dj Orthopedics, LLC Reports Third Quarter 2001 Results

October 29, 2001

Vista, CA (October 29, 2001) -- dj Orthopedics, LLC, today announced its financial results for the quarter ended September 29, 2001. The Company's net revenues amounted to $44.1 million, up $4.2 million, or 10.5%, over the same period last year. EBITDA for the quarter ended September 29, 2001 amounted to $8.4 million, up $1.1 million, or 14.7%, over EBITDA (as adjusted) for the same period last year.

For the nine months ended September 29, 2001, net revenues amounted to $127.4 million, up $25.2 million, or 24.6%, over the same period last year. EBITDA for the first nine months of 2001 amounted to $24.8 million, up $3.7 million, or 17.5%, over EBITDA (as adjusted) for the same period last year. There was one less business day in the 2001 year to date period compared with the 2000 year to date period, resulting in approximately $0.7 million less of revenues in the first nine months of 2001.

Growth over the prior year can be attributed to the acquisition of the bracing and soft goods business of DePuy Orthopaedic Technology, Inc. ("OrthoTech"), the introduction of new products, our dj Australia joint venture and the launch of the our surgical division, Alaron Surgical®.

Les Cross, president and CEO, commented, "This is our first quarter comparing actual results of operations for the current year to the prior year where both quarters include operational results from the OrthoTech acquisition. With the OrthoTech acquisition fully integrated, the third quarter demonstrated strong growth over the prior year in the key operational metrics of revenue, net income and EBITDA."

dj Orthopedics is a global orthopedic sports medicine company specializing in the design, manufacture and marketing of surgical and non-surgical products and services that repair, regenerate and rehabilitate soft tissue and bone, help protect against injury, and treat osteoarthritis of the knee. Its broad range of over 600 existing products, many of which are based on proprietary technologies, includes rigid knee braces, soft goods, specialty and other complementary orthopedic products and its recently introduced line of surgical products. These products provide solutions for patients and orthopedic sports medicine professionals throughout the patient's continuum of care.

The following is condensed consolidated financial data of dj Orthopedics, LLC:
(amounts in thousands)            
  Three Months Ended Nine Months Ended  
  September 29, September 30,   September 29, September 30,  
  2001 2000   2001 2000  
  (Unaudited)    
Net revenues $ 44,078 $ 39,873   $ 127,361 $ 102,186  
Cost of goods sold 19,176 17,845   53,856 43,050  
Gross profit 24,902 22,028   73,505 59,136  
Operating expenses:            
   Sales and marketing 12,147 11,036   35,661 26,751  
   General and administrative 6,206 5,495   18,270 14,529  
   Research and development 513 514   1,813 1,678  
   Merger and integration costs                    -                    400                      -                   400  
Total operating expenses 18,866 17,445   55,744 43,358  
Income from operations 6,036 4,583   17,761 15,778  
Interest expense (4,357) (4,636)   (13,701) (12,245)  
Interest income 49 95   230 348  
Net income 1,728 42   4,290 3,881  
Less: Preferred stock dividends and accretion    
         of preferred unit fee (1,632) (1,428)   (4,738) (3,908)  
Net income (loss) available to members $ 96 $ (1,386)    $ (448) $ (27)  
             
EBITDA(1) data:            
Income from operations $ 6,036 $ 4,583   $ 17,761 $ 15,778  
Merger and integration costs                    -                    400                      -                   400  
Depreciation and amortization 2,363 2,073   7,001 4,627  
EBITDA $ 8,399 $ 7,056   $ 24,762 $ 20,805  
Step-up to fair value of acquired inventory                -                    268                     -                   268  
EBITDA (as adjusted) $ 8,399 $ 7,324   $ 24,762 $ 21,073  
             
             
  September 29, December 31,        
  2001 2000        
  (Unaudited)        
Assets:            
  Current assets $ 70,530 $ 60,384        
   Property, plant and equipment, net 14,880 12,785        
   Intangible assets, net 72,029 75,419        
   Other assets 7,485 7,084        
   Total $ 164,924 $ 155,672        
Liabilities and members' deficit:          
  Current liabilities $ 25,124 $ 21,689        
  Long-term obligations, net of current portion 194,898 197,608        
  Members' deficit (55,098) (63,625)        
  Total $ 164,924 $ 155,672        
                         

 

Company Contacts: Investor Relations Contacts:
dj Orthopedics, LLC Lippert/Heilshorn & Associates, Inc.
Les Cross, CEO Bruce Voss (bvoss[at]lhai[dot]com)
Cy Talbot, CFO Jody Cain (jcain[at]lhai[dot]com)
(760) 734-3559 (310) 691-7100
http://www.djortho.com/ www.lhai.com