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Wright Medical Group, Inc. Reports 2012 Fourth Quarter and Full-Year Financial Results and Provides 2013 Guidance

  Wright Medical Group, Inc. Reports 2012 Fourth Quarter and Full-Year
  Financial Results and Provides 2013 Guidance

Significant Progress Made in 2012 to Transform Business and Maximize Foot and
                              Ankle Opportunity

 Fourth Quarter Global Foot and Ankle Net Sales Increase 20% As Reported and
                            20% Constant Currency

 Full-Year 2012 Net Cash Flow from Operating Activities of $68.8 Million and
                       Free Cash Flow of $49.5 Million

Business Wire

ARLINGTON, Tenn. -- February 21, 2013

Wright Medical Group, Inc. (NASDAQ: WMGI) reported financial results for its
fourth quarter ended December 31,2012 and provided 2013 guidance.

Net sales totaled $123.5 million during the fourth quarter ended December 31,
2012, representing a 3% decrease as reported and a 2% decrease on a constant
currency basis compared to the fourth quarter of 2011. During the fourth
quarter of 2012, as anticipated, global sales were negatively affected by U.S.
OrthoRecon customer losses and price decreases in Japan that were effective in
the second quarter of 2012, partially offset by strong growth in the global
foot and ankle business.

Robert Palmisano, president and chief executive officer, commented, “Our
performance in the fourth quarter reflects continued strong implementation of
the transformational changes to our business. Notably, the fourth consecutive
quarter of accelerating global foot and ankle growth underscores the positive
progress that we continue to make in our foot and ankle business by leveraging
our large, direct sales organization, introducing new products, driving
productivity gains and increasing our medical education programs. We also
generated strong free cash flow in 2012, which was more than triple the amount
generated in the prior year.”

Palmisano commented further, “We remain optimistic about the longer term
outlook for our OrthoRecon business and will continue to focus on driving
significant improvements in customer satisfaction and ensuring an R&D product
pipeline that meets current and future customer needs. With this focus, our
team is confident that we will be able to work towards building a growing
global OrthoRecon business that delivers exceptional levels of customer
service, market rates of growth and significant cash contribution.”

Net income for the fourth quarter of 2012 totaled $5.4 million or $0.14 per
diluted share, compared to net income of $1.2 million or $0.03 per diluted
share in the fourth quarter of 2011.

Net income for the fourth quarter of 2012 included the after-tax effects of
$2.5 million of non-cash stock-based compensation expense, $1.7 million of
charges associated with distributor conversions and non-competes, $2.1 million
of non-cash interest expense related to the 2017 Convertible Notes, an
unrealized loss of $3.5 million related to mark-to-market adjustments on
derivatives, $1.8 million of due diligence and transaction costs, a $2.4
million increase to management’s estimate of the Company’s probable insurance
recovery for previously recognized costs associated with product liability
claims, and a $15 million gain on the sale of intellectual property. Net
income for the fourth quarter of 2011 included the after-tax effects of $2.8
million of charges associated with the 2011 cost restructuring plan, $3.4
million of expenses associated with the Company’s DPA, and $2.4 million of
non-cash stock-based compensation expense.

The Company’s fourth quarter 2012 net income, as adjusted for the above items,
decreased to $1.8 million in 2012 from $6.7 million in 2011, while diluted
earnings per share, as adjusted, decreased to $0.05 in the fourth quarter of
2012 from $0.17 in the fourth quarter of 2011. Including stock-based expense,
diluted earnings per share, as adjusted, totaled $0.01 in the fourth quarter
of 2012. The attached financial tables include a reconciliation of U.S. GAAP
to “as adjusted” results.

Cash and cash equivalents and marketable securities totaled $333.0 million as
of the end of the fourth quarter of 2012, an increase of $161.3 million
compared to the end of the fourth quarter of 2011. Net cash flow from
operating activities was $11.1 million, which combined with capital
expenditures of $6.0 million, resulted in free cash flow of $5.0 million in
the fourth quarter of 2012 compared to free cash flow of $0.9 million in the
fourth quarter of 2011.

Palmisano concluded, “During 2013, we will continue to make investments to
accelerate foot and ankle growth and sales productivity, build a growing
global OrthoRecon business and deliver sustained, strong cash flow. We also
look forward to closing the transaction with BioMimetic and adding
BioMimetic’s breakthrough biologics platform and pipeline to our Extremities
business. We believe this will significantly accelerate the positive
transformation of our business as well as our strategy of building a
world-class biologics platform and growing our foot and ankle business at well
above market growth rates. Our team is confident that the right organizational
alignment and strategic programs are in place to position us for future
success and drive growth and shareholder value.”

Outlook

Excluding the impact of the proposed transaction with BioMimetic Therapeutics,
Inc. that was previously announced on November 19, 2012, the Company
anticipates full-year 2013 net sales to be in the range of $485 million to
$495 million. This range includes a negative impact from currency of
approximately 2 percent as compared to 2012.

The Company anticipates as-adjusted earnings per share, including stock-based
compensation, to be in the range of $0.00 to $0.06 per diluted share, based on
approximately 40.0 million shares outstanding. While the amount of the
non-cash stock-based compensation charges will vary depending upon a number of
factors, the Company currently estimates that the after-tax impact of those
expenses will be approximately $0.19 per diluted share for the full-year 2013.
The Company’s earnings target excludes non-compete and transition costs
associated with converting a major portion of independent foot and ankle
territories to direct, possible future acquisitions, other material future
business developments, the U.S. government inquiry relating to the PROFEMUR^®
hip products, non-cash interest expense associated with the 2017 Convertible
Notes, and non-cash mark-to-market derivative adjustments.

The Company anticipates 2013 free cash flow to be in the range of $35 million
to $40 million.

If the proposed transaction with BioMimetic closes as anticipated by the end
of the first quarter of 2013, the Company anticipates no change to its
full-year 2013 net sales range of $485 million to $495 million. This
transaction is anticipated to negatively impact earnings per share in the
range of $0.32 to $0.34 per diluted share, resulting in anticipated full-year
2013 loss per share including stock-based compensation for the combined
company of $(0.26) to $(0.34) per diluted share, based on approximately 45.8
million shares outstanding, and free cash flow in the range of $0 million to
$5 million.

The Company’s anticipated ranges for net sales, adjusted earnings per share,
non-cash stock-based compensation charges and free cash flow are
forward-looking statements, as are any other statements which anticipate or
aspire to future performance against key metrics. 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.

Conference Call

As previously announced, the Company will host a conference call starting at
3:30 p.m. Central Time today. The live dial-in number for the call is
800-659-1966 (U.S.) / 617-614-2711 (International). The participant passcode
for the call is “Wright.” To access a simultaneous webcast of the conference
call via the internet, go to the “Corporate - Investor Information” section of
the Company’s website located at www.wmt.com.

A replay of the conference call by telephone will be available starting at
5:30 p.m. Central Time today and continuing until February 28, 2013. To hear
this replay, dial 888-286-8010 (U.S.) or 617-801-6888 (International) and
enter the passcode 37790344. 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
“Corporate - Investor Information - Audio Archives” section of the Company’s
website located at www.wmt.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 press release, the Form 8-K filed with the
SEC today, or otherwise available in the “Corporate - Investor Information -
Supplemental Financial Information” section of the Company’s website located
at www.wmt.com.

The conference call may include forward-looking statements. See the cautionary
information about forward-looking statements in the “Safe-Harbor Statement”
section of this press release.

About Wright Medical

Wright Medical Group, Inc. is a global orthopaedic medical device company that
specializes in the design, manufacture and marketing of devices and biologics
for extremity, hip and knee reconstruction and is the recognized leader of
surgical solutions for the foot and ankle market. The Company has been in
business for more than 60 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.

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; effective tax rate, as
adjusted; and free cash flow. 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 costs related to the U.S.
governmental inquiries and the DPA, costs associated with distributor
conversions and non-competes, non-cash interest expense related to the
Company’s 2017 Convertible Notes, mark-to-market adjustments on derivative
assets and liabilities, losses associated with the termination of derivative
instruments, write-off of unamortized deferred financing costs, restructuring
charges, gains or losses on the sale of assets, transaction costs, changes in
estimates of the Company’s total probable insurance recovery for costs
associated with product liability claims, IRS audit liabilities, costs related
to settlement of certain employment matters and the hiring of a new CEO, 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.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain “forward-looking statements” as defined under
U.S. federal securities laws. These statements reflect management’s current
knowledge, assumptions, beliefs, estimates, and expectations and express
management’s current view of future performance, results, and trends. Forward
looking statements 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. Forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results to materially differ
from those described in the forward-looking statements. In addition to those
described below, forward looking statements contained in this press release
include, without limitation, statements concerning the timing and expected
benefits of the previously announced merger agreement with BioMimetic
Therapeutics, Inc., including statements about the possibility of FDA approval
of Augment Bone Graft, statements regarding market acceptance of, and expected
annual market demand for Augment Bone Graft, and statements regarding the
expected impact of the transaction on Wright’s adjusted EBITDA and other
financial results. The reader should not place undue reliance on
forward-looking statements. Such statements are made as of the date of this
press release, and we undertake no obligation to update such statements after
this date. In addition to those described above, risks and uncertainties that
could cause our actual results to materially differ from those described in
forward-looking statements are discussed in our filings with the Securities
and Exchange Commission (including those described in Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2012, and as may be
supplemented in our Quarterly Reports on Form 10-Q). By way of example and
without implied limitation, such risks and uncertainties include: the failure
of BioMimetic stockholders to adopt the merger agreement or the failure of
either Wright or BioMimetic to meet any of the other conditions to the closing
of the transaction, the failure to realize the anticipated benefits from the
transaction or delay in realization thereof, future actions of the United
States Attorney’s office, the FDA, the Department of Health and Human Services
or other U.S. or foreign government authorities, including those resulting
from increased scrutiny under the Foreign Corrupt Practices Act and similar
laws, that could delay, limit or suspend our development, manufacturing,
commercialization and sale of products, or result in seizures, injunctions,
monetary sanctions or criminal or civil liabilities; failure to obtain the FDA
or other regulatory clearances needed to market and sell our products; any
actual or alleged breach of the Corporate Integrity Agreement to which we are
subject through September 2015 which could expose us to significant liability
including exclusion from Medicare, Medicaid and other federal healthcare
programs, potential criminal prosecution, and civil and criminal fines or
penalties; adverse outcomes in existing product liability litigation; new
product liability claims; inadequate insurance coverage; the possibility of
private securities litigation or shareholder derivative suits; demand for and
market acceptance of our new and existing products; potentially burdensome tax
measures; recently enacted healthcare laws and changes in product
reimbursement which could generate downward pressure on our product pricing;
lack of suitable business development opportunities; product quality or
patient safety issues; challenges to our intellectual property rights;
geographic and product mix impact on our sales; our inability to retain key
sales representatives, independent distributors and other personnel or to
attract new talent; inventory reductions or fluctuations in buying patterns by
wholesalers or distributors; inability to realize the anticipated benefits of
restructuring initiatives; negative impact of the commercial and credit
environment on us, our customers and our suppliers; and the potentially
negative effect of our ongoing compliance enhancements on our relationships
with customers, and on our ability to deliver timely and effective medical
education, clinical studies, and new products.

ADDITIONAL INFORMATION ABOUT THIS TRANSACTION

This press release may be deemed to be solicitation material regarding the
proposed business combination of Wright and BioMimetic. In connection with the
proposed transaction, Wright has filed with the SEC a registration statement
on Form S-4, which includes a proxy statement/prospectus and other relevant
materials in connection with the proposed transaction, and each of Wright and
BioMimetic intend to file with the SEC other documents regarding the proposed
transaction. The proxy statement/prospectus and this press release are not
offers to sell Wright securities and are not soliciting an offer to buy Wright
securities in any state where the offer and sale is not permitted. The final
proxy statement/prospectus will be mailed to the stockholders of BioMimetic.
INVESTORS AND SECURITY HOLDERS OF BIOMIMETIC ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND THE
OTHER RELEVANT MATERIAL CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT WRIGHT AND BIOMIMETIC
AND THE PROPOSED TRANSACTION.

The proxy statement/prospectus and other relevant materials (when they become
available), and any and all documents filed with the SEC, may be obtained free
of charge at the SEC’s web site at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with the SEC by
Wright by directing a written request to Wright Medical Group, Inc, 5677
Airline Road, Arlington, TN 38002, Attention: Investor Relations, and by
BioMimetic by directing a written request to BioMimetic Therapeutics, Inc.,
389 Nichol Mill Lane, Franklin, TN 37067, Attention: Investor Relations.

BioMimetic and its respective executive officers and directors and other
persons, including Wright and its respective executive officers and directors,
may be deemed to be participants in the solicitation of proxies from its
stockholders in connection with the proposed transaction. Information about
the executive officers and directors of BioMimetic and their ownership of
BioMimetic common stock is set forth in its annual report on Form 10-K for the
year ended December 31, 2011, filed with the SEC on March 13, 2012 and the
proxy statement for BioMimetic’s 2012 annual meeting of stockholders, filed
with the SEC on April 27, 2012. Information about the executive officers and
directors of Wright Medical Group is set forth in its annual report on Form
10-K for the year ended December 31, 2011, filed with the SEC on February 24,
2012 and the proxy statement for Wright Medical Group’s 2012 annual meeting of
stockholders, filed with the SEC on March 27, 2012. Certain directors and
executive officers of BioMimetic and other persons may have direct or indirect
interests in the merger due to securities holdings, pre-existing or future
indemnification arrangements and rights to severance payments if their
employment is terminated prior to or following the transaction. If and to the
extent that any of the BioMimetic participants will receive any additional
benefits in connection with the transaction, the details of those benefits
will be described in the proxy statement/prospectus relating to the
transaction. Investors and security holders may obtain additional information
regarding the direct and indirect interests of BioMimetic and its executive
officers and directors in the transaction.


Wright Medical Group, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data--unaudited)

                      Three Months Ended            Twelve Months Ended
                        December        December        December        December
                        31,           31,             31,           31,
                        2012            2011            2012            2011
Net sales               $ 123,477       $ 126,872       $ 483,776       $ 512,947
Cost of sales           39,649          40,449          149,978         156,906
Cost of sales -         —              571            435            2,471     
restructuring
Gross profit            83,828          85,852          333,363         353,570
Operating expenses:
Selling, general        74,200          72,361          290,261         301,588
and administrative
Research and            7,456           6,331           27,033          30,114
development
Amortization of         1,949           782             5,772           2,870
intangible assets
Gain on sale of
intellectual            (15,000   )     —               (15,000   )     —
property
Restructuring           —              2,273          1,153          14,405    
charges
Total operating         68,605          81,747          309,219         348,977
expenses
Operating income        15,223          4,105           24,144          4,593
Interest expense,       3,920           1,755           10,188          6,529
net
Other (income)          3,360          (56       )     5,395          4,719     
expense, net
Income (loss)           7,943           2,406           8,561           (6,655    )
before income taxes
Provision (benefit)     2,591          1,243          3,277          (1,512    )
for income taxes
Net income (loss)       $ 5,352        $ 1,163        $ 5,284        $ (5,143  )
Net income (loss)       $ 0.14         $ 0.03         $ 0.14         $ (0.13   )
per share, basic
Net income (loss)
income per share,       $ 0.14         $ 0.03         $ 0.14         $ (0.13   )
diluted
Weighted-average
number of shares        38,959         38,430         38,769         38,279    
outstanding-basic
Weighted-average
number of shares        39,342         38,673         39,086         38,279    
outstanding-diluted
                                                                                  


Wright Medical Group, Inc.

Consolidated Sales Analysis

(dollars in thousands--unaudited)

                Three Months Ended                     Twelve Months Ended
                  December      December      %            December      December      %
                  31,         31,         change       31,         31,         change
                  2012          2011                       2012          2011
Geographic
Domestic          $ 70,657      $ 73,265      (3.6  %)     $ 275,686     $ 295,943     (6.8  %)
International      52,820       53,607      (1.5  %)      208,090      217,004     (4.1  %)
Total net         $ 123,477     $ 126,872     (2.7  %)     $ 483,776     $ 512,947     (5.7  %)
sales
                                                                                       
                  Three Months Ended                       Twelve Months Ended
                  December      December      %            December      December      %
                  31,           31,           change       31,           31,           change
                  2012          2011                       2012          2011
OrthoRecon
Hips              $ 35,929      $ 42,715      (15.9 %)     $ 150,550     $ 173,201     (13.1 %)
Knees               27,968        30,559      (8.5  %)       114,896       123,988     (7.3  %)
Other              1,200        923         30.0  %       4,225        5,005       (15.6 %)
Total               65,097        74,197      (12.3 %)       269,671       302,194     (10.8 %)
OrthoRecon
                                                                                       
Extremities
Foot and            35,360        29,524      19.8  %        122,897       107,734     14.1  %
Ankle
Upper               5,876         6,553       (10.3 %)       24,977        27,742      (10.0 %)
Extremity
Biologics           15,240        15,563      (2.1  %)       60,495        69,409      (12.8 %)
Other              1,904        1,035       84.0  %       5,736        5,868       (2.2  %)
Total               58,380        52,675      10.8  %        214,105       210,753     1.6   %
Extremities
                                                                                  
Total Sales       $ 123,477     $ 126,872     (2.7  %)     $ 483,776     $ 512,947     (5.7  %)
                                                                                             


Wright Medical Group, Inc.

Supplemental Sales Information

(unaudited)

                Fourth Quarter 2012 Sales Growth
                  Domestic     Int’l        Int’l        Total        Total
                  As         Constant   As         Constant   As
                  Reported     Currency     Reported     Currency     Reported
OrthoRecon
Hips              (17  %)      (13  %)      (15  %)      (14  %)      (16  %)
Knees             (17  %)      4    %       2    %       (8   %)      (8   %)
Other             154  %     11   %     10   %     30   %     30   %
Total             (17  %)      (7   %)      (9   %)      (11  %)      (12  %)
OrthoRecon
                                                                      
Extremities
Foot and          16   %       37   %       36   %       20   %       20   %
Ankle
Upper             (17  %)      10   %       8    %       (10  %)      (10  %)
Extremity
Biologics         (8   %)      21   %       22   %       (2   %)      (2   %)
Other             100  %     76   %     76   %     84   %     84   %
Total             6    %       30   %       30   %       11   %       11   %
Extremities
                                                          
Total Sales       (4   %)    0    %     (1   %)    (2   %)    (3   %)
                                                                           


Wright Medical Group, Inc.

Supplemental Sales Information

(unaudited)

                2012 Sales Growth
                  Domestic     Int’l        Int’l        Total        Total
                  As         Constant   As         Constant   As
                  Reported     Currency     Reported     Currency     Reported
OrthoRecon
Hips              (18  %)      (8   %)      (10  %)      (12  %)      (13  %)
Knees             (13  %)      2    %       0    %       (6   %)      (7   %)
Other             (13  %)    (14  %)    (16  %)    (14  %)    (16  %)
Total             (15  %)      (5   %)      (7   %)      (9   %)      (11  %)
OrthoRecon
                                                                      
Extremities
Foot and          12   %       26   %       22   %       15   %       14   %
Ankle
Upper             (13  %)      (1   %)      (3   %)      (9   %)      (10  %)
Extremity
Biologics         (16  %)      1    %       0    %       (13  %)      (13  %)
Other             12   %     (6   %)    (9   %)    0    %     (2   %)
Total             0    %       11   %       8    %       2    %       2    %
Extremities
                                                          
Total Sales       (7   %)    (2   %)    (4   %)    (5   %)    (6   %)
                                                                      

             
                Sales as a % of Total Sales
                Three Months Ended                     Twelve Months Ended
                December 31, 2012                        December 31, 2012
                Domestic   International   Total     Domestic   International   Total
OrthoRecon
Hips            10   %       19      %         29  %     10   %       21      %         31  %
Knees           11   %       12      %         23  %     12   %       12      %         24  %
Other           0    %     1       %       1   %     0    %     1       %       1   %
Total           21   %       32      %         53  %     23   %       33      %         56  %
OrthoRecon
                                                                                        
Extremities
Foot and        23   %       6       %         29  %     21   %       5       %         25  %
Ankle
Upper           3    %       2       %         5   %     4    %       2       %         5   %
Extremity
Biologics       9    %       3       %         12  %     10   %       3       %         13  %
Other           1    %     1       %       2   %     0    %     1       %       1   %
Total           36   %       11      %         47  %     34   %       10      %         44  %
Extremities
                                                                           
Total Sales     57   %     43      %       100 %     57   %     43      %       100 %
                                                                                        


Wright Medical Group, Inc.

Reconciliation of Net Sales to Net Sales Excluding the Impact of Foreign
Currency

(dollars in thousands--unaudited)

                 Three Months Ended            Twelve Months Ended
                   December 31, 2012               December 31, 2012
                   International   Total         International   Total
                   Net Sales         Net Sales     Net Sales         Net Sales
Net sales, as      $    52,820       $ 123,477     $   208,090       $ 483,776
reported
Currency
impact as              1,030         1,030          5,346          5,346
compared to
prior period
Net sales,
excluding the
impact of          $    53,850       $ 124,507     $   213,436       $ 489,122
foreign
currency
                                                                     


Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(in thousands, except per share data--unaudited)

                  Three Months Ended             Twelve Months Ended
                    December 31,     December        December       December
                    2012           31,             31,          31,
                                     2011            2012           2011
Operating
Income
Operating
income, as          $  15,223        $  4,105        $ 24,144       $ 4,593
reported
Reconciling
items impacting
Gross Profit:
Non-cash,
stock-based         347              349             1,401          1,412
compensation
Cost of sales -     —                571             435            2,471
restructuring
Employment          —                —               —              99
matters ^(1)
Inventory
step-up             16              32             158           32       
amortization
Total               363             952            1,994         4,014    
Reconciling
items impacting
Selling,
General and
Administrative
expense:
Non-cash,
stock-based         2,018            1,945           8,898          7,028
compensation
U.S.
governmental        (54        )     3,379           6,593          12,920
inquiries/DPA
related
Distributor         403              —               1,027          —
conversions
Due diligence
and                 1,798            —               1,798          —
transactions
costs
Employment          —                —               —              1,783
matters ^(1)
Product
liability           (2,432     )     —               (2,432   )     —
insurance
recovery
Product
liability           —               —              —             13,199   
provision
Total               1,733           5,324          15,884        34,930   
Reconciling
items impacting
Amortization of
Intangible
Assets:
Amortization of
distributor         1,290            —               3,029          —
non-competes
Reconciling
items impacting
Research and
Development
expense:
Non-cash,
stock-based         141              126             675            668
compensation
Employment          —               —              —             135      
matters ^(1)
Total               141             126            675           803      
Other
Reconciling
Items:
Gain on sale of
intellectual        (15,000    )     —               (15,000  )     —
property
Restructuring       —               2,273          1,153         14,405   
charges
Operating
income, as          $  3,750        $  12,780      $ 31,879      $ 58,745 
adjusted
Operating
income, as
adjusted, as a      3.0        %     10.1      %     6.6      %     11.5     %
percentage of
net sales
____________________________

^(1) Costs associated with settlement of certain employment matters and the
hiring of a new CEO.



Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(in thousands, except per share data--unaudited)

                  Three Months Ended             Twelve Months Ended
                    December 31,     December        December       December
                    2012           31,             31,          31,
                                     2011            2012           2011
Net Income
Income (loss)
before taxes,       $  7,943         $  2,406        $ 8,561        $ (6,655 )
as reported
Pre-tax impact
of reconciling
items:
Non-cash,
stock-based         2,507            2,420           10,974         9,108
compensation
U.S.
governmental        (54       )      3,379           6,593          12,920
inquiries/DPA
related
Restructuring       —                2,844           1,588          16,876
charges
Inventory
step-up             16               32              158            32
amortization
Distributor
conversion and      1,693            —               4,055          —
non-competes
Loss on
interest rate       —                —               1,769          —
swap
termination
Non-cash
interest
expense on 2017     2,086            —               2,773          —
Convertible
Notes
Derivatives
mark-to-market      3,472            —               1,142          —
adjustment
Due diligence
and                 1,798            —               1,798          —
transactions
costs
Write-off of
deferred
financing fees
associated with
Senior Credit       —                —               2,721          —
Facility and
2014
Convertible
Notes
Employment          —                —               —              2,017
matters ^(1)
Product
liability           (2,432    )      —               (2,432   )     —
insurance
recovery
Product
liability           —                —               —              13,199
provision
Gain on sale of
intellectual        (15,000   )      —               (15,000  )     —
property
Deferred
financing fees
and transaction
costs               —               —              —            4,099    
associated with
Convertible
Notes Tender
Offer
Income before
taxes, as           2,029           11,081         24,700        51,596   
adjusted
                                                                    
Provision
(benefit) for       $  2,591         $  1,243        $ 3,277        $ (1,512 )
income taxes,
as reported
Non-cash,
stock-based         1,078            853             3,767          2,946
compensation
U.S.
governmental        85               1,754           2,380          5,125
inquiries/DPA
related
Restructuring       —                1,591           620            6,165
charges
Inventory
step-up             1                12              57             12
amortization
Distributor
conversion and      661              —               1,456          —
non-competes
Loss on
interest rate       —                —               691            —
swap
termination
Non-cash
interest
expense on 2017     727              —               996            —
Convertible
Notes
Derivatives
mark-to-market      1,310            —               420            —
adjustment
Write-off of
deferred
financing fees
associated with
Senior Credit       —                —               1,063          —
Facility and
2014
Convertible
Notes
Employment          —                —               —              720
matters ^(1)
Product
liability           (853      )      —               (853     )     —
insurance
recovery
Product
liability           —                —               —              4,740
provision
Gain on sale of
intellectual        (5,387    )      —               (5,387   )     —
property
Deferred
financing fees
and transaction
costs               —                —               —              1,599
associated with
Convertible
Notes Tender
Offer
IRS audit           —               (1,041    )     —             (1,041   )
liability
Provision for
income taxes,       $  213          $  4,412       $ 8,487       $ 18,754 
as adjusted
Effective tax
rate, as            10.5      %      39.8      %     34.4     %     36.3     %
adjusted
Net income, as      $  1,816        $  6,669       $ 16,213      $ 32,842 
adjusted
____________________________

^(1) Costs associated with settlement of certain employment matters and the
hiring of a new CEO.



Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(continued)

                   Three Months Ended            Three Months Ended
                     December 31, 2012               December 31, 2011
                     As Reported   As Adjusted     As Reported   As
                                                                     Adjusted
Basic net income     $   5,352       $   1,816       $   1,163       $  6,669
Interest expense
on convertible       N/A             N/A             N/A             137
notes
Diluted net          $   5,352       $   1,816       $   1,163       $  6,806
income
                                                                     
Basic shares         38,959          38,959          38,430          38,430
Dilutive effect
of stock options     383             383             243             243
and restricted
shares
Dilutive effect
of convertible       N/A             N/A             N/A             891
notes
Diluted shares       39,342          39,342          38,673          39,564
                                                                     
Net income per       $   0.14        $   0.05        $   0.03        $  0.17
share, diluted
                                                                        

                                               
                    Twelve Months Ended             Twelve Months Ended
                    December 31, 2012               December 31, 2011
                    As Reported   As Adjusted     As Reported   As
                                                                    Adjusted
Basic net           $   5,284       $   16,213      $  (5,143)      $  32,842
income (loss)
Interest
expense on          N/A             N/A             N/A             1,203
convertible
notes
Diluted net         $   5,284       $   16,213      $  (5,143)      $  34,045
income
                                                                    
Basic shares        38,769          38,769          38,279         38,279
Dilutive effect
of stock
options and         317             317             N/A             136
restricted
shares
Dilutive effect
of convertible      N/A             N/A             N/A             1,909
notes
Diluted shares      39,086          39,086          38,279         40,324
                                                                    
Net income per      $   0.14        $   0.41        $  (0.13)       $  0.84
share, diluted
                                                                       


Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(continued)

                   Three Months Ended            Twelve Months Ended
                     December        December        December        December
                     31,           31,             31,           31,
                     2012            2011            2012            2011
Net Income per
Diluted Share
Net income
(loss), as           $  0.14         $  0.03         $  0.14         $ (0.13 )
reported, per
diluted share
Interest expense
on convertible       N/A             0.00            N/A             0.03
notes
Effect of
convertible          N/A             (0.00    )      N/A             0.01
notes on diluted
shares
Non-cash,
stock-based          0.04            0.04            0.18            0.15
compensation
U.S.
governmental         0.00            0.04            0.11            0.19
inquiries/DPA
related
Restructuring        —               0.03            0.02            0.27
charges
Inventory
step-up              0.00            0.00            0.00            0.00
amortization
Distributor
conversion and       0.03            —               0.07            —
non-competes
Loss on interest
rate swap            —               —               0.03            —
termination
Non-cash
interest expense
on 2017              0.03            —               0.05            —
Convertible
Notes
Derivatives
mark-to-market       0.05            —               0.02            —
adjustment
Due diligence
and transactions     0.05            —               0.05            —
costs
Write-off of
deferred
financing fees
associated with      —               —               0.04            —
Senior Credit
Facility and
2014 Convertible
Notes
Employment           —               —               —               0.03
matters ^(1)
Product
liability            (0.04    )      —               (0.04    )      —
insurance
recovery
Product
liability            —               —               —               0.21
provision
Gain on sale of
intellectual         (0.24    )      —               (0.25    )      —
property
Deferred
financing fees
and transaction
costs associated     —               —               —               0.06
with Convertible
Notes Tender
Offer
IRS audit            —              0.03           —              0.03    
liability
Net income, as
adjusted, per        $  0.05        $  0.17        $  0.41        $ 0.84  
diluted share
^(2)
____________________________

^(1) Costs associated with settlement of certain employment matters and the
hiring of a new CEO.

^(2) Reconciling items may not add to total net income, as adjusted, per
diluted share due to rounding differences.


                                                
Wright Medical Group, Inc.

Reconciliation of Free Cash Flow

(dollars in thousands--unaudited)
                                                   
                  Three Months Ended            Twelve Months Ended
                    December       December        December        December
                    31,          31,             31,           31,
                    2012           2011            2012            2011
Net cash
provided by         11,070       12,655          68,822        61,441
operating
activities
Capital             (6,032  )    (11,759  )      (19,323  )    (46,957  )
expenditures
Free cash flow      5,038       896            49,499       14,484   
                                                                            


Wright Medical Group, Inc.

Segment Income Statement

(In thousands, except share data)

(unaudited)

                 Three months ended December 31, 2012
                   OrthoRecon   Extremities   Corporate     Other^(1)    Total
Net sales          $ 65,097       $  58,380       $ —             $ —            $ 123,477
Cost of sales      26,136      13,150       —            363         39,649    
Gross profit       38,961         45,230          —               (363     )     83,828
                                                                                 
Operating
expenses:
Selling,
general and        30,937         27,369          14,161          1,733          74,200
administrative
Research and       3,769          3,546           —               141            7,456
development
Amortization
of intangible      58             601             —               1,290          1,949
assets
Gain on sale
of                 —              —               —               (15,000  )     (15,000   )
intellectual
property
Restructuring      —           —            —            —           —         
charges
Total
operating          34,764         31,516          14,161          (11,836  )     68,605
expenses
                                                                     
Operating          $ 4,197     $  13,714    $ (14,161 )   $ 11,473    $ 15,223  
income (loss)
                                                                                 
Operating
income (loss)      6.4      %   23.5      %   N/A           N/A          12.3      %
as a percent
of net sales
                                                                                 
                   Three months ended December 31, 2012
                   OrthoRecon     Extremities     Corporate       Other^(1)      Total
Depreciation       $ 5,522        $  2,892        $ 679           $ —            $ 9,093
expense
Amortization       58             601             —               1,290          1,949
expense
Capital            1,297          1,142           3,593           —              6,032
expenditures
____________________________

^(1) Other consists exclusively of the reconciling items from Operating Income, as reported,
to Operating Income, as adjusted, as included in the reconciliations above.



Wright Medical Group, Inc.

Segment Income Statement

(continued)

                 Three months ended December 31, 2011
                   OrthoRecon   Extremities   Corporate     Other^(1)    Total
Net sales          $ 74,197       $  52,675       $ —             $ —            $ 126,872
Cost of sales      26,625      13,443       —            952         41,020    
Gross profit       47,572         39,232          —               (952     )     85,852
                                                                                 
Operating
expenses:
Selling,
general and        32,075         22,443          12,519          5,324          72,361
administrative
Research and       2,088          4,117           —               126            6,331
development
Amortization
of intangible      134            648             —               —              782
assets
Restructuring      —           —            —            2,273       2,273     
charges
Total
operating          34,297         27,208          12,519          7,723          81,747
expenses
                                                                     
Operating          $ 13,275    $  12,024    $ (12,519 )   $ (8,675 )   $ 4,105   
income (loss)
                                                                                 
Operating
income (loss)      17.9     %     22.8      %     N/A             N/A            3.2       %
as a percent
of net sales
                                                                                 
                   Three months ended December 31, 2011
                   OrthoRecon     Extremities     Corporate       Other^(1)      Total
Depreciation       $ 6,468        $  2,913        $ 1,632         $ —            $ 11,013
expense
Amortization       134            648             —               —              782
expense
Capital            5,023          3,101           3,635           —              11,759
expenditures
____________________________

^(1) Other consists exclusively of the reconciling items from Operating Income, as reported,
to Operating Income, as adjusted, as included in the reconciliations above.



Wright Medical Group, Inc.

Segment Income Statement

(continued)

                 Twelve months ended December 31, 2012
                   OrthoRecon    Extremities   Corporate     Other^(1)    Total
Net sales          $ 269,671       $ 214,105       $ —             $ —            $ 483,776
Cost of sales      101,044      47,375       —            1,994       150,413   
Gross profit       168,627         166,730         —               (1,994   )     333,363
                                                                                  
Operating
expenses:
Selling,
general and        121,945         101,303         51,129          15,884         290,261
administrative
Research and       12,821          13,537          —               675            27,033
development
Amortization
of intangible      334             2,409           —               3,029          5,772
assets
Gain on sale
of                 —               —               —               (15,000  )     (15,000   )
intellectual
property
Restructuring      —            —            —            1,153       1,153     
charges
Total
operating          135,100         117,249         51,129          5,741          309,219
expenses
                                                                      
Operating          $ 33,527     $ 49,481     $ (51,129 )   $ (7,735 )   $ 24,144  
income (loss)
                                                                                  
Operating
income as a        12.4      %   23.1      %   N/A           N/A          5.0       %
percent of net
sales
                                                                                  
                   Twelve months ended December 31, 2012
                   OrthoRecon      Extremities     Corporate       Other^(1)      Total
Depreciation       $ 23,928        $ 11,386        $ 2,961         $ —            $ 38,275
expense
Amortization       334             2,409           —               3,029          5,772
expense
Capital            5,582           7,056           6,685           —              19,323
expenditures
____________________________

^(1) Other consists exclusively of the reconciling items from Operating Income, as reported,
to Operating Income, as adjusted, as included in the reconciliations above.



Wright Medical Group, Inc.

Segment Income Statement

(continued)

                 Twelve months ended December 31, 2011
                   OrthoRecon    Extremities   Corporate     Other^(1)     Total
Net sales          $ 302,194       $ 210,753       $ —             $ —             $ 512,947
Cost of sales      99,467       55,896       —            4,014        159,377   
Gross profit       202,727         154,857         —               (4,014    )     353,570
                                                                                   
Operating
expenses:
Selling,
general and        127,030         90,489          49,139          34,930          301,588
administrative
Research and       14,344          14,967          —               803             30,114
development
Amortization
of intangible      458             2,412           —               —               2,870
assets
Restructuring      —            —            —            14,405       14,405    
charges
Total
operating          141,832         107,868         49,139          50,138          348,977
expenses
                                                                       
Operating          $ 60,895     $ 46,989     $ (49,139 )   $ (54,152 )   $ 4,593   
income (loss)
                                                                                   
Operating
income as a        20.2      %   22.3      %   N/A           N/A           0.9       %
percent of net
sales
                                                                                   
                   Twelve months ended December 31, 2011
                   OrthoRecon      Extremities     Corporate       Other^(1)       Total
Depreciation       $ 26,070        $ 10,876        $ 3,281         $ —             $ 40,227
expense
Amortization       458             2,412           —               —               2,870
expense
Capital            19,031          12,926          15,000          —               46,957
expenditures
____________________________

^(1) Other consists exclusively of the reconciling items from Operating Income, as reported,
to Operating Income, as adjusted, as included in the reconciliations above.



Wright Medical Group, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands--unaudited)

                                                 December 31,  December 31,
                                                   2012           2011
Assets
Current assets:
Cash and cash equivalents                          $   320,360    $   153,642
Marketable securities                              12,646         13,597
Accounts receivable, net                           98,636         98,995
Inventories                                        144,250        164,600
Prepaid expenses and other current assets          76,253         69,699
Total current assets                               652,145        500,533
                                                                  
Property, plant and equipment, net                 138,242        160,284
Goodwill and intangible assets, net                79,360         75,651
Marketable securities                              —              4,502
Other assets                                       83,706         13,610
Total assets                                       $   953,453    $   754,580
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable                                   $   10,342     $   11,651
Accrued expenses and other current liabilities     65,304         55,831
Current portion of long-term obligations           786            8,508
Total current liabilities                          76,432         75,990
Long-term obligations                              258,504        166,792
Other liabilities                                  95,076         43,334
Total liabilities                                  430,012        286,116
                                                                  
Stockholders’ equity                               523,441        468,464
Total liabilities and stockholders’ equity         $   953,453    $   754,580
                                                                      

Contact:

Wright Medical Group, Inc.
Julie D. Tracy, 901-290-5817
Sr. Vice President, Chief Communications Officer
julie.tracy@wmt.com