AMSTERDAM, The Netherlands, May 07, 2019 (GLOBE NEWSWIRE) — Wright Medical Group N.V. (WMGI) today reported financial results for its first quarter ended March 31, 2019 and reiterated its 2019 annual guidance. Unless otherwise noted, all net sales growth rates in this release are stated on a constant currency basis.
Net sales totaled $230.1 million during the first quarter ended March 31, 2019, representing 15.9% as reported, 17.8% constant currency, 12.7% pro-forma constant currency and 13.1% organic constant currency growth. Gross margins were 80% during the first quarter of 2019, both as reported and on a non-GAAP adjusted basis. Reconciliations of all historical non-GAAP financial measures used in this release to the most comparable GAAP measures can be found in the attached financial tables.
Robert Palmisano, president and chief executive officer, commented, “Our first quarter net sales results represent an outstanding start to 2019, with 18% constant currency growth, and 13% pro-forma and organic constant currency growth, driven by exceptional performance across our total U.S. business with organic growth of 17%. This was led by U.S. upper extremities growth of 21% and 11% organic U.S. foot and ankle growth, with 18% growth in our total ankle franchise and above market growth in the ambulatory surgery center segment. In addition, Cartiva sales of $9.2 million finished ahead of expectations and returned to year over year growth ahead of schedule.”
Palmisano continued, “Our U.S. shoulder business delivered another strong performance with 21% growth, which is approximately triple the market growth rate. We continue to take share in U.S. shoulder, and we anticipate that accelerating adoption of our BLUEPRINT enabling technology, SIMPLICITI shoulder, our ongoing PERFORM Reversed launch and the upcoming full launch of our REVIVE revision shoulder system will continue to drive outstanding shoulder sales growth in 2019 and beyond. On the lower extremities side of the business, we had an excellent quarter organically with high teens growth in total ankle and strong double-digit growth in the ambulatory surgery center portion of our business. Additionally, Cartiva was fully launched with our U.S. lower extremities sales force on January 1, including the integration of the former Cartiva distributors that we have chosen to retain. We couldn’t be happier with the Cartiva acquisition. This provides us with another platform technology with high gross margins and many avenues for growth.”
Palmisano further commented, “In addition to these strong sales growth results, we also achieved record gross margins of 80% and adjusted EBITDA margin expansion of approximately 300 basis points, all of which we believe put us on a strong pathway for the remainder of the year and right on track to achieve our previously stated goals of double-digit net sales growth and adjusted EBITDA margin in excess of 20% for the full fourth quarter of 2019.”
Net loss from continuing operations for the first quarter of 2019 totaled $30.3 million, or $(0.24) per diluted share.
The company’s net loss from continuing operations for the first quarter of 2019 included the after-tax impacts of a $14.3 million loss on the exchange of cash convertible notes, primarily due to the settlement of related conversion derivatives, non-cash interest expense of $12.3 million related to its convertible notes, $0.4 million of transition costs, a $0.4 million loss related to fair value adjustments to contingent consideration, non-cash amortization of inventory step-up of $0.4 million associated with inventory acquired from the Cartiva acquisition, a $1.0 million gain related to mark-to-market adjustments on derivative assets and liabilities, a $0.4 million gain related to mark-to-market adjustments on contingent value rights (CVRs) issued in connection with the BioMimetic acquisition, non-cash foreign currency translation income of $0.3 million, and $2.6 million of tax expense due to a change in tax rates on income from deferred intercompany transactions.
The company’s first quarter 2019 non-GAAP net loss from continuing operations, as adjusted for the above items, was $1.7 million. The company’s first quarter 2019 non-GAAP adjusted EBITDA from continuing operations, as defined in the non-GAAP to GAAP reconciliation provided later in this release, was $37.4 million. The attached financial tables include reconciliations of all historical non-GAAP measures to the most comparable GAAP measures.
Cash and cash equivalents totaled $161.5 million as of the end of the first quarter of 2019.
Palmisano concluded, “We have accomplished much on all of our financial and organizational metrics over the past several quarters. We see that pace continuing. We exited the quarter on a strong, positive trajectory, and I continue to be optimistic as we look forward. I believe we are set up well for double-digit net sales growth and significant EBITDA margin expansion in 2019 and beyond. We also believe our new digital organization that was announced earlier today will pay dividends well into the future. We have leadership positions in three of the fastest growing markets in orthopaedics. Additionally, we have truly differentiated products in all of our market segments, exceptional enabling technologies for shoulder and total ankle, very high gross margins and specialized sales forces that are performing at a high level.”