Wright Medical Group, Inc. (NASDAQ: WMGI), a global orthopaedic medical device company and a leading provider of surgical solutions for the foot and ankle market, today reported financial results for its fourth quarter ended December 31, 2011 and provided financial guidance for 2012.
Net sales totaled $126.9 million during the fourth quarter ended December 31, 2011, representing an 8% decrease from net sales of $138.3 million during the fourth quarter of 2010. Excluding the impact of foreign currency, net sales decreased 9% in the fourth quarter of 2011, as compared to the same period last year. During the fourth quarter of 2011, U.S. sales were negatively affected by previously announced distributor transitions that occurred in the third quarter of 2011 and challenges associated with implementing enhancements to the Company’s compliance processes.
Net income for the fourth quarter of 2011 totaled $1.2 million or $0.03 per diluted share, compared to net income of $8.9 million or $0.22 per diluted share in the fourth quarter of 2010.
Net income for the fourth quarter of 2011 included the after-tax effects of $2.8 million of charges associated with the previously announced cost restructuring plan, $3.4 million of expenses associated with the Company’s deferred prosecution agreement (DPA), and $2.4 million of non-cash stock-based compensation expense, as well as a $1.0 million income tax provision for an estimated IRS audit liability. Net income for the fourth quarter of 2010 included the after-tax effects of approximately $3.0 million of non-cash stock-based compensation expense and $1.3 million of expenses related to the U.S. governmental inquiry.
The Company’s fourth quarter net income, as adjusted, was $6.7 million in 2011 compared to $11.8 million in 2010, while diluted earnings per share, as adjusted, was $0.17 in the fourth quarter of 2011 compared to $0.29 in the fourth quarter of 2010. A reconciliation of U.S. GAAP to “as adjusted” results is included in the attached financial tables.