Wright Medical Group N.V. (WMGI) saw its loss widen to $58.70 million, or $0.57 a share for the quarter ended Mar. 26, 2017. In the previous year period, the company reported a loss of $47.99 million, or $0.47 a share. On an adjusted basis, net loss from continuing operations for the quarter was $16.23 million, when compared with $14.58 million in the last year period. Revenue during the quarter grew 4.67 percent to $177.19 million from $169.29 million in the previous year period. Gross margin for the quarter expanded 661 basis points over the previous year period to 79.05 percent. Operating margin for the quarter stood at negative 5.42 percent as compared to a negative 18.13 percent for the previous year period.
Operating loss for the quarter was $9.60 million, compared with an operating loss of $30.69 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $18.17 million compared with $12.99 million in the prior year period. At the same time, adjusted EBITDA margin improved 258 basis points in the quarter to 10.26 percent from 7.67 percent in the last year period.
Robert Palmisano, president and chief executive officer, commented, "Our upper extremities business continued to have strong growth as SIMPLICITI drove 13% growth in U.S. shoulder. Additionally, we launched our PERFORM reversed glenoid in March and anticipate that this will drive accelerating revenue in the second half of the year as we deliver additional instrument sets to the U.S. field."
For financial year 2017, Wright Medical Group N.V. projects revenue to be in the range of $755 million to $765 million. It forecasts diluted loss per share to be in the range of $0.33 to $0.26 on adjusted basis for the same period.
Working capital turns negative
Working capital of Wright Medical Group N.V. has turned negative to $54.59 million on Mar. 26, 2017 from positive $327.93 million on Mar. 27, 2016. Current ratio was at 0.95 as on Mar. 26, 2017, down from 2.64 on Mar. 27, 2016. Cash conversion cycle (CCC) has decreased to 170 days for the quarter from 443 days for the last year period. Days sales outstanding went down to 64 days for the quarter compared with 69 days for the same period last year.
Days inventory outstanding has decreased to 188 days for the quarter compared with 434 days for the previous year period. At the same time, days payable outstanding went up to 82 days for the quarter from 60 for the same period last year.
Debt increases substantially
Wright Medical Group N.V. has witnessed an increase in total debt over the last one year. It stood at $814.58 million as on Mar. 26, 2017, up 42.28 percent or $242.05 million from $572.53 million on Mar. 27, 2016. Total debt was 33.55 percent of total assets as on Mar. 26, 2017, compared with 28.92 percent on Mar. 27, 2016. Debt to equity ratio was at 1.24 as on Mar. 26, 2017, up from 0.56 as on Mar. 27, 2016.
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