Ossur hf. - Annual Results and results for the Fourth Quarter of 2001
Revenues over the year amounted to ISK 6.765 million, an increase of 87% between years.
EBITDA amounted to ISK 1.268 million, an increase by 80%.
The years profit amounted to ISK 844 million, as compared to profits from regular operations of ISK 409 million in 2000.
Earnings per share (EPS) amounted to ISK 2.57, doubling between years.
The Annual Consolidated Financial Statement of the Össur Group for the year 2001 was approved at a meeting of the Board of Directors on 6 February 2001. The statement has been prepared using the same accounting principles as have been used consistently through out the year 2001. The Financial statement has been audited and signed off by the Company auditors without qualification.
The Össur Group consists of Össur hf. in Iceland, the groups Össur Holdings Inc., USA, and Össur Holding A.B., Sweden, and separate companies in Iceland, Luxembourg the Netherlands and elsewhere. There have been no substantial changes in the composition of the Group in the course of the year 2001.
The principal results of the year are as follows:
Profit and Loss Account 2001 (ISK m) 1 Q 2 Q 3 Q 4 Q Total
Operating revenues 1,422 1,714 1,816 1,813 6,765
Operating expenses -1,275 -1,520 -1,444 -1,459 -5,698
Operating profit 147 194 372 354 1,067
Financial income / (financial expenses) -31 17 1 -35 -48
Earnings before taxes 116 211 373 319 1,019
Income tax -59 44 -126 -34 -175
Net income for the period 57 255 247 285 844
EBITDA 193 246 422 407 1,268
Balance Sheet (ISK m) 31 Dec 31 Dec
2001 2000
Fixed assets 3,194 2,614
Current assets 2,812 2,201
Total assets 6,006 4,815
Equity 3,152 2,061
Long-term liabilities 1,335 1,172
Short-term liabilities 1,519 1,582
Total equity and liabilities 6,006 4,815
Statement of Cash Flows 2001 (ISK m) 1 Q 2 Q 3 Q 4 Q Total
Cash from operations 118 262 374 259 1,013
Investment activities -90 -132 -24 -49 -295
Financing activities -69 -218 -238 -262 -787
Increase (decrease) in cash -41 -88 112 -52 -69
Key Indicators 2001 2000
EPS 2,57 1,25
P/E ratio 19,4 53
Return on equity 32% 9%
Current ratio 1,9 1,5
Equity ratio 52% 45%
Market value of shares (ISK billion) 16,3 21,7
Comparison with the Year 2000:
Profit and Loss Account (ISK m) 4 Q 4 Q Year Year
2001 2000 2001 2000
Operating revenues 1,813 787 6,765 3,614
Operating expenses -1,459 -729 -5,698 -3,018
Operating profit 354 58 1,067 596
Financial income / (financial expenses) -35 11 -48 -131
Earnings before taxes 319 69 1,019 465
Income tax -34 80 -175 -56
Earnings before other income and expenses 285 149 844 409
Extraordinary expenses 0 -3,413 0 -7,172
Profit (loss) for the period 285 -3,264 844 -6,763
EBITDA 407 92 1,268 702
Revenues increased by 87% over the year. Earnings before interest, taxes, depreciation and amortization, EBITDA, increased by 80%, while profit from regular operations increased by 106%. Profit from regular operations per share, EPS, doubled, from ISK 1.25 per share, to 2.57 per share. Any comparison of the years 2001 and 2000 must take account of the fact that as a result of new acquisitions, the composition of the Group in the two periods is not comparable. It should also be noted that the price of the US dollar against the Icelandic krona, rose by almost 22% from beginning of the year to the year end 2001, that had a substantial impact on the profit and loss account and balance sheet in the consolidated accounts of the Company.
Fourth-Quarter Operations:
Operations in the fourth quarter, were in all principal respects, according to plan.
In October, estimates were reviewed and the annual revenues projected at ISK 6,650 million, or approximately USD 70 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) were projected at 20%, or approximately ISK 1,320 million. The initial profit projection for the year was expected to prove accurate, with total profit at USD 8.5 million, or approximately ISK 810 million. Taking into account changes in the exchange rate to the end of the year, this corresponds to revenues of ISK 6,845 million, earnings before interest, taxes, depreciation and amortization of ISK 1,360 million and profits of ISK 831 million. Actual figures turned out to be ISK 6,765 million in revenues, ISK 1,268 million EBITDA and ISK 844 million for net profit.
In December, operations in the Netherlands were moved to new and larger premises, a new information system was introduced and other preparations were commenced to transfer European operations to an independent sales company, Össur Europe B.V., as of 1 January 2002. Previously, these operations had been carried out under a branch of Össur North America, Inc. in California (formerly Flex-Foot, Inc.).
At year-end, an agreement was concluded with the company B&L in Iceland on the lease of premises comprising 2,360 square meters, at Grjótháls 1, Reykjavík. The premises will be used to house future production growth in Iceland. A decision has been made to move the research and development work on artificial feet and knee joints from the United States to Iceland. Once this change has taken effect, virtually all the research and development work of the Group will be based in Iceland.
A new organization chart for the Company formally took effect 1 January 2002. The sales activities of the Company are now conducted through three sales companies: Össur North America, Inc. in California (formerly Flex-Foot, Inc.), Össur Europe B.V. in the Netherlands (formerly a branch of Flex-Foot, Inc.) and Össur Nordic A.B. in Sweden. There are now two main production units: Össur hf. in Reykjavik, and Össur Engineering, Inc. in Albion. This means that all production activities in California, excluding assembly, will cease in 2002. The main production of knee-joints, which has been conducted by Mauch, Inc. in Dayton, Ohio, will be moved to Össur Engineering, Inc, in Albion during the course of the year. After the move, Mauch, Inc. will primarily produce metal implants.
In line with the new organization chart, the senior management of the Group has been simplified. The operation of the Group is now divided into seven operating divisions: Business Development, Corporate Finance, Prosthetic, Technical division (Global R&D and Manufacturing), Össur North America, Inc., Össur Europe B.V. and Össur Nordic A.B.
Prospects for the Year 2002:
The Companys financial reporting and budgeting will be in USD in the year 2002. According to the operating budget for 2002, which was made public on 29 January, the annual revenues for 2002 is projected at USD 78-86 million, EBITDA at USD 15.6-17.2 million, and profit for the year at USD 9.5-11.5 million. More than ten products being developed by the Company are scheduled for launch in the course of the year, compared to thirteen products in 2001.
Publication of Interim Reports in 2002:
The publication schedule for Interim Reports in 2002 is as follows:
First quarter 2 May 2002
Second quarter 31 July 2002
Third quarter 30 October 2002
Fourth quarter 5 February 2003
Open teleconferences with key management are scheduled for the day following the publication of interim reports.
Open Teleconference with Management:
Investors and others interested in the operation of the Company are invited to participate in an open teleconference on Friday 8 February at 9:00 a.m. At the conference, Mr. Jón Sigurðsson, CEO, and Mr. Hjörleifur Pálsson, CFO, will review the results of the fourth quarter.
To participate in the conference, call [+354]-595-2019. The conference can also be monitored on the Company website at www.ossur.is.
Annual General Meeting 2002:
The Annual General Meeting of Össur hf. will be held at the Grand Hotel, Sigtún 38, Reykjavík, on 15 February at 3:00 p.m. Voting rights at the meeting will be based on the share register of Össur hf. at the end of Thursday, February 14, 2002.
