Fourth Quarter 2018 Net Sales, Including
Cartiva, of Approximately $238 Million
Wright Medical Group N.V. (NASDAQ: WMGI) today announced
preliminary, unaudited fourth quarter and full-year 2018 net sales
results and reaffirms its previously provided full-year 2018
adjusted EBITDA guidance.
The company expects net sales for the fourth quarter of 2018 to
be approximately $238.1 million, representing growth of 9.4% as
reported and 10.3% on a constant currency basis, including the
negative impact of four fewer selling days in the fourth quarter of
2018, which the company estimates to be approximately $9 million or
4.3%. For the full-year 2018, the company expects net sales
to be approximately $836.2 million, representing growth of
approximately 12.2% as reported and 11.6% on a constant currency
basis, including the negative impact of four fewer selling days in
the fourth quarter of 2018. As stated previously, the company
is unable to determine the impact of the four fewer selling days on
individual product lines; however, it had a disproportionate impact
on the U.S. business. These preliminary, unaudited financial
results for the quarter and year ended December 30, 2018 are based
on current expectations and are subject to quarter-end closing
adjustments; actual results may differ.
Robert Palmisano, president and chief executive officer,
commented, “Our preliminary fourth quarter results represent an
outstanding performance across our businesses. This
performance was driven by continued strong shoulder growth,
including the ongoing launch of our PERFORM Reversed glenoid and
continued contributions from our SIMPLICITI shoulder system.
We anticipate that these products, as well as accelerating adoption
of our BLUEPRINT enabling technology and the upcoming launch of our
REVIVE revision shoulder system, will continue to drive strong
shoulder sales growth in 2019 and beyond.”
Palmisano further commented, “In our U.S. lower extremities
business, we got off to a very strong start with Cartiva revenue of
approximately $9.5 million, which exceeded our expectations in the
fourth quarter. On January 1, Cartiva was fully launched with
our U.S. lower extremities sales force, including the integration
of the former Cartiva distributors that we have chosen to
retain. We also saw continued strong growth in our core
products as well as in total ankle. We intend to continue to
focus on strong execution and new product launches throughout
2019.”
New Long-Term Financial Targets Announced
As previously announced, the company anticipates achieving its
goal of 20% adjusted EBITDA margins for the full fourth quarter of
2019.
The company also announced new three-year financial targets for
2019 through 2021:
- Deliver double-digit, constant currency net sales growth each
year
- Maintain adjusted gross margin in the high 70s% range each
year
- Expand adjusted EBITDA margin to the mid-20% range exiting
2021
Palmisano concluded, “Delivering on these long-term financial
targets is expected to make Wright a company with a best in class
combination of size, growth and adjusted EBITDA margin. I
believe our leadership positions in high-growth markets, combined
with specialized sales forces and differentiated technologies
positions us well to achieve these targets and deliver enhanced
shareholder value.”
Wright plans to report its full financial results and provide
more detail for its fourth quarter and full-year 2018 financial
results, as well as issue its 2019 financial guidance, after the
market closes on Tuesday, February 26, 2019, to be followed by its
quarterly conference call at 3:30 p.m. Central Time that day.
Wright Medical to Present Today at J.P. Morgan
Healthcare Conference
Wright’s management will present today, January 7, 2019, at the
J.P. Morgan Healthcare Conference at 1:30 p.m. Pacific Time.
A live audio webcast of the conference presentation and the Q&A
session, along with the accompanying presentation materials, will
be available on Wright’s corporate website at www.wright.com, under
the “Investors” link. The presentation materials, as well as
the reconciliations of its non-GAAP financial measures, will be
posted prior to the presentation as soon as practicable after the
issuance of this press release. The audio webcast and
accompanying presentation materials will be archived on this site
under the “Investor Presentations” link following the
conference.
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.
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. 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.
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,” “plans,” “intend,”
“could,” “may,” “will,” “believe,” “estimate,” “continue,”
“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, the preliminary and unaudited net sales
results for fourth quarter and full year of 2018 and statements
about the company’s anticipated financial results for 2018,
including adjusted EBITDA from continuing operations, continued
strong shoulder sales growth, accelerating adoption of BLUEPRINT
enabling technology, upcoming launch of REVIVE revision shoulder
system, strong execution and new product launches during 2019 and
new long-term financial targets. 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, risk that Wright’s final net sales results will deviate
from the preliminary, unaudited net sales results in this release;
failure to achieve anticipated financial results for 2018 or new
long-term financial targets, failure to achieve the anticipated
financial benefits of the recent Cartiva acquisition, unanticipated
clinical performance issues with Cartiva products or the
introduction of competitive products with clinical performance
attributes that are superior to Cartiva products, failure to
achieve wide market acceptance of the Cartiva products due to
clinical, regulatory, cost, reimbursement or other issues, the
failure of the company’s 2017 U.S. sales force additions to achieve
expected results, delay or failure to drive U.S. lower extremities
or biologics sales to anticipated levels; continued supply
constraints; failure to integrate the legacy Wright and Tornier
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 commercial sales of AUGMENT® Bone Graft
and other new products; 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 the subsequent metal-on-metal settlement agreements
and ability to obtain the additional new insurance proceeds; 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 31, 2017 filed by Wright with the
SEC on February 28, 2018 and subsequent SEC filings by Wright,
including without limitation its Quarterly Report on Form 10-Q for
the quarter ended September 30, 2018 filed with the SEC on November
8, 2018. 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. |
|
Consolidated Net Sales Analysis |
|
(dollars in thousands--unaudited) |
|
|
|
Three months ended |
|
December 30, 2018 |
|
December 31, 2017 |
|
Legacy Wright |
|
Standalone Cartiva |
|
Wright Medical Group N.V. |
|
Wright Medical Group N.V. |
U.S. |
|
|
|
|
|
|
|
Lower
extremities |
67,679 |
|
|
9,167 |
|
|
76,846 |
|
|
66,816 |
|
Upper
extremities |
78,151 |
|
|
— |
|
|
78,151 |
|
|
71,685 |
|
Biologics |
24,024 |
|
|
— |
|
|
24,024 |
|
|
21,814 |
|
Sports
med & other |
2,584 |
|
|
— |
|
|
2,584 |
|
|
2,242 |
|
Total
U.S. |
$ |
172,438 |
|
|
$ |
9,167 |
|
|
$ |
181,605 |
|
|
$ |
162,557 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Lower
extremities |
15,922 |
|
|
319 |
|
|
16,241 |
|
|
16,101 |
|
Upper
extremities |
30,048 |
|
|
— |
|
|
30,048 |
|
|
28,093 |
|
Biologics |
7,369 |
|
|
— |
|
|
7,369 |
|
|
6,784 |
|
Sports
med & other |
2,884 |
|
|
— |
|
|
2,884 |
|
|
4,067 |
|
Total
International |
$ |
56,223 |
|
|
$ |
319 |
|
|
$ |
56,542 |
|
|
$ |
55,045 |
|
|
|
|
|
|
|
|
|
Global |
|
|
|
|
|
|
|
Lower
extremities |
83,601 |
|
|
9,486 |
|
|
93,087 |
|
|
82,917 |
|
Upper
extremities |
108,199 |
|
|
— |
|
|
108,199 |
|
|
99,778 |
|
Biologics |
31,393 |
|
|
— |
|
|
31,393 |
|
|
28,598 |
|
Sports
med & other |
5,468 |
|
|
— |
|
|
5,468 |
|
|
6,309 |
|
Total net
sales |
$ |
228,661 |
|
|
$ |
9,486 |
|
|
$ |
238,147 |
|
|
$ |
217,602 |
|
|
Fiscal year ended |
|
December 30, 2018 |
|
December 31, 2017 |
|
Legacy Wright |
|
Standalone Cartiva |
|
Wright Medical Group N.V. |
|
Wright Medical Group N.V. |
U.S. |
|
|
|
|
|
|
|
Lower
extremities |
241,568 |
|
|
9,167 |
|
|
250,735 |
|
|
|
228,044 |
|
Upper
extremities |
281,314 |
|
|
— |
|
|
281,314 |
|
|
|
239,965 |
|
Biologics |
83,077 |
|
|
— |
|
|
83,077 |
|
|
|
78,361 |
|
Sports
med & other |
8,412 |
|
|
— |
|
|
8,412 |
|
|
|
8,141 |
|
Total
U.S. |
$ |
614,371 |
|
|
$ |
9,167 |
|
|
$ |
623,538 |
|
|
$ |
554,511 |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
Lower
extremities |
60,430 |
|
|
319 |
|
|
60,749 |
|
|
|
58,473 |
|
Upper
extremities |
114,460 |
|
|
— |
|
|
114,460 |
|
|
|
94,699 |
|
Biologics |
25,757 |
|
|
— |
|
|
25,757 |
|
|
|
22,276 |
|
Sports
med & other |
11,686 |
|
|
— |
|
|
11,686 |
|
|
|
15,030 |
|
Total
International |
$ |
212,333 |
|
|
$ |
319 |
|
|
$ |
212,652 |
|
|
$ |
190,478 |
|
|
|
|
|
|
|
|
|
Global |
|
|
|
|
|
|
|
Lower
extremities |
301,998 |
|
|
9,486 |
|
|
311,484 |
|
|
|
286,517 |
|
Upper
extremities |
395,774 |
|
|
— |
|
|
395,774 |
|
|
|
334,664 |
|
Biologics |
108,834 |
|
|
— |
|
|
108,834 |
|
|
|
100,637 |
|
Sports
med & other |
20,098 |
|
|
— |
|
|
20,098 |
|
|
|
23,171 |
|
Total net
sales |
$ |
826,704 |
|
|
$ |
9,486 |
|
|
$ |
836,190 |
|
|
$ |
|
744,989 |
|
|
|
|
Wright Medical Group N.V. |
|
Supplemental Net Sales
Information |
|
(unaudited) |
|
|
|
Three months ended December 30, 2018 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 |
15 |
% |
4 |
% |
1 |
% |
13 |
% |
12 |
% |
Upper
extremities |
9 |
% |
11 |
% |
7 |
% |
10 |
% |
8 |
% |
Biologics |
10 |
% |
11 |
% |
9 |
% |
10 |
% |
10 |
% |
Sports
med & other |
15 |
% |
(27 |
%) |
(29 |
%) |
(12 |
%) |
(13 |
%) |
Total net
sales |
12 |
% |
6 |
% |
3 |
% |
10 |
% |
9 |
% |
|
|
|
Fiscal year ended December 30, 2018 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 |
10 |
% |
2 |
% |
4 |
% |
8 |
% |
9 |
% |
Upper
extremities |
17 |
% |
18 |
% |
21 |
% |
17 |
% |
18 |
% |
Biologics |
6 |
% |
16 |
% |
16 |
% |
8 |
% |
8 |
% |
Sports
med & other |
3 |
% |
(25 |
%) |
(22 |
%) |
(15 |
%) |
(13 |
%) |
Total net
sales |
12 |
% |
9 |
% |
12 |
% |
12 |
% |
12 |
% |
Investors & Media:
Julie D.
Dewey
Sr. Vice President, Chief Communications
OfficerWright Medical Group N.V.(901)
290-5817julie.dewey@wright.com
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