Wright Medical Group Inc. (NSDQ:WMGI) posted fourth-quarter sales of $129.9 million for the three months ended Dec. 31, 2009, up 8.2 percent compared with $120.1 million during the same period in 2008. Net income was $2.2 million, compared with net losses of $2.7 million during Q4 2008:
Press Release
Wright Medical Group, Inc. Reports Results for Fourth Quarter Ended
December 31, 2009
Net Sales and Adjusted Earnings Exceed Previously Communicated
Outlook Ranges
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, today reported financial results for its fourth
quarter ended December 31, 2009.
Net sales totaled $129.9 million during the fourth quarter ended
December 31, 2009, representing an 8% increase over net sales of $120.1
million during the fourth quarter of 2008, exceeding the previously
communicated outlook range of $122 to $127 million. Excluding the impact
of foreign currency, net sales increased 5% during the fourth quarter.
For the fourth quarter of 2009, the Company recorded net income of $2.2
million, or $0.06 per diluted share, compared to net loss for the fourth
quarter of 2008 of $2.7 million, or ($0.07) per diluted share. Net
income for the fourth quarter of 2009 included the after-tax effects of
approximately $5.6 million of charges to write down a significant
international receivable, $3.0 million of non-cash stock-based
compensation expense, $2.6 million of non-cash charges to write-off
cumulative translation adjustment (CTA) balances associated with the
substantially complete liquidation of certain foreign subsidiaries, $2.6
million of restructuring charges, and $186,000 of expenses related to
the ongoing U.S. governmental inquiries. Net loss for the fourth quarter
of 2008 included the after-tax effects of approximately $3.0 million of
non-cash stock-based compensation expense, $2.9 million of expenses
related to the ongoing U.S. governmental inquiries, and $1.1 million of
restructuring charges, as well as a $11.2 million tax provision
associated with the write-off of French net operating losses (NOLs).
Our fourth quarter net income, as adjusted, totaled $10.8 million in
2009 compared to $12.6 million in 2008, while diluted earnings per
share, as adjusted, totaled $0.27 and $0.31 for the fourth quarter of
2009 and 2008, respectively. A reconciliation of U.S. GAAP to “as
adjusted” results is included in the attached financial tables.
Gary D. Henley, President and Chief Executive Officer commented, “We are
pleased with the improvements we made to the underlying capabilities of
our business in 2009 including increasing the size of our focused sales
force, expanding our product portfolios and improving our cash flow
capabilities. These improvements leave us well positioned for growth in
2010 and beyond.”
Mr. Henley continued, “We are also pleased with our fourth quarter
performance, as better than anticipated sales and a lower than expected
effective tax rate enabled us to make strategic investments in our
business while still exceeding our previously communicated earnings
guidance. Additionally, continued excellent working capital management
produced $10.8 million of free cash flow for the quarter, and a record
$34.6 million for the full year 2009.”
Outlook
The Company’s earnings target, as communicated in the guidance range
stated below, excludes the effect of possible future acquisitions, other
material future business developments, non-cash stock-based compensation
expense, restructuring charges, and costs associated with the Company’s
ongoing U.S. governmental inquiries.
The Company anticipates full year 2010 net sales to be in the range of
$515 million to $530 million, which represents annualized as-reported
and constant-currency growth expectations of approximately 6% to 9%. The
Company anticipates full year 2010 as-adjusted earnings per share to be
in the range of $0.88 to $0.94 per diluted share, reflecting growth of
4% to 11%.
As noted above, the Company’s earnings target excludes the impact of
non-cash stock-based compensation charges as well as the impact of
restructuring charges. While the amount of the non-cash stock-based
compensation charges will vary depending upon a number of factors, many
of which are not within the Company’s control, the Company currently
estimates that the after-tax impact of those expenses will range from
$0.20 to $0.24 per diluted share for the full year 2010. With regard to
restructuring charges, the Company has adjusted the top-end of its
estimate of total pre-tax charges related to the closing of the Toulon
facilities to a range of approximately $28 million to $30 million, of
which $27 million have been incurred to date. Additionally, we continue
to anticipate incurring pre-tax restructuring charges related to our
Creteil, France operations to total $3 million to $4 million, of which
$2.1 million of these charges have been incurred to date, the remainder
of which we expect to record in the first half of 2010.
The Company’s anticipated ranges for net sales, adjusted earnings per
share, stock-based compensation charges and restructuring charges are
forward-looking statements. They are subject to various risks and
uncertainties that could cause the Company’s actual results to differ
materially from the anticipated targets. The anticipated targets are not
predictions of the Company’s actual performance. See the cautionary
information about forward-looking statements in the “Safe-Harbor
Statement” section of this press release.
