 1,7<br>
Return on equity after taxes 9,00% 44,70%<br>
Market value at year-end 21.677 8.477<br>
P/E ratio 53 58<br>
No. of shares (million) 328,4 212<br>
Earnings per share 1,2 0,69<br>
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Return on common equity is 9% and decreases from the previous year<br> which can be explained by aquistions with common stock towards the end of the year.<br>
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Earnings before interest, depreciation and amortization are ISK 702 million below forecast of ISK 780 million. In December it was decided to take back stock from distributors in the US as a result of the change and the biggest part of missing EBITDA is caused by that. Another explanation can be found in the average currency rate of USD/ISK that is used for the consolidated statement and difference from the individual end of the month rate used for monthly reporting. <br>
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Activities in 2000<br>
In 2000, Össur hf. acquired four manufacturing and distribution companies. The acquisitions extended the product line of the company, which is now in a position to offer comprehensive prosthetic solutions. The scope of activities of the company expanded substantially over the year, and Össur hf. is now the second largest international company in its field. In addition to the impact on the operations and finances of the company, the expansion required certain restructuring measures, which were completed at the end of the year. The purpose of introducing a new organizational chart was twofold: to prepare the company for further growth in new areas and to fully integrate the new companies into the Össur Group to create a single international corporation.<br>
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The number of employees grew from 122 in 1999 to 327 at the end of 2000. The Össur hf. sales office in Baltimore was merged with the company's California operation. The Össur Sales Division for Western Europe was merged with the Eindhoven operation, Holland, and Össur UK took over the entire sales activities in the UK of the newly formed companies. The number of sales representatives in the US, Össur´s largest market area, increased from 5 to 14 during the year, and Össur now has the largest direct sales system for the US market. "Despite the increase in scope and costs relating to the integration of the various divisions activities, it has been possible to maintain an acceptable level of profitability from the regular operations of the company", said Össurs CEO, Jón Sigurðsson.<br>
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With regards to product innovation, Össur launched two new sockets during the year. Their introduction represents a milestone in the progress of the materials and production methods currently in use. In the production of these products, the company is increasingly manufacturing the materials that it uses in production. <br>
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Prospects for 2001<br>
The largest projects in 2001 include further growth and integration of the companies and restructuring of the company under the new organizational framework. Preparations are being <br>
made for Össur USA to take over the entire distribution network for North America and contracts with distributors in the US have been terminated. Work is also in progress for similar changes in Europe. <br>
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Numerous new products will be introduced on the market next year. These include a new artificial ankle, "Talux", an artificial knee joint and an artificial intelligent knee that is the result of co-operation between Össur and the Massachusetts Institute of Technology (MIT).<br>
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The estimated revenues of the company for the year 2001 are 74 million USD or approximately 6.100 million IKR and the profit of 8,5 million USD or 700 million ISK.<br>
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Open Teleconference with Management<br>
On Friday 16 February, at 11 a.m., investors and others who are interested in the operations of Össur will have an opportunity to participate in an open teleconference. During the conference, Mr. Jón Sigurðsson, CEO, and Mr. Árni Alvar Arason, CFO, will discuss the conclusions of the annual statement and respond to questions. Participants in the teleconference should call 595-2030, but the teleconference can also be monitored on the web at www.ossur.is <br>
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Annual General Meeting<br>
The Annual General Meeting of Össur hf. will be held on 9 March 2001 at 4 p.m. at the Radisson SAS Hotel Saga, Conference Hall A. The Board of Directors of the company has decided to submit to the AGM a proposal to invest profits in the growth of the company rather than pay dividends.y dividends.dividends.
