WARSAW, Ind., Feb. 1, 2019 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter and full year ended December 31, 2018. The Company reported fourth quarter net sales of $2.071 billion, an increase of 0.1% over the prior year period, and an increase of 1.6% on a constant currency basis. Diluted loss per share for the fourth quarter was $4.42. The Company’s diluted loss per share included goodwill impairment charges of $4.78 per share and legal charges of $0.59 per share primarily related to a previously disclosed patent litigation matter. Fourth quarter adjusted diluted earnings per share were $2.18, an increase of 3.8% over the prior year period.
Full-year 2018 net sales were $7.933 billion, an increase of 1.7% over the prior year, and an increase of 0.8% on a constant currency basis. Diluted loss per share for the full year was $1.86. Adjusted diluted earnings per share for the full year were $7.64, a decrease of 4.9% from the prior year.
“We are encouraged with the solid close to 2018, driven by strong fourth quarter performance in the Asia Pacific and Europe, Middle East and Africa regions, and in our Spine & CMF category,” said Bryan Hanson, President and CEO of Zimmer Biomet. “Overall, our financial results for the full year were in-line with our expectations for the progress of the turnaround of the business, and increase our confidence in achieving our 2019 objectives. We look forward to delivering on our near-term commitments to transition to offense and drive enhanced shareholder value, including the launch of a number of exciting new products and platform technologies to expand our ecosystem of differentiated solutions.”
Net loss for the fourth quarter was $901.1 million, including goodwill impairment and litigation charges. Net earnings on an adjusted basis were $447.9 million. Operating cash flows for the fourth quarter and full-year 2018 were $379.5 millionand $1,747.4 million, respectively. Free cash flows in the fourth quarter and full-year 2018 were $259.4 million and $1,308.4 million, respectively.
In the quarter, the Company paid $49.0 million in dividends and declared a fourth quarter dividend of $0.24 per share.
Guidance
The Company provided the following full-year 2019 financial guidance:
| Projected Year Ending December 31, 2019 | |
| 2019 Sales Growth vs Prior Year(1) | (0.5%) – 0.5% |
| Adjusted Operating Profit Margin(2) | 27.0% – 28.0% |
| Adjusted Tax Rate(2) | 17.0% – 18.0% |
| Adjusted Diluted EPS(2) | $7.70 – $7.90 |
| Free Cash Flow(3)(4) | $1.1 billion – $1.3 billion |
| (1) | 2019 sales growth vs prior year is provided on an as reported basis and includes 100 to150 basis points of negative foreign exchange impact | |
| (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.” | |
| (3) | The range includes a potential one-time payment of approximately $170 million for apreviously disclosed patent litigation matter | |
| (4) | Reconciliation of Projected Free Cash Flow for the Year Ending December 31, 2019 | |
| ($ in millions) | Low | High |
| Net Cash Provided by Operating Activities | $1,580 | $1,730 |
| Additions to Instruments and Other Property, Plant and Equipment | (480) | (430) |
| Free Cash Flow | $1,100 | $1,300 |
Conference Call
The Company will conduct its fourth quarter and full-year 2018 investor conference call today, February 1, 2019, 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.
