First Quarter 2017 Net Sales of $177
Million
Wright Medical Group N.V. (NASDAQ:WMGI) today reported financial
results for its first quarter ended March 26, 2017 and
reaffirmed 2017 guidance.
As a result of the previously announced sale of the large joints
(hip/knee) business to Corin Orthopaedics Holdings Limited (Corin),
this business which was previously reported as a separate reporting
segment is now reported as discontinued operations.
Net sales from continuing operations totaled $177.2 million
during the first quarter ended March 26, 2017, representing 5% as
reported growth, and 6% growth on a constant currency basis.
Gross margins from continuing operations were 79.0% during the
quarter ended March 26, 2017 and were 79.4% on a non-GAAP adjusted
basis. Reconciliations of all historical non-GAAP financial
measures used in this release to the most comparable GAAP measures
can be found in the attached financial tables.
Robert Palmisano, president and chief executive officer,
commented, “Our upper extremities business continued to have strong
growth as SIMPLICITI drove 13% growth in U.S. shoulder.
Additionally, we launched our PERFORM reversed glenoid in March and
anticipate that this will drive accelerating revenue in the second
half of the year as we deliver additional instrument sets to the
U.S. field.”
Palmisano continued, “In our U.S. lower extremities and
biologics business, we saw outstanding growth of 28% in the most
technologically advanced portions of our portfolio, which include
AUGMENT, SALVATION and Total Ankle Replacement. Growth in the
core lower extremities and biologics portfolio was significantly
lower, partially due to the revenue dis-synergies in the quarter,
which we anticipated. The key to improving our growth rates
in this core lower extremities and biologics portfolio is our sales
force expansion, which we have completed ahead of schedule.
This accelerated implementation of our sales force expansion
plan resulted in some short-term distraction in the first quarter
that we expect will be offset in the second half of the year.”
Palmisano further commented, “We had outstanding gross margin
performance of 79.0% as reported and 79.4% on a non-GAAP adjusted
basis, in the first quarter and adjusted EBITDA margin expansion of
260 basis points, right on track with our plan for the year.
We will continue to focus on improving our balance sheet and our
cash flow throughout 2017 and expect to make significant progress
on our specific Vital Few initiatives in this
area.”
Net loss from continuing operations for the first quarter of
2017 totaled $36.7 million, or $(0.35) per diluted share.
The company’s net loss from continuing operations for the first
quarter of 2017 included the after-tax effects of $3.0 million of
transition costs, an unrealized loss of $0.4 million related to
mark-to-market adjustments on derivatives, $11.0 million of
non-cash interest expense related to its convertible notes, and a
$6.2 million unrealized loss related to mark-to-market adjustments
on contingent value rights (CVRs) issued in connection with the
BioMimetic acquisition.
The company's first quarter 2017 non-GAAP net loss from
continuing operations, as adjusted for the above items, was $16.2
million. The company's first quarter 2017 non-GAAP adjusted
EBITDA from continuing operations, as defined in the non-GAAP to
GAAP reconciliation provided later in this release, was $18.2
million. The attached financial tables include reconciliations of
all historical non-GAAP measures to the most comparable GAAP
measures.
Cash, cash equivalents and restricted cash totaled $386.0
million as of the end of the first quarter of 2017. This
amount includes $150 million classified as restricted cash on the
company’s balance sheet that is held in escrow to fund a portion of
the metal-on-metal hip litigation Master Settlement Agreement
(MSA).
Palmisano concluded, “Today we are the leading
Extremities-Biologics company in the world, both in terms of
leading edge products and size. Through the remainder of the
year, we intend to build on our lead. We are right on track
with the key revenue growth drivers for 2017, and remain confident
in our full-year guidance, which calls for annual constant currency
growth of 12 to 14 percent, excluding the impacts of revenue
dis-synergies, the Salto divestiture and the impact of the extra
selling days. We continue to expect there will be strong
acceleration in the second half of the year as we annualize the
impact of the merger revenue dis-synergies and begin to realize the
benefits from an expanded U.S. sales force and new product
launches. In addition, I believe we are positioned well for
future success and achieving our key financial goals of mid-teens
constant currency net sales growth, gross margins in the high 70%
range and non-GAAP adjusted EBITDA margins of approximately 20%
three to four years post the close of the merger.”
Outlook
The company continues to anticipate net sales for full-year 2017
of approximately $755 million to $765 million, representing an as
reported growth rate of 9% to 11%. This range assumes:
- a negative impact from foreign currency exchange rates as
compared to 2016 of approximately 2%;
- $10 million of net sales dis-synergies resulting from customers
lost over the course of 2016 due to the sales force
integrations;
- approximately $3 million of dis-synergies from the anticipated
divestiture of the international Salto ankle business; and
- a positive impact of approximately 1% due to four extra selling
days in the fourth quarter of 2017.
The midpoint of this net sales guidance range assumes constant
currency growth of approximately 13%, excluding the negative
impacts of revenue dis-synergies and Salto divestiture of 2%, and
the approximately 1% positive impact of the extra selling
days. Additionally, the company anticipates the second half
of the year to grow faster than the first half of the year as it
realizes the benefits from its new product launches and sales force
expansion.
The company continues to anticipate full-year 2017 non-GAAP
adjusted EBITDA from continuing operations, as described in the
non-GAAP reconciliation provided later in this release, of $78.5
million to $85.5 million.
The company continues to anticipate non-GAAP adjusted earnings
per share from continuing operations, including share-based
compensation, as described in the non-GAAP to GAAP reconciliation
provided later in this release, for full-year 2017 of $(0.33) to
$(0.26) per diluted share.
The company estimates approximately 105.1 million diluted
weighted average ordinary shares outstanding for fiscal year
2017.
The company's non-GAAP adjusted EBITDA from continuing
operations target is measured by adding back to net loss from
continuing operations charges for interest, income taxes,
depreciation and amortization expenses, non-cash share-based
compensation expense and non-operating income and expense.
Additionally, the company’s adjusted EBITDA from continuing
operations target excludes possible future acquisitions; other
material future business developments; and due diligence,
transaction and transition costs associated with acquisitions and
divestitures. Further, this adjusted EBITDA from continuing
operations target excludes any expenses, earnings or losses related
to the divested large joints business, legacy Wright’s divested
OrthoRecon business and legacy Tornier’s divested ankle replacement
and silastic toe products.
The company’s non-GAAP adjusted earnings per share from
continuing operations target is measured by adding back to net loss
from continuing operations non-cash interest expense associated
with the 2017, 2020 and 2021 convertible notes; due diligence,
transaction and transition costs associated with acquisitions and
divestitures; mark-to-market adjustments to CVRs; non-cash
mark-to-market derivative adjustments; and charges for non-cash
amortization expenses, net of taxes. Note that as a result of the
company’s relatively low effective tax rate due to the valuation
allowance impacting a substantial portion of the company’s
income/loss, the company is currently estimating the tax effect on
amortization expense at 0%. Further, this adjusted earnings per
share from continuing operations target excludes possible future
acquisitions; other material future business developments; and any
expenses, earnings or losses related to the large joints
business.
All of the historical non-GAAP financial measures used in this
release are reconciled to the most directly comparable GAAP
measures. With respect to the company’s 2017 financial guidance
regarding non-GAAP adjusted EBITDA from continuing operations and
non-GAAP adjusted earnings per share from continuing operations,
however, the company cannot provide a quantitative reconciliation
to the most directly comparable GAAP measures without unreasonable
effort due to its inability to make accurate projections and
estimates related to certain information needed to calculate some
of the adjustments as described above, including the market driven
fair value adjustments to CVRs and derivatives. The anticipated
differences between these non-GAAP financial measures and the most
directly comparable GAAP measure are described above
qualitatively.
The company's anticipated ranges for net sales from continuing
operations, non-GAAP adjusted EBITDA from continuing operations,
and non-GAAP adjusted earnings per share from continuing operations
are forward-looking statements, as are any other statements that
anticipate or aspire to future events or performance. 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 “Cautionary Note Regarding
Forward-Looking Statements” section of this release.
Supplemental Financial Information
To view the first quarter of 2017 supplemental financial
information, visit ir.wright.com. For historical information
on Wright Medical Group N.V. segment reporting changes and non-GAAP
combined pro forma financial information, please refer to the
presentation posted on Wright’s website at ir.wright.com in the
“Financial Information” section.
Internet Posting of Information
Wright routinely posts information that may be important to
investors in the “Investor Relations” section of its website at
www.wright.com. The company encourages investors and
potential investors to consult the Wright website regularly for
important information about Wright.
Conference Call and Webcast
As previously announced, Wright will host a conference call
starting at 3:30 p.m. Central Time today. The live dial-in
number for the call is (844) 295-9436 (U.S.) / (574) 990-1040
(Outside U.S.). The participant passcode for the call is
“Wright.” A simultaneous webcast of the call will be
available via Wright’s corporate website at www.wright.com.
A replay of the call will be available beginning at 5:30 p.m.
Central Time on May 3, 2017 through May 10, 2017. To hear
this replay, dial (855) 859-2056 (U.S.) / (404) 537-3406 (Outside
U.S.) and enter code 90734703. A replay of the conference
call will also be available via the internet starting today and
continuing for at least 12 months. To access a replay of the
conference call via the internet, go to the Investor Relations
-Presentations/Calendar section of the company’s corporate website
located at www.wright.com.
The conference call may include a discussion of non-GAAP
financial measures. Reference is made to the most directly
comparable GAAP financial measures, the reconciliation of the
differences between the two financial measures, and the other
information included in this release, the Current Report on Form
8-K filed with the U.S. Securities and Exchange Commission (SEC)
today, or otherwise available in the “Investor Relations -
Supplemental Financial Information” section of the company's
corporate website located at www.wright.com.
The conference call may include forward-looking
statements. See the cautionary information about
forward-looking statements in the “Cautionary Note Regarding
Forward-Looking Statements” section of this release.
About Wright Medical Group N.V.
Wright Medical Group N.V. is a global medical device company
focused on extremities and biologics products. The company is
committed to delivering innovative, value-added solutions improving
the quality of life for patients worldwide. Wright is a
recognized leader of surgical solutions for the upper extremities
(shoulder, elbow, wrist and hand), lower extremities (foot and
ankle) and biologics markets, three of the fastest growing segments
in orthopaedics. For more information about Wright, visit
www.wright.com.
™ and ® denote trademarks and registered trademarks of Wright
Medical Group N.V. or its affiliates, registered as indicated
in the United States, and in other countries. All other
trademarks and trade names referred to in this release are the
property of their respective owners.
Non-GAAP Financial Measures
To supplement the company’s consolidated financial statements
prepared in accordance with U.S. generally accepted accounting
principles, the company uses certain non-GAAP financial measures in
this release. Reconciliations of the historical non-GAAP financial
measures used in this release to the most comparable GAAP measures
for the respective periods can be found in tables later in this
release. Wright’s non-GAAP financial measures include net sales,
excluding the impact of foreign currency; net income, as adjusted;
EBITDA, as adjusted; gross margin, as adjusted; earnings, as
adjusted; and earnings, as adjusted, per diluted share, in each
case, from continuing operations. 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. Wright’s
non-GAAP financial measures exclude such items as non-cash interest
expense related to the company's 2017 convertible notes, 2020
convertible notes and 2021 convertible notes, net gains and losses
on mark-to-market adjustments on and settlements of derivative
assets and liabilities, write-off of unamortized debt discount and
deferred financing charges following the partial settlement of 2017
convertible notes and 2020 convertible notes, mark-to-market
adjustments on CVRs, and transaction and transition costs, 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. It is for this reason
that the company cannot provide without unreasonable effort a
quantitative reconciliation to the most directly comparable GAAP
measures for its 2017 financial guidance regarding non-GAAP
adjusted EBITDA from continuing operations and non-GAAP adjusted
earnings per share from continuing operations. Management uses the
non-GAAP measures in this release 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 non-GAAP
financial measures only as a supplement to, not as a substitute for
or as superior to, measures of financial performance prepared in
accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This release includes forward-looking statements under the
Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified
by the use of words such as “anticipate,” “expect,” “intend,”
“could,” “may,” “will,” “believe,” “estimate,” “look forward,”
“forecast,” “goal,” “target,” “project,” “continue,”
“outlook,” “guidance,” “future,” other words of similar meaning and
the use of future dates. Forward-looking statements in this
release include, but are not limited to, statements about the
company’s anticipated financial results for 2017, including
net sales from continuing operations, adjusted EBITDA
from continuing operations and adjusted earnings per share
from continuing operations; anticipated sales acceleration in the
second half of the year and benefits from expanded U.S. sales force
and new product launches, anticipated sales and cost synergies and
dis-synergies and the timing thereof; the company’s expectations
regarding the benefits of its merger with Tornier and integration
efforts and progress; and the company’s ability to achieve its key
financial goals. Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Each
forward-looking statement contained in this release is subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statement.
Applicable risks and uncertainties include, among others, the
failure to integrate the businesses and realize net sales synergies
and cost savings from the merger with Tornier or delay in
realization thereof; operating costs and business disruption as a
result of the merger, including adverse effects on employee
retention and sales force productivity and on business
relationships with third parties; integration costs; actual or
contingent liabilities; adverse effects of diverting resources and
attention to providing transition services to the purchaser of the
large joints business; the adequacy of the company’s capital
resources and need for additional financing; the timing of
regulatory approvals and introduction of new products; physician
acceptance, endorsement, and use of new products; failure to
achieve the anticipated benefits from approval of AUGMENT® Bone
Graft; the effect of regulatory actions, changes in and adoption of
reimbursement rates; product liability claims and product recalls;
pending and threatened litigation; risks associated with the
metal-on-metal master settlement agreement and the settlement
agreement with the three settling insurers; risks associated with
international operations and expansion; fluctuations in foreign
currency exchange rates; other business effects, including the
effects of industry, economic or political conditions outside of
the company’s control; reliance on independent distributors and
sales agencies; competitor activities; changes in tax and other
legislation; and the risks identified under the heading “Risk
Factors” in Wright’s Annual Report on Form 10-K for the year ended
December 25, 2016 filed by Wright with the SEC on February 23, 2017
and in other subsequent SEC filings by Wright. Investors should not
place considerable reliance on the forward-looking statements
contained in this release. Investors are encouraged to read
Wright’s filings with the SEC, available at www.sec.gov, for a
discussion of these and other risks and uncertainties. The
forward-looking statements in this release speak only as of the
date of this release, and Wright undertakes no obligation to update
or revise any of these statements. Wright’s business is subject to
substantial risks and uncertainties, including those referenced
above. Investors, potential investors, and others should give
careful consideration to these risks and uncertainties.
--Tables Follow--
Wright Medical Group N.V. |
Condensed Consolidated Statements of
Operations |
(dollars in thousands, except per share
data--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
Net sales |
$ |
177,191 |
|
|
$ |
169,291 |
|
Cost of sales |
37,126 |
|
|
46,666 |
|
Gross
profit |
140,065 |
|
|
122,625 |
|
Operating
expenses: |
|
|
|
Selling,
general and administrative |
129,834 |
|
|
134,746 |
|
Research
and development |
12,432 |
|
|
12,116 |
|
Amortization of intangible assets |
7,397 |
|
|
6,457 |
|
Total
operating expenses |
149,663 |
|
|
153,319 |
|
Operating
loss |
(9,598 |
) |
|
(30,694 |
) |
Interest expense,
net |
18,195 |
|
|
11,854 |
|
Other expense (income),
net |
7,975 |
|
|
(1,068 |
) |
Loss from
continuing operations before income taxes |
(35,768 |
) |
|
(41,480 |
) |
Provision (benefit) for
income taxes |
939 |
|
|
(1,287 |
) |
Net loss
from continuing operations |
$ |
(36,707 |
) |
|
$ |
(40,193 |
) |
Loss from discontinued
operations, net of tax |
$ |
(21,992 |
) |
|
$ |
(7,799 |
) |
Net
loss |
$ |
(58,699 |
) |
|
$ |
(47,992 |
) |
|
|
|
|
Net loss from
continuing operations per share, basic and diluted |
$ |
(0.35 |
) |
|
$ |
(0.39 |
) |
|
|
|
|
Net loss per share,
basic and diluted |
$ |
(0.57 |
) |
|
$ |
(0.47 |
) |
|
|
|
|
Weighted-average number
of shares outstanding-basic and diluted |
103,663 |
|
|
102,704 |
|
Wright Medical Group N.V. |
Consolidated Net Sales Analysis |
(dollars in thousands--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
|
%change |
U.S. |
|
|
|
|
|
Lower
extremities |
55,461 |
|
|
55,278 |
|
|
0.3 |
% |
Upper
extremities |
55,958 |
|
|
50,001 |
|
|
11.9 |
% |
Biologics |
18,634 |
|
|
17,128 |
|
|
8.8 |
% |
Sports
med & other |
2,101 |
|
|
2,137 |
|
|
(1.7 |
)% |
Total
U.S. |
$ |
132,154 |
|
|
$ |
124,544 |
|
|
6.1 |
% |
|
|
|
|
|
|
International |
|
|
|
|
|
Lower
extremities |
13,642 |
|
|
15,542 |
|
|
(12.2 |
)% |
Upper
extremities |
22,422 |
|
|
20,975 |
|
|
6.9 |
% |
Biologics |
5,171 |
|
|
4,198 |
|
|
23.2 |
% |
Sports
med & other |
3,802 |
|
|
4,032 |
|
|
(5.7 |
)% |
Total
International |
$ |
45,037 |
|
|
$ |
44,747 |
|
|
0.6 |
% |
|
|
|
|
|
|
Global |
|
|
|
|
|
Lower
extremities |
69,103 |
|
|
70,820 |
|
|
(2.4 |
)% |
Upper
extremities |
78,380 |
|
|
70,976 |
|
|
10.4 |
% |
Biologics |
23,805 |
|
|
21,326 |
|
|
11.6 |
% |
Sports
med & other |
5,903 |
|
|
6,169 |
|
|
(4.3 |
)% |
Total net
sales |
$ |
177,191 |
|
|
$ |
169,291 |
|
|
4.7 |
% |
Wright Medical Group N.V. |
Supplemental Net Sales
Information |
(unaudited) |
|
|
Three months ended March 26, 2017 net sales
growth/(decline) |
|
U.S. as reported |
Int'l constant currency |
Int'l as reported |
Global constant currency |
Global as reported |
Product line |
|
|
|
|
|
Lower
extremities |
0 |
% |
(8 |
%) |
(12 |
%) |
(2 |
%) |
(2 |
%) |
Upper
extremities |
12 |
% |
10 |
% |
7 |
% |
11 |
% |
10 |
% |
Biologics |
9 |
% |
24 |
% |
23 |
% |
12 |
% |
12 |
% |
Sports
med & other |
(2 |
%) |
0 |
% |
(6 |
%) |
0 |
% |
(4 |
%) |
Total net
sales |
6 |
% |
4 |
% |
1 |
% |
6 |
% |
5 |
% |
Wright Medical Group N.V. |
Reconciliation of Non-GAAP Adjusted Gross
Margins to Gross Margins from Continuing Operations |
(dollars in thousands--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
Gross profit
from continuing operations, as reported |
$ |
140,065 |
|
|
$ |
122,625 |
|
Gross margins
from continuing operations, as reported |
79.0 |
% |
|
72.4 |
% |
Reconciling items
impacting gross profit: |
|
|
|
Inventory
step-up amortization |
— |
|
|
10,229 |
|
Transaction and transition costs |
685 |
|
|
124 |
|
Non-GAAP gross
profit from continuing operations, as adjusted |
$ |
140,750 |
|
|
$ |
132,978 |
|
Net sales
from continuing operations |
177,191 |
|
|
169,291 |
|
Non-GAAP
adjusted gross margins from continuing operations |
79.4 |
% |
|
78.5 |
% |
Wright Medical Group N.V. |
Reconciliation of Adjusted Non-GAAP Earnings
Per Share to Net Loss from Continuing Operations Per
Share |
(dollars in thousands, except per share
data--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
Net loss from
continuing operations, as reported |
$ |
(36,707 |
) |
|
$ |
(40,193 |
) |
Net loss from
continuing operations per share, as reported |
$ |
(0.35 |
) |
|
$ |
(0.39 |
) |
Reconciling items: |
|
|
|
Inventory
step-up amortization |
— |
|
|
10,229 |
|
Non-cash
interest expense on convertible notes 1 |
10,999 |
|
|
7,056 |
|
Derivatives mark-to-market adjustments 2 |
365 |
|
|
(6,641 |
) |
Transaction and transition costs |
2,972 |
|
|
10,833 |
|
CVR
mark-to-market adjustments 2 |
6,160 |
|
|
5,324 |
|
Tax
effect of reconciling items 3 |
(18 |
) |
|
(1,189 |
) |
Non-GAAP net
loss from continuing operations, as adjusted |
$ |
(16,229 |
) |
|
$ |
(14,581 |
) |
Add back
amortization of intangible assets |
7,397 |
|
|
6,457 |
|
Adjusted
non-GAAP earnings |
$ |
(8,832 |
) |
|
$ |
(8,124 |
) |
Weighted-average basic shares outstanding |
103,663 |
|
|
102,704 |
|
Adjusted
non-GAAP earnings per share |
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
1 Impacting
interest expense, net |
|
|
|
|
|
|
|
2
Impacting other expense (income), net |
3
Determined based upon the effective tax rate in the jurisdiction in
which the expense was incurred. |
Wright Medical Group N.V. |
Reconciliation of Non-GAAP Adjusted EBITDA to
Net Loss from Continuing Operations |
(dollars in thousands--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
Net loss from
continuing operations |
$ |
(36,707 |
) |
|
$ |
(40,193 |
) |
Interest expense,
net |
18,195 |
|
|
11,854 |
|
Provision (benefit)
from income taxes |
939 |
|
|
(1,287 |
) |
Depreciation |
13,446 |
|
|
12,850 |
|
Amortization |
7,397 |
|
|
6,457 |
|
Non-GAAP
EBITDA |
$ |
3,270 |
|
|
$ |
(10,319 |
) |
Reconciling items
impacting EBITDA: |
|
|
|
Non-cash
share-based compensation expense |
3,954 |
|
|
3,317 |
|
Other
expense (income), net |
7,975 |
|
|
(1,068 |
) |
Inventory
step-up amortization |
— |
|
|
10,229 |
|
Transaction and transition costs |
2,972 |
|
|
10,833 |
|
Non-GAAP
adjusted EBITDA |
$ |
18,171 |
|
|
$ |
12,992 |
|
Net sales from
continuing operations |
|
177,191 |
|
|
|
169,291 |
|
Non-GAAP
adjusted EBITDA margin |
|
10.3 |
% |
|
|
7.7 |
% |
Wright Medical Group N.V. |
Reconciliation of Other Non-GAAP Financial
Measures to Other As Reported Results |
(dollars in thousands--unaudited) |
|
|
Three months ended |
|
March 26, 2017 |
|
March 27, 2016 |
Net
sales |
$ |
177,191 |
|
|
$ |
169,291 |
|
|
|
|
|
Selling,
general and administrative expense, as reported |
$ |
129,834 |
|
|
$ |
134,746 |
|
Selling, general and
administrative expense as a percentages of net sales, as
reported |
73.3 |
% |
|
79.6 |
% |
Reconciling items
impacting selling, general and administrative expense: |
|
|
|
Transaction and transition costs - selling, general and
administrative |
2,287 |
|
|
10,560 |
|
Selling,
general and administrative expense, as adjusted |
$ |
127,547 |
|
|
$ |
124,186 |
|
Selling,
general and administrative expense as a percentage of net sales, as
adjusted |
72.0 |
% |
|
73.4 |
% |
|
|
|
|
Research &
development expense, as reported |
$ |
12,432 |
|
|
$ |
12,116 |
|
Research &
development expense as a percentages of net sales, as reported |
7.0 |
% |
|
7.2 |
% |
Reconciling items
impacting research & development expense: |
|
|
|
Transaction and transition costs - research & development |
— |
|
|
149 |
|
Research &
development expense, as adjusted |
$ |
12,432 |
|
|
$ |
11,967 |
|
Research &
development expense as a percentage of net sales, as
adjusted |
7.0 |
% |
|
7.1 |
% |
Wright Medical Group N.V. |
Condensed Consolidated Balance
Sheets |
(dollars in thousands--unaudited) |
|
|
March 26, 2017 |
|
December 25, 2016 |
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
235,982 |
|
|
$ |
262,265 |
|
|
|
Restricted cash |
150,000 |
|
|
150,000 |
|
|
|
Accounts
receivable, net |
119,328 |
|
|
130,602 |
|
|
|
Inventories |
153,066 |
|
|
150,849 |
|
|
|
Prepaid
expenses and other current assets 1 |
327,878 |
|
|
65,909 |
|
|
|
Total
current assets |
986,254 |
|
|
759,625 |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net |
200,098 |
|
|
201,732 |
|
|
|
Goodwill and intangible
assets, net |
1,081,954 |
|
|
1,082,839 |
|
|
|
Other assets 1 |
159,711 |
|
|
246,390 |
|
|
|
Total
assets |
$ |
2,428,017 |
|
|
$ |
2,290,586 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
36,057 |
|
|
$ |
32,866 |
|
|
|
Accrued
expenses and other current liabilities 1 |
697,645 |
|
|
407,704 |
|
|
|
Current
portion of long-term obligations |
21,697 |
|
|
33,948 |
|
|
|
2021
Notes 1 |
285,448 |
|
|
— |
|
|
|
Total
current liabilities |
1,040,847 |
|
|
474,518 |
|
|
|
Long-term obligations
1 |
507,430 |
|
|
780,407 |
|
|
|
Other liabilities
1 |
224,524 |
|
|
348,797 |
|
|
|
Total
liabilities |
1,772,801 |
|
|
1,603,722 |
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
655,216 |
|
|
686,864 |
|
|
|
Total
liabilities and shareholders' equity |
$ |
2,428,017 |
|
|
$ |
2,290,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________ |
|
|
|
|
|
|
|
|
|
1 As
of March 26, 2017, the closing price of our ordinary shares was
greater than 130% of the 2021 Notes conversion price
for 20 or more of the 30 consecutive trading
days preceding the quarter-end; and, therefore, the holders of the
2021 Notes may convert the notes during the succeeding quarterly
period. Due to the ability of the holders of the 2021 Notes to
convert the notes during this period, the carrying value of the
2021 Notes and the fair value of the 2021 Notes Conversion
Derivative were classified as current liabilities, and the fair
value of the 2021 Notes Hedges were classified as current assets as
of March 26, 2017. The respective balances were classified as
long-term as of December 25, 2016. |
Investors & Media:
Julie D. Tracy
Sr. Vice President, Chief Communications Officer
Wright Medical Group N.V.
(901) 290-5817
julie.tracy@wright.com
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