345 E. Main St. |
|
Warsaw, IN 46580 |
|
www.zimmerbiomet.com |
Exhibit 99.1 |
Media |
Investors |
Meredith Weissman |
Zach Weiner |
(703) 346-3127 |
(908) 591-6955 |
meredith.weissman@zimmerbiomet.com |
zach.weiner@zimmerbiomet.com |
|
|
Heather Zoumas-Lubeski |
|
(445) 248-0577 |
|
heather.zoumaslubeski@zimmerbiomet.com |
|
Zimmer Biomet Announces
Third Quarter 2023 Financial Results
(WARSAW, IN) November 7, 2023 — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2023. The Company reported third quarter net sales of $1.754 billion, an increase of 5.0% over the prior year period, and an increase of 4.7% on a constant currency1 basis. Net earnings for the third quarter were $162.7 million, or $346.5 million on an adjusted1 basis.
Diluted earnings per share were $0.77 for the third quarter, and adjusted1 diluted earnings per share were $1.65.
Page 1 of 24
“We’re very pleased to report another Zimmer Biomet quarter with strong revenue growth and earnings per share. Our team continues to successfully drive execution and growth, focusing on innovation to create value for the stakeholders we serve,” said Ivan Tornos, Zimmer Biomet’s President and Chief Executive Officer. “As ZB’s new CEO, I’m more confident than ever in our team, our full year expectations for 2023 and that our solid growth – on both the top and bottom lines – will continue in 2024.”
Recent Highlights
Aligned with the ongoing transformation of Zimmer Biomet's business, key recent highlights include:
Page 2 of 24
Geographic and Product Category Sales
The following sales tables provide results by geography and product category for the three- and nine-month periods ended September 30, 2023, as well as the percentage change compared to the applicable prior year period, on both a reported basis and a constant currency basis.
NET SALES - THREE MONTHS ENDED SEPTEMBER 30, 2023 |
|||||||||||||
(in millions, unaudited) |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
Constant |
|
|
|||
|
Net |
|
|
|
|
|
|
Currency |
|
|
|||
|
Sales |
|
|
% Change |
|
|
|
% Change |
|
|
|||
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|||
United States |
$ |
1,031.4 |
|
|
|
6.0 |
|
% |
|
|
6.0 |
|
% |
International |
|
722.2 |
|
|
|
3.6 |
|
|
|
|
2.9 |
|
|
Total |
$ |
1,753.6 |
|
|
|
5.0 |
|
% |
|
|
4.7 |
|
% |
Product Categories |
|
|
|
|
|
|
|
|
|
|
|||
Knees |
|
|
|
|
|
|
|
|
|
|
|||
United States |
$ |
413.3 |
|
|
|
6.1 |
|
% |
|
|
6.1 |
|
% |
International |
|
293.0 |
|
|
|
9.7 |
|
|
|
|
9.1 |
|
|
Total |
|
706.3 |
|
|
|
7.5 |
|
|
|
|
7.3 |
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
242.5 |
|
|
|
3.0 |
|
|
|
|
3.0 |
|
|
International |
|
222.8 |
|
|
|
(4.1 |
) |
|
|
|
(4.2 |
) |
|
Total |
|
465.3 |
|
|
|
(0.6 |
) |
|
|
|
(0.6 |
) |
|
S.E.T. * |
|
423.2 |
|
|
|
3.3 |
|
|
|
|
2.8 |
|
|
Other |
|
158.8 |
|
|
|
17.2 |
|
|
|
|
16.4 |
|
|
Total |
$ |
1,753.6 |
|
|
|
5.0 |
|
% |
|
|
4.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic |
|
|
|||||||||||
Page 3 of 24
NET SALES - NINE MONTHS ENDED SEPTEMBER 30, 2023 |
||||||||||||
(in millions, unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
Constant |
|
|
|||
|
Net |
|
|
|
|
|
Currency |
|
|
|||
|
Sales |
|
|
% Change |
|
|
% Change |
|
|
|||
Geographic Results |
|
|
|
|
|
|
|
|
|
|||
United States |
$ |
3,160.6 |
|
|
|
7.8 |
|
% |
|
7.8 |
|
% |
International |
|
2,293.5 |
|
|
|
5.1 |
|
|
|
8.1 |
|
|
Total |
$ |
5,454.1 |
|
|
|
6.6 |
|
% |
|
7.9 |
|
% |
Product Categories |
|
|
|
|
|
|
|
|
|
|||
Knees |
|
|
|
|
|
|
|
|
|
|||
United States |
$ |
1,299.1 |
|
|
|
11.3 |
|
% |
|
11.3 |
|
% |
International |
|
941.0 |
|
|
|
9.8 |
|
|
|
12.9 |
|
|
Total |
|
2,240.1 |
|
|
|
10.6 |
|
|
|
12.0 |
|
|
Hips |
|
|
|
|
|
|
|
|
|
|||
United States |
|
749.2 |
|
|
|
5.9 |
|
|
|
5.9 |
|
|
International |
|
713.3 |
|
|
|
2.1 |
|
|
|
5.4 |
|
|
Total |
|
1,462.5 |
|
|
|
4.0 |
|
|
|
5.6 |
|
|
S.E.T. * |
|
1,299.3 |
|
|
|
2.1 |
|
|
|
2.9 |
|
|
Other |
|
452.2 |
|
|
|
10.0 |
|
|
|
11.2 |
|
|
Total |
$ |
5,454.1 |
|
|
|
6.6 |
|
% |
|
7.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic |
|
|
|
|||||||||
Amounts reported in millions are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Percentages presented are calculated from the underlying unrounded amounts.
Page 4 of 24
Financial Guidance
The Company is updating its full-year 2023 financial guidance to modify the expected foreign currency exchange impact and is reaffirming constant currency revenue growth as well as adjusted EPS guidance
Projected Year Ending December 31, 2023 |
||
|
Previous Guidance |
Updated Guidance |
2023 Reported Revenue Change |
6.5% - 7.0% |
6.0% - 6.5% |
Foreign Currency Exchange Impact |
(0.5)% |
(1.0)% |
2023 Constant Currency Revenue Change |
7.0% - 7.5% |
7.0% - 7.5% |
Adjusted Diluted EPS(1) |
$7.47 - $7.57 |
$7.47 - $7.57 |
(1) |
This measure is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See “Forward-Looking Non-GAAP Financial Measures” below, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure. |
Conference Call
The Company will conduct its third quarter investor conference call today, November 7, 2023, at 8:30 a.m. ET. The audio webcast can be accessed via Zimmer Biomet's Investor Relations website at https://investor.zimmerbiomet.com. It will be archived for replay following the conference call.
About the Company
Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.
With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation.
For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow on LinkedIn at www.linkedin.com/company/zimmerbiomet or X / Twitter at www.twitter.com/zimmerbiomet.
Page 5 of 24
Website Information
We routinely post important information for investors on our website, www.zimmerbiomet.com, in the “Investor Relations” section. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.
The information contained on, or that may be accessed through, our website or any other website referenced herein is not incorporated by reference into, and is not a part of, this document.
Note on Non-GAAP Financial Measures
This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.
Net sales change information for the three- and nine-month periods ended September 30, 2023 is presented on a GAAP (reported) basis and on a constant currency basis. Constant currency percentage changes exclude the effects of foreign currency exchange rates. They are calculated by translating current and prior-period sales at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases.
Net earnings and diluted earnings per share for the three- and nine-month periods ended September 30, 2023, net earnings and diluted earnings per share for the three-month period ended September 30, 2022, and net earnings and diluted earnings per share from continuing operations for the nine-month period ended September 30, 2022 are presented on a GAAP (reported) basis and on an adjusted basis. Adjusted earnings and adjusted diluted earnings per share exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in this press release.
Free cash flow from continuing operations is an additional non-GAAP measure that is presented in this press release. Free cash flow from continuing operations is computed by deducting additions to instruments and other property, plant and equipment from net cash provided by operating activities from continuing operations.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release. This press release also contains
Page 6 of 24
supplemental reconciliations of additional non-GAAP financial measures that the Company presents in other contexts. These additional non-GAAP financial measures are computed from the most directly comparable GAAP financial measure as indicated in the applicable reconciliation.
Management uses non-GAAP financial measures internally to evaluate the performance of the business. Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company. Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations. The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures. In addition, constant currency sales changes, adjusted operating profit, adjusted diluted earnings per share and free cash flow are used as performance metrics in our incentive compensation programs.
Forward-Looking Non-GAAP Financial Measures
This press release also includes certain forward-looking non-GAAP financial measures for the year ending December 31, 2023. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of certain charges related to initial compliance with the European Union Medical Device Regulation; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; and certain legal and tax matters. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management's plans may change. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial guidance, statements regarding macro pressures, including the impact of such
Page 7 of 24
pressures on our business, and any statements about our forecasts, expectations, plans, intentions, strategies or prospects. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: the effects of business disruptions, either alone or in combination with other risks on our business and operations, such as those business disruptions associated with the COVID-19 pandemic; the risks and uncertainties related to our ability to successfully execute our restructuring plans; control of costs and expenses; our ability to attract, retain and develop the highly skilled employees, senior management, independent agents and distributors we need to support our business; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; the ability to form and implement alliances; dependence on a limited number of suppliers for key raw materials and other inputs and for outsourced activities; the risk of disruptions in the supply of materials and components used in manufacturing or sterilizing our products; supply and prices of raw materials and products; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration (FDA) and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the outcome of government investigations in any jurisdiction; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform and cost containment measures, including efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, through reductions in reimbursement levels and otherwise; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; changes in tax obligations arising from examinations by tax authorities and from changes in tax laws in jurisdictions where we do business, including those expected to occur as a result of
Page 8 of 24
the “base erosion and profit shifting” project (“Pillar Two”) undertaken by the Organisation for Economic Co-operation and Development (“OECD”) and otherwise; challenges to the tax-free nature of the ZimVie Inc. ("ZimVie") spinoff transaction and the subsequent liquidation of our retained interest in ZimVie; the risk of additional tax liability due to the recategorization of our independent agents and distributors to employees; the risk that material impairment of the carrying value of our intangible assets, including goodwill, could negatively affect our operating results; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; changes in general industry and market conditions, including domestic and international growth, inflation and currency exchange rates; the domestic and international business impact of political, social and economic instability, tariffs, trade restrictions and embargoes, sanctions, wars, disputes and other conflicts, including on our ability to operate in, export from or collect accounts receivable in affected countries; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the FDA and foreign government regulators relating to medical products, healthcare fraud and abuse laws and data privacy and security laws; the success of our quality and operational excellence initiatives; the ability to remediate matters identified in inspectional observations or warning letters issued by the FDA and other regulators, while continuing to satisfy the demand for our products; product liability, intellectual property and commercial litigation losses; and the ability to obtain and maintain adequate intellectual property protection. A further list and description of these risks and uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2022, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and our subsequent filings with the Securities and Exchange Commission (SEC). Copies of these filings are available online at www.sec.gov, www.zimmerbiomet.com or on request from us. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this press release are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary note is applicable to all forward-looking statements contained in this press release.
Note: Amounts reported in millions within this press release are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.
Page 9 of 24
###
Page 10 of 24
|
|
||||||
ZIMMER BIOMET HOLDINGS, INC. |
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
|
||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
||||||
(in millions, except per share amounts, unaudited) |
|
||||||
|
|
|
|
|
|
||
|
2023 |
|
|
2022 |
|
||
Net Sales |
$ |
1,753.6 |
|
|
$ |
1,669.8 |
|
Cost of products sold, excluding intangible asset amortization |
|
518.6 |
|
|
|
488.2 |
|
Intangible asset amortization |
|
145.0 |
|
|
|
131.5 |
|
Research and development |
|
116.9 |
|
|
|
101.7 |
|
Selling, general and administrative |
|
674.9 |
|
|
|
654.9 |
|
Restructuring and other cost reduction initiatives |
|
24.3 |
|
|
|
28.3 |
|
Quality remediation |
|
- |
|
|
|
8.1 |
|
Acquisition, integration, divestiture and related |
|
7.3 |
|
|
|
11.8 |
|
Operating expenses |
|
1,487.0 |
|
|
|
1,424.5 |
|
Operating Profit |
|
266.6 |
|
|
|
245.3 |
|
Other income (expense), net |
|
3.8 |
|
|
|
(25.4 |
) |
Interest expense, net |
|
(51.1 |
) |
|
|
(42.3 |
) |
Earnings before income taxes |
|
219.2 |
|
|
|
177.6 |
|
Provision (benefit) for income taxes |
|
56.4 |
|
|
|
(16.6 |
) |
Net Earnings |
|
162.8 |
|
|
|
194.2 |
|
Less: Net earnings attributable to noncontrolling interest |
|
0.2 |
|
|
|
0.2 |
|
Net Earnings of Zimmer Biomet Holdings, Inc. |
$ |
162.7 |
|
|
$ |
194.0 |
|
|
|
|
|
|
|
||
Earnings Per Common Share |
|
|
|
|
|
||
Basic |
$ |
0.78 |
|
|
$ |
0.92 |
|
Diluted |
$ |
0.77 |
|
|
$ |
0.92 |
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
||
Basic |
|
208.9 |
|
|
|
209.8 |
|
Diluted |
|
210.0 |
|
|
|
210.3 |
|
|
|
|
|
|
|
||
|
|
||||||
Page 11 of 24
|
|
||||||
ZIMMER BIOMET HOLDINGS, INC. |
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
|
||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
||||||
(in millions, except per share amounts, unaudited) |
|
||||||
|
|
|
|
|
|
||
|
2023 |
|
|
2022 |
|
||
Net Sales |
$ |
5,454.1 |
|
|
$ |
5,114.8 |
|
Cost of products sold, excluding intangible asset amortization |
|
1,545.0 |
|
|
|
1,499.2 |
|
Intangible asset amortization |
|
416.6 |
|
|
|
395.3 |
|
Research and development |
|
345.4 |
|
|
|
298.0 |
|
Selling, general and administrative |
|
2,116.6 |
|
|
|
2,034.6 |
|
Intangible asset impairment |
|
- |
|
|
|
3.0 |
|
Restructuring and other cost reduction initiatives |
|
90.6 |
|
|
|
129.2 |
|
Quality remediation |
|
- |
|
|
|
22.4 |
|
Acquisition, integration, divestiture and related |
|
16.4 |
|
|
|
8.5 |
|
Operating expenses |
|
4,530.6 |
|
|
|
4,390.2 |
|
Operating Profit |
|
923.5 |
|
|
|
724.6 |
|
Other income (expense), net |
|
10.3 |
|
|
|
(124.1 |
) |
Interest expense, net |
|
(150.9 |
) |
|
|
(122.2 |
) |
Earnings from continuing operations before income taxes |
|
782.8 |
|
|
|
478.3 |
|
Provision for income taxes from continuing operations |
|
177.4 |
|
|
|
56.9 |
|
Net Earnings from continuing operations |
|
605.4 |
|
|
|
421.4 |
|
Less: Net earnings attributable to noncontrolling interest |
|
0.6 |
|
|
|
0.7 |
|
Net Earnings from Continuing Operations of Zimmer Biomet Holdings, Inc. |
|
604.8 |
|
|
|
420.7 |
|
Loss from discontinued operations, net of taxes |
|
- |
|
|
|
(58.8 |
) |
Net Earnings of Zimmer Biomet Holdings, Inc. |
$ |
604.8 |
|
|
$ |
361.9 |
|
|
|
|
|
|
|
||
Earnings Per Common Share - Basic |
|
|
|
|
|
||
Earnings from continuing operations |
$ |
2.89 |
|
|
$ |
2.01 |
|
Loss from discontinued operations |
|
- |
|
|
|
(0.28 |
) |
Net Earnings Per Common Share - Basic |
$ |
2.89 |
|
|
$ |
1.73 |
|
Earnings Per Common Share - Diluted |
|
|
|
|
|
||
Earnings from continuing operations |
$ |
2.88 |
|
|
$ |
2.00 |
|
Loss from discontinued operations |
|
- |
|
|
|
(0.28 |
) |
Net Earnings Per Common Share - Diluted |
$ |
2.88 |
|
|
$ |
1.72 |
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
||
Basic |
|
209.0 |
|
|
|
209.5 |
|
Diluted |
|
210.1 |
|
|
|
210.2 |
|
|
|
|
|
|
|
||
|
|
||||||
Page 12 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|||||||
(in millions, unaudited) |
|
|||||||
|
|
|||||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
292.1 |
|
|
$ |
375.7 |
|
Receivables, net |
|
|
1,340.7 |
|
|
|
1,381.5 |
|
Inventories |
|
|
2,323.3 |
|
|
|
2,147.2 |
|
Other current assets |
|
|
415.8 |
|
|
|
522.9 |
|
Total current assets |
|
|
4,372.0 |
|
|
|
4,427.3 |
|
Property, plant and equipment, net |
|
|
2,032.2 |
|
|
|
1,872.5 |
|
Goodwill |
|
|
8,710.4 |
|
|
|
8,580.2 |
|
Intangible assets, net |
|
|
4,891.7 |
|
|
|
5,063.8 |
|
Other assets |
|
|
1,211.0 |
|
|
|
1,122.2 |
|
Total Assets |
|
$ |
21,217.3 |
|
|
$ |
21,066.0 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||
Current liabilities |
|
$ |
1,716.6 |
|
|
$ |
1,813.9 |
|
Current portion of long-term debt |
|
|
355.0 |
|
|
|
544.3 |
|
Other long-term liabilities |
|
|
1,500.4 |
|
|
|
1,528.6 |
|
Long-term debt |
|
|
5,127.4 |
|
|
|
5,152.2 |
|
Stockholders' equity |
|
|
12,518.0 |
|
|
|
12,027.0 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
21,217.3 |
|
|
$ |
21,066.0 |
|
Page 13 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
|||||||
(in millions, unaudited) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
2023 |
|
|
2022 |
|
||
Cash flows provided by (used in) operating activities from continuing operations |
|
|
|
|
|
|
||
Net earnings from continuing operations |
|
$ |
605.4 |
|
|
$ |
421.4 |
|
Depreciation and amortization |
|
|
710.5 |
|
|
|
697.9 |
|
Share-based compensation |
|
|
74.5 |
|
|
|
78.2 |
|
Intangible asset impairment |
|
|
- |
|
|
|
3.0 |
|
(Gain) loss on investment in ZimVie Inc. |
|
|
(2.5 |
) |
|
|
114.3 |
|
Changes in operating assets and liabilities, net of acquired assets and liabilities |
|
|
|
|
|
|
||
Income taxes |
|
|
23.4 |
|
|
|
(12.4 |
) |
Receivables |
|
|
15.5 |
|
|
|
(114.5 |
) |
Inventories |
|
|
(212.2 |
) |
|
|
(63.5 |
) |
Accounts payable and accrued liabilities |
|
|
(219.5 |
) |
|
|
(1.6 |
) |
Other assets and liabilities |
|
|
(2.0 |
) |
|
|
(10.8 |
) |
Net cash provided by operating activities from continuing operations |
|
|
993.2 |
|
|
|
1,112.0 |
|
Cash flows provided by (used in) investing activities from continuing operations |
|
|
|
|
|
|
||
Additions to instruments |
|
|
(232.8 |
) |
|
|
(192.2 |
) |
Additions to other property, plant and equipment |
|
|
(228.3 |
) |
|
|
(124.5 |
) |
Net investment hedge settlements |
|
|
27.2 |
|
|
|
71.2 |
|
Acquisition of intellectual property rights |
|
|
(86.4 |
) |
|
|
- |
|
Business combination investments, net of acquired cash |
|
|
(32.9 |
) |
|
|
(99.8 |
) |
Investments in other assets |
|
|
(5.0 |
) |
|
|
(64.2 |
) |
Net cash used in investing activities from continuing operations |
|
|
(558.1 |
) |
|
|
(409.5 |
) |
Cash flows provided by (used in) financing activities from continuing operations |
|
|
|
|
|
|
||
Net payments on revolving facilities |
|
|
(20.0 |
) |
|
|
- |
|
Redemption of senior notes |
|
|
(86.3 |
) |
|
|
(750.0 |
) |
Proceeds from term loan |
|
|
- |
|
|
|
83.0 |
|
Payments on term loans |
|
|
(33.9 |
) |
|
|
(242.9 |
) |
Dividends paid to stockholders |
|
|
(150.7 |
) |
|
|
(150.8 |
) |
Proceeds from employee stock compensation plans |
|
|
81.8 |
|
|
|
63.2 |
|
Distribution from ZimVie Inc. |
|
|
- |
|
|
|
540.6 |
|
Business combination contingent consideration payments |
|
|
(10.3 |
) |
|
|
- |
|
Deferred business combination payments |
|
|
(4.0 |
) |
|
|
- |
|
Repurchase of common stock |
|
|
(281.9 |
) |
|
|
- |
|
Other financing activities |
|
|
(6.8 |
) |
|
|
(5.4 |
) |
Net cash used in financing activities from continuing operations |
|
|
(512.1 |
) |
|
|
(462.3 |
) |
Cash flows provided by (used in) discontinued operations |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
- |
|
|
|
(71.5 |
) |
Net cash used in investing activities |
|
|
- |
|
|
|
(7.2 |
) |
Net cash used in financing activities |
|
|
- |
|
|
|
(68.1 |
) |
Net cash used in discontinued operations |
|
|
- |
|
|
|
(146.8 |
) |
Effect of exchange rates on cash and cash equivalents |
|
|
(6.5 |
) |
|
|
(26.5 |
) |
(Decrease) increase in cash and cash equivalents |
|
|
(83.5 |
) |
|
|
66.9 |
|
Cash and cash equivalents, beginning of period (includes $100.4 at January 1, 2022 of discontinued operations cash) |
|
|
375.7 |
|
|
|
478.5 |
|
Cash and cash equivalents, end of period |
|
$ |
292.1 |
|
|
$ |
545.4 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Page 14 of 24
ZIMMER BIOMET HOLDINGS, INC. |
||||||||||||||
RECONCILIATION OF REPORTED NET SALES % CHANGE TO |
||||||||||||||
CONSTANT CURRENCY % CHANGE |
||||||||||||||
(unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
For the Three Months Ended |
|
|
|||||||||||
|
September 30, 2023 vs. 2022 |
|
|
|||||||||||
|
|
|
|
|
Foreign |
|
|
|
Constant |
|
|
|||
|
|
|
|
|
Exchange |
|
|
|
Currency |
|
|
|||
|
% Change |
|
|
|
Impact |
|
|
|
% Change |
|
|
|||
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
6.0 |
|
% |
|
|
- |
|
% |
|
|
6.0 |
|
% |
International |
|
3.6 |
|
|
|
|
0.7 |
|
|
|
|
2.9 |
|
|
Total |
|
5.0 |
|
% |
|
|
0.3 |
|
% |
|
|
4.7 |
|
% |
Product Categories |
|
|
|
|
|
|
|
|
|
|
|
|||
Knees |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
6.1 |
|
% |
|
|
- |
|
% |
|
|
6.1 |
|
% |
International |
|
9.7 |
|
|
|
|
0.6 |
|
|
|
|
9.1 |
|
|
Total |
|
7.5 |
|
|
|
|
0.2 |
|
|
|
|
7.3 |
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
3.0 |
|
|
|
|
- |
|
|
|
|
3.0 |
|
|
International |
|
(4.1 |
) |
|
|
|
0.1 |
|
|
|
|
(4.2 |
) |
|
Total |
|
(0.6 |
) |
|
|
|
- |
|
|
|
|
(0.6 |
) |
|
S.E.T. |
|
3.3 |
|
|
|
|
0.5 |
|
|
|
|
2.8 |
|
|
Other |
|
17.2 |
|
|
|
|
0.8 |
|
|
|
|
16.4 |
|
|
Total |
|
5.0 |
|
% |
|
|
0.3 |
|
% |
|
|
4.7 |
|
% |
Page 15 of 24
ZIMMER BIOMET HOLDINGS, INC. |
||||||||||||||
RECONCILIATION OF REPORTED NET SALES % CHANGE TO |
||||||||||||||
CONSTANT CURRENCY % CHANGE |
||||||||||||||
(unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
For the Nine Months Ended |
|
|
|||||||||||
|
September 30, 2023 vs. 2022 |
|
|
|||||||||||
|
|
|
|
|
Foreign |
|
|
|
Constant |
|
|
|||
|
|
|
|
|
Exchange |
|
|
|
Currency |
|
|
|||
|
% Change |
|
|
|
Impact |
|
|
|
% Change |
|
|
|||
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
7.8 |
|
% |
|
|
- |
|
% |
|
|
7.8 |
|
% |
International |
|
5.1 |
|
|
|
|
(3.0 |
) |
|
|
|
8.1 |
|
|
Total |
|
6.6 |
|
% |
|
|
(1.3 |
) |
% |
|
|
7.9 |
|
% |
Product Categories |
|
|
|
|
|
|
|
|
|
|
|
|||
Knees |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
11.3 |
|
% |
|
|
- |
|
% |
|
|
11.3 |
|
% |
International |
|
9.8 |
|
|
|
|
(3.1 |
) |
|
|
|
12.9 |
|
|
Total |
|
10.6 |
|
|
|
|
(1.4 |
) |
|
|
|
12.0 |
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|
|||
United States |
|
5.9 |
|
|
|
|
- |
|
|
|
|
5.9 |
|
|
International |
|
2.1 |
|
|
|
|
(3.3 |
) |
|
|
|
5.4 |
|
|
Total |
|
4.0 |
|
|
|
|
(1.6 |
) |
|
|
|
5.6 |
|
|
S.E.T. |
|
2.1 |
|
|
|
|
(0.8 |
) |
|
|
|
2.9 |
|
|
Other |
|
10.0 |
|
|
|
|
(1.2 |
) |
|
|
|
11.2 |
|
|
Total |
|
6.6 |
|
% |
|
|
(1.3 |
) |
% |
|
|
7.9 |
|
% |
Page 16 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
|||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS |
|
|||||||||||||||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
|||||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts, unaudited) |
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 |
|
|||||||||||||||||||||||||||||||||||||||
|
|
Cost of products sold, excluding intangible asset amortization |
|
|
Intangible asset amortization |
|
|
Research and development |
|
|
Selling, general and administrative |
|
|
Restructuring and other cost reduction initiatives |
|
|
Acquisition, integration, divestiture and related |
|
|
Other income (expense), net |
|
|
Provision (benefit) for income taxes |
|
|
Net Earnings of Zimmer Biomet Holdings, Inc. |
|
|
Diluted earnings per common share |
|
||||||||||
As Reported |
|
$ |
518.6 |
|
|
$ |
145.0 |
|
|
$ |
116.9 |
|
|
$ |
674.9 |
|
|
$ |
24.3 |
|
|
$ |
7.3 |
|
|
$ |
3.8 |
|
|
$ |
56.4 |
|
|
$ |
162.7 |
|
|
$ |
0.77 |
|
Inventory and manufacturing-related charges(1) |
|
|
(7.5 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.7 |
|
|
|
3.8 |
|
|
|
0.02 |
|
Intangible asset amortization(2) |
|
|
- |
|
|
|
(145.0 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28.8 |
|
|
|
116.2 |
|
|
|
0.55 |
|
Restructuring and other cost reduction initiatives(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(24.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
4.2 |
|
|
|
20.1 |
|
|
|
0.10 |
|
Acquisition, integration, divestiture and related(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(7.3 |
) |
|
|
- |
|
|
|
0.1 |
|
|
|
7.2 |
|
|
|
0.03 |
|
European Union Medical Device Regulation(5) |
|
|
- |
|
|
|
- |
|
|
|
(13.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.0 |
|
|
|
10.3 |
|
|
|
0.05 |
|
Other charges(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
- |
|
|
|
- |
|
|
|
(0.3 |
) |
|
|
(2.5 |
) |
|
|
2.0 |
|
|
|
0.01 |
|
Other certain tax adjustments(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(24.3 |
) |
|
|
24.3 |
|
|
|
0.12 |
|
As Adjusted |
|
$ |
511.1 |
|
|
$ |
- |
|
|
$ |
103.5 |
|
|
$ |
675.1 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3.5 |
|
|
$ |
69.4 |
|
|
$ |
346.5 |
|
|
$ |
1.65 |
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 |
|
|||||||||||||||||||||||||||||||||||||||||||
|
|
Cost of products sold, excluding intangible asset amortization |
|
|
Intangible asset amortization |
|
|
Research and development |
|
|
Selling, general and administrative |
|
|
Restructuring and other cost reduction initiatives |
|
|
Quality remediation |
|
|
Acquisition, integration, divestiture and related |
|
|
Other income (expense), net |
|
|
Provision (benefit) for income taxes |
|
|
Net Earnings of Zimmer Biomet Holdings, Inc. |
|
|
Diluted earnings per common share |
|
|||||||||||
As Reported |
|
$ |
488.2 |
|
|
$ |
131.5 |
|
|
$ |
101.7 |
|
|
$ |
654.9 |
|
|
$ |
28.3 |
|
|
$ |
8.1 |
|
|
$ |
11.8 |
|
|
$ |
(25.4 |
) |
|
$ |
(16.6 |
) |
|
$ |
194.0 |
|
|
$ |
0.92 |
|
Inventory and manufacturing-related charges(1) |
|
|
0.6 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1.1 |
|
|
|
(1.7 |
) |
|
|
(0.01 |
) |
Intangible asset amortization(2) |
|
|
- |
|
|
|
(131.5 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
27.3 |
|
|
|
104.2 |
|
|
|
0.50 |
|
Restructuring and other cost reduction initiatives(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(28.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
12.3 |
|
|
|
16.0 |
|
|
|
0.07 |
|
Quality remediation(10) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8.1 |
) |
|
|
- |
|
|
|
- |
|
|
|
1.9 |
|
|
|
6.2 |
|
|
|
0.03 |
|
Acquisition, integration, divestiture and related(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(11.8 |
) |
|
|
- |
|
|
|
(0.1 |
) |
|
|
11.9 |
|
|
|
0.06 |
|
Litigation(8) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.1 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
(0.3 |
) |
|
|
- |
|
European Union Medical Device Regulation(5) |
|
|
- |
|
|
|
- |
|
|
|
(13.5 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.2 |
|
|
|
10.3 |
|
|
|
0.05 |
|
Other charges(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1.7 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
26.4 |
|
|
|
(6.7 |
) |
|
|
34.8 |
|
|
|
0.16 |
|
Other certain tax adjustments(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
42.3 |
|
|
|
(42.3 |
) |
|
|
(0.20 |
) |
As Adjusted |
|
$ |
488.8 |
|
|
$ |
- |
|
|
$ |
88.2 |
|
|
$ |
653.3 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1.0 |
|
|
$ |
64.9 |
|
|
$ |
333.1 |
|
|
$ |
1.58 |
|
Page 17 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
|||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS |
|
|||||||||||||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
|||||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts, unaudited) |
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 |
|
|||||||||||||||||||||||||||||||||||||||
|
|
Cost of products sold, excluding intangible asset amortization |
|
|
Intangible asset amortization |
|
|
Research and development |
|
|
Selling, general and administrative |
|
|
Restructuring and other cost reduction initiatives |
|
|
Acquisition, integration, divestiture and related |
|
|
Other income (expense), net |
|
|
Provision for income taxes from continuing operations |
|
|
Net Earnings from Continuing Operations of Zimmer Biomet Holdings, Inc. |
|
|
Diluted earnings from continuing operations per common share |
|
||||||||||
As Reported |
|
$ |
1,545.0 |
|
|
$ |
416.6 |
|
|
$ |
345.4 |
|
|
$ |
2,116.6 |
|
|
$ |
90.6 |
|
|
$ |
16.4 |
|
|
$ |
10.3 |
|
|
$ |
177.4 |
|
|
$ |
604.8 |
|
|
$ |
2.88 |
|
Inventory and manufacturing-related charges(1) |
|
|
(13.4 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7.8 |
|
|
|
5.6 |
|
|
|
0.03 |
|
Intangible asset amortization(2) |
|
|
- |
|
|
|
(416.6 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
84.9 |
|
|
|
331.7 |
|
|
|
1.58 |
|
Restructuring and other cost reduction initiatives(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(90.6 |
) |
|
|
- |
|
|
|
- |
|
|
|
20.5 |
|
|
|
70.1 |
|
|
|
0.33 |
|
Acquisition, integration, divestiture and related(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(16.4 |
) |
|
|
- |
|
|
|
0.4 |
|
|
|
16.0 |
|
|
|
0.08 |
|
Litigation(8) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.8 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.9 |
) |
|
|
(2.9 |
) |
|
|
(0.02 |
) |
European Union Medical Device Regulation(5) |
|
|
- |
|
|
|
- |
|
|
|
(42.6 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9.9 |
|
|
|
32.7 |
|
|
|
0.16 |
|
Other charges(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1.0 |
|
|
|
- |
|
|
|
- |
|
|
|
(9.8 |
) |
|
|
(7.1 |
) |
|
|
(3.7 |
) |
|
|
(0.02 |
) |
Other certain tax adjustments(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(71.7 |
) |
|
|
71.7 |
|
|
|
0.34 |
|
As Adjusted |
|
$ |
1,531.5 |
|
|
$ |
- |
|
|
$ |
302.8 |
|
|
$ |
2,121.4 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.5 |
|
|
$ |
221.2 |
|
|
$ |
1,126.1 |
|
|
$ |
5.36 |
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 |
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
Cost of products sold, excluding intangible asset amortization |
|
|
Intangible asset amortization |
|
|
Research and development |
|
|
Selling, general and administrative |
|
|
Intangible asset impairment |
|
|
Restructuring and other cost reduction initiatives |
|
|
Quality remediation |
|
|
Acquisition, integration, divestiture and related |
|
|
Other income (expense), net |
|
|
Provision for income taxes from continuing operations |
|
|
Net Earnings from Continuing Operations of Zimmer Biomet Holdings, Inc. |
|
|
Diluted earnings from continuing operations per common share |
|
||||||||||||
As Reported |
|
$ |
1,499.2 |
|
|
$ |
395.3 |
|
|
$ |
298.0 |
|
|
$ |
2,034.6 |
|
|
$ |
3.0 |
|
|
$ |
129.2 |
|
|
$ |
22.4 |
|
|
$ |
8.5 |
|
|
$ |
(124.1 |
) |
|
$ |
56.9 |
|
|
$ |
420.7 |
|
|
$ |
2.00 |
|
Inventory and manufacturing-related charges(1) |
|
|
(14.7 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
12.4 |
|
|
|
2.3 |
|
|
|
0.01 |
|
Intangible asset amortization(2) |
|
|
- |
|
|
|
(395.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
79.9 |
|
|
|
315.4 |
|
|
|
1.50 |
|
Intangible assets impairment(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3.0 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.8 |
|
|
|
2.2 |
|
|
|
0.01 |
|
Restructuring and other cost reduction initiatives(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(129.2 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
30.5 |
|
|
|
98.7 |
|
|
|
0.47 |
|
Quality remediation(10) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(22.4 |
) |
|
|
- |
|
|
|
- |
|
|
|
5.0 |
|
|
|
17.4 |
|
|
|
0.08 |
|
Acquisition, integration, divestiture and related(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8.5 |
) |
|
|
- |
|
|
|
4.4 |
|
|
|
4.1 |
|
|
|
0.02 |
|
Litigation(8) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(35.0 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8.2 |
|
|
|
26.8 |
|
|
|
0.13 |
|
European Union Medical Device Regulation(5) |
|
|
- |
|
|
|
- |
|
|
|
(37.3 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8.5 |
|
|
|
28.8 |
|
|
|
0.14 |
|
Other charges(6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(6.9 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
128.6 |
|
|
|
(4.2 |
) |
|
|
139.7 |
|
|
|
0.66 |
|
Other certain tax adjustments(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.2 |
|
|
|
(3.2 |
) |
|
|
(0.01 |
) |
As Adjusted |
|
$ |
1,484.5 |
|
|
$ |
- |
|
|
$ |
260.7 |
|
|
$ |
1,992.7 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
4.5 |
|
|
$ |
205.6 |
|
|
$ |
1,052.9 |
|
|
$ |
5.01 |
|
Page 18 of 24
Page 19 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
|||||||||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES FROM |
|
|||||||||||||
CONTINUING OPERATIONS TO FREE CASH FLOW FROM CONTINUING OPERATIONS |
|
|||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|
|||||||||||||
(in millions, unaudited) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
||||
Net cash provided by operating activities from continuing operations |
$ |
337.5 |
|
|
$ |
450.8 |
|
|
$ |
993.2 |
|
$ |
1,112.0 |
|
Additions to instruments |
|
(64.5 |
) |
|
|
(71.6 |
) |
|
|
(232.8 |
) |
|
(192.2 |
) |
Additions to other property, plant and equipment |
|
(84.3 |
) |
|
|
(47.2 |
) |
|
|
(228.3 |
) |
|
(124.5 |
) |
Free cash flow from continuing operations |
$ |
188.7 |
|
|
$ |
332.0 |
|
|
$ |
532.1 |
|
$ |
795.3 |
|
Page 20 of 24
ZIMMER BIOMET HOLDINGS, INC. |
||||||||||||||||
RECONCILIATION OF GROSS PROFIT & MARGIN FROM CONTINUING OPERATIONS |
||||||||||||||||
TO ADJUSTED GROSS PROFIT & MARGIN FROM CONTINUING OPERATIONS |
||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
||||||||||||||||
(in millions, unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
||||
Net Sales |
$ |
1,753.6 |
|
|
$ |
1,669.8 |
|
|
$ |
5,454.1 |
|
|
$ |
5,114.8 |
|
|
Cost of products sold, excluding intangible asset amortization |
|
518.6 |
|
|
|
488.2 |
|
|
|
1,545.0 |
|
|
|
1,499.2 |
|
|
Intangible asset amortization |
|
145.0 |
|
|
|
131.5 |
|
|
|
416.6 |
|
|
|
395.3 |
|
|
Gross Profit |
$ |
1,090.0 |
|
|
$ |
1,050.1 |
|
|
$ |
3,492.5 |
|
|
$ |
3,220.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Inventory and manufacturing-related charges |
|
7.5 |
|
|
|
(0.6 |
) |
|
|
13.4 |
|
|
|
14.7 |
|
|
Intangible asset amortization |
|
145.0 |
|
|
|
131.5 |
|
|
|
416.6 |
|
|
|
395.3 |
|
|
Adjusted gross profit |
$ |
1,242.4 |
|
|
$ |
1,181.0 |
|
|
$ |
3,922.6 |
|
|
$ |
3,630.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross margin |
|
62.2 |
|
% |
|
62.9 |
|
% |
|
64.0 |
|
% |
|
63.0 |
|
% |
Inventory and manufacturing-related charges |
|
0.4 |
|
|
|
- |
|
|
|
0.3 |
|
|
|
0.3 |
|
|
Intangible asset amortization |
|
8.3 |
|
|
|
7.8 |
|
|
|
7.6 |
|
|
|
7.7 |
|
|
Adjusted gross margin |
|
70.9 |
|
% |
|
70.7 |
|
% |
|
71.9 |
|
% |
|
71.0 |
|
% |
Page 21 of 24
ZIMMER BIOMET HOLDINGS, INC. |
||||||||||||||||
RECONCILIATION OF OPERATING PROFIT & MARGIN FROM CONTINUING OPERATIONS TO ADJUSTED OPERATING PROFIT & MARGIN FROM CONTINUING OPERATIONS |
||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
||||||||||||||||
(in millions, unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
||||
Operating profit |
$ |
266.6 |
|
|
$ |
245.3 |
|
|
$ |
923.5 |
|
|
$ |
724.6 |
|
|
Inventory and manufacturing-related charges |
|
7.5 |
|
|
|
(0.6 |
) |
|
|
13.4 |
|
|
|
14.7 |
|
|
Intangible asset amortization |
|
145.0 |
|
|
|
131.5 |
|
|
|
416.6 |
|
|
|
395.3 |
|
|
Intangible asset impairment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3.0 |
|
|
Restructuring and other cost reduction initiatives |
|
24.3 |
|
|
|
28.3 |
|
|
|
90.6 |
|
|
|
129.2 |
|
|
Quality remediation |
|
- |
|
|
|
8.1 |
|
|
|
- |
|
|
|
22.4 |
|
|
Acquisition, integration, divestiture and related |
|
7.3 |
|
|
|
11.8 |
|
|
|
16.4 |
|
|
|
8.5 |
|
|
Litigation |
|
- |
|
|
|
(0.1 |
) |
|
|
(3.8 |
) |
|
|
35.0 |
|
|
European Union Medical Device Regulation |
|
13.3 |
|
|
|
13.5 |
|
|
|
42.6 |
|
|
|
37.3 |
|
|
Other charges |
|
(0.2 |
) |
|
|
1.7 |
|
|
|
(1.0 |
) |
|
|
6.9 |
|
|
Adjusted operating profit |
$ |
463.8 |
|
|
$ |
439.5 |
|
|
$ |
1,498.4 |
|
|
$ |
1,376.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating profit margin |
|
15.2 |
|
% |
|
14.7 |
|
% |
|
16.9 |
|
% |
|
14.2 |
|
% |
Inventory and manufacturing-related charges |
|
0.4 |
|
|
|
- |
|
|
|
0.3 |
|
|
|
0.3 |
|
|
Intangible asset amortization |
|
8.3 |
|
|
|
7.8 |
|
|
|
7.6 |
|
|
|
7.7 |
|
|
Intangible asset impairment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.1 |
|
|
Restructuring and other cost reduction initiatives |
|
1.4 |
|
|
|
1.7 |
|
|
|
1.7 |
|
|
|
2.5 |
|
|
Quality remediation |
|
- |
|
|
|
0.5 |
|
|
|
- |
|
|
|
0.4 |
|
|
Acquisition, integration, divestiture and related |
|
0.4 |
|
|
|
0.7 |
|
|
|
0.3 |
|
|
|
0.2 |
|
|
Litigation |
|
- |
|
|
|
- |
|
|
|
(0.1 |
) |
|
|
0.7 |
|
|
European Union Medical Device Regulation |
|
0.8 |
|
|
|
0.8 |
|
|
|
0.8 |
|
|
|
0.7 |
|
|
Other charges |
|
- |
|
|
|
0.1 |
|
|
|
- |
|
|
|
0.1 |
|
|
Adjusted operating profit margin |
|
26.4 |
|
% |
|
26.3 |
|
% |
|
27.5 |
|
% |
|
26.9 |
|
% |
Page 22 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|||||||||||||||||
RECONCILIATION OF EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS TO ADJUSTED EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS |
|||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 |
|||||||||||||||||
(unaudited) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended September 30, |
|
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
||||
Effective tax rate |
|
25.7 |
|
% |
|
(9.3 |
) |
% |
|
|
22.7 |
|
% |
|
11.9 |
|
% |
Tax effect of adjustments made to earnings before taxes(1) |
|
2.1 |
|
|
|
1.7 |
|
|
|
|
2.8 |
|
|
|
3.7 |
|
|
Other certain tax adjustments (2) |
|
(11.1 |
) |
|
|
23.9 |
|
|
|
|
(9.1 |
) |
|
|
0.7 |
|
|
Adjusted effective tax rate |
|
16.7 |
|
% |
|
16.3 |
|
% |
|
|
16.4 |
|
% |
|
16.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Includes inventory and manufacturing-related charges; intangible asset amortization; intangible asset impairment; restructuring and other cost reduction initiatives; quality remediation; acquisition, integration, divestiture and related; litigation; European Union Medical Device Regulation; and other charges |
|||||||||||||||||
(2) Other certain tax adjustments are related to certain significant and discrete tax adjustments including intercompany transactions between jurisdictions, ongoing impacts of tax only amortization resulting from certain restructuring transactions, impacts of significant tax reform including Swiss reform and certain favorable tax audit settlements |
|||||||||||||||||
Page 23 of 24
ZIMMER BIOMET HOLDINGS, INC. |
|
||||||
RECONCILIATION OF DEBT TO NET DEBT |
|
||||||
AS OF SEPTEMBER 30, 2023 and DECEMBER 31, 2022 |
|
||||||
(in millions, unaudited) |
|
||||||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
September 30, 2023 |
|
|
December 31, 2022 |
|
||
Debt, both current and long-term |
$ |
5,482.4 |
|
|
$ |
5,696.5 |
|
Cash and cash equivalents |
|
(292.1 |
) |
|
|
(375.7 |
) |
Net debt |
$ |
5,190.3 |
|
|
$ |
5,320.8 |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Page 24 of 24