WARSAW, Ind., April 26, 2018 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended March 31, 2018. The Company reported first quarter net sales of $2.018 billion, an increase of 2.3% over the prior year period, and a decrease of 1.5% on a constant currency basis. Diluted earnings per share for the first quarter were $0.85, a decrease of 42.2% from the prior year period. First quarter adjusted diluted earnings per share were $1.91, a decrease of 10.3% from the prior year period.
“As expected, in the first quarter our performance continued to reflect supply headwinds associated with key brands within our Knee, Hip and S.E.T. portfolios, as well as the ongoing quality remediation work at our Warsaw North Campus facility,” said Bryan Hanson, President and CEO of Zimmer Biomet. “As we look out over the course of the next 18 to 24 months, we will stay laser-focused on taking the necessary actions to narrow our gap to market and drive sustained shareholder value. These actions include successfully driving our ongoing quality remediation program, restoring supply, and scaling up the commercial launch of compelling new technologies, all of which remain on track.”
Net earnings for the first quarter were $174.7 million, and $390.9 million on an adjusted basis. Operating cash flow for the first quarter was $490.5 million. Free cash flow in the quarter was $403.4 million.
In the quarter, the Company paid $48.6 million in dividends and declared a first quarter dividend of $0.24 per share.
Guidance
The Company provided the following full-year 2018 financial guidance:
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Projected Year Ending December 31, 2018 |
|
|
2018 Sales Growth vs Prior Year(1) |
1.5% – 3.5% |
|
Adjusted Operating Profit Margin(2) |
27.5% – 28.5% |
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Adjusted Tax Rate(2) |
18.5% – 19.5% |
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Adjusted Diluted EPS(2) |
$7.60 – $7.80 |
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Free Cash Flow(3) |
$1.1 billion – $1.3 billion |
|
(1) |
2018 sales growth vs prior year is provided on an as reported basis and includes 200 to 300 basis points of positive foreign exchange impact |
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(2) |
These measures are non-GAAP financial measures 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.” |
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(3) |
Projected Year Ending December 31, 2018 |
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(in millions) |
Low |
High |
|
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Net Cash Provided by Operating Activities |
$1,585 |
$1,755 |
|
|
Additions to Instruments and Other Property, Plant and Equipment |
(485) |
(455) |
|
|
Free Cash Flow |
$1,100 |
$1,300 |
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Conference Call
The Company will conduct its first quarter 2018 investor conference call today, April 26, 2018, at 8:30 a.m. Eastern Time. The audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at http://investor.zimmerbiomet.com. It will be archived for replay following the conference call.
Individuals in the U.S. and Canada who wish to dial into the conference call may do so by dialing (888) 312-9837 and entering conference ID 7278985. For a complete listing of international toll-free and local numbers, please visit http://investor.zimmerbiomet.com. A digital recording will be available 24 hours after the completion of the conference call, from April 27, 2018 to May 26, 2018. To access the recording, U.S. callers should dial (888) 203-1112 and international callers should dial +1 (719) 457-0820 and enter the Access Code ID 7278985.
Sales Table
The following first quarter sales table provides results by geography and product category, as well as the percentage change compared to the prior year quarter on a reported basis and a constant currency basis.
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NET SALES – THREE MONTHS ENDED MARCH 31, 2018 |
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(in millions, unaudited) |
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|
Constant |
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|
Net |
Currency |
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|
Sales |
% Change |
% Change |
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|
Geographic Results |
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|
Americas |
$ |
1,208 |
(1.8) |
% |
(2.0) |
% |
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EMEA |
497 |
9.6 |
(3.0) |
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Asia Pacific |
313 |
8.2 |
2.6 |
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Total |
$ |
2,018 |
2.3 |
% |
(1.5) |
% |
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|
Product Categories |
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|
Knees |
|||||||||||||
|
Americas |
$ |
417 |
(2.5) |
% |
(2.7) |
% |
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|
EMEA |
189 |
12.4 |
(0.1) |
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|
Asia Pacific |
107 |
2.3 |
(3.0) |
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Total |
713 |
1.8 |
(2.1) |
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|
Hips |
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|
Americas |
248 |
1.3 |
1.0 |
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|
EMEA |
142 |
4.5 |
(7.6) |
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|
Asia Pacific |
102 |
9.5 |
3.6 |
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Total |
492 |
3.8 |
(0.9) |
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|
S.E.T * |
443 |
4.4 |
1.1 |
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|
Dental |
108 |
(0.2) |
(4.8) |
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Spine & CMF |
183 |
(1.7) |
(3.8) |
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Other |
79 |
(1.1) |
(4.0) |
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Total |
$ |
2,018 |
2.3 |
% |
(1.5) |
% |
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* Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma |
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About the Company
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer Biomet is a global leader in musculoskeletal healthcare. We design, manufacture and market orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; office based technologies; spine, craniomaxillofacial and thoracic products; dental implants; and related surgical products.
We collaborate with healthcare professionals around the globe to advance the pace of innovation. Our products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. Together with healthcare professionals, we help millions of people live better lives.
We have operations in more than 25 countries around the world and sell products in more than 100 countries. For more information, visit www.zimmerbiomet.com or follow Zimmer Biomet on Twitter at www.twitter.com/zimmerbiomet.
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 is not incorporated by reference into, and is not a part of, this document.
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