UPDATE: Wright Medical shares rise on Street-beating Q1 earnings

May 8, 2019 By Fink Densford Leave a Comment

Updated to include share prices after opening.

Shares in Wright Medical (NSDQ:WMGI) are rising today after the medical device maker posted first quarter 2019 earnings that topped both sales and earnings per share expectations on Wall Street.

The Amsterdam-based company posted losses of $36.6 million, or 29¢ per share, on sales of approximately $230.1 million for the three months ended March 31, seeing losses increase 43.5% while sales grew 15.9% when compared to the same period during the previous year.

Adjusted to exclude one-time items, earnings per share were 5¢, just ahead of the 3¢ expectation on Wall Street where analysts expected to see sales of $226.2 million, which the company also topped by nearly $4 million.

“Our first quarter net sales results represent an outstanding start to 2019, with 18% constant currency growth, and 13% pro-forma and organic constant currency growth, driven by exceptional performance across our total U.S. business with organic growth of 17%. This was led by U.S. upper extremities growth of 21% and 11% organic U.S. foot and ankle growth, with 18% growth in our total ankle franchise and above market growth in the ambulatory surgery center segment. In addition, Cartiva sales of $9.2 million finished ahead of expectations and returned to year over year growth ahead of schedule. Our U.S. shoulder business delivered another strong performance with 21% growth, which is approximately triple the market growth rate. We continue to take share in U.S. shoulder, and we anticipate that accelerating adoption of our Blueprint enabling technology, Simpliciti shoulder, our ongoing Perform Reversed launch and the upcoming full launch of our Revive revision shoulder system will continue to drive outstanding shoulder sales growth in 2019 and beyond. On the lower extremities side of the business, we had an excellent quarter organically with high teens growth in total ankle and strong double-digit growth in the ambulatory surgery center portion of our business. Additionally, Cartiva was fully launched with our U.S. lower extremities sales force on January 1, including the integration of the former Cartiva distributors that we have chosen to retain. We couldn’t be happier with the Cartiva acquisition. This provides us with another platform technology with high gross margins and many avenues for growth. In addition to these strong sales growth results, we also achieved record gross margins of 80% and adjusted EBITDA margin expansion of approximately 300 basis points, all of which we believe put us on a strong pathway for the remainder of the year and right on track to achieve our previously stated goals of double-digit net sales growth and adjusted EBITDA margin in excess of 20% for the full fourth quarter of 2019,” prez & CEO Robert Palmisano said in a prepared statement.

The company reiterated its full-year 2019 sales outlook of between $954 million and $966 million, with non-GAAP adjusted EPS of between 17¢ and 25¢ per diluted share.

“We have accomplished much on all of our financial and organizational metrics over the past several quarters. We see that pace continuing. We exited the quarter on a strong, positive trajectory, and I continue to be optimistic as we look forward. I believe we are set up well for double-digit net sales growth and significant EBITDA margin expansion in 2019 and beyond. We also believe our new digital organization that was announced earlier today will pay dividends well into the future. We have leadership positions in three of the fastest growing markets in orthopedics. Additionally, we have truly differentiated products in all of our market segments, exceptional enabling technologies for shoulder and total ankle, very high gross margins and specialized sales forces that are performing at a high level,” Palmisano said in a press release.

Shares in Wright Medical closed down 2.5% yesterday at $29.38, and have not moved in pre-market trading as of 8:35 a.m. EDT.

Shares in Wright Medical are up 6% so far today, at $31.16 as of 10:40 a.m. EDT.

Earlier this week, Wright Medical said that it is creating a new digital division and that it is promoting strategy, tech & corporate dev senior VP Jason Asper to chief digital officer.

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