Wright Medical Group Inc. (WMGI, Financial) filed Quarterly Report for the period ended 2010-06-30.
Wright Medical Group Inc. has a market cap of $621.8 million; its shares were traded at around $16.02 with a P/E ratio of 25.8 and P/S ratio of 1.3. WMGI is in the portfolios of Paul Tudor Jones of The Tudor Group, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Steven Cohen of SAC Capital Advisors.
Net Sales. Overall, our net sales increased 7% in the second quarter of 2010 compared to the second quarter of 2009. We experienced continued growth in our extremity product line, which increased 15% over prior year, as well as growth of 8%, 5%, and 2% in our hip, knee and biologic product lines, respectively. Geographically, our domestic net sales totaled $76.5 million in the second quarter of 2010 and $73.1 million in the second quarter of 2009, representing 60% and 62% of total net sales, respectively, and growth of 5% in 2010 compared to 2009. Our international net sales totaled $51.3 million in the second quarter of 2010, compared to $45.8 million in the second quarter of 2009, representing growth of 12%. This increase is primarily a result of increased sales in Europe, Japan, and Australia.
Our extremity product line net sales increased to $29.5 million in the second quarter of 2010, representing growth of 15% over the second quarter of 2009. Domestically, extremity product sales increased 13% over the second quarter of 2009, as higher levels of sales of our foot and ankle products were partially offset by declines in certain of our upper extremity products. Our international extremity sales increased 25% compared to the same period in 2009 primarily due to increased sales by our new subsidiary in Australia.
Selling, General and Administrative. Our selling, general and administrative expenses as a percentage of net sales totaled 53.1% in the second quarter of 2010, a 2.2 percentage point decrease from 55.3% in the second quarter of 2009. Selling, general and administrative expense for the second quarter of 2010 included $3.2 million of non-cash, stock based compensation expense (2.5% of net sales) and $606,000 of costs associated with U.S. government inquiries (0.5% of net sales). During the second quarter of 2009, selling, general and administrative expense included $3.2 million of non-cash, stock based compensation expense (2.7% of net sales) and $2.0 million of costs, primarily legal fees, associated with U.S. government inquiries (1.7% of net sales). The decrease in selling, general and administrative expenses as a percentage of sales during the second quarter of 2010 is primarily the result of lower levels of expenses associated with U.S. government inquiries, savings realized from our restructuring efforts, and cost savings initiatives, partially offset by higher levels of spending on compliance and cash incentive compensation.
Net Sales. Net sales totaled $259.0 million during the first six months of 2010, representing a 8% increase over the first six months in the prior year. The increase in net sales is primarily attributable to 16% growth over prior year in our extremity product line, 9% growth in our hip product line and a favorable currency impact of $2.4 million. Specifically, the increase in our extremities product line can be attributed to increased domestic sales in our foot and ankle products, including sales of our DARCO® plating systems, the continued success of our CHARLOTTE Foot and Ankle system, sales of our INBONE products, and sales of ORTHOLOC Polyaxial Locked Plating System launched in September 2009.
In the first six months of 2010, domestic net sales increased by 5% over the first six months of 2009 to $154.2 million, or 59.5% of total net sales. International sales totaled $104.8 million, including the aforementioned favorable currency impact of $2.4 million, representing an increase of 14% over the first six months in the prior year. This increase is attributable to growth in Europe, Japan, and Australia, as well as the favorable currency impact.
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Wright Medical Group Inc. has a market cap of $621.8 million; its shares were traded at around $16.02 with a P/E ratio of 25.8 and P/S ratio of 1.3. WMGI is in the portfolios of Paul Tudor Jones of The Tudor Group, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Our second quarter domestic sales increased 5% in 2010, primarily due to 13% growth within our extremity line. Our domestic extremities growth is primarily attributable to higher sales volume of our foot and ankle products, in particular our INBONE products, our ORTHOLOC Polyaxial Locked Plating System, launched in September 2009, and our DARCO® plating systems . Domestic sales of our hip products increased by 2% in the second quarter of 2010 as compared to the same period in 2009, while both our domestic knee sales and domestic biologic sales increased by less than 1%.Net Sales. Overall, our net sales increased 7% in the second quarter of 2010 compared to the second quarter of 2009. We experienced continued growth in our extremity product line, which increased 15% over prior year, as well as growth of 8%, 5%, and 2% in our hip, knee and biologic product lines, respectively. Geographically, our domestic net sales totaled $76.5 million in the second quarter of 2010 and $73.1 million in the second quarter of 2009, representing 60% and 62% of total net sales, respectively, and growth of 5% in 2010 compared to 2009. Our international net sales totaled $51.3 million in the second quarter of 2010, compared to $45.8 million in the second quarter of 2009, representing growth of 12%. This increase is primarily a result of increased sales in Europe, Japan, and Australia.
Our extremity product line net sales increased to $29.5 million in the second quarter of 2010, representing growth of 15% over the second quarter of 2009. Domestically, extremity product sales increased 13% over the second quarter of 2009, as higher levels of sales of our foot and ankle products were partially offset by declines in certain of our upper extremity products. Our international extremity sales increased 25% compared to the same period in 2009 primarily due to increased sales by our new subsidiary in Australia.
Selling, General and Administrative. Our selling, general and administrative expenses as a percentage of net sales totaled 53.1% in the second quarter of 2010, a 2.2 percentage point decrease from 55.3% in the second quarter of 2009. Selling, general and administrative expense for the second quarter of 2010 included $3.2 million of non-cash, stock based compensation expense (2.5% of net sales) and $606,000 of costs associated with U.S. government inquiries (0.5% of net sales). During the second quarter of 2009, selling, general and administrative expense included $3.2 million of non-cash, stock based compensation expense (2.7% of net sales) and $2.0 million of costs, primarily legal fees, associated with U.S. government inquiries (1.7% of net sales). The decrease in selling, general and administrative expenses as a percentage of sales during the second quarter of 2010 is primarily the result of lower levels of expenses associated with U.S. government inquiries, savings realized from our restructuring efforts, and cost savings initiatives, partially offset by higher levels of spending on compliance and cash incentive compensation.
Net Sales. Net sales totaled $259.0 million during the first six months of 2010, representing a 8% increase over the first six months in the prior year. The increase in net sales is primarily attributable to 16% growth over prior year in our extremity product line, 9% growth in our hip product line and a favorable currency impact of $2.4 million. Specifically, the increase in our extremities product line can be attributed to increased domestic sales in our foot and ankle products, including sales of our DARCO® plating systems, the continued success of our CHARLOTTE Foot and Ankle system, sales of our INBONE products, and sales of ORTHOLOC Polyaxial Locked Plating System launched in September 2009.
In the first six months of 2010, domestic net sales increased by 5% over the first six months of 2009 to $154.2 million, or 59.5% of total net sales. International sales totaled $104.8 million, including the aforementioned favorable currency impact of $2.4 million, representing an increase of 14% over the first six months in the prior year. This increase is attributable to growth in Europe, Japan, and Australia, as well as the favorable currency impact.
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