VOL. 126 | NO. 29 | Friday, February 11, 2011
Wright Medical Posts Strong Fourth Quarter Sales, Income
By Aisling Maki
Wright Medical Group, Inc. Thursday reported increased net sales and net income for the fourth quarter ended Dec. 31.
The Arlington, Tenn.-based orthopedic device company reported net sales totaling $138.3 million, a 6 percent increase over $129.9 million in net sales during the fourth quarter of 2009. Net sales increased by 7 percent, excluding the impact of foreign currency.
Net income rose sharply with $8.9 million, or $0.22 per diluted share, in Q4 2010 compared to $2.2 million, or $0.06 per diluted share, in Q4 2009.
Net income for Q4 2010 included the after-tax effects of about $3 million of non-cash stock-based compensation expense and $1.3 million of expenses associated with deferred prosecution agreement.
Net income Q4 2009 included the after-tax effects of about $5.6 million of charges to write down a significant international receivable; $3 million of non-cash, stock-based compensation expense; $2.6 million of non-cash charges to write off cumulative translation adjustment balances associated with the substantially complete liquidation of certain foreign subsidiaries; and $2.6 million of restructuring charges.
As adjusted, Q4 2010 net income totaled $11.8 million, or $0.29 per diluted share, compared to net income, as adjusted, totaling $10.8 million, or $0.27 per diluted share, for Q4 2009.
“We are pleased with our ability to deliver fourth quarter revenue and earnings results above our communicated guidance ranges,” Wright Medical Group president and CEO Gary D. Henley said in a statement. “Our U.S. business benefited from an accelerating extremities growth rate and favorable early results from the launch of our Evolution Medial-Pivot knee system, and our international business continued to deliver the strong revenue results that we have seen throughout 2010. In addition to the better-than-expected revenue and earnings results, we also finished the year strong from a cash flow perspective, resulting in full year 2010 free cash flow of $24 million.”
Henley said 2010 was a challenging year for the orthopedics industry.
“Despite the industry-wide challenges, we were able to deliver revenue and earnings results in line with our original guidance for the year and produce free cash flow in excess of our original expectations,” he said. “This 2010 performance highlights the flexibility of our business model and the advantages of our business profile, which is unique within the orthopedic industry.”
Wright Medical has successfully weathered the economic downturn, which has compelled many potential patients to turn to older, lower-cost artificial joints and extremity implants or defer elective surgery altogether.
On Wednesday, the company announced its latest commercially available product offering with the launch of the Evolve Elbow Plating System, used to treat fractures.
The polished stainless steel system is designed to match the patient’s anatomy to reduce the need for intra-operative bending and minimize post-operative irritation. The system’s plates are equipped with a locking technology said to provide greater stability.
“There are well over 200,000 elbow fractures each year involving the distal humerus, proximal ulna and proximal radius with a significant percentage requiring surgical intervention,” said Eric E. Gay, Wright Medical’s senior director of Upper Extremity and Biologics. “The Evolve EPS bolsters our Evolve product family and significantly strengthens our elbow product offering.”
The more than 50-year-old Mid-South company, which employs roughly 1,000 people, is headquartered at 5677 Airline Road in Arlington.