Wright Medical Group (WMGI), a leading orthopedic company, recently announced that its Board of Directors has selected Mr. David D. Stevens as interim President and CEO with immediate effect. He will continue to be the Chairman of the Board.
Mr. Stevens comes in place of Mr. Gary D. Henley who resigned, on April 4, 2011, from his position as CEO and President as well as a director. Mr. Henley had held these positions since 2006. He submitted his resignation ahead of a Board meeting to discuss management’s monitoring of Wright Medical’s current compliance effort.
The Board chose to honor Mr. Henley’s resignation. His resignation is deemed to be lacking in “good reason” as per his employment contract and he will consequently not be eligible to receive severance.
Wright Medical also stated that its Board had terminated the services of Mr. Frank S. Bono, its Chief Technology Officer and Senior Vice President, for not demonstrating adequate regard toward its current compliance program.
The company stated that changes in its top management were not connected to either its financial and operational situation or financial reporting. It maintains that its adjusted earnings per share (with and without non-cash stock based expense) for the first quarter of 2011 will be in consonance with consensus estimates.
The Board of Directors of the company has set up a committee consisting of Robert J. Quillinan, Mr. David D. Stevens, John L. Miclot and Lawrence W. Hamilton to conduct a search for a permanent CEO. Mr. Stevens has requested that he should not be considered for the position of permanent CEO. He will, however, fulfill his role as interim CEO until the selection of the next CEO.
Wright Medical is a global orthopedic devices company specializing in the design, manufacture and marketing of reconstructive joint devices and bio-orthopedic materials. It is a leading provider of surgical solutions for the foot and ankle market.
We feel future revenue growth will be supported by new product (including internally developed and those from acquisitions) launches. Moreover, new deals in extremities, Wright Medical’s fastest growing segment, are expected to bolster growth in this business.
Our views are moderated by intense competition from larger players, pricing pressure, and a still soft U.S. orthopedic reconstruction market. Wright Medical competes with much larger players such as Zimmer Holdings (ZMH), Stryker (SYK), Johnson & Johnson’s (JNJ) De Puy and Smith & Nephew (SNN). We are currently Neutral on the stock.
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
SMITH & NEPHEW (SNN): Free Stock Analysis Report
STRYKER CORP (SYK): Free Stock Analysis Report
WRIGHT MEDICAL (WMGI): Free Stock Analysis Report
ZIMMER HOLDINGS (ZMH): Free Stock Analysis Report
Zacks Investment Research
