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Wright Medical Group, Inc. Hosts Financial Guidance Conference Call

^{Published on 2008-12-09 17:51:33 - Market Wire}
 

ARLINGTON, Tenn.--([ BUSINESS WIRE ])--Wright Medical Group, Inc. (NASDAQ: WMGI):

Wright Medical Group, Inc. (NASDAQ: WMGI), a global orthopaedic medical device company specializing in the design, manufacture and marketing of reconstructive joint devices and biologics, earlier today held a conference call reaffirming its previously-communicated net sales and profit outlook for the fourth quarter of 2008, and provided the Company's expectations of financial performance for the year ending December 31, 2009, and beyond.

During the conference call, the Company reaffirmed its outlook for fourth quarter 2008 financial performance, originally communicated on November 3, 2008. The reaffirmed targets for the fourth quarter of 2008 call for net sales in the range of $119 million to $122 million and adjusted earnings per share in the range of $0.28 to $0.30 per diluted share. The Company added further that it would likely report actual net sales results closer to the lower end of its $119 million to $122 million net sales range. The Company's fourth quarter outlook for earnings per share, as adjusted, excludes the impact of non-cash stock-based compensation, restructuring charges, expenses associated with the ongoing Department of Justice inquiry and other charges including acquisition-related inventory step-up amortization and a non-cash adjustment to certain foreign net operating loss carryforwards.

The Company's anticipated net sales targets for the full year 2008 are in the range of $464 million to $467 million, representing annualized growth of approximately 20% to 21%, with adjusted earnings per share results (exclusive of the aforementioned adjustments) in the range of $0.88 to $0.90 per diluted share. Consistent with past practice, the Company intends to release finalized results for the fourth quarter and full year 2008 in mid-February, following the completion of its annual audit.

The Company's anticipated revenue target for 2009 is in the range of $510 million to $520 million. Calculated from the mid-point of the Company's current 2008 guidance target, the 2009 revenue target represents an annual growth objective between 10% and 12% on an as-reported basis and 13% to 15% on a constant currency basis. The Company's profit objective for the full year (excluding possible acquisitions or material business developments) consists of adjusted earnings per share targets of $0.96 to $1.02, representing an annual growth objective between 8% and 15%. The Company also noted that it anticipates a continuation of strong operating performance in 2009 with expectations for annual adjusted operating income growth of 18% to 25% for the year.

For 2010, the Company communicated objectives that call for net sales in a range of $570 million to $580 million, representing an annualized growth objective (as calculated from the mid-point of the Company's 2009 guidance) between 11% and 13%, with anticipated profit targets for adjusted earnings per share of $1.16 to $1.21, representing 17% to 22% annual growth over 2009.

The financial targets discussed above exclude the impact of non-cash stock-based compensation charges, restructuring charges, expenses associated with the ongoing Department of Justice inquiry and other charges and acquisition-related inventory step-up amortization, as well as any possible future acquisitions or material business developments. 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 stock-based compensation will range from $0.23 to $0.26 per diluted share for the full year 2009. Inclusive of the Company's mid-point estimate for stock-based compensation, the Company's 2009 outlook calls for adjusted earnings per share in a range of $0.72 to $0.78, representing 11% to 20% annual growth over 2008.

The Company continues to estimate that the total pre-tax charges related to the closing of the Toulon facilities will be in the range of approximately $28 million to $32 million, of which $24.5 million has been incurred cumulative to date through the third quarter of 2008. The Company expects to record restructuring charges throughout 2009.

The Company's anticipated targets 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.

The conference call was held to provide financial analysts the opportunity to ask questions necessary to complete financial models. The call was open to the public and is now archived on the internet in the "Corporate – Investor Information" section of the Company's website at [ www.wmt.com ], and will be available for a period of 12 months. A recorded replay of the call is also accessible from 7:30 p.m., Central, today until 12:00 a.m., Central, on December 16, 2008. To access this recording, domestic callers may dial 888-286-8010, and international callers may dial 617-801-6888, followed by the confirmation code 52433665.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as net sales, excluding the impact of foreign currency, operating income, as adjusted, net income, as adjusted, net income, as adjusted, per diluted share, and effective tax rate, as adjusted. The Company's management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the Company's operations, period over period. The measures exclude such items as business development activities, including purchased in-process research and development, the financial impact of significant litigation, costs related to the DOJ inquiry, restructuring charges, and non-cash stock-based expense, all of which may be highly variable, difficult to predict and of a size that could have substantial impact on the Company's reported results of operations for a period. Management uses these measures internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to employee performance compensation targets. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

Safe-Harbor Statement

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.All statements made in this press release, other than statements of historical fact, are forward-looking statements.Forward-looking statements reflect management's current knowledge, assumptions, beliefs, estimates, and expectations and express management's current views of future performance, results, and trends and may be identified by their use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," and other similar terms. The Company wishes to caution readers that actual results might differ materially from those described in the forward-looking statements.Forward-looking statements are subject to a number of risks and uncertainties, including the factors discussed in the Company's filings with the Securities and Exchange Commission (including the Company's annual report on Form 10-K for the year ended December 31, 2007,under the heading, "Risk Factors" and its quarterly reports), which could cause the Company's actual results to materially differ from those described in the forward-looking statements.Although the Company believes that the forward-looking statements are accurate, there can be no assurance that any forward-looking statement will prove to be accurate.A forward-looking statement should not be regarded as a representation by the Company that the results described therein will be achieved.The Company wishes to caution readers not to place undue reliance on any forward-looking statement.The forward-looking statements are made as of the date of this press release. The Company assumes no obligation to update any forward-looking statement after this date.

Wright Medical Group, Inc. is a global orthopaedic medical device company specializing in the design, manufacture and marketing of reconstructive joint devices and biologics. The Company has been in business for more than 50 years and markets its products in over 60 countries worldwide. For more information about Wright Medical, visit the Company's website at [ www.wmt.com ].