Wright Medical Group, Inc. (WMGI) reported that it will incur a relocation cost of as much as $4 million for relocating its French distribution and supply operations to its European headquarters in Amsterdam. The relocation plan was first announced by the company in Oct 2009. Wright expects to complete the relocation by Dec 31, 2009.

Wright provided a detailed breakdown of these expenses that include: $1 million-$1.5 million for severance and other termination benefits; $1 million -$1.5 million for contract termination charges; $500,000 for external legal and professional fees; and $500,000 for other restructuring related costs. The company expects to report most of these expenses in the fourth quarter of 2009 and the rest in 2010.

We think that Wright Medical will be least affected by the relocation cost. The company reported strong fiscal third quarter 2009 results.

Earnings per share stood at 14 cents, beating the Zacks Consensus Estimate of 9 cents. However, earnings was flat on a year-over-year basis.

Wright Medical also reported sales growth of 6% year over year in the third quarter. Growth was registered in the company’s hip, knee and extremity products.

Wright Medical is a global orthopedic devices company specializing in the design, manufacture and marketing of reconstructive joint devices and bio-orthopedic materials. The orthopedic industry is highly competitive, and Wright Medical faces challenges from large players, such as, Zimmer Holdings Inc. (ZMH), Stryker Corp. (SYK), Johnson & Johnson/De Puy (JNJ), Smith & Nephew plc. (SNN) and Biomet.

Currently, we have a Neutral recommendation on Wright Medical.

Zacks Investment Research

1. (WMGI) Wright Medical Group Earns Favorable Judgement in Patent CaseWright Medical Group, Inc. (WMGI) recently received a favorable summary judgment in its patent infringement...
2. (WMGI) Wright Medical Group Receives FDA ApprovalWright Medical Group, Inc. (WMGI) recently received the Food and Drug administration (FDA) approval to...
3. (WMGI) Wright Medical Group Eclipses Consensus EstimatesWright Medical Group, Inc. (WMGI) reported third-quarter earnings per share of 19 cents, surpassing the...
4. (WMGI) Wright Medical Group in Expansion ModeYesterday, Wright Medical Group Inc. (WMGI) announced the launch of its direct Australian subsidiary subsidiary,...
5. (WMGI) Wright Medical Group Launches New DeviceWright Medical Group, Inc. (WMGI) launched a new product for surgical treatment of foot and...
6. (JNJ) Wright Medical’s New ProductWright Medical Group Inc. (WMGI) launched a new product, CORETRAK Articulating External Fixator, which is...

Search Posts by Tag: JNJ | Johnson & Johnson | Smith & Nephew Plc | SNN | Stryker Corporation | SYK | WMGI | Wright Medical Group Inc | Zimmer Holdings Inc | ZMH | Healthcare | Medical Appliances & Equipment

RSS Feeds by Tag: JNJ | Johnson & Johnson | Smith & Nephew Plc | SNN | Stryker Corporation | SYK | WMGI | Wright Medical Group Inc | Zimmer Holdings Inc | ZMH | Healthcare | Medical Appliances & Equipment |

Other Posts by: vitalstocks | RSS Feed for this author