Annual results from Ossur

Ossur has announced its financial results for the year 2001. The consolidated financial statement shows an increase in revenues of 87% on the previous year. The Company has moved into the new year on a strong and buoyant platform, according to President and CEO, Jon Sigurdsson. "Having successfully consolidated our business and remained on track throughout last year, we are in the healthy position of being able to concentrate on further improving services to our customers. Last year we invested a record amount in R&D, and these results mean that we will continue to deliver exciting new products which make a huge difference to people's quality of life."

Ossur hf. Interim
Statement 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 of 80%.

The year's profit amounted to ISK 844 million, 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	-1,495	-5,698
Operating profit	147	194	372	354	1,067
Financial income / (financial expenses)	-31	17	1	-35	-48
Earning 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
Earning 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	258	-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.

 

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 Company's 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.

 

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 Februar 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.

 

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.