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Wright Medical Group, Inc. Reports 2013 First Quarter Financial Results

  Wright Medical Group, Inc. Reports 2013 First Quarter Financial Results

First Quarter Global Foot and Ankle Net Sales Increase 18% As Reported and 19%
                              Constant Currency

Business Wire

ARLINGTON, Tenn. -- April 30, 2013

Wright Medical Group, Inc. (NASDAQ: WMGI) today reported financial results for
its first quarter ended March 31,2013.

Net sales totaled $120.4 million during the first quarter ended March 31,
2013, representing a 5% decrease as reported and a 3% decrease on a constant
currency basis compared to the first quarter of 2012. During the first quarter
of 2013, 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, “We
delivered a strong start to 2013 with our first quarter results.
Implementation of our new Vital Few initiatives is on track, with continued
positive progress in driving sales productivity gains in our foot and ankle
business and developing plans for building a growing, global OrthoRecon
business. Despite the impact of two less selling days in the U.S. in the first
quarter, our global foot and ankle business had strong constant currency
growth of 19%, and our U.S. foot and ankle growth accelerated to 17%, both of
which were well ahead of last year’s annual growth rates and reinforce our
leadership position in this market.”

Palmisano continued, “As anticipated, our global OrthoRecon business continued
to be impacted by U.S. customer losses from the prior year and current
quarter. However, we believe we have excellent opportunities to stabilize our
U.S. business with our new divisional focus and to drive growth in a number of
international markets.”

Net income for the first quarter of 2013 totaled $8.4 million or $0.20 per
diluted share, compared to net income of $4.6 million or $0.12 per diluted
share in the first quarter of 2012.

Net income for the first quarter of 2013 included the after-tax effects of
$1.1 million of expense associated with U.S. Government inquiries, $1.6
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 $2.0 million related to mark-to-market
adjustments on derivatives, $7.5 million of due diligence, transaction and
transition costs, a $7.8 million gain on our previously held investment in
BioMimetic, and a $19.4 million increase to management’s estimate of the
Company’s probable insurance recovery for previously recognized costs
associated with certain product liability claims. The increase is due to an
insurance coverage decision on PROFEMUR^® long titanium modular neck claims.
Net income for the first quarter of 2012 included the after-tax effects of
$2.9 million of expenses associated with the U.S. Government inquiries and the
Company’s DPA, and $0.9 million of charges associated with the previously
announced cost restructuring plan.

The Company’s first quarter 2013 net loss, as adjusted for the above items,
was ($0.9) million in 2013, down from net income of $6.5 million in 2012,
while diluted loss per share, as adjusted, decreased to ($0.02) in the first
quarter of 2013 from $0.17 in the first 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 $291.4 million as
of the end of the first quarter of 2013, a decrease of $41.6 million compared
to the end of the fourth quarter of 2012, which was driven by the closing of
the BioMimetic transaction. Net cash outflow from operating activities was
($5.2) million, which combined with capital expenditures of $3.7 million,
resulted in free cash outflow of ($8.9) million in the first quarter of 2013
compared to free cash flow of $14.5 million in the first quarter of 2012.

Palmisano concluded, “In addition to continued progress on our inventory
reduction initiatives and focus on cash generation, our top priorities during
2013 will be to build momentum with three new Vital Few projects, which are to
increase U.S. foot and ankle sales force productivity, improve gross margins,
and build a growing, global OrthoRecon business. We are very positive about
these new Vital Few and the opportunity we have to drive significant
improvement again this year. As we exit 2013, we expect to have an Extremities
segment that is growing in the mid- to high-teens, driven by global foot and
ankle growth in the mid-twenty percent range, and a global OrthoRecon segment
that is growing and has opportunities for acceleration. Additionally, we
expect to have returned the business to profitability and to be positioned
well for growth in 2014 and beyond.”

Outlook

The Company anticipates no change to its previously issued full-year 2013 net
sales guidance range of $485 million to $495 million. This range includes a
negative impact from currency of approximately 2 percent as compared to 2012.

Including the impact of the BioMimetic transaction, which closed on March 1,
2013, the Company anticipates as adjusted earnings per share, including
stock-based compensation, to be in the range of $(0.26) to $(0.34) per diluted
share, based on approximately 45.1 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, due diligence, transaction and transition costs
associated with our BioMimetic acquisition, mark-to-market adjustments to the
contingent value rights (CVRs) issued as part of our BioMimetic acquisition,
changes to management’s estimate of the probable insurance recovery associated
with product liability claims, and non-cash mark-to-market derivative
adjustments.

The Company continues to anticipate 2013 free cash flow to be 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. 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 and Webcast

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
877-546-5020 (U.S.) / 857-244-7552 (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 through May 7, 2013. To hear this
replay, dial 888-286-8010 (U.S.) or 617-801-6888 (International) and enter the
passcode 88767428. 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, restructuring charges, gains or losses on the sale of
assets, transaction and transition costs, and changes in estimates of the
Company’s total probable insurance recovery for costs associated with product
liability claims, 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. 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: failure to realize the anticipated financial and other benefits from
the acquisition of BioMimetic Therapeutics, Inc. or a delay in realization
thereof; failure to obtain, or a delay in obtaining, FDA approval of Augment
Bone Graft, or a material limitation on the scope of such approval; lower than
anticipated market acceptance of, or annual market demand for, Augment Bone
Graft; 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; inability to capitalize on 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 our
ability to deliver timely and effective medical education, clinical studies,
and new products.

                                                                            
Wright Medical Group, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data--unaudited)
                                                                            
                                           Three Months Ended
                                                             
                                             March 31, 2013     March 31, 2012
Net sales                                    $  120,355         $  126,656
Cost of sales                                   38,275             36,806
Cost of sales – restructuring                  —                435      
Gross profit                                    82,080             89,415
                                                                            
Operating expenses:
Selling, general and administrative             64,993             72,348
Research and development                        6,756              6,221
Amortization of intangible assets               2,097              742
Restructuring charges                          —                443      
Total operating expenses                        73,846             79,754
                                                                            
Operating income                                8,234              9,661
Interest expense, net                           3,945              1,807
Other (income) expense, net                    (5,751   )        161      
Income before income taxes                      10,040             7,693
Provision for income taxes                     1,605            3,132    
                                                                            
Net income                                   $  8,435          $  4,561    
                                                                            
Net income per share, basic                  $  0.20           $  0.12     
                                                                            
Net income per share, diluted                $  0.20           $  0.12     
                                                                            
Weighted-average number of shares              41,438           38,492   
outstanding-basic
                                                                            
Weighted-average number of shares              42,139           38,826   
outstanding-diluted
                                                                            

                                                                     
Wright Medical Group, Inc.

Consolidated Sales Analysis

(dollars in thousands--unaudited)
                                                                     
                    Three Months Ended
                      March 31, 2013   March 31, 2012   %
                                                            change
Geographic
Domestic              $  67,805          $  70,062          (3.2  %)
International           52,550           56,594         (7.1  %) 
Total net sales       $  120,355        $  126,656        (5.0  %) 
                                                                     
                      Three Months Ended
                      March 31, 2013     March 31, 2012     %
                                                            change
OrthoRecon
Hips                  $  35,497          $  41,500          (14.5 %)
Knees                    27,812             31,082          (10.5 %)
Other                   753              1,201          (37.3 %) 
Total OrthoRecon         64,062             73,783          (13.2 %)
                                                                     
Extremities
Foot and Ankle           35,077             29,627          18.4  %
Upper Extremity          6,062              6,545           (7.4  %)
Biologics                13,657             15,187          (10.1 %)
Other                   1,497            1,514          (1.1  %) 
Total Extremities        56,293             52,873          6.5   %
                                                                
Total Sales           $  120,355        $  126,656        (5.0  %) 
                                                                     


Wright Medical Group, Inc.

Supplemental Sales Information

(unaudited)

                First Quarter 2013 Sales Growth
                  Domestic     Int’l        Int’l        Total        Total
                  As         Constant   As         Constant   As
                  Reported     Currency     Reported     Currency     Reported
OrthoRecon
Hips              (7   %)      (12  %)      (18  %)      (11  %)      (14  %)
Knees             (19  %)      1    %       (2   %)      (9   %)      (11  %)
Other             (48  %)    (31  %)    (34  %)    (35  %)    (37  %)
Total             (14  %)      (8   %)      (13  %)      (11  %)      (13  %)
OrthoRecon
                                                                      
Extremities
Foot and          17   %       27   %       26   %       19   %       18   %
Ankle
Upper             (7   %)      (3   %)      (7   %)      (6   %)      (7   %)
Extremity
Biologics         (14  %)      5    %       4    %       (10  %)      (10  %)
Other             (22  %)    11   %     10   %     (1   %)    (1   %)
Total             4    %       15   %       13   %       7    %       6    %
Extremities
                                                          
Total Sales       (3   %)    (3   %)    (7   %)    (3   %)    (5   %)
                                                                           


Wright Medical Group, Inc.

Supplemental Sales Information

(unaudited)

                    Sales as a % of Total Sales
                      
                      Three Months Ended March 31, 2013
                      Domestic   International   Total
OrthoRecon
Hips                  10   %       19      %         29  %
Knees                 11   %       12      %         23  %
Other                 0    %     1       %       1   %
Total OrthoRecon      21   %       32      %         53  %
                                                     
Extremities
Foot and Ankle        23   %       6       %         29  %
Upper Extremity       3    %       2       %         5   %
Biologics             9    %       3       %         11  %
Other                 0    %     1       %       1   %
Total Extremities     36   %       11      %         47  %
                                               
Total Sales           56   %     44      %       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
                                                   March 31, 2013
                                                   International   Total
                                                   Net Sales         Net Sales
Net sales, as reported                             $    52,550       $ 120,355
Currency impact as compared to prior period            2,138         2,138
                                                                       
Net sales, excluding the impact of foreign         $    54,688       $ 122,493
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
                                                   March 31,      March 31,
                                                   2013             2012 ^(1)
Operating Income
Operating income, as reported                      $ 8,234          $ 9,661
Reconciling items impacting Gross Profit:
Cost of sales - restructuring                        —                435
Inventory step-up amortization                      108            48     
Total                                               108            483    
Reconciling items impacting Selling, General
and Administrative expense:
U.S. governmental inquiries/DPA related              1,096            2,868
Distributor conversions                              357              —
Due diligence, transaction and transition            7,498            —
costs ^(2)
Product liability insurance recovery                (19,376 )       —      
Total                                               (10,425 )       2,868  
Reconciling items impacting Amortization of
Intangible Assets:
Amortization of distributor non-competes             1,292            —
Other Reconciling Items:
Restructuring charges                               —              443    
Operating (loss) income, as adjusted               $ (791    )      $ 13,455 
Operating (loss) income, as adjusted, as a          (0.7    )%      10.6   %
percentage of net sales

_______________________________
        Beginning in 2013, we do not adjust our reported earnings for non-cash
(1)    stock-based compensation expense in calculating adjusted earnings.
        2012 adjusted earnings have been recast to reflect this change.
        Includes $2.3 million of non-cash stock-based compensation expense
(2)     related to the conversion of BioMimetic options to Wright Medical
        options.
        


Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

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

                                                  Three Months Ended
                                                    March 31,     March 31,
                                                    2013            2012 ^(1)
Net Income
Income before taxes, as reported                    $ 10,040        $ 7,693
Pre-tax impact of reconciling items:
U.S. governmental inquiries/DPA related               1,096           2,868
Restructuring charges                                 —               878
Inventory step-up amortization                        108             48
Distributor conversion and non-competes               1,649           —
Non-cash interest expense on 2017 Convertible         2,117           —
Notes
Derivatives mark-to-market adjustment                 2,000           —
Due diligence, transaction and transition costs       7,498           —
^(2)
Product liability insurance recovery                  (19,376 )       —
Gain on previously held investment in                (7,798  )      —      
BioMimetic
(Loss) income before taxes, as adjusted              (2,666  )      11,487 
                                                                             
Provision for income taxes, as reported             $ 1,605         $ 3,132
U.S. governmental inquiries/DPA related               423             1,465
Restructuring charges                                 —               343
Inventory step-up amortization                        42              19
Distributor conversion and non-competes               637             —
Non-cash interest expense on 2017 Convertible         818             —
Notes
Derivatives mark-to-market adjustment                 778             —
Due diligence, transaction and transition costs       1,439           —
Product liability insurance recovery                  (7,486  )       —
Gain on previously held investment in                —             —      
BioMimetic
(Benefit) provision for income taxes, as            $ (1,744  )     $ 4,959  
adjusted
Effective tax rate, as adjusted                      65.4    %      43.2   %
Net (loss) income, as adjusted                      $ (922    )     $ 6,528  

_______________________________
        Beginning in 2013, we do not adjust our reported earnings for non-cash
(1)    stock-based compensation expense in calculating adjusted earnings.
        2012 adjusted earnings have been recast to reflect this change.
        Includes $2.3 million of non-cash stock-based compensation expense
(2)     related to the conversion of BioMimetic options to Wright Medical
        options.
        


Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(continued)

                  Three Months Ended            Three Months Ended
                    March 31, 2013                  March 31, 2012 ^(1)
                    As Reported   As Adjusted     As Reported   As
                                                                    Adjusted
Basic net           $   8,435       $  (922   )     $   4,561       $  6,528
income (loss)
Interest
expense on             18            N/A            N/A           137
convertible
notes
Diluted net         $   8,453       $  (922   )     $   4,561       $  6,665
income (loss)
                                                                    
Basic shares            41,438         41,438           38,492         38,492
Dilutive effect
of stock
options and             586            N/A              334            334
restricted
shares
Dilutive effect
of convertible         115           N/A            N/A           891
notes
Diluted shares          42,139         41,438           38,826         39,717
                                                                    
Net income
(loss) per          $   0.20        $  (0.02  )     $   0.12        $  0.17
share, diluted

_______________________________
        Beginning in 2013, we do not adjust our reported earnings for non-cash
(1)    stock-based compensation expense in calculating adjusted earnings.
        2012 adjusted earnings have been recast to reflect this change.
        


Wright Medical Group, Inc.

Reconciliation of As Reported Results to Non-GAAP Financial Measures

(continued)

                                                     Three Months Ended
                                                       March 31,   March 31,
                                                       2013          2012 ^(1)
Net Income per Diluted Share
Net income, as reported, per diluted share             $ 0.20        $ 0.12
Interest expense on convertible notes                    0.00          0.00
Effect of convertible notes on diluted shares            (0.00 )       (0.00 )
U.S. governmental inquiries/DPA related                  0.02          0.04
Restructuring charges                                    —             0.01
Inventory step-up amortization                           0.00          0.00
Distributor conversion and non-competes                  0.02          —
Non-cash interest expense on 2017 Convertible            0.03          —
Notes
Derivatives mark-to-market adjustment                    0.03          —
Due diligence, transaction and transition costs          0.15          —
Product liability insurance recovery                     (0.29 )       —
Gain on previously held investment in BioMimetic        (0.19 )      —     
Net (loss) income, as adjusted, per diluted share      $ (0.02 )     $ 0.17  
^(2)

_______________________________
        Beginning in 2013, we do not adjust our reported earnings for non-cash
(1)    stock-based compensation expense in calculating adjusted earnings.
        2012 adjusted earnings have been recast to reflect this change.
(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
                                             March 31, 2013   March 31, 2012
Net cash (used in) provided by operating     $   (5,168  )      $   19,080
activities
Capital expenditures                            (3,740  )         (4,531  )
Free cash flow                               $   (8,908  )      $   14,549  
                                                                            


Wright Medical Group, Inc.

Segment Income Statement

(In thousands, except share data)

(unaudited)

                 Three Months Ended March 31, 2013
                   OrthoRecon   Extremities   Corporate     Other ^(2)    Total
                                                  ^(1)
Net sales          $ 64,062       $  56,293       $ —             $ —             $ 120,355
Cost of sales       24,393      13,441     333         108         38,275  
Gross profit         39,669          42,852         (333    )       (108    )       82,080
                                                                                  
Operating
expenses:
Selling,
general and          28,957          30,160         16,301          (10,425 )       64,993
administrative
Research and         3,189           3,386          181             —               6,756
development
Amortization
of intangible       45          760        —           1,292       2,097   
assets
Total
operating            32,191          34,306         16,482          (9,133  )       73,846
expenses
                                                                      
Operating          $ 7,478     $  8,546     $ (16,815 )   $ 9,025      $ 8,234   
income (loss)
                                                                                  
Operating
income (loss)       11.7   %     15.2   %    N/A         N/A         6.8     %
as a percent
of net sales
                                                                                  
                   Three Months Ended March 31, 2013
                   OrthoRecon     Extremities     Corporate       Other ^(2)      Total
Depreciation       $ 5,322        $  2,889        $ 734           $ —             $ 8,945
expense
Amortization         45              760            —               1,292           2,097
expense
Capital              916             1,159          1,665           —               3,740
expenditures

_______________________________
(1)    Includes the impact of non-cash stock-based compensation expense.
        Other consists exclusively of the reconciling items from Operating
(2)     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 March 31, 2012
                   OrthoRecon   Extremities   Corporate     Other ^(2)   Total
                                                  ^(1)
Net sales          $ 73,783       $  52,873       $ —             $ —            $ 126,656
Cost of sales       25,203      11,209     346         483        37,241  
Gross profit         48,580          41,664         (346    )       (483   )       89,415
                                                                                 
Operating
expenses:
Selling,
general and          31,340          24,086         14,054          2,868          72,348
administrative
Research and         2,786           3,284          151             —              6,221
development
Amortization
of intangible        134             608            —               —              742
assets
Restructuring       —           —          —           443        443     
charges
Total
operating            34,260          27,978         14,205          3,311          79,754
expenses
                                                                     
Operating          $ 14,320    $  13,686    $ (14,551 )   $ (3,794 )   $ 9,661   
income (loss)
                                                                                 
Operating
income (loss)       19.4   %     25.9   %    N/A         N/A        7.6     %
as a percent
of net sales
                                                                                 
                   Three Months Ended March 31, 2012
                   OrthoRecon     Extremities     Corporate       Other ^(2)     Total
Depreciation       $ 6,397        $  2,864        $ 1,083         $ —            $ 10,344
expense
Amortization         134             608            —               —              742
expense
Capital              1,894           2,173          464             —              4,531
expenditures

_______________________________
(1)    Includes the impact of non-cash stock-based compensation expense.
        Other consists exclusively of the reconciling items from Operating
(2)     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)
                                                                           
                                        March 31, 2013   December 31, 2012
Assets
Current assets:
Cash and cash equivalents                 $  267,479         $   320,360
Marketable securities                        12,015              12,646
Accounts receivable, net                     101,350             98,636
Inventories                                  144,783             144,250
Prepaid expenses and other current          94,205            76,253    
assets
Total current assets                        619,832           652,145   
                                                                           
Property, plant and equipment, net           135,607             138,242
Goodwill and intangible assets, net          342,918             79,360
Marketable securities                        11,899              —
Other assets                                105,491           83,706    
Total assets                              $  1,215,747      $   953,453   
                                                                           
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable                          $  16,181          $   10,342
Accrued expenses and other current           130,694             65,304
liabilities
Current portion of long-term                629               786       
obligations
Total current liabilities                   147,504           76,432    
Long-term obligations                        260,645             258,504
Other liabilities                           107,991           95,076    
Total liabilities                           516,140           430,012   
                                                                           
Stockholders’ equity                        699,607           523,441   
Total liabilities and stockholders’       $  1,215,747      $   953,453   
equity
                                                                           

Contact:

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