Wright Medical Group Inc. reported net sales fell 8 percent to $126.9 million in the fourth quarter of 2011, compared to $138.3 million during the same period in 2010.
The Arlington-based orthopedic medical device company said U.S. sales in Q4 were negatively impacted by distributor transitions that occurred in Q3, as well as challenges associated with implementing enhancements to the company’s compliance processes.
Q4 net income totaled $1.2 million, or $0.03 per diluted share, compared to net income of $8.9 million, or $0.22 per diluted share, in Q4 2010.
Wright Medical’s net income for the quarter ended Dec. 31 included after-tax effects of $2.8 million of charges associated with the cost restructuring; $3.4 million in expenses associated with a deferred prosecution agreement; $2.4 million of non-cash stock-based compensation expense; and a $1 million income tax provision for an estimated IRS audit liability.
The company’s Q4 net income, as adjusted, was $6.7 million in 2011 compared to $11.8 million in 2010.
“Although our fourth quarter results were stronger than anticipated, we are not satisfied with our 2011 financial performance relative to the market opportunities,” said Robert Palmisano, Wright Medical president and CEO, in a statement. “And we have much work ahead of us to improve our execution, efficiency and return to a high-growth company. My top priorities will be to grow our foot and ankle business above market rates, run a much more focused and efficient ortho-recon business, and increase cash generation. I believe these initiatives will in turn drive growth and shareholder value.”