Wright Medical Group, Inc. Announces Cost Restructuring Plan

ARLINGTON, Tenn.–(BUSINESS WIRE)–Wright Medical Group, Inc. (NASDAQ: WMGI), a global orthopaedic medical
device company and a leading provider of surgical solutions for the foot
and ankle market, announced today that it is implementing a cost
restructuring plan to foster growth, enhance profitability and cash
flow, and build shareholder value. Wright Medical expects that the
initial phase of this plan will be completed during the next nine
months, with additional efficiency initiatives to be implemented
throughout 2012 and beyond.

Under the plan, Wright Medical has begun to implement numerous
initiatives to reduce spending, including streamlining select aspects of
its international selling and distribution operations, reducing the size
of its international product portfolio, adjusting plant operations to
align with the Company’s volume and mix expectations and rationalizing
its research and development projects. In total, Wright Medical plans to
reduce its workforce by approximately 80 employees, or 6%. The Company
has notified affected employees and has taken steps to ensure a smooth

Objectives of the plan include generating annual operating efficiencies
to bolster the Company’s financial results in 2012 and beyond while
enabling investments in longer term strategies for growth. Wright
Medical estimates that the plan will have a favorable impact to adjusted
earnings per share of approximately $0.05 to $0.06 in 2012, and a
favorable annual impact of approximately $0.08 thereafter.

David D. Stevens, Interim Chief Executive Officer stated, “Our industry
continues to face a challenging economic environment and, after
extensive analysis and consideration, we believe this plan will enhance
the Company’s prospects for growth and value creation. We are taking
these actions now to better position the Company to grow its earnings in
2012 and we are confident that this plan will result in a leaner, more
cost efficient operation, which is in the best interest of our business
and all of our stakeholders. Additionally, the Company continues to have
a strong balance sheet and is positioned well for investments in
acquisitions to drive future growth.”

The Company expects to record total pre-tax charges related to the cost
restructuring plan in the range of approximately $25 million to $30
million, of which approximately $6 million to $8 million is expected to
be non-cash. These charges will include, among others, severance and
benefits costs, excess and obsolete inventory charges, asset impairment
charges, external legal and professional fees and contract termination
costs. A majority of these charges are expected to be recorded in the
third and fourth quarters of 2011, with some additional charges to be
recorded during the first half of 2012.

The Company’s adjusted earnings per share excludes costs associated with
the restructuring plan, the transaction costs and non-cash deferred
financing fees associated with the Convertible Notes tendered, possible
future acquisitions, other material future business developments,
non-cash stock-based compensation expense, and costs associated with the
Company’s DPA (including the associated independent monitor).

Cautionary Note Regarding Forward-Looking

This press release contains “forward-looking statements” as
defined under U.S. federal securities laws. These statements reflect
management’s current knowledge, assumptions, beliefs, estimates, and
expectations and express management’s current views of future
performance, results, and trends and may be identified by their use of
terms such as anticipate, believe, could, estimate, expect, intend, may,
plan, predict, project, will, and other similar terms. Forward-looking
statements are subject to a number of risks and uncertainties that could
cause our actual results to materially differ from those described in
the forward-looking statements.
Readers should not place
undue reliance on forward looking statements. Such statements are made
as of the date of this press release, and we undertake no obligation to
update such statements after this date. Risks and uncertainties that
could cause our actual results to materially differ from those described
in forward-looking statements include those discussed in our filings
with the Securities and Exchange Commission (including those described
in Item 1A of our Annual Report on Form 10-K for the year ended December
31, 2010, and our subsequently filed quarterly reports, under the
heading “Risk Factors” and elsewhere), and the impact of our settlement
of the federal investigation into our consulting arrangements with
orthopaedic surgeons relating to our hip and knee products in the United
States, including our compliance with the Deferred Prosecution Agreement
through September 2011 (which could be extended) and the Corporate
Integrity Agreement through September 2015.
Our failure to
comply with the Deferred Prosecution Agreement or the Corporate
Integrity Agreement could expose us to significant liability including,
but not limited to, extension of the term of the Deferred Prosecution
Agreement, exclusion from federal healthcare program participation,
including Medicaid and Medicare, which would have a material adverse
effect on our financial condition, results of operations and cash flows,
potential prosecution, including under the previously-filed criminal
complaint, civil and criminal fines or penalties, and additional
litigation cost and expense. In addition, a breach of the Deferred
Prosecution Agreement or the Corporate Integrity Agreement could result
in an event of default under the Senior Credit Facility, which in turn
could result in an event of default under the Indenture.

Additional risks and uncertainties that could cause our actual
results to materially differ from those described in forward-looking
statements include the possibility of litigation brought by
shareholders, including private securities litigation and shareholder
derivative suits, which if initiated, could divert management’s
attention, harm our business and/or reputation and result in significant
liabilities; demand for and market acceptance of our new and existing
products; future actions of governmental authorities and other third
parties; tax measures; business development and growth opportunities;
product quality or patient safety issues; products liability claims;
enforcement of our intellectual property rights; the geographic and
product mix impact on our sales; retention of sales representatives and
independent distributors; inventory reductions or fluctuations in buying
patterns by wholesalers or distributors; ability to realize the
anticipated benefits of restructuring initiatives; and impact of the
commercial and credit environment on us and our customers and suppliers.

Wright Medical Group, Inc. is a global orthopaedic medical device
company and a leading provider of surgical solutions for the foot and
ankle market. The Company specializes in the design, manufacture and
marketing of devices and biologic products for extremity, hip and knee
repair and reconstruction. The Company has been in business for more
than 60 years and markets its products in over 60 countries worldwide.
For more information about Wright Medical, visit the Company’s website
at www.wmt.com.


Wright Medical Group, Inc.
Lance Berry, 901-867-4607

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