Wright Medical Group Inc. has reported revenue in fourth quarter 2007 was up 19 percent compared to the year-ago quarter, but earnings were down 75 percent due to ongoing restructuring costs and arbitration expenses.
Wright posted revenue of $103 million, compared to revenue of $86.6 million Q4 2006, outpacing analyst projections of $100.1 million. Earnings were $1.4 million, or 4 cents per share, compared to earnings of $5.7 million, or 16 cents per share for Q4 2006.
After two years as CEO, Gary Henley seems to be finding his traction, with Wright's international sales up 20 percent for the quarter to $40.2 million and domestic sales up 18 percent to $63 million.
More than 40 percent of Wright's sales are on foreign soil, with Japan and South Korea as particularly critical markets. International sales volume has been helped by a weak dollar.
Henley is an entrepreneur with a background in the orthopedic industry, one reason he was recruited to Wright in April 2005. He was the founder of Cecorp, which made the tiny cameras used in minimally invasive surgery; when Cecorp was acquired by Smith & Nephew, Henley kept the job and assumed the title of president of Smith & Nephew's Endoscopy Division. In 1996 he moved to Orthofix, which makes products for trauma rehab and spinal fusion.
As the smallest of the major orthopedic device companies in the Memphis area, Wright is in a unique position, Henley said. The size makes the company entrepreneurial by nature, but with smaller product runs, the per-unit research and development costs are higher. Wright has to be aggressively innovative to maintain its position, he said.
"We are the Apple Computer of the orthopedic world," he said.
Henley's strategy has been to focus on the core business of hips, knees and small joints such as knuckles, plus selective acquisitions in biologic products that complement the product line.