Wright Medical Group Inc. (Wright Medical), a orthopaedic medical device company, has reported total net sales of $465.5 million for the full year of 2008, compared with the net sales of $386.8 million in the previous year-end. It has also reported a net income of $3.197 million, or $0.09 per share, for the full year of 2008, compared with the net loss of $0.96 million, or $0.03 per share, in the previous year-end.
Net sales totaled $120.1 million during the fourth quarter ended December 31, 2008, up 16% over net sales of $103.2 million during the fourth quarter of 2007, meeting its previously communicated outlook range of $119 million to $122 million. Excluding the impact of foreign currency, net sales increased 18% during the fourth quarter.
For the fourth quarter of 2008, the company recorded a net loss of $2.7 million, or $0.07 per diluted share, against net income for the fourth quarter of 2007 of $1.4 million, or $0.04 per diluted share. Net income 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 US governmental inquiries, $1.1 million of restructuring charges related to the previously announced closure of the company’s Toulon, France operations, and $18,000 of acquisition related inventory step-up amortization, as well as an $11.2 million tax provision associated with the write-off of French net operating losses (NOLs). Net income for the fourth quarter of 2007 included the after-tax effect of approximately $4.4 million of restructuring charges, $4.1 million of non-cash stock-based compensation expense, $3.9 million of charges associated with an unfavorable arbitration ruling, and $109,000 of acquisition related inventory step-up amortization.
Excluding those items previously mentioned, fourth quarter net income, as adjusted, increased 25% to $12.6 million in 2008 from $10.1 million in 2007, while diluted earnings per share, as adjusted, increased 15% to $0.31 for the fourth quarter of 2008 from $0.27 per diluted share for the fourth quarter of 2007. 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 our fourth quarter top- and bottom-line results, as we delivered sales growth that was among the best in our industry while continuing to expand our adjusted operating margin. Our sales growth during the fourth quarter continued to be broad-based as we experienced annual increases across all major product lines, as well as both in the U.S. and internationally. We are also very pleased with our full year performance which included sales growth of 20% combined with 270 basis points of adjusted SG&A leverage, producing an outstanding adjusted operating income growth of 36%.”
Henley continued, “Looking forward, while we remain clearly committed to the long-standing corporate financial objectives that we reiterated during our December guidance call, today we are adjusting our outlook for 2009 to incorporate an expectation for procedural demand in the current economy that is more in line with industry expectations, and also to reflect additional costs that will enable us to devote more resources to global compliance efforts this year. Taking these measures positions us for sustained success in the orthopaedic market place.”
The company has revised its sales target for the full year 2009 to a range of $500 million to $510 million against its previously-communicated guidance range of $510 million to $520 million. The company is also revising its previously-communicated as-adjusted earnings per share outlook to a target range for the full year of $0.85 to $0.92 per diluted share, down from $0.96 to $1.02 per share.
The company’s anticipated targets for the first quarter of 2009 for net sales are in the range of $120 million to $123 million, representing as-reported sales growth objectives between approximately 4% and 6% and constant-currency growth expectations of approximately 7% to 10%, with as-adjusted earnings per share results ranging from $0.17 to $0.19 per diluted share.