Wright Medical Group N.V.WMGI reported loss of 38 cents per share in the first quarter of 2016, much narrower than the loss of 88 cents reported in the year-ago quarter.
Including one-time adjustments of 26 cents, the loss figure was 12 cents per share, narrower than the Zacks Consensus Estimate of a loss of 29 cents.
Net sales increased 11.7% year over year (up 12% on constant currency) to $181 million, comfortably beating the Zacks Consensus Estimate of $171 million. The growth was driven by strong performance by the legacy Wright lower extremity, Tornier upper extremity and the booming biologic businesses.
U.S. sales increased almost 17% from the year-ago quarter to $124.6 million. International sales inched up 1.6% year over year to $56.5 million.
Wright Medical reported revenues under two major segments: Total Extremities & Biologics and Large Joint. Total Extremities & Biologics include four sub-segments, namely, Lower Extremities, Upper Extremities, Biologics and Sports Med & Other.
Total Extremities & Biologics increased approximately 13% year over year (14% on constant currency) to $169.3 million. U.S. sales increased almost 17% to $124.5 million, while international sales climbed 3% to $44.7 million. International sales were led by strong growth in Australian and European markets, partially offset by slower growth in Asia and Latin America.
U.S. Lower Extremities sales increased 11.6% from the year-ago quarter to $55.3 million, driven by improved sales across the legacy Wright portfolio, which grew in the high teens, including 31% growth in total ankle products. Initial response from physicians in the U.S. for the recently launched SALVATION Limb Salvage system was positive. International sales improved roughly 8% to $15.5 million.
Upper Extremities sales in U.S. increased 15.5% year over year to $50 million on the back of increased sales of Ascend Flex and the SIMPLICITI shoulder system. Further, as the first ultra-short stem shoulder implant system in the U.S., SIMPLICITI provided Wright Medical with first mover access of about $200 million to $250 million. International sales increased 12.1% from the year-ago quarter to almost $71 million.
Biologics had strong U.S. sales with almost 47.7% year-over-year growth to $17.1 million, primarily owing to increased AUGMENT sales. International sales however declined 8.9% to $4.2 million in the quarter.
U.S. sales in Sports, Med & Other increased 2% from the year-ago quarter to $2.1 million. International sales declined 5.4% to $6.2 million.
Large Joint sales declined across both in the U.S. and international markets. In the U.S., sales were down 43.5% year over year to $26 million while international sales declined 3.3% year over year to $11.7 million.
Wright Medical raised its full-year 2016 guidance based on the strong first-quarter revenue growth. The company now expects net sales in the range of $705 million to $715 million, up from $695 million to $705 million (including 1.5% foreign exchange volatility). The projected figures reflect about $25 million to $30 million of potential net sales dis-synergies expected to be realized throughout 2016 from the Tornier merger.
Adjusted EBITDA is now estimated in the range of $30--$35 million, up from the earlier guided range of $20-$30 million. Wright Medical continues to expect $10 million to $15 million in cost synergies for 2016. The cost synergy is forecasted in the range of $40 million to $45 million in the third year, post the completion of the merger of Wright Medical and Tornier.
Zacks Rank & Other Key Picks
Currently, Wright Medical carries a Zacks Rank #2 (Buy).
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