Credit: Shutterstock photoWright 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.
Wright Medical Group Inc. - Earnings Surprise | FindTheBest
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.
Segment Details
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.
Guidance
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).
Other favorably ranked stocks in the medical sector include Edwards Lifesciences EW Masimo Corp MASI and IRadimed IRMD . All the three stocks sport a Zacks Rank #1 (Strong Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
