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Form 8-K Wright Medical Group For: Aug 02

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August 2, 2016 4:23 PM EDT


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
__________________
Date of Report (Date of earliest event reported): August 2, 2016
___________________
WRIGHT MEDICAL GROUP N.V.
(Exact name of registrant as specified in its charter)

The Netherlands
1-35065
98-0509600
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)


Prins Bernhardplein 200
1097 JB Amsterdam, The Netherlands
None
(Address of principal executive offices)
(Zip Code)

(+ 31) 20 521 4777
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)    
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)    
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))    
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





TABLE OF CONTENTS






Item 2.02. Results of Operations and Financial Condition.

On August 2, 2016, Wright Medical Group N.V. (Wright) issued a press release announcing financial results for the quarter ended June 26, 2016. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and the information set forth therein is incorporated herein by reference and constitutes a part of this report.
Unless the context otherwise requires, references to "Wright," the "company," "we," "our" or "us" in this report refer to Wright Medical Group N.V. and its subsidiaries. References to "legacy Wright" refer to Wright Medical Group, Inc. and its subsidiaries and references to "legacy Tornier" refer to Tornier N.V. and its subsidiaries, in each case prior to the merger between Wright Medical Group, Inc. and Tornier N.V. (the merger or the Wright/Tornier merger).
Wright is furnishing the information contained in this report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the United States Securities and Exchange Commission (SEC). This information shall not be deemed to be filed with the SEC for purposes of Section 18 of the United States Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the United States Securities Act of 1933, as amended (Securities Act), except as expressly set forth by specific reference in such filing. By filing this report and furnishing this information, Wright makes no admission as to the materiality of any information contained in this report, including Exhibit 99.1. This report shall not be incorporated into any future filings by Wright under the Securities Act or the Exchange Act.
To supplement our consolidated financial statements prepared in accordance with United States generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, several of which are included in the press release furnished as Exhibit 99.1 to this report. The press release includes the following non-GAAP financial measures: combined pro forma net sales; combined pro forma net sales, on a constant currency basis; net income from continuing operations, as adjusted; EBITDA from continuing operations, as adjusted; cash earnings, as adjusted; cash earnings, as adjusted, per diluted share; and gross margins, as adjusted. In each case, our non-GAAP financial measures refer to results from continuing operations.
For internal budgeting and resource allocation process, our management uses financial information that does not include:
1.
non-cash inventory step-up amortization;
2.
product rationalization costs;
3.
non-cash interest expense on convertible notes;
4.
non-cash loss on extinguishment of debt;
5.
mark-to-market adjustments of derivatives;
6.
transaction and transition costs;
7.
cost associated with management changes;
8.
BioMimetic contingent value right (CVR) mark-to-market adjustments;
9.
contingent consideration fair value adjustment;
10.
legal settlement;
11.
cost associated with new convertible debt;
12.
IRS settlement; and
13.
income tax effects of the foregoing.

Additionally, for internal budgeting process and evaluation of net sales performance, management uses net sales on a constant currency basis. To measure net sales on a constant currency basis, it is necessary to remove the impact of changes in foreign currency exchange rates, which affects the comparability and trend of net sales. Net sales, on a constant currency basis, is calculated by translating current period results at prior period average foreign currency exchange rates.
For internal budgeting and resource allocation process, management uses pro forma measures to evaluate performance when certain acquisitions occur. Historical data reflects results of acquired businesses only after the acquisition dates, while pro forma data enhances comparability of financial information between periods by adjusting the data as if the acquisitions occurred at the beginning of the preceding year or period.
For internal budgeting and resource allocation process, management also uses EBITDA, EBITDA, as adjusted, and cash earnings, as adjusted. EBITDA is calculated by adding back to net loss from continuing operations charges for interest, benefit (provision) from income taxes, depreciation, and amortization expenses. EBITDA, as adjusted, is calculated by excluding non-cash share-based compensation expense, non-operating income and expense, as well as the applicable adjustments numbered above, from EBITDA. Cash earnings, as adjusted, is calculated by adding back to net loss from continuing operations charges for non-cash amortization expenses, net of taxes, as well as the applicable adjustments numbered above.




We use these non-GAAP financial measures in making operating decisions because we believe these measures provide meaningful supplemental information regarding our core operational performance and give us a better understanding of how we should invest in research and development activities and how we should allocate resources to both ongoing and prospective business initiatives. We use these measures to help make budgeting and spending decisions, for example, between research and development and selling, general and administrative expenses. Additionally, management is evaluated on the basis of some of these non-GAAP financial measures when determining achievement of their performance incentive plan compensation targets. Further, these non-GAAP financial measures facilitate management’s internal comparisons to both our historical operating results and to our competitors’ operating results by factoring out potential differences caused by charges not related to our regular, ongoing business, including without limitation, non-cash charges, certain large and unpredictable charges, acquisitions and dispositions, legal settlements, and tax positions.
As described above, we exclude the following items from one or more of our non-GAAP financial measures for the following reasons:
Foreign currency impact on net sales. We excluded the foreign currency impact on net sales compared to prior period from our non-GAAP measure, primarily because it is not reflective of our ongoing operating results, and it is not used by management for internal budgeting process and evaluation of net sales performance. We further believe that excluding this item is useful to investors in that it allows for period-over-period comparability.
Non-cash inventory step-up amortization. We excluded inventory step-up amortization associated with our acquisitions from our non-GAAP measures, primarily because it is not reflective of ongoing operating results, and it is not used by management to assess the core profitability of our business operations. Additionally, because this is a non-cash expense, it does not impact our operational performance, liquidity, or our ability to invest in research and development and to fund acquisitions and capital expenditures. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Product rationalization costs. We excluded product rationalization costs from our non-GAAP financial measures, primarily because such costs are not reflective of our ongoing operating results and are not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Non-cash interest expense on convertible notes. We excluded the non-cash interest expense on convertible notes from our non-GAAP financial measures, primarily because it is a non-cash expense. We believe that it is useful to investors to understand our operational performance, liquidity, and our ability to invest in research and development and to fund acquisitions and capital expenditures. While interest expense associated with the amortization of the debt discount constitutes an ongoing and recurring expense, such expense is excluded from our non-GAAP financial measures because it is not an expense that requires cash settlement and is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Non-cash loss on extinguishment of debt. We excluded the non-cash loss on extinguishment of debt from our non-GAAP financial measures, primarily because it is not reflective of our ongoing operating results, and it is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Mark-to-market adjustment of derivatives. We excluded the adjustment of the mark-to-market adjustments on derivatives from our non-GAAP financial measures, primarily because it is not reflective of our ongoing operating results, and it is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Transaction and transition costs. We excluded the transaction and transition costs associated with acquisitions and mergers, including the Wright/Tornier merger and the divestiture of legacy Wright's hip/knee (OrthoRecon) business, from our non-GAAP financial measures, primarily because such costs are not reflective of our ongoing operating results and are not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Cost associated with management changes. We excluded the costs associated with changes in management from our non-GAAP measures, primarily because such costs are not reflective of our ongoing operating results and are not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.




BioMimetic CVR mark-to-market adjustments. We excluded the adjustment of the mark-to-market adjustments on the contingent value rights associated with acquired assets and liabilities from our BioMimetic acquisition from our non-GAAP financial measures, primarily because it is not reflective of our ongoing operating results, and it is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that such exclusion allows for period-over-period comparability.
Contingent consideration fair value adjustment. We excluded the fair value adjustment of our contingent consideration from our non-GAAP measures, primarily because it is not reflective of our ongoing operating results, and it is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that they allow for period-over-period comparability.
Legal settlement. We excluded legal settlement from our non-GAAP financial measures, primarily because it is not reflective of our ongoing operating results and is not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Costs associated with new convertible debt. We excluded costs associated with our new convertible debt from our non-GAAP financial measures, primarily because such costs are not reflective of our ongoing operating results and are not used by management to assess the core profitability of our business operations. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
IRS settlement. We excluded interest income and a tax benefit related to the resolution of an IRS tax audit from our non-GAAP financial measures, primarily because they are not reflective of our ongoing operating results, and they are not used by management to assess the core profitability of our business operations. We further believe that excluding these items from our non-GAAP results is useful to investors in that it allows for period-over-period comparability.
Income tax effects of the foregoing. This amount is used to present each of the amounts described above, except for foreign currency exchange rate impact on net sales, on an after-tax basis consistent with the presentation of net income, as adjusted.
These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP measures and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive or standard set of accounting rules or principles. Accordingly, the calculation of our non-GAAP financial measures may differ from the definitions of other companies using the same or similar names limiting, to some extent, the usefulness of such measures for comparison purposes. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our financial results as determined in accordance with GAAP. These measures should only be used to evaluate our financial results in conjunction with the corresponding GAAP measures. Accordingly, we qualify our use of non-GAAP financial information in a statement when non-GAAP financial information is presented.
All of the historical non-GAAP financial measures used in our press release are reconciled to the most directly comparable GAAP measure. With respect to our 2016 financial guidance regarding adjusted EBITDA from continuing operations and adjusted cash earnings per share from continuing operations, we cannot provide a quantitative reconciliation to the most directly comparable GAAP measure without unreasonable effort due to our inability to make accurate projections and estimates related to certain information needed to calculate some of the adjustments. However, we have described in the press release the anticipated differences between these non-GAAP financial measures and the most directly comparable GAAP measure qualitatively.
Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit
Number
 
Description
99.1
 
Press release issued by Wright Medical Group N.V. on August 2, 2016 announcing financial results for the quarter ended June 26, 2016 (furnished herewith)

Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K, including the exhibit hereto, includes forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by the use of words




such as “anticipate,” “expect,” “intend,” “could,” “may,” “will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,” “target,” “project,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning and the use of future dates. Forward-looking statements in this report include, but are not limited to, statements about the company’s anticipated financial results for 2016, including net sales from continuing operations, adjusted EBITDA from continuing operations and adjusted cash earnings per share from continuing operations; anticipated sales and cost synergies and dis-synergies and the timing thereof; the company’s expectations regarding the market size and continued sales growth of its extremities and biologics products; the benefits of its merger with Tornier and integration efforts and progress; the anticipated closing of the sale of its large joints business to Corin, the company’s expectations regarding legacy Wright's insurance and metal-on-metal litigation and the company’s ability to create significant shareholder value. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward-looking statement contained in this report is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the failure to integrate the businesses and realize net sales synergies and cost savings from the merger with Tornier or delay in realization thereof; operating costs and business disruption as a result of the merger, including adverse effects on employee retention and sales force productivity and on business relationships with third parties; integration costs; actual or contingent liabilities; adverse effects of diverting resources and attention to the proposed sale of the large joints business; the adequacy of the company’s capital resources and need for additional financing; the timing of regulatory approvals and introduction of new products; physician acceptance, endorsement, and use of new products; failure to achieve the anticipated benefits from approval of AUGMENT® Bone Graft; the effect of regulatory actions, changes in and adoption of reimbursement rates; product liability claims and product recalls; pending and threatened litigation; risks associated with international operations and expansion; fluctuations in foreign currency exchange rates; other business effects, including the effects of industry, economic or political conditions outside of the company’s control; reliance on independent distributors and sales agencies; competitor activities; changes in tax and other legislation; and the risks identified under the heading “Risk Factors” in Wright’s Annual Report on Form 10-K for the year ended December 27, 2015 filed by Wright with the SEC on February 23, 2016 and Wright’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2016 to be filed by Wright with the SEC on August 2, 2016. Investors should not place considerable reliance on the forward-looking statements contained in this report. Investors are encouraged to read Wright’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this report speak only as of the date of this report, and Wright undertakes no obligation to update or revise any of these statements. Wright’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 2, 2016

 
WRIGHT MEDICAL GROUP N.V.
 
 
 
 
 
 
 
 
By: /s/ Lance A. Berry
 
 
Name: Lance A. Berry
 
 
Title: Senior Vice President and Chief Financial Officer
 





WRIGHT MEDICAL GROUP N.V.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit
Number
Description
Method of Filing
99.1
Press release issued by Wright Medical Group N.V. on August 2, 2016 announcing financial results for the quarter ended June 26, 2016
Furnished herewith










FOR IMMEDIATE RELEASE
Investors and Media:
Wright Medical Group N.V.
Julie D. Tracy
Sr. VP, Chief Communications Officer
(901) 290-5817 (office)

Wright Medical Group N.V. Reports 2016 Second Quarter Financial Results and Increases 2016 Guidance

Second Quarter 2016 Net Sales From Continuing Operations of $171 Million As Reported; Excludes $10 Million of Large Joint Sales, Which are Now Part of Discontinued Operations

Second Quarter 2016 Global Extremities and Biologics Net Sales Increased 112%, Driven By Year over Year Impact from Tornier Merger, and 14% on a Non-GAAP Pro Forma Constant Currency Basis

Second Quarter 2016 Net Loss From Continuing Operations of $42 Million; Significant Progress in Non-GAAP Adjusted EBITDA From Continuing Operations of $12 Million

Company Increases Full-Year 2016 Net Sales From Continuing Operations Guidance to $675 Million to $685 Million and Full-Year 2016 Non-GAAP Adjusted EBITDA From Continuing Operations Guidance to $40 Million to $45 Million

Company Provides Update on Metal-On-Metal Hip and Related Insurance Litigation

AMSTERDAM, The Netherlands - August 2, 2016 - Wright Medical Group N.V. (NASDAQ: WMGI) today reported financial results for its second quarter ended June 26, 2016 and provided updated 2016 guidance.  As a result of the previously announced binding offer under which Corin Orthopaedics Holdings Limited (Corin) would acquire the large joints (hip/knee) business from Wright, this business which was previously reported as a separate reporting segment is now reported as discontinued operations.

As previously announced, Wright Medical Group, Inc. and Tornier N.V. completed their merger on October 1, 2015, and, in accordance with Unites States generally accepted accounting principles (GAAP), legacy Wright’s historical results of operations replaced legacy Tornier’s historical results of operations for all periods prior to the merger and the results of the two legacy businesses have been consolidated only from that date forward. This release and Wright’s website at ir.wright.com contain certain unaudited non-GAAP combined pro forma financial results for Wright Medical Group N.V. which give effect to the merger as if it had occurred on the first day of fiscal 2014, as well as reconciliations to the most comparable GAAP measure.

Net sales from continuing operations totaled $170.7 million during the second quarter ended June 26, 2016. Combined pro forma net sales from continuing operations totaled $150.2 million during the second quarter of 2015. On pro forma constant currency basis, global extremities and biologics net sales grew 14%. The second quarter 2016 net sales from continuing operations excludes $10.2 million of large joint sales, which are included in discontinued operations. 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, “For the third consecutive quarter, all of our most important financial results exceeded our expectations. Global extremities and biologics pro forma constant currency net sales growth of 14%, adjusted EBITDA from continuing operations of $12.2 million and adjusted



gross margins from continuing operations of 78.5% reflect the strength of our markets and our unique position in them. We continued to successfully execute our merger integration plans and with this continued success, we believe we are well positioned to continue our strong business momentum and to deliver on our synergy commitments as we progress through the remainder of 2016.”

Palmisano continued, “Highlights in the quarter included strong contributions from the ongoing rollout of our SIMPLICITI and AEQUALIS ASCEND FLEX shoulder systems, which drove 20% sales growth in U.S. shoulders, and the ongoing launch of the INFINITY total ankle replacement system, which drove 33% sales growth in U.S. total ankle replacement. In addition, net sales of our U.S. biologics business grew 52% in the quarter, driven by the ongoing commercial activities for AUGMENT Bone Graft. Biologics is now the fastest growing part of our business. We expect all of these products, which are still early in commercial rollout, will continue to be growth engines during the remainder of 2016 and beyond.”

Palmisano further commented, “As anticipated, we began to see the impact of revenue dis-synergies in the second quarter, particularly in our U.S. lower extremities business. Although it is still too early to determine the ultimate impact of dis-synergies, where we stand today, combined with the strength of our core upper extremities and lower extremities businesses, and our anticipated ability to execute on cost synergies ahead of schedule, gives us the confidence to increase our full-year outlook. We intend to continue to focus on executing our integration plans to realize our full potential and believe that the positive progress we have made since the merger close sets us up well for continued strong net sales growth and significant margin expansion this year, next year and beyond.”

Net loss from continuing operations for the second quarter of 2016 totaled $42.0 million, or $(0.41) per diluted share.

The company’s net loss from continuing operations for the second quarter of 2016 included the after-tax effects of $10.4 million of inventory step-up amortization, $7.1 million of transition costs, a gain of $16.6 million related to mark-to-market adjustments on derivatives, $8.2 million of non-cash interest expense related to its convertible notes,$12.3 million non-cash loss on extinguishment of debt to write-off unamortized debt discount and deferred financing fees associated with the partial settlement of 2017 and 2020 convertible notes, a $1.4 million unrealized loss related to mark-to-market adjustments on contingent value rights (CVRs) issued in connection with the BioMimetic acquisition, $2.0 million of non-cash inventory provisions associated with a product rationalization initiative, $1.3 million of costs associated with executive management changes, $1.8 million related to a legal settlement, and a $3.1 million interest and income tax benefit related to the settlement of an IRS audit.

The company's second quarter 2016 net loss from continuing operations, as adjusted for the above items, was $18.8 million. The company's second quarter 2016 adjusted EBITDA from continuing operations, as defined in the non-GAAP to GAAP reconciliation provided later in this release, was $12.2 million. The attached financial tables include reconciliations of non-GAAP measures to the most comparable GAAP measures.

Cash and cash equivalents totaled $326.3 million as of the end of the second quarter of 2016.

Update on Metal-On-Metal Hip Litigation and Related Insurance Litigation

During the second and early third quarters of 2016, the company believes it made meaningful progress toward resolution of the legacy Wright metal-on-metal hip litigation and the related insurance litigation. In June 2016, the company reached a confidential settlement in principle with a subgroup of three insurance carriers.  Settlement discussions with the remaining insurance carriers continue.  In July 2016, the company and plaintiffs continued with ongoing mediation discussions. As a result of the July discussions, the company established a reasonably possible loss range applicable to a substantial portion of revision cases of $150 million to $198 million, net of expected recoveries from the insurance settlement.  Accordingly, the company has recognized a $150 million charge within discontinued operations in the accompanying condensed consolidated statement of operations.  Settlement discussions with the plaintiffs continue. The company is continuing to actively work toward its goal of securing a global settlement, although this is complex and subject to significant uncertainties, which makes the ultimate outcome and precise timing difficult to predict.




Palmisano concluded, “During the second half of the year, we look forward to closing the transaction with Corin, completing our merger integration activities and exiting the year as a high-growth, pure-play extremities and biologics company. Following our merger, our increased size and scale have allowed us to leverage strong sales growth into even stronger EBITDA growth. We have multiple opportunities through a robust new product pipeline to further accelerate our growth, continue to expand our markets and gain market share. In addition, we intend to devote our full resources and attention on accelerating growth opportunities in the high-growth extremities and biologics markets and believe this will enhance our ability to create significant shareholder value.”

Outlook

Following the previously announced transaction with Corin, the company now anticipates net sales from continuing operations for full-year 2016 of approximately $675 million to $685 million, an increase from the company’s previous guidance range of $668 million to $678 million.

The company is also increasing its full-year 2016 adjusted EBITDA from continuing operations, as described in the non-GAAP reconciliation provided later in this release, to be in the range of $40 million to $45 million from its previous range of $30 million to $35 million, which included the negative impact from the Corin transaction of approximately $5 million to $6 million. Taking this into account, the company’s actual adjusted EBITDA guidance increase is approximately $15 million from its previous guidance issued on May 4, 2016. This increase to adjusted EBITDA is driven by the company’s first half of 2016 financial performance and the company’s ability to capture synergies earlier and at a greater level than anticipated.

The company anticipates adjusted cash earnings per share from continuing operations, including share-based compensation, as described in the non-GAAP to GAAP reconciliation provided later in this release, for full-year 2016 of $(0.54) to $(0.47) per diluted share.

The company estimates approximately 103 million diluted weighted-average ordinary shares outstanding for fiscal year 2016.

The company's adjusted EBITDA from continuing operations target is measured by adding back to net loss from continuing operations charges for interest, income taxes, depreciation and amortization expenses, non-cash share-based compensation expense and non-operating income and expense. Additionally, the company’s adjusted EBITDA from continuing operations target excludes possible future acquisitions; other material future business developments; and due diligence, transaction and transition costs associated with acquisitions and divestitures. Further, this adjusted EBITDA from continuing operations target excludes any expenses, earnings or losses related to the large joints business and legacy Wright’s divested OrthoRecon business and legacy Tornier’s divested ankle and silastic toe products.

The company’s adjusted cash earnings per share from continuing operations target is measured by adding back to net loss from continuing operations charges for non-cash amortization expenses, net of taxes. Note that as a result of the company’s relatively low effective tax rate due to the valuation allowance impacting a substantial portion of the company’s income/loss, the company is currently estimating the tax effect on amortization expense at 0%. Additionally, this adjusted cash earnings per share from continuing operations target excludes possible future acquisitions; other material future business developments; non-cash interest expense associated with the 2017, 2020 and 2021 convertible notes; due diligence, transaction and transition costs associated with acquisitions and divestitures; mark-to-market adjustments to CVRs; non-cash mark-to-market derivative adjustments; and non-cash write-offs of unamortized debt discount and deferred financing charges associated with the partial settlement of the 2017 convertible notes and 2020 convertible notes. Further, this earnings target excludes any expenses, earnings or losses related to the large joints business.

The company's anticipated ranges for net sales from continuing operations, adjusted EBITDA from continuing operations, and adjusted cash earnings per share from continuing operations are forward-looking statements, as are any other statements that anticipate or aspire to future events or performance. They are subject to various risks and



uncertainties that could cause the company's actual results to differ materially from the anticipated targets. The anticipated targets are not predictions of the company's actual performance. See the cautionary information about forward-looking statements in the “Cautionary Note Regarding Forward-Looking Statements” section of this release.

Supplemental Financial Information

To view the second quarter of 2016 supplemental financial information, visit ir.wright.com. For updated information on Wright Medical Group N.V. segment reporting changes and non-GAAP combined pro forma historical financial information, including second quarter of 2016, please refer to the presentation posted on Wright’s website at ir.wright.com in the “Financial Information” section.

Internet Posting of Information

Wright routinely posts information that may be important to investors in the “Investor Relations” section of its website at www.wright.com. The company encourages investors and potential investors to consult the Wright website regularly for important information about Wright.

Conference Call and Webcast
 
As previously announced, Wright will host a conference call starting at 3:30 p.m. Central Time today.
The live dial-in number for the call is (877) 516-3529 (U.S.) / (281) 973-6135 (Outside U.S.). The participant passcode for the call is “Wright.” A simultaneous webcast of the call will be available via Wright’s corporate website at www.wright.com.

A replay of the call will be available beginning at 5:30 p.m. Central Time on August 2, 2016 through August 9, 2016. To hear this replay, dial (855) 859-2056 (U.S.) / (404) 537-3406 (Outside U.S.) and enter code 68878522. A replay of the conference call will also be available via the internet starting today and continuing for at least 12 months. To access a replay of the conference call via the internet, go to the “Investor Relations - Presentations/Calendar” section of the company’s corporate website located at www.wright.com.

The conference call may include a discussion of non-GAAP financial measures. Reference is made to the most directly comparable GAAP financial measures, the reconciliation of the differences between the two financial measures, and the other information included in this release, the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) today, or otherwise available in the “Investor Relations - Supplemental Financial Information” section of the company's corporate website located at www.wright.com.

The conference call may include forward-looking statements. See the cautionary information about forward-looking statements in the “Cautionary Note Regarding Forward-Looking Statements” section of this release.
 
About Wright Medical Group N.V.

Wright Medical Group N.V. is a global medical device company focused on extremities and biologics products. The company is committed to delivering innovative, value-added solutions improving quality of life for patients worldwide and is a recognized leader of surgical solutions for the upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics markets, three of the fastest growing segments in orthopaedics. For more information about Wright, visit www.wright.com.

WRIGHT®, INFINITY®, AUGMENT®, TORNIER®, AEQUALIS®, AEQUALIS ASCEND®, AEQUALIS ASCEND® FLEX™, and SIMPLICITI® are trademarks of Wright Medical Group N.V. or its affiliates, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.

Non-GAAP Financial Measures




To supplement the company’s consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles, the company uses certain non-GAAP financial measures in this release. Reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP measures for the respective periods can be found in tables later in this release. Wright’s non-GAAP financial measures include combined pro forma net sales; combined pro forma net sales, excluding the impact of foreign currency; net income, as adjusted; EBITDA, as adjusted; gross margin, as adjusted; cash earnings, as adjusted; and cash earnings, as adjusted, per diluted share, in each case, from continuing operations. The company's management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the company's operations, period over period. While pro forma data gives effect to the merger with Tornier as if it had occurred on the first day of fiscal 2015 and enhances comparability of financial information between periods, pro forma data is not indicative of the results that actually would have been obtained if the merger had occurred as of the beginning of 2015. Wright’s non-GAAP financial measures exclude such items as non-cash interest expense related to the company's 2017 convertible notes, 2020 convertible notes and 2021 convertible notes, net gains and losses on mark-to-market adjustments on and settlements of derivative assets and liabilities, write-off of unamortized debt discount and deferred financing charges following the partial settlement of 2017 convertible notes and 2020 convertible notes, mark-to-market adjustments on CVRs, and transaction and transition costs, all of which may be highly variable, difficult to predict and of a size that could have substantial impact on the company's reported results of operations for a period. Management uses these measures internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to employee performance compensation targets. Investors should consider these non-GAAP financial measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “intend,” “could,” “may,” “will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,” “target,” “project,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning and the use of future dates. Forward-looking statements in this release include, but are not limited to, statements about the company’s anticipated financial results for 2016, including net sales from continuing operations, adjusted EBITDA from continuing operations and adjusted cash earnings per share from continuing operations; anticipated sales and cost synergies and dis-synergies and the timing thereof; the company’s expectations regarding the market size and continued sales growth of its extremities and biologics products; the benefits of its merger with Tornier and integration efforts and progress; the anticipated closing of the sale of its large joints business to Corin, the company’s expectations regarding legacy Wright’s insurance and metal-on-metal litigation and the company’s ability to create significant shareholder value. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward-looking statement contained in this release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the failure to integrate the businesses and realize net sales synergies and cost savings from the merger with Tornier or delay in realization thereof; operating costs and business disruption as a result of the merger, including adverse effects on employee retention and sales force productivity and on business relationships with third parties; integration costs; actual or contingent liabilities; adverse effects of diverting resources and attention to the proposed sale of the large joints business; the adequacy of the company’s capital resources and need for additional financing; the timing of regulatory approvals and introduction of new products; physician acceptance, endorsement, and use of new products; failure to achieve the anticipated benefits from approval of AUGMENT® Bone Graft; the effect of regulatory actions, changes in and adoption of reimbursement rates; product liability claims and product recalls; pending and threatened litigation; risks associated with international operations and expansion; fluctuations in foreign currency exchange rates; other business effects, including the effects of industry, economic or political conditions outside of the company’s control; reliance on independent distributors and sales agencies; competitor activities; changes in tax and other legislation; and the risks identified under the heading “Risk Factors” in Wright’s Annual Report on Form 10-K for



the year ended December 27, 2015 filed by Wright with the SEC on February 23, 2016 and Wright’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2016 to be filed by Wright with the SEC on August 2, 2016. Investors should not place considerable reliance on the forward-looking statements contained in this release. Investors are encouraged to read Wright’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this release speak only as of the date of this release, and Wright undertakes no obligation to update or revise any of these statements. Wright’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.


--Tables Follow--



Wright Medical Group N.V.
Condensed Consolidated Statements of Operations
(dollars in thousands, except per share data--unaudited)
 
Three months ended
 
Six months ended
 
June 26, 2016
 
June 30, 2015
 
June 26, 2016
 
June 30, 2015
Net sales
$
170,716

 
$
80,420

 
$
340,007

 
$
158,354

Cost of sales
49,009

 
21,635

 
95,675

 
40,760

Gross profit
121,707


58,785


244,332


117,594

Operating expenses:
 
 
 
 
 
 
 
Selling, general and administrative
136,483

 
82,605

 
271,229

 
164,804

Research and development
12,108

 
7,957

 
24,224

 
15,074

Amortization of intangible assets
7,484

 
2,565

 
13,941

 
5,179

Total operating expenses
156,075

 
93,127

 
309,394

 
185,057

Operating loss
(34,368
)
 
(34,342
)
 
(65,062
)
 
(67,463
)
Interest expense, net
13,024

 
10,959

 
24,878

 
18,608

Other (income) expense, net
(2,061
)
 
(8,153
)
 
(3,129
)
 
(2,841
)
Loss from continuing operations before income taxes
(45,331
)
 
(37,148
)
 
(86,811
)
 
(83,230
)
(Benefit) provision for income taxes
(3,300
)
 
158

 
(4,588
)
 
324

Net loss from continuing operations
$
(42,031
)

$
(37,306
)
 
$
(82,223
)
 
$
(83,554
)
Loss from discontinued operations, net of tax
(187,329
)
 
$
(7,009
)
 
$
(195,135
)
 
$
(10,509
)
Net loss
$
(229,360
)
 
$
(44,315
)
 
$
(277,358
)
 
$
(94,063
)
 
 
 
 
 
 
 
 
Net loss from continuing operations per share, basic (1)
$
(0.41
)
 
$
(0.71
)
 
$
(0.80
)
 
$
(1.59
)
Net loss from continuing operations per share, diluted (1)
$
(0.41
)
 
$
(0.71
)
 
$
(0.80
)
 
$
(1.59
)
 
 
 
 
 
 
 
 
Net loss per share, basic (1)
$
(2.23
)
 
$
(0.84
)
 
$
(2.70
)
 
$
(1.79
)
Net loss per share, diluted (1)
$
(2.23
)
 
$
(0.84
)
 
$
(2.70
)
 
$
(1.79
)
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding-basic (1)
102,785

 
52,631

 
102,745

 
52,535

Weighted-average number of shares outstanding-diluted (1)
102,785

 
52,631

 
102,745

 
52,535

_______________________________
(1) 
The prior year balances were converted to meet post-merger valuations.



Wright Medical Group N.V.
Consolidated Net Sales Analysis
(dollars in thousands--unaudited)
 
Three months ended
 
Six months ended
 
June 26, 2016
 
June 30, 2015
 
%
change
 
June 26, 2016
 
June 30, 2015
 
%
change
U.S.
 
 
 
 
 
 
 
 
 
 
 
Lower extremities
52,008

 
42,360

 
22.8
 %
 
107,286

 
84,348

 
27.2
 %
Upper extremities
49,909

 
4,175

 
1,095.4
 %
 
99,910

 
8,049

 
1,141.3
 %
Biologics
17,792

 
11,281

 
57.7
 %
 
34,920

 
22,414

 
55.8
 %
Sports med & other
2,164

 
454

 
376.7
 %
 
4,301

 
945

 
355.1
 %
Total U.S.
$
121,873

 
$
58,270

 
109.2
 %
 
$
246,417

 
$
115,756

 
112.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
 
 
 
 
Lower extremities
16,241

 
12,600

 
28.9
 %
 
31,783

 
24,396

 
30.3
 %
Upper extremities
23,940

 
2,042

 
1,072.4
 %
 
44,915

 
3,959

 
1,034.5
 %
Biologics
4,867

 
5,318

 
(8.5
)%
 
9,065

 
9,810

 
(7.6
)%
Sports med & other
3,795

 
2,190

 
73.3
 %
 
7,827

 
4,433

 
76.6
 %
Total International
$
48,843

 
$
22,150

 
120.5
 %
 
$
93,590

 
$
42,598

 
119.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
Global
 
 
 
 
 
 
 
 
 
 
 
Lower extremities
68,249

 
54,960

 
24.2
 %
 
139,069

 
108,744

 
27.9
 %
Upper extremities
73,849

 
6,217

 
1,087.9
 %
 
144,825

 
12,008

 
1,106.1
 %
Biologics
22,659

 
16,599

 
36.5
 %
 
43,985

 
32,224

 
36.5
 %
Sports med & other
5,959

 
2,644

 
125.4
 %
 
12,128

 
5,378

 
125.5
 %
Total net sales
$
170,716

 
$
80,420

 
112.3
 %
 
$
340,007

 
$
158,354

 
114.7
 %





Wright Medical Group N.V.
Reconciliation of Non-GAAP Combined Pro Forma Net Sales to Net Sales
(dollars in thousands--unaudited)
 
Three months ended
 
June 30, 2015
 
Standalone Wright Medical Group, Inc.
 
Standalone Tornier N.V., recast (1)
 
Discontinued revenues (2)
 
Non-GAAP
combined pro forma
net sales
U.S.
 
 
 
 
 
 
 
Lower extremities
$
42,360

 
$
9,518

 
$
(2,930
)
 
$
48,948

Upper extremities
4,175

 
38,525

 
—

 
42,700

Biologics
11,281

 
415

 
—

 
11,696

Sports med & other
454

 
1,606

 
—

 
2,060

Total extremities & biologics
58,270

 
50,064

 
(2,930
)
 
105,404

Large joint
—

 
40

 
(40
)
 
—

Total U.S.
$
58,270

 
$
50,104

 
$
(2,970
)
 
$
105,404

 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
Lower extremities
$
12,600

 
$
2,525

 
$
—

 
$
15,125

Upper extremities
2,042

 
18,316

 
—

 
20,358

Biologics
5,318

 
127

 
—

 
5,445

Sports med & other
2,190

 
1,684

 
—

 
3,874

Total extremities & biologics
22,150

 
22,652

 
—

 
44,802

Large joint
—

 
10,465

 
(10,465
)
 
—

Total International
$
22,150

 
$
33,117

 
$
(10,465
)
 
$
44,802

 
 
 
 
 
 
 
 
Global
 
 
 
 
 
 
 
Lower extremities
$
54,960

 
$
12,043

 
$
(2,930
)
 
$
64,073

Upper extremities
6,217

 
56,841

 
—

 
63,058

Biologics
16,599

 
542

 
—

 
17,141

Sports med & other
2,644

 
3,290

 
—

 
5,934

Total extremities & biologics
80,420

 
72,716

 
(2,930
)
 
150,206

Large joint
—

 
10,505

 
(10,505
)
 
—

Total net sales
$
80,420

 
$
83,221

 
$
(13,435
)
 
$
150,206

_______________________________
(1) 
Legacy Tornier product line sales have been recast to reflect the reclassification of cement, instruments and freight from the historical Tornier product line "Large Joints and Other" to the product line associated with those revenues that will be utilized for future revenue reporting.
(2) 
To reduce from Tornier’s historical sales the U.S. sales associated with Tornier’s Salto Talaris and Salto XT ankle replacement products and silastic toe replacement products, and the global sales associated with Tornier's Large Joint business.



Wright Medical Group N.V.
Reconciliation of Non-GAAP Combined Pro Forma Net Sales to Net Sales
(dollars in thousands--unaudited)
 
Six months ended
 
June 30, 2015
 
Standalone Wright Medical Group, Inc.
 
Standalone Tornier N.V., recast (1)
 
Discontinued revenues (2)
 
Non-GAAP
combined pro forma
net sales
U.S.
 
 
 
 
 
 
 
Lower extremities
84,348

 
20,961

 
(6,827
)
 
98,482

Upper extremities
8,049

 
77,938

 
—

 
85,987

Biologics
22,414

 
878

 
—

 
23,292

Sports med & other
945

 
3,211

 
—

 
4,156

Total extremities & biologics
115,756

 
102,988

 
(6,827
)
 
211,917

Large joint
—

 
86

 
(86
)
 
—

Total U.S.
$
115,756

 
$
103,074

 
$
(6,913
)
 
$
211,917

 
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
Lower extremities
24,396

 
5,127

 
—

 
29,523

Upper extremities
3,959

 
36,431

 
—

 
40,390

Biologics
9,810

 
243

 
—

 
10,053

Sports med & other
4,433

 
3,867

 
—

 
8,300

Total extremities & biologics
42,598

 
45,668

 
—

 
88,266

Large joint
—

 
22,571

 
(22,571
)
 
—

Total International
$
42,598

 
$
68,239

 
$
(22,571
)
 
$
88,266

 
 
 
 
 
 
 
 
Global
 
 
 
 
 
 
 
Lower extremities
108,744

 
26,088

 
(6,827
)
 
128,005

Upper extremities
12,008

 
114,369

 
—

 
126,377

Biologics
32,224

 
1,121

 
—

 
33,345

Sports med & other
5,378

 
7,078

 
—

 
12,456

Total extremities & biologics
158,354

 
148,656

 
(6,827
)
 
300,183

Large joint
—

 
22,657

 
(22,657
)
 
—

Total sales
$
158,354

 
$
171,313

 
$
(29,484
)
 
$
300,183

_______________________________
(1) 
Legacy Tornier product line sales have been recast to reflect the reclassification of cement, instruments and freight from the historical Tornier product line "Large Joints and Other" to the product line associated with those revenues that will be utilized for future revenue reporting.
(2) 
To reduce from Tornier’s historical sales the U.S. sales associated with Tornier’s Salto Talaris and Salto XT ankle replacement products and silastic toe replacement products, and the global sales associated with Tornier's Large Joint business.




Wright Medical Group N.V.
Supplemental Combined Pro Forma Net Sales Information
(unaudited)
 
Second Quarter 2016 sales growth/(decline)
 
U.S. combined
pro
forma
Int'l combined pro forma
constant
currency
Int'l combined
pro
forma
Global combined pro
forma constant
currency
Global combined
pro
forma
Product line
 
 
 
 
 
Lower extremities
6%
9%
7%
7%
7%
Upper extremities
17%
17%
18%
17%
17%
Biologics
52%
(7%)
(11%)
33%
32%
Sports med & other
5%
(1%)
(2%)
1%
—%
Total net sales
16%
10%
9%
14%
14%

 
Six months ended June 26, 2016 sales growth/(decline)
 
U.S. combined
pro
forma
Int'l combined pro forma
constant
currency
Int'l combined
pro
forma
Global combined pro
forma constant
currency
Global combined
pro
forma
Product line
 
 
 
 
 
Lower extremities
9%
10%
8%
9%
9%
Upper extremities
16%
13%
11%
15%
15%
Biologics
50%
(6%)
(10%)
33%
32%
Sports med & other
3%
(3%)
(6%)
(1%)
(3%)
Total net sales
16%
8%
6%
14%
13%




Wright Medical Group N.V.
Reconciliation of Non-GAAP Adjusted Gross Margins to Gross Profit from Continuing Operations
(dollars in thousands--unaudited)
 
Three months ended
 
Six months ended
 
June 26, 2016
 
June 26, 2016
Gross profit from continuing operations, as reported
$
121,707

 
$
244,332

Reconciling items impacting gross profit:
 
 
 
Inventory step-up amortization
10,387

 
20,616

Product rationalization
1,954

 
1,954

Transaction and transition costs
—

 
124

Non-GAAP gross profit from continuing operations, as adjusted
$
134,048

 
$
267,026

Net sales from continuing operations
170,716

 
340,007

Adjusted gross margins from continuing operations
78.5
%
 
78.5
%

Wright Medical Group N.V.
Reconciliation of Non-GAAP Cash Earnings Per Share to Net Loss from Continuing Operations
(dollars in thousands, except per share data--unaudited)
 
Three months ended
 
Six months ended
 
June 26, 2016
 
June 26, 2016
Net loss from continuing operations, as reported
$
(42,031
)
 
$
(82,223
)
Other reconciling items:
 
 
 
Inventory step-up amortization (1)
10,387

 
20,616

Product rationalization (1)
1,954

 
1,954

Non-cash interest expense on convertible notes
8,240

 
15,296

Non-cash loss on extinguishment of debt
12,343

 
12,343

Derivatives mark-to-market adjustments
(16,632
)
 
(23,273
)
Transaction and transition costs (3)
7,060

 
17,893

Management changes (2)
1,348

 
1,348

CVR mark-to-market adjustments
1,401

 
6,725

Contingent consideration fair value adjustment
306

 
306

Legal settlement (2)
1,800

 
1,800

Costs associated with new convertible debt (2)
234

 
234

IRS settlement (4)
(3,073
)
 
(3,073
)
Tax effect of reconciling items
(2,132
)
 
(3,321
)
Non-GAAP net loss from continuing operations, as adjusted
$
(18,795
)
 
$
(33,375
)
Add back amortization of intangible assets
7,484

 
13,941

Non-GAAP cash earnings
$
(11,311
)
 
$
(19,434
)
Weighted-average basic shares outstanding
102,785

 
102,745

Non-GAAP cash earnings per share
$
(0.11
)
 
$
(0.19
)
_______________________________
(1) 
Impacting Gross Profit.
(2) 
Impacting Selling, General, and Administrative expense.
(3) 
Impacting Selling, General, and Administrative expense and Research and Development expense for $7.0 million and $0.1 million, respectively, for the three months ended June 26, 2016. Impacting Gross Profit; Selling, General, and Administrative expense; and Research and Development expense for $0.1 million, $17.5 million, and $0.2 million, respectively, for the six months ended June 26, 2016.
(4) 
IRS settlement includes $0.8 million of interest income and $2.3 million tax benefit.




Wright Medical Group N.V.
Reconciliation of Non-GAAP Adjusted EBITDA to Net Loss from Continuing Operations
(dollars in thousands--unaudited)
 
Three months ended
 
Six months ended
 
June 26, 2016
 
June 26, 2016
Net loss from continuing operations
$
(42,031
)
 
$
(82,223
)
Interest expense, net
13,024

 
24,878

Benefit from income taxes
(3,300
)
 
(4,588
)
Depreciation
13,270

 
26,120

Amortization
7,484

 
13,941

Non-GAAP EBITDA
$
(11,553
)
 
$
(21,872
)
Reconciling items impacting EBITDA:
 
 
 
Non-cash share-based compensation expense
3,056

 
6,373

Other income, net
(2,061
)
 
(3,129
)
Inventory step-up amortization
10,387

 
20,616

Product rationalization
1,954

 
1,954

Transaction and transition costs
7,060

 
17,893

Management changes
1,348

 
1,348

Legal settlement
1,800

 
1,800

Costs associated with new convertible debt
234

 
234

Non-GAAP adjusted EBITDA
$
12,225

 
$
25,217





Wright Medical Group N.V.
Condensed Consolidated Balance Sheets
(dollars in thousands--unaudited)
 
June 26, 2016
 
December 27, 2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
326,251

 
$
139,804

Accounts receivable, net
125,350

 
131,050

Inventories
182,995

 
210,701

Prepaid expenses and other current assets
127,297

 
59,842

Current assets held for sale
23,305

 
18,487

Total current assets
785,198

 
559,884

 
 
 
 
Property, plant and equipment, net
216,041

 
224,256

Goodwill and intangible assets, net
1,115,290

 
1,117,917

Other assets (1)
127,436

 
139,754

Non-current assets held for sale
—

 
31,683

Total assets (1)
$
2,243,965

 
$
2,073,494

 
 
 
 
Liabilities and shareholders' equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
28,104

 
$
30,904

Accrued expenses and other current liabilities
368,124

 
171,171

Current portion of long-term obligations
2,009

 
2,171

Current liabilities held for sale
1,799

 
2,692

Total current liabilities
400,036

 
206,938

Long-term obligations (1)
759,461

 
561,201

Other liabilities
242,099

 
250,329

Total liabilities (1)
1,401,596

 
1,018,468

 
 
 
 
Shareholders' equity
842,369

 
1,055,026

Total liabilities and shareholders' equity (1)
$
2,243,965

 
$
2,073,494

_______________________________
(1) 
The prior year debt issuance costs were reclassified to account for adoption of ASU 2015-03 and ASU 2015-15.




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