SAN DIEGO–(BUSINESS WIRE)–DJO Incorporated (“DJO” or the “Company”), a global provider of medical device solutions for musculoskeletal health, vascular health and pain management, today announced financial results for its operating subsidiary, DJO Finance LLC (“DJOFL”), for the third quarter of 2009, ended September 26, 2009. ReAble Therapeutics, Inc. (“ReAble”) acquired DJO Incorporated (“DJO Opco”) in a transaction completed on November 20, 2007 (the “DJO Merger”). Following completion of the DJO Merger, ReAble changed its name to DJO Incorporated. The Company sold its Empi Therapy Solutions (“ETS”) catalog business in June 2009. The ETS business, a non-core part of the Company’s Empi business unit, consisted primarily of the resale of non-DJO branded rehabilitation equipment and supplies and generated annual revenue of approximately $30 million. Results of the ETS business for periods prior to the date of sale, have been presented as discontinued operations. Certain prior period amounts have been reclassified to conform with this presentation.
Third Quarter Results
DJOFL achieved net sales from continuing operations for the third quarter of 2009 of $236.2 million, compared to $235.5 million for the third quarter of 2008. Sales for the third quarter of 2009 were reduced by approximately $3.4 million due to unfavorable changes in foreign currency exchange rates from the rates in effect in the third quarter of 2008. On the basis of constant currency, sales in the third quarter of 2009 increased approximately two percent over sales in the third quarter of 2008.
For the third quarter of 2009, DJOFL reported a net loss of $11.4 million, compared to a net loss of $14.4 million for the third quarter of 2008. The results for the current and prior year third quarter periods were impacted by significant non-recurring charges and other adjustments related to the DJO Merger and certain other smaller acquisitions.
The Company defines Adjusted EBITDA as net income (loss) plus loss (income) from discontinued operations, interest expense, net, provision (benefit) for income taxes, and depreciation and amortization, further adjusted for certain non-cash items, non-recurring items and other adjustment items, including the addition of certain future cost savings expected to be achieved related to the DJO Merger and other recent acquisitions, all as permitted in calculating covenant compliance under the Company’s senior secured credit facility and the indentures governing its 10.875% senior notes and its 11.75% senior subordinated notes. A reconciliation between net loss and Adjusted EBITDA is included in the attached financial tables.
