Robert Palmisano, President and Chief Executive Officer, commented, “Although our fourth quarter results were stronger than anticipated, we are not satisfied with our 2011 financial performance relative to the market opportunities, and we have much work ahead of us to improve our execution, efficiency and return to a high growth company. My top priorities will be to grow our foot and ankle business above market rates, run a much more focused and efficient ortho-recon business, and increase cash generation. I believe these initiatives will in turn drive growth and shareholder value.”
Palmisano continued, “We plan on making a number of important changes over the next several months that we believe will transform our business and deliver significant long-term shareholder return:
- First, we plan to make the necessary investments to aggressively convert a major portion of our U.S. independent distributor foot and ankle territories to direct sales representation in order to increase sales productivity and maximize the growth opportunity that we see in this business. We also believe this will benefit our ortho-recon franchise as it continues to be an important part of our business;
- Second, we will focus on driving significant improvements in customer satisfaction in our ortho-recon business while vigorously protecting our position;
- Third, we plan to significantly reduce inventories to improve cash flow and operational efficiency;
- Fourth, we are substantially increasing our investment in medical education and foot and ankle product development to drive market adoption of new products and technologies; and
- Lastly, we will pursue internal and external development opportunities to expand our extremities and biologic product portfolio.”
Palmisano commented further, “As our guidance implies, these transformational changes for our business will require significant investment in 2012, which will negatively impact our full-year 2012 results. However, we believe these investments will generate significant future returns, including accelerating foot and ankle sales growth rates and improving inventory management and cash generation. We are enthusiastic about our plan and look forward to executing our current strategies and improving our performance.”
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