- Third quarter net sales of $1.754
billion increased 5.0% and 4.7% on a constant
currency1 basis
- Third quarter diluted earnings per share were $0.77; adjusted1 diluted earnings per
share were $1.65
- The Company updates 2023 reported revenue guidance due to
currency expectations and reaffirms 2023 constant currency revenue
growth and adjusted1 earnings per share financial
guidance
WARSAW,
Ind., Nov. 7, 2023 /PRNewswire/ -- 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.
|
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|
|
|
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|
|
|
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1.
|
Reconciliations of
these measures to the corresponding U.S. generally accepted
accounting principles measures are included in this press
release.
|
"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:
- Appointment of Ivan Tornos as President and Chief Executive
Officer and expansion of Chief Financial Officer Suketu (Suky) Upadhyay's role to CFO and EVP,
Finance, Operations & Supply Chain as part of Zimmer Biomet's
increased focus on innovation and commercial execution
- Key updates to the Zimmer Biomet Executive Leadership Team,
including promotions of Wilfred van
Zuilen to Group President, EMEA and Mark Bezjak to President
of the Americas, as well as the appointment of Chief Science,
Technology and Innovation Officer Nitin
Goyal, M.D. to the Executive Leadership Team
- Enrollment of 100,000 patients since launch on the
mymobility® care management platform, which provides a
guided orthopedic patient experience, with automation, data and
insights for clinicians
- Continued recognition for our Environmental, Social and
Governance (ESG) programs with inclusion in the Newsweek Americas
Greenest Companies 2024 and the Sustainability Magazine Top 10:
Sustainable Healthcare Device Companies lists
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
|
|
|
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.
|
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.
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 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 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 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.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
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
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
%
|
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
|
|
%
|
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
|
|
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
|
|
|
|
(1)
|
Inventory and
manufacturing-related charges include excess and obsolete inventory
charges on certain product lines we intend to discontinue and other
inventory and manufacturing-related charges or gains.
|
|
|
(2)
|
We exclude intangible
asset amortization as well as deferred tax rate changes on our
intangible assets from our non-GAAP financial measures because we
internally assess our performance against our peers without this
amortization. Due to various levels of acquisitions among our
peers, intangible asset amortization can vary significantly from
company to company.
|
|
|
(3)
|
In December 2019 and
2021, we initiated global restructuring programs that included a
reorganization of key businesses and an overall effort to reduce
costs in order to accelerate decision-making, focus the
organization on priorities to drive growth and to prepare for the
spinoff of ZimVie. Restructuring and other cost reduction
initiatives also include other cost reduction and optimization
initiatives that have the goal of reducing costs across the
organization. The costs include employee termination
benefits; contract terminations for facilities and sales agents;
and other charges, such as consulting fees, project management
expenses, retention period salaries and benefits and relocation
costs.
|
|
|
(4)
|
The acquisition,
integration, divestiture and related gains and expenses we have
excluded from our non-GAAP financial measures resulted from various
acquisitions, post-separation costs we have incurred related to
ZimVie and gains related to a transition services agreement for
services we provide to ZimVie and a transition manufacturing and
supply agreement for products we supply to ZimVie for a limited
period.
|
|
|
(5)
|
The European Union
Medical Device Regulation imposes significant additional premarket
and postmarket requirements. The new regulations provided a
transition period until May 2021 for previously-approved medical
devices to meet the additional requirements. For certain
devices, this transition period can be extended until May
2024. A conditional extension of the transition period has
been implemented until December 2027 and 2028 depending on the
legacy medical device's risk class. We are excluding from our
non-GAAP financial measures the incremental costs incurred to
establish initial compliance with the regulations related to our
previously-approved medical devices. The incremental costs
primarily relate to temporary personnel and third-party
professionals necessary to supplement our internal
resources.
|
|
|
(6)
|
We have incurred other
various expenses from specific events or projects that we consider
highly variable or that have a significant impact to our operating
results that we have excluded from our non-GAAP measures.
These include costs related to contract terminations and gains and
losses from changes in fair value on our equity investments
including our investment in ZimVie, among other various
costs.
|
|
|
(7)
|
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.
|
|
|
(8)
|
We are involved in
patent litigation, product liability litigation, commercial
litigation and other various litigation matters. We review
litigation matters from both a qualitative and quantitative
perspective to determine if excluding the losses or gains will
provide our investors with useful incremental information.
Litigation matters can vary in their characteristics, frequency and
significance to our operating results. The litigation charges
and gains excluded from our non-GAAP financial measures in the
periods presented relate to patent litigation and product liability
litigation. Once the litigation matter has been excluded from
our non-GAAP financial measures in a particular period, any
additional expenses or gains from changes in estimates are also
excluded, even if they are not significant, to ensure consistency
in our non-GAAP financial measures from
period-to-period.
|
|
|
(9)
|
In the second quarter
of 2022, we recognized an impairment charge of $3.0 million on a
certain in-process research and development project.
|
|
|
(10)
|
We addressed
inspectional observations on Form 483 and a Warning Letter issued
by the U.S. Food and Drug Administration ("FDA") following its
previous inspections of our Warsaw North Campus facility, among
other matters. This quality remediation required us to devote
significant financial resources. The majority of the expenses
were related to consultants who helped us to update previous
documents and redesign certain processes.
|
|
|
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
|
|
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
|
|
%
|
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
|
|
%
|
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
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
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SOURCE Zimmer Biomet Holdings, Inc.