Delaware | ||||
(State or other jurisdiction of incorporation) |
001-16407 (Commission File Number) |
13-4151777 (IRS Employer Identification No.) |
Exhibit No. | Description | |
99.1
|
Press Release, dated July 27, 2011, issued by the Registrant |
ZIMMER HOLDINGS, INC. |
||||
By: | /s/ Chad F. Phipps | |||
Name: | Chad F. Phipps | |||
Title: | Senior Vice President, General Counsel and Secretary |
Exhibit No. | Description | |
99.1
|
Press Release, dated July 27, 2011, issued by the Registrant |
Media | Investors | |||
Garry R. Clark | Robert J. Marshall Jr. | |||
574-372-4493 | 574-371-8042 | |||
garry.clark@zimmer.com | robert.marshall@zimmer.com |
| Net Sales of $1,137 million for the second quarter represent an increase of 7.5% reported (2.1% constant currency) over the prior year period | ||
| Diluted EPS for the second quarter were $1.06 reported, an increase of 29.3% over the prior year period, and $1.21 adjusted, an increase of 11% over the prior year period | ||
| Company updates full-year sales and EPS guidance |
1
2
3
Constant | ||||||||||||
Net | Reported | Currency | ||||||||||
Sales | % Growth | % Growth | ||||||||||
Geographic Segments |
||||||||||||
Americas |
$ | 608 | | % | | % | ||||||
Europe |
325 | 17 | 5 | |||||||||
Asia Pacific |
204 | 19 | 6 | |||||||||
Total |
1,137 | 8 | 2 | |||||||||
Product Categories |
||||||||||||
Reconstructive |
||||||||||||
Americas |
449 | (2 | ) | (2 | ) | |||||||
Europe |
257 | 16 | 4 | |||||||||
Asia Pacific |
151 | 17 | 4 | |||||||||
Total |
857 | 6 | | |||||||||
Knees |
||||||||||||
Americas |
266 | (5 | ) | (5 | ) | |||||||
Europe |
128 | 21 | 9 | |||||||||
Asia Pacific |
77 | 14 | 2 | |||||||||
Total |
471 | 4 | (1 | ) | ||||||||
Hips |
||||||||||||
Americas |
151 | 2 | 2 | |||||||||
Europe |
122 | 12 | (1 | ) | ||||||||
Asia Pacific |
72 | 20 | 7 | |||||||||
Total |
345 | 9 | 2 | |||||||||
Extremities |
41 | 7 | 4 | |||||||||
Dental |
67 | 20 | 16 | |||||||||
Trauma |
69 | 20 | 14 | |||||||||
Spine |
56 | (3 | ) | (6 | ) | |||||||
Surgical and other |
88 | 13 | 8 |
4
Constant | ||||||||||||
Net | Reported | Currency | ||||||||||
Sales | % Growth | % Growth | ||||||||||
Geographic Segments |
||||||||||||
Americas |
$ | 1,238 | 1 | % | 1 | % | ||||||
Europe |
624 | 11 | 5 | |||||||||
Asia Pacific |
391 | 17 | 7 | |||||||||
Total |
2,253 | 6 | 3 | |||||||||
Product Categories |
||||||||||||
Reconstructive |
||||||||||||
Americas |
915 | (1 | ) | (1 | ) | |||||||
Europe |
495 | 9 | 3 | |||||||||
Asia Pacific |
289 | 16 | 5 | |||||||||
Total |
1,699 | 5 | 1 | |||||||||
Knees |
||||||||||||
Americas |
544 | (4 | ) | (4 | ) | |||||||
Europe |
245 | 12 | 6 | |||||||||
Asia Pacific |
144 | 13 | 2 | |||||||||
Total |
933 | 2 | (1 | ) | ||||||||
Hips |
||||||||||||
Americas |
306 | 4 | 3 | |||||||||
Europe |
236 | 7 | | |||||||||
Asia Pacific |
140 | 20 | 9 | |||||||||
Total |
682 | 8 | 3 | |||||||||
Extremities |
84 | 9 | 7 | |||||||||
Dental |
130 | 20 | 18 | |||||||||
Trauma |
139 | 18 | 14 | |||||||||
Spine |
113 | (4 | ) | (6 | ) | |||||||
Surgical and other |
172 | 12 | 7 |
5
6
7
2011 | 2010 | % Inc/(Dec) | ||||||||||
Net Sales |
$ | 1,137.4 | $ | 1,057.7 | 8 | % | ||||||
Cost of products sold |
287.9 | 250.6 | 15 | |||||||||
Gross Profit |
849.5 | 807.1 | 5 | |||||||||
Research and development |
57.0 | 54.2 | 5 | |||||||||
Selling, general and administrative |
469.9 | 438.3 | 7 | |||||||||
Certain claims |
50.0 | 75.0 | (33 | ) | ||||||||
Special items |
13.5 | 11.5 | 17 | |||||||||
Operating expenses |
590.4 | 579.0 | 2 | |||||||||
Operating Profit |
259.1 | 228.1 | 14 | |||||||||
Interest expense, net |
9.8 | 14.3 | (31 | ) | ||||||||
Earnings before income taxes |
249.3 | 213.8 | 17 | |||||||||
Provision for income taxes |
45.5 | 48.3 | (6 | ) | ||||||||
Net Earnings of Zimmer Holdings, Inc. |
$ | 203.8 | $ | 165.5 | 23 | |||||||
Earnings Per Common Share |
||||||||||||
Basic |
$ | 1.06 | $ | 0.82 | 29 | |||||||
Diluted |
$ | 1.06 | $ | 0.82 | 29 | |||||||
Weighted Average Common Shares Outstanding |
||||||||||||
Basic |
191.5 | 201.9 | ||||||||||
Diluted |
192.7 | 203.0 |
8
2011 | 2010 | % Inc/(Dec) | ||||||||||
Net Sales |
$ | 2,253.0 | $ | 2,120.5 | 6 | % | ||||||
Cost of products sold |
566.9 | 519.0 | 9 | |||||||||
Gross Profit |
1,686.1 | 1,601.5 | 5 | |||||||||
Research and development |
112.6 | 104.7 | 8 | |||||||||
Selling, general and administrative |
928.2 | 885.5 | 5 | |||||||||
Certain claims |
50.0 | 75.0 | (33 | ) | ||||||||
Special items |
39.0 | 14.1 | 176 | |||||||||
Operating expenses |
1,129.8 | 1,079.3 | 5 | |||||||||
Operating Profit |
556.3 | 522.2 | 7 | |||||||||
Interest expense, net |
20.8 | 28.9 | (28 | ) | ||||||||
Earnings before income taxes |
535.5 | 493.3 | 9 | |||||||||
Provision for income taxes |
122.8 | 122.4 | 0 | |||||||||
Net Earnings of Zimmer Holdings, Inc. |
$ | 412.7 | $ | 370.9 | 11 | |||||||
Earnings Per Common Share |
||||||||||||
Basic |
$ | 2.15 | $ | 1.83 | 17 | |||||||
Diluted |
$ | 2.14 | $ | 1.82 | 18 | |||||||
Weighted Average Common Shares Outstanding |
||||||||||||
Basic |
192.1 | 202.4 | ||||||||||
Diluted |
193.3 | 203.6 |
9
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 624.1 | $ | 668.9 | ||||
Short-term investments |
321.4 | 265.1 | ||||||
Receivables, net |
888.4 | 775.9 | ||||||
Inventories, net |
975.1 | 936.4 | ||||||
Other current assets |
299.3 | 363.4 | ||||||
Total current assets |
3,108.3 | 3,009.7 | ||||||
Property, plant and equipment, net |
1,213.0 | 1,213.8 | ||||||
Goodwill |
2,694.0 | 2,580.8 | ||||||
Intangible assets, net |
811.5 | 827.1 | ||||||
Other assets |
422.4 | 368.5 | ||||||
Total Assets |
$ | 8,249.2 | $ | 7,999.9 | ||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
$ | 679.0 | $ | 702.5 | ||||
Other long-term liabilities |
407.1 | 384.0 | ||||||
Long-term debt |
1,147.3 | 1,142.1 | ||||||
Shareholders equity |
6,015.8 | 5,771.3 | ||||||
Total Liabilities and Shareholders Equity |
$ | 8,249.2 | $ | 7,999.9 | ||||
10
2011 | 2010 | |||||||
Cash flows provided by (used in) operating activities |
||||||||
Net earnings of Zimmer Holdings, Inc. |
$ | 412.7 | $ | 370.9 | ||||
Depreciation and amortization |
174.7 | 165.8 | ||||||
Share-based compensation |
31.7 | 30.6 | ||||||
Income tax benefits from employee stock compensation plans |
9.5 | 2.9 | ||||||
Excess income tax benefits from employee stock compensation plans |
(3.6 | ) | (1.0 | ) | ||||
Inventory step-up |
7.8 | 1.3 | ||||||
Changes in operating assets and liabilities, net of acquired
assets and liabilities |
||||||||
Income taxes |
(11.5 | ) | (70.5 | ) | ||||
Receivables |
(76.0 | ) | (51.3 | ) | ||||
Inventories |
(21.8 | ) | 27.5 | |||||
Accounts payable and accrued expenses |
(42.2 | ) | (37.4 | ) | ||||
Other assets and liabilities |
(48.1 | ) | 93.4 | |||||
Net cash provided by operating activities |
433.2 | 532.2 | ||||||
Cash flows provided by (used in) investing activities |
||||||||
Additions to instruments |
(85.2 | ) | (83.1 | ) | ||||
Additions to other property, plant and equipment |
(34.0 | ) | (26.7 | ) | ||||
Purchases of investments |
(186.7 | ) | (4.0 | ) | ||||
Sales of investments |
169.8 | 37.0 | ||||||
Investments in other assets |
(26.4 | ) | (15.1 | ) | ||||
Net cash used in investing activities |
(162.5 | ) | (91.9 | ) | ||||
Cash flows provided by (used in) financing activities |
||||||||
Net proceeds under revolving credit facilities |
0.2 | | ||||||
Proceeds from employee stock compensation plans |
29.1 | 8.1 | ||||||
Excess income tax benefits from employee stock compensation plans |
3.6 | 1.0 | ||||||
Repurchase of common stock |
(357.2 | ) | (178.9 | ) | ||||
Net cash used in financing activities |
(324.3 | ) | (169.8 | ) | ||||
Effect of exchange rates on cash and cash equivalents |
8.8 | (8.5 | ) | |||||
Increase (decrease) in cash and cash equivalents |
(44.8 | ) | 262.0 | |||||
Cash and cash equivalents, beginning of period |
668.9 | 691.7 | ||||||
Cash and cash equivalents, end of period |
$ | 624.1 | $ | 953.7 | ||||
11
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2011 | 2010 | % Inc | 2011 | 2010 | % Inc | |||||||||||||||||||
Americas |
$ | 608.6 | $ | 609.3 | | % | $ | 1,238.3 | $ | 1,225.0 | 1 | % | ||||||||||||
Europe |
324.7 | 276.5 | 17 | 623.9 | 562.6 | 11 | ||||||||||||||||||
Asia Pacific |
204.1 | 171.9 | 19 | 390.8 | 332.9 | 17 | ||||||||||||||||||
Total |
$ | 1,137.4 | $ | 1,057.7 | 8 | $ | 2,253.0 | $ | 2,120.5 | 6 | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2011 | 2010 | % Inc/(Dec) | 2011 | 2010 | % Inc/(Dec) | |||||||||||||||||||
Reconstructive |
||||||||||||||||||||||||
Knees |
$ | 470.9 | $ | 452.9 | 4 | % | $ | 933.1 | $ | 913.3 | 2 | % | ||||||||||||
Hips |
345.0 | 317.1 | 9 | 682.3 | 632.8 | 8 | ||||||||||||||||||
Extremities |
40.7 | 38.2 | 7 | 83.6 | 76.6 | 9 | ||||||||||||||||||
856.6 | 808.2 | 6 | 1,699.0 | 1,622.7 | 5 | |||||||||||||||||||
Dental |
67.1 | 55.9 | 20 | 129.5 | 107.6 | 20 | ||||||||||||||||||
Trauma |
69.1 | 57.8 | 20 | 139.2 | 118.2 | 18 | ||||||||||||||||||
Spine |
56.4 | 57.9 | (3 | ) | 113.3 | 117.9 | (4 | ) | ||||||||||||||||
Surgical and other |
88.2 | 77.9 | 13 | 172.0 | 154.1 | 12 | ||||||||||||||||||
Total |
$ | 1,137.4 | $ | 1,057.7 | 8 | $ | 2,253.0 | $ | 2,120.5 | 6 | ||||||||||||||
12
For the Three Months Ended | ||||||||||||
June 30, 2011 | ||||||||||||
Foreign | Constant | |||||||||||
Reported | Exchange | Currency | ||||||||||
% Growth | Impact | % Growth | ||||||||||
Geographic Segments |
||||||||||||
Americas |
| % | | % | | % | ||||||
Europe |
17 | 12 | 5 | |||||||||
Asia Pacific |
19 | 13 | 6 | |||||||||
Total |
8 | 6 | 2 | |||||||||
Product Categories |
||||||||||||
Reconstructive |
||||||||||||
Americas |
(2 | ) | | (2 | ) | |||||||
Europe |
16 | 12 | 4 | |||||||||
Asia Pacific |
17 | 13 | 4 | |||||||||
Total |
6 | 6 | | |||||||||
Knees |
||||||||||||
Americas |
(5 | ) | | (5 | ) | |||||||
Europe |
21 | 12 | 9 | |||||||||
Asia Pacific |
14 | 12 | 2 | |||||||||
Total |
4 | 5 | (1 | ) | ||||||||
Hips |
||||||||||||
Americas |
2 | | 2 | |||||||||
Europe |
12 | 13 | (1 | ) | ||||||||
Asia Pacific |
20 | 13 | 7 | |||||||||
Total |
9 | 7 | 2 | |||||||||
Extremities |
7 | 3 | 4 | |||||||||
Dental |
20 | 4 | 16 | |||||||||
Trauma |
20 | 6 | 14 | |||||||||
Spine |
(3 | ) | 3 | (6 | ) | |||||||
Surgical and other |
13 | 5 | 8 |
13
For the Six Months Ended | ||||||||||||
June 30, 2011 | ||||||||||||
Foreign | Constant | |||||||||||
Reported | Exchange | Currency | ||||||||||
% Growth | Impact | % Growth | ||||||||||
Geographic Segments |
||||||||||||
Americas |
1 | % | | % | 1 | % | ||||||
Europe |
11 | 6 | 5 | |||||||||
Asia Pacific |
17 | 10 | 7 | |||||||||
Total |
6 | 3 | 3 | |||||||||
Product Categories |
||||||||||||
Reconstructive |
||||||||||||
Americas |
(1 | ) | | (1 | ) | |||||||
Europe |
9 | 6 | 3 | |||||||||
Asia Pacific |
16 | 11 | 5 | |||||||||
Total |
5 | 4 | 1 | |||||||||
Knees |
||||||||||||
Americas |
(4 | ) | | (4 | ) | |||||||
Europe |
12 | 6 | 6 | |||||||||
Asia Pacific |
13 | 11 | 2 | |||||||||
Total |
2 | 3 | (1 | ) | ||||||||
Hips |
||||||||||||
Americas |
4 | 1 | 3 | |||||||||
Europe |
7 | 7 | | |||||||||
Asia Pacific |
20 | 11 | 9 | |||||||||
Total |
8 | 5 | 3 | |||||||||
Extremities |
9 | 2 | 7 | |||||||||
Dental |
20 | 2 | 18 | |||||||||
Trauma |
18 | 4 | 14 | |||||||||
Spine |
(4 | ) | 2 | (6 | ) | |||||||
Surgical and other |
12 | 5 | 7 |
14
Three Months | ||||||||
Ended June 30, | ||||||||
2011 | 2010 | |||||||
Net Earnings of Zimmer Holdings, Inc. |
$ | 203.8 | $ | 165.5 | ||||
Inventory step-up |
3.4 | | ||||||
Certain claims |
50.0 | 75.0 | ||||||
Special items |
13.5 | 11.5 | ||||||
Taxes on inventory step-up, certain claims and special items
and tax adjustments related to resolution of certain tax matters* |
(38.2 | ) | (30.8 | ) | ||||
Adjusted Net Earnings |
$ | 232.5 | $ | 221.2 | ||||
* | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred. |
Six Months | ||||||||
Ended June 30, | ||||||||
2011 | 2010 | |||||||
Net Earnings of Zimmer Holdings, Inc. |
$ | 412.7 | $ | 370.9 | ||||
Inventory step-up |
7.8 | 1.3 | ||||||
Certain claims |
50.0 | 75.0 | ||||||
Special items |
39.0 | 14.1 | ||||||
Taxes on inventory step-up, certain claims and special items
and tax adjustments related to resolution of certain tax matters* |
(46.1 | ) | (32.7 | ) | ||||
Adjusted Net Earnings |
$ | 463.4 | $ | 428.6 | ||||
* | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred. |
15
Three Months | ||||||||
Ended June 30, | ||||||||
2011 | 2010 | |||||||
Diluted EPS |
$ | 1.06 | $ | 0.82 | ||||
Inventory step-up |
0.02 | | ||||||
Certain claims |
0.26 | 0.37 | ||||||
Special items |
0.07 | 0.05 | ||||||
Taxes on inventory step-up, certain claims and special items
and tax adjustments related to resolution of certain tax matters* |
(0.20 | ) | (0.15 | ) | ||||
Adjusted Diluted EPS |
$ | 1.21 | $ | 1.09 | ||||
* | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred. |
Six Months | ||||||||
Ended June 30, | ||||||||
2011 | 2010 | |||||||
Diluted EPS |
$ | 2.14 | $ | 1.82 | ||||
Inventory step-up |
0.04 | 0.01 | ||||||
Certain claims |
0.26 | 0.37 | ||||||
Special items |
0.20 | 0.06 | ||||||
Taxes on inventory step-up, certain claims and special items
and tax adjustments related to resolution of certain tax matters* |
(0.24 | ) | (0.16 | ) | ||||
Adjusted Diluted EPS |
$ | 2.40 | $ | 2.10 | ||||
* | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred. |
16
Projected Year Ended December 31, 2011: | Low | High | ||||||
Diluted EPS |
4.25 | 4.35 | ||||||
Inventory step-up |
0.05 | 0.05 | ||||||
Special items |
0.44 | 0.44 | ||||||
Certain claims |
0.26 | 0.26 | ||||||
Taxes on inventory step-up, certain claims and special items and tax
adjustments related to resolution of certain tax matters* |
(0.30 | ) | (0.30 | ) | ||||
Adjusted Diluted EPS |
$ | 4.70 | $ | 4.80 | ||||
* | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items have or are projected to be incurred. |
17