US Leads Medical Device Packaging

by Juicy Wallet juicywallet

US Leads Medical Device Packaging

World medical device packaging product demand will increase 5.9 percent yearly to $25.7 billion in 2017. Reflecting the operation of advanced and diverse medical product industries, Western Europe, the US and Japan will divide almost 60 percent of the total amount. However, these markets will expand measurably slower than the global average as health care cost containment pressures and intensifying multiple supplier competition increase the pricing sensitivity of medical device producers to packaging costs. The fastest growth in medical device packaging demand will occur in India, Mexico, China, and various Africa/Mideast countries where the expansion, diversification, and stricter regulation of medical product industries are raising the quality requirements of containers and related accessories.

Among individual countries, the US will remain the largest market for medical device packaging products as its advanced medical product industries introduce new sophisticated items with specialized packaging needs. Gains in West European and Japanese demand will evolve mostly from upgraded government standards requiring the greater barrier and security protection of medical supplies and devices. In the developing world, China will provide the largest and most diverse sales opportunities for medical device packaging due to burgeoning domestic and export markets for nationally produced medical products.

Containers will make up about 80 percent of medical device packaging demand through 2017 and beyond. Based on adaptability to cost effective infection prevention and security enhanced formats, pouches and trays will continue to lead sales. Growth in pouch demand will reflect improved strength, puncture resistance, and barrier properties, which will lead to expanding applications in the packaging of small- to medium-sized supplies and devices. Multiple compartment trays will build sales as they virtually eliminate the risk of staff errors and infection spreading during the collection and organization of products required for various patient procedures. Clamshell packs will also fare well in the global marketplace as they match or exceed all the advantages of multiple compartment trays while offering greater protection against product damage during transport and storage.

Among other medical device containers, blister packs and glass vials will account for the fastest expanding demand: the former from applications in the packaging of contact lenses; the latter from applications in the packaging of diagnostic reagents and related substances. By contrast, bags — which are used primarily for the packaging of large and odd-sized products — will decelerate based on the downsizing and miniaturization of many medical supplies and devices. Demand for boxes will also slow as cost considerations erode some secondary packaging. The fastest gains among medical device packaging accessories will be seen in high visibility labels and tamper-evident and other security accessories. Demand for these products will benefit from more strict government regulations and industry standards covering the safety, security, and functional features of medical device containers.

"Consistent with the growth strategy we laid out, this quarter we made significant progress on three notable initiatives: (i) we recently obtained a Third Party Processor (TPP1) license for Mexico, Panama and Costa Rica from MasterCard; (ii) we partnered with a large existing client to increase the scope of our services across their multi-country operations; and (iii) we completed preparations for the launch of dynamic currency conversion services in Costa Rica in 2014. The regular quarterly dividend program we announced today is a further reflection of both our momentum and long-term growth prospects as well as our commitment to maximizing total value for our shareholders."

Merchant Acquiring net revenues for the quarter ended June 30, 2013 were $18.2 million, representing an increase of 7% as compared to $17.0 million in the prior year. Revenue growth in the quarter was driven primarily by an increase in transaction volumes.

Payment Processing revenues for the quarter ended June 30, 2013 were $24.3 million, representing an increase of 2% as compared to $23.8 million in the prior year. The revenue growth comparison in this quarter is impacted by a non-recurring increase in processing volumes during the quarter ended June 30, 2012 related to certain one-time items. Normalizing for these one-time items, revenues in this segment grew at 6% versus the prior year.

Business Solutions revenues for the quarter ended June 30, 2013 were $46.7 million, representing an increase of 7% as compared to $43.5 million in the prior year. Revenue growth was primarily driven by an increase in our sales and higher demand for our services.

Adjusted EBITDA. For the quarter ended June 30, 2013, Adjusted EBITDA was $43.4 million, representing an increase of 6% as compared to $40.9 million in the prior year. The increase in Adjusted EBITDA was primarily due to revenue growth. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) improved by 20 basis points to 48.7% from 48.5% in the prior year as a result of operating leverage.

Certain statements in this press release constitute "forward-looking statements" within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," and "plans" and similar expressions of future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: the Company's reliance on its relationship with Popular for a significant portion of our revenues; our ability to renew our client contracts on terms favorable to us; our dependence on our processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems; our ability to develop, install and adopt new technology; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH(R) network; the Company's dependence on credit card associations; changes in the regulatory environment and changes in international, legal, political, administrative or economic conditions; the geographical concentration of the Company's business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; our ability to execute our expansion and acquisition strategies; our ability to protect our intellectual property rights; our ability to recruit and retain qualified personnel; our ability to comply with federal, state, and local regulatory requirements; evolving industry standards; the Company's high level of indebtedness and restrictions contained in the Company's debt agreements; and the Company's ability to generate sufficient cash to service the Company's indebtedness and to generate future profits.

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