|
Media |
Investors |
|
Monica Kendrick |
Coleman Lannum |
|
(574) 372-4989 |
(574) 371-9480 |
|
Monica.Kendrick@ZimmerBiomet.com |
Cole.Lannum@ZimmerBiomet.com |
|
|
|
|
|
Derek Davis |
|
|
(574) 372-4250 |
|
|
Derek.Davis@ZimmerBiomet.com |
Zimmer Biomet Announces
Third Quarter 2018 Financial Results
|
|
• |
Net sales of $1.837 billion for the third quarter represent an increase of 1.3% over the prior year period, and an increase of 2.3% on a constant currency basis |
|
|
• |
Diluted EPS for the third quarter were $0.79 as reported |
|
|
• |
Adjusted diluted EPS for the third quarter were $1.63 |
|
|
• |
The Company updates full-year 2018 guidance |
(WARSAW, IN) October 26, 2018 — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2018. The Company reported third quarter net sales of $1.837 billion, an increase of 1.3% over the prior year period, and an increase of 2.3% on a constant currency basis. Diluted earnings per share for the third quarter were $0.79, an increase of 65% over the prior year period. Third quarter adjusted diluted earnings per share were $1.63, a decrease of 5% from the prior year period.
“We are pleased with our third quarter accomplishments, which reflect our sustained progress in a number of areas. Although our sales results clearly benefited from less challenging sales comparisons, as well as the timing of certain tenders and capital sales, our organic growth continued to signal that we are turning the business around consistent with our expectations,” said Bryan Hanson, President and CEO of Zimmer
Page 1 of 24
Biomet. “Looking to the balance of the year, we will continue to focus on priorities to improve the consistency of our results and drive sustained value creation. These include important new innovations that are expanding our comprehensive portfolio, advancing standards of care and creating new opportunities for our salesforce to deliver growth.”
Net earnings for the third quarter were $162.2 million, and $334.6 million on an adjusted basis. Operating cash flow for the third quarter was $484.1 million. Free cash flow in the quarter was $345.0 million.
In the quarter, the Company paid $48.8 million in dividends and declared a third quarter dividend of $0.24 per share.
Guidance
The Company made minor updates to its full-year 2018 guidance. The only factors changing are the expected impact of foreign currency and the expected adjusted effective tax rate. All other prior guidance for 2018 remains unchanged.
|
• |
The Company now expects the positive impact of foreign currency translation to be slightly below the low end of the previous range of 100 to 150 basis points, due to the strengthening of the dollar over the last several months. |
|
• |
The Company now expects the adjusted effective tax rate for the full year to be slightly below the low end of the previous range of 18.5% to 19.5%(1). |
|
(1) |
This 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." |
Conference Call
The Company will conduct its third quarter 2018 investor conference call today, October 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.
Page 2 of 24
The following sales tables provide results by geography and product category, as well as the percentage change compared to the prior year quarter and nine months, on both a reported basis and a constant currency basis.
NET SALES - THREE MONTHS ENDED SEPTEMBER 30, 2018
(in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Constant |
|
|
|
|
|
Net |
|
|
|
|
|
|
|
Currency |
|
|
||
|
|
Sales |
|
|
% Change |
|
|
|
% Change |
|
|
|||
|
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
1,154 |
|
|
|
1.5 |
|
% |
|
|
1.7 |
|
% |
|
EMEA |
|
372 |
|
|
|
(2.3 |
) |
|
|
|
- |
|
|
|
Asia Pacific |
|
311 |
|
|
|
5.4 |
|
|
|
|
7.6 |
|
|
|
Total |
$ |
1,837 |
|
|
|
1.3 |
|
% |
|
|
2.3 |
|
% |
|
Product Categories |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
385 |
|
|
|
0.8 |
|
% |
|
|
1.0 |
|
% |
|
EMEA |
|
134 |
|
|
|
(0.6 |
) |
|
|
|
2.6 |
|
|
|
Asia Pacific |
|
109 |
|
|
|
2.5 |
|
|
|
|
5.4 |
|
|
|
Total |
|
628 |
|
|
|
0.8 |
|
|
|
|
2.1 |
|
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
240 |
|
|
|
5.9 |
|
|
|
|
6.2 |
|
|
|
EMEA |
|
108 |
|
|
|
(6.4 |
) |
|
|
|
(4.1 |
) |
|
|
Asia Pacific |
|
97 |
|
|
|
6.7 |
|
|
|
|
8.6 |
|
|
|
Total |
|
445 |
|
|
|
2.8 |
|
|
|
|
3.9 |
|
|
|
S.E.T * |
|
415 |
|
|
|
2.4 |
|
|
|
|
3.1 |
|
|
|
Dental |
|
92 |
|
|
|
(0.6 |
) |
|
|
|
(0.2 |
) |
|
|
Spine & CMF** |
|
185 |
|
|
|
0.2 |
|
|
|
|
0.7 |
|
|
|
Other |
|
72 |
|
|
|
(4.0 |
) |
|
|
|
(3.3 |
) |
|
|
Total |
$ |
1,837 |
|
|
|
1.3 |
|
% |
|
|
2.3 |
|
% |
* Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma
** Craniomaxillofacial
Page 3 of 24
NET SALES - NINE MONTHS ENDED SEPTEMBER 30, 2018
(in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
Constant |
|
|
|
|
|
Net |
|
|
|
|
|
|
Currency |
|
|
||
|
|
Sales |
|
|
% Change |
|
|
% Change |
|
|
|||
|
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
3,578 |
|
|
|
0.2 |
|
% |
|
0.1 |
|
% |
|
EMEA |
|
1,326 |
|
|
|
4.2 |
|
|
|
(1.7 |
) |
|
|
Asia Pacific |
|
958 |
|
|
|
7.4 |
|
|
|
5.2 |
|
|
|
Total |
$ |
5,862 |
|
|
|
2.2 |
|
% |
|
0.5 |
|
% |
|
Product Categories |
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
1,210 |
|
|
|
(0.4 |
) |
% |
|
(0.5 |
) |
% |
|
EMEA |
|
494 |
|
|
|
6.8 |
|
|
|
1.1 |
|
|
|
Asia Pacific |
|
340 |
|
|
|
4.4 |
|
|
|
2.6 |
|
|
|
Total |
|
2,044 |
|
|
|
2.0 |
|
|
|
0.4 |
|
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
738 |
|
|
|
3.3 |
|
|
|
3.1 |
|
|
|
EMEA |
|
384 |
|
|
|
0.4 |
|
|
|
(5.2 |
) |
|
|
Asia Pacific |
|
302 |
|
|
|
8.7 |
|
|
|
6.2 |
|
|
|
Total |
|
1,424 |
|
|
|
3.6 |
|
|
|
1.4 |
|
|
|
S.E.T * |
|
1,291 |
|
|
|
3.3 |
|
|
|
1.8 |
|
|
|
Dental |
|
307 |
|
|
|
(1.4 |
) |
|
|
(3.7 |
) |
|
|
Spine & CMF** |
|
566 |
|
|
|
0.4 |
|
|
|
(0.6 |
) |
|
|
Other |
|
230 |
|
|
|
(0.8 |
) |
|
|
(2.1 |
) |
|
|
Total |
$ |
5,862 |
|
|
|
2.2 |
|
% |
|
0.5 |
|
% |
* Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma
** Craniomaxillofacial
Page 4 of 24
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.
Reclassifications
Beginning in the second quarter 2018, in our consolidated statements of earnings we have reclassified expenses that were previously recognized in a financial statement line item labeled, “Acquisition, quality remediation and other” to the financial statement line items of “Research and development”, “Selling, general and administrative”, “Goodwill and intangible asset impairment”, “Acquisition, integration and related”, and “Quality remediation”. Prior periods have been reclassified to conform to the current year presentation.
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
Page 5 of 24
and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.
Sales change information for the three and nine-month periods ended September 30, 2018 are 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, 2018 are presented on a GAAP (reported) basis and on an adjusted basis. Adjusted earnings and adjusted diluted earnings per share exclude the effects of inventory step-up; certain inventory and manufacturing-related charges, including charges to discontinue certain product lines; intangible asset amortization; goodwill and intangible asset impairment; acquisition, integration and related expenses; quality remediation expenses; certain litigation gains and charges; other charges; any related effects on our income tax provision associated with these items; and other certain tax adjustments.
Free cash flow is an additional non-GAAP measure that is presented in this press release. Free cash flow is computed by deducting additions to instruments and other property, plant and equipment from net cash provided by operating activities.
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
Page 6 of 24
This press release also includes the forward-looking non-GAAP financial measure of adjusted effective tax rate for the year ending December 31, 2018. 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 potential charges or gains connected to quality remediation efforts and certain legal and tax matters. We have not provided a quantitative reconciliation of this forward-looking non-GAAP financial measure to the most directly comparable forward-looking GAAP financial measure because the excluded items are not available on a prospective basis without unreasonable efforts. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.
Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding sales and earnings guidance and any statements about our expectations, plans, strategies or prospects. We generally use the words “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees,” “seeks,” “should,” “could,” “intends” and similar expressions to identify forward-looking statements. 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 and expectations of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially. These risks, uncertainties and changes in circumstances include, but are not limited to: our chief executive officer transition, including disruptions and uncertainties related thereto, the potential impact on our business and future strategic direction resulting from our transition to a new chief executive officer, and our ability to recruit and retain other key members of senior management; 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, vendors and lenders and on our operating results and businesses generally; compliance with the Deferred Prosecution Agreement entered into in January 2017; the success of our quality and operational excellence initiatives, including ongoing quality remediation efforts at our Warsaw North Campus facility; 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
Page 7 of 24
foreign government regulators, such as more stringent requirements for regulatory clearance of products; the ability to remediate matters identified in any inspectional observations or warning letters issued by the FDA, while continuing to satisfy the demand for our products; the outcome of government investigations; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts of healthcare purchasing organizations; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; control of costs and expenses; the ability to obtain and maintain adequate intellectual property protection; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability and intellectual property litigation losses; the ability to retain the independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the impact of the ongoing financial and political uncertainty on countries in the Euro zone on the ability to collect accounts receivable in affected countries. For a further list and description of such risks and uncertainties, see our reports filed with the U.S. Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2017. Copies of these filings, as well as subsequent filings, are available online at www.sec.gov, www.zimmerbiomet.com or on request from us. Forward-looking statements speak only as of the date they are made, and we 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 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 statement is applicable to all forward-looking statements contained in this release.
###
Page 8 of 24
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, except per share amounts, unaudited)
|
|
2018 |
|
|
2017 |
|
||
|
Net Sales |
$ |
1,836.7 |
|
|
$ |
1,813.1 |
|
|
Cost of products sold, excluding intangible asset amortization |
|
529.0 |
|
|
|
500.9 |
|
|
Intangible asset amortization |
|
147.6 |
|
|
|
152.7 |
|
|
Research and development |
|
95.7 |
|
|
|
91.2 |
|
|
Selling, general and administrative |
|
787.7 |
|
|
|
711.7 |
|
|
Goodwill and intangible asset impairment |
|
3.8 |
|
|
|
32.7 |
|
|
Acquisition, integration and related |
|
17.4 |
|
|
|
61.6 |
|
|
Quality remediation |
|
32.2 |
|
|
|
51.1 |
|
|
Operating expenses |
|
1,613.4 |
|
|
|
1,601.9 |
|
|
Operating Profit |
|
223.3 |
|
|
|
211.2 |
|
|
Other expense, net |
|
(2.2 |
) |
|
|
(2.3 |
) |
|
Interest income |
|
0.8 |
|
|
|
0.6 |
|
|
Interest expense |
|
(68.3 |
) |
|
|
(82.3 |
) |
|
Earnings before income taxes |
|
153.6 |
|
|
|
127.2 |
|
|
(Benefit) provision for income taxes |
|
(8.5 |
) |
|
|
28.4 |
|
|
Net Earnings |
|
162.1 |
|
|
|
98.8 |
|
|
Less: Net Loss attributable to noncontrolling interest |
|
(0.1 |
) |
|
|
- |
|
|
Net Earnings of Zimmer Biomet Holdings, Inc. |
$ |
162.2 |
|
|
$ |
98.8 |
|
|
Earnings Per Common Share |
|
|
|
|
|
|
|
|
Basic |
$ |
0.80 |
|
|
$ |
0.49 |
|
|
Diluted |
$ |
0.79 |
|
|
$ |
0.48 |
|
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
|
|
|
Basic |
|
203.7 |
|
|
|
202.3 |
|
|
Diluted |
|
205.4 |
|
|
|
204.0 |
|
|
Cash Dividends Declared Per Common Share |
$ |
0.24 |
|
|
$ |
0.24 |
|
Page 9 of 24
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, except per share amounts, unaudited)
|
|
2018 |
|
|
2017 |
|
||
|
Net Sales |
$ |
5,861.9 |
|
|
$ |
5,735.0 |
|
|
Cost of products sold, excluding intangible asset amortization |
|
1,688.5 |
|
|
|
1,541.5 |
|
|
Intangible asset amortization |
|
447.9 |
|
|
|
452.4 |
|
|
Research and development |
|
290.5 |
|
|
|
274.9 |
|
|
Selling, general and administrative |
|
2,380.7 |
|
|
|
2,239.6 |
|
|
Goodwill and intangible asset impairment |
|
3.8 |
|
|
|
59.5 |
|
|
Acquisition, integration and related |
|
113.9 |
|
|
|
192.3 |
|
|
Quality remediation |
|
112.3 |
|
|
|
135.4 |
|
|
Operating expenses |
|
5,037.6 |
|
|
|
4,895.6 |
|
|
Operating Profit |
|
824.3 |
|
|
|
839.4 |
|
|
Other expense, net |
|
(8.7 |
) |
|
|
(4.5 |
) |
|
Interest income |
|
2.3 |
|
|
|
1.4 |
|
|
Interest expense |
|
(223.1 |
) |
|
|
(247.5 |
) |
|
Earnings before income taxes |
|
594.8 |
|
|
|
588.8 |
|
|
Provision for income taxes |
|
71.6 |
|
|
|
6.6 |
|
|
Net Earnings |
|
523.2 |
|
|
|
582.2 |
|
|
Less: Net Earnings (Loss) attributable to noncontrolling interest |
|
1.3 |
|
|
|
(0.2 |
) |
|
Net Earnings of Zimmer Biomet Holdings, Inc. |
$ |
521.9 |
|
|
$ |
582.4 |
|
|
Earnings Per Common Share |
|
|
|
|
|
|
|
|
Basic |
$ |
2.57 |
|
|
$ |
2.89 |
|
|
Diluted |
$ |
2.55 |
|
|
$ |
2.86 |
|
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
|
|
|
Basic |
|
203.3 |
|
|
|
201.7 |
|
|
Diluted |
|
204.9 |
|
|
|
203.6 |
|
|
Cash Dividends Declared Per Common Share |
$ |
0.72 |
|
|
$ |
0.72 |
|
Page 10 of 24
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)
|
|
|
September 30, |
|
|
December 31, |
|
||
|
|
|
2018 |
|
|
2017 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
524.6 |
|
|
$ |
524.4 |
|
|
Receivables, net |
|
|
1,262.7 |
|
|
|
1,544.1 |
|
|
Inventories |
|
|
2,219.5 |
|
|
|
2,068.3 |
|
|
Other current assets |
|
|
506.5 |
|
|
|
428.0 |
|
|
Total current assets |
|
|
4,513.3 |
|
|
|
4,564.8 |
|
|
Property, plant and equipment, net |
|
|
2,002.4 |
|
|
|
2,038.6 |
|
|
Goodwill |
|
|
10,583.6 |
|
|
|
10,668.4 |
|
|
Intangible assets, net |
|
|
7,837.4 |
|
|
|
8,353.4 |
|
|
Other assets |
|
|
445.3 |
|
|
|
388.8 |
|
|
Total Assets |
|
$ |
25,382.0 |
|
|
$ |
26,014.0 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
$ |
1,791.2 |
|
|
$ |
1,844.7 |
|
|
Current portion of long-term debt |
|
|
600.0 |
|
|
|
1,225.0 |
|
|
Other long-term liabilities |
|
|
2,170.4 |
|
|
|
2,291.3 |
|
|
Long-term debt |
|
|
8,597.4 |
|
|
|
8,917.5 |
|
|
Stockholders' equity |
|
|
12,223.0 |
|
|
|
11,735.5 |
|
|
Total Liabilities and Stockholders' Equity |
|
$ |
25,382.0 |
|
|
$ |
26,014.0 |
|
Page 11 of 24
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, unaudited)
|
|
|
2018 |
|
|
2017 |
|
||
|
Cash flows provided by (used in) operating activities |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
523.2 |
|
|
$ |
582.2 |
|
|
Depreciation and amortization |
|
|
785.7 |
|
|
|
798.2 |
|
|
Share-based compensation |
|
|
45.3 |
|
|
|
40.1 |
|
|
Goodwill and intangible asset impairment |
|
|
3.8 |
|
|
|
59.5 |
|
|
Inventory step-up |
|
|
- |
|
|
|
32.2 |
|
|
Changes in operating assets and liabilities, net of acquired assets and liabilities |
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
(58.3 |
) |
|
|
(245.4 |
) |
|
Receivables |
|
|
237.4 |
|
|
|
346.7 |
|
|
Inventories |
|
|
(165.2 |
) |
|
|
(123.9 |
) |
|
Accounts payable and accrued expenses |
|
|
23.6 |
|
|
|
(170.6 |
) |
|
Other assets and liabilities |
|
|
(27.6 |
) |
|
|
(139.6 |
) |
|
Net cash provided by operating activities |
|
|
1,367.9 |
|
|
|
1,179.4 |
|
|
Cash flows used in investing activities |
|
|
|
|
|
|
|
|
|
Additions to instruments |
|
|
(203.7 |
) |
|
|
(255.7 |
) |
|
Additions to other property, plant and equipment |
|
|
(115.2 |
) |
|
|
(109.8 |
) |
|
Business combination investments, net of acquired cash |
|
|
- |
|
|
|
(4.0 |
) |
|
Other investing activities |
|
|
(15.3 |
) |
|
|
(13.1 |
) |
|
Net cash used in investing activities |
|
|
(334.2 |
) |
|
|
(382.6 |
) |
|
Cash flows provided by (used in) financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from senior notes |
|
|
749.5 |
|
|
|
- |
|
|
Proceeds from multicurrency revolving facility |
|
|
400.0 |
|
|
|
400.0 |
|
|
Payments on multicurrency revolving facility |
|
|
(400.0 |
) |
|
|
(400.0 |
) |
|
Redemption of senior notes |
|
|
(1,150.0 |
) |
|
|
(500.0 |
) |
|
Proceeds from term loan |
|
|
- |
|
|
|
192.7 |
|
|
Payments on term loan |
|
|
(500.0 |
) |
|
|
(640.0 |
) |
|
Net payments on other debt |
|
|
(3.9 |
) |
|
|
(0.9 |
) |
|
Dividends paid to stockholders |
|
|
(146.2 |
) |
|
|
(145.0 |
) |
|
Proceeds from employee stock compensation plans |
|
|
103.4 |
|
|
|
132.6 |
|
|
Net cash flows from unremitted collections from factoring programs |
|
|
(54.6 |
) |
|
|
- |
|
|
Business combination contingent consideration payments |
|
|
(16.7 |
) |
|
|
(9.1 |
) |
|
Restricted stock withholdings |
|
|
(3.3 |
) |
|
|
(7.6 |
) |
|
Debt issuance costs |
|
|
(4.9 |
) |
|
|
(0.3 |
) |
|
Net cash used in financing activities |
|
|
(1,026.7 |
) |
|
|
(977.6 |
) |
|
Effect of exchange rates on cash and cash equivalents |
|
|
(6.8 |
) |
|
|
27.5 |
|
|
Increase (decrease) in cash and cash equivalents |
|
|
0.2 |
|
|
|
(153.3 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
524.4 |
|
|
|
634.1 |
|
|
Cash and cash equivalents, end of period |
|
$ |
524.6 |
|
|
$ |
480.8 |
|
Page 12 of 24
NET SALES BY GEOGRAPHY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, unaudited)
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
2018 |
|
|
2017 |
|
|
% Inc / (Dec) |
|
|
Volume / Mix |
|
|
Price |
|
|
Foreign Exchange |
|
|
||||||
|
Americas |
|
$ |
1,153.6 |
|
|
$ |
1,137.0 |
|
|
|
1.5 |
|
% |
|
4.1 |
|
% |
|
(2.4 |
) |
% |
|
(0.2 |
) |
% |
|
EMEA |
|
|
372.1 |
|
|
|
381.1 |
|
|
|
(2.3 |
) |
|
|
2.0 |
|
|
|
(2.0 |
) |
|
|
(2.3 |
) |
|
|
Asia Pacific |
|
|
311.0 |
|
|
|
295.0 |
|
|
|
5.4 |
|
|
|
10.8 |
|
|
|
(3.2 |
) |
|
|
(2.2 |
) |
|
|
Total |
|
$ |
1,836.7 |
|
|
$ |
1,813.1 |
|
|
|
1.3 |
|
% |
|
4.7 |
|
% |
|
(2.4 |
) |
% |
|
(1.0 |
) |
% |
ZIMMER BIOMET HOLDINGS, INC.
NET SALES BY PRODUCT CATEGORY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, unaudited)
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
2018 |
|
|
2017 |
|
|
% Inc / (Dec) |
|
|
Volume / Mix |
|
|
Price |
|
|
Foreign Exchange |
|
|
||||||
|
Knees |
|
$ |
627.9 |
|
|
$ |
622.9 |
|
|
|
0.8 |
|
% |
|
5.0 |
|
% |
|
(2.9 |
) |
% |
|
(1.3 |
) |
% |
|
Hips |
|
|
444.8 |
|
|
|
432.8 |
|
|
|
2.8 |
|
|
|
7.2 |
|
|
|
(3.3 |
) |
|
|
(1.1 |
) |
|
|
S.E.T |
|
|
414.6 |
|
|
|
404.8 |
|
|
|
2.4 |
|
|
|
4.9 |
|
|
|
(1.8 |
) |
|
|
(0.7 |
) |
|
|
Dental |
|
|
92.3 |
|
|
|
92.9 |
|
|
|
(0.6 |
) |
|
|
- |
|
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
Spine & CMF |
|
|
184.9 |
|
|
|
184.5 |
|
|
|
0.2 |
|
|
|
2.1 |
|
|
|
(1.4 |
) |
|
|
(0.5 |
) |
|
|
Other |
|
|
72.2 |
|
|
|
75.2 |
|
|
|
(4.0 |
) |
|
|
(1.4 |
) |
|
|
(1.9 |
) |
|
|
(0.7 |
) |
|
|
Total |
|
$ |
1,836.7 |
|
|
$ |
1,813.1 |
|
|
|
1.3 |
|
% |
|
4.7 |
|
% |
|
(2.4 |
) |
% |
|
(1.0 |
) |
% |
Page 13 of 24
NET SALES BY GEOGRAPHY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, unaudited)
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
2018 |
|
|
2017 |
|
|
% Inc |
|
|
Volume / Mix |
|
|
Price |
|
|
Foreign Exchange |
|
|
||||||
|
Americas |
|
$ |
3,578.0 |
|
|
$ |
3,570.8 |
|
|
|
0.2 |
|
% |
|
2.5 |
|
% |
|
(2.4 |
) |
% |
|
0.1 |
|
% |
|
EMEA |
|
|
1,326.3 |
|
|
|
1,272.5 |
|
|
|
4.2 |
|
|
|
0.6 |
|
|
|
(2.3 |
) |
|
|
5.9 |
|
|
|
Asia Pacific |
|
|
957.6 |
|
|
|
891.7 |
|
|
|
7.4 |
|
|
|
8.8 |
|
|
|
(3.6 |
) |
|
|
2.2 |
|
|
|
Total |
|
$ |
5,861.9 |
|
|
$ |
5,735.0 |
|
|
|
2.2 |
|
% |
|
3.0 |
|
% |
|
(2.5 |
) |
% |
|
1.7 |
|
% |
ZIMMER BIOMET HOLDINGS, INC.
NET SALES BY PRODUCT CATEGORY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 and 2017
(in millions, unaudited)
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
2018 |
|
|
2017 |
|
|
% Inc / (Dec) |
|
|
Volume / Mix |
|
|
Price |
|
|
Foreign Exchange |
|
|
||||||
|
Knees |
|
$ |
2,044.2 |
|
|
$ |
2,003.7 |
|
|
|
2.0 |
|
% |
|
3.3 |
|
% |
|
(2.9 |
) |
% |
|
1.6 |
|
% |
|
Hips |
|
|
1,423.7 |
|
|
|
1,374.6 |
|
|
|
3.6 |
|
|
|
4.4 |
|
|
|
(3.0 |
) |
|
|
2.2 |
|
|
|
S.E.T |
|
|
1,290.7 |
|
|
|
1,249.4 |
|
|
|
3.3 |
|
|
|
4.0 |
|
|
|
(2.2 |
) |
|
|
1.5 |
|
|
|
Dental |
|
|
306.8 |
|
|
|
311.1 |
|
|
|
(1.4 |
) |
|
|
(2.6 |
) |
|
|
(1.1 |
) |
|
|
2.3 |
|
|
|
Spine & CMF |
|
|
566.2 |
|
|
|
564.1 |
|
|
|
0.4 |
|
|
|
1.2 |
|
|
|
(1.8 |
) |
|
|
1.0 |
|
|
|
Other |
|
|
230.3 |
|
|
|
232.1 |
|
|
|
(0.8 |
) |
|
|
(0.6 |
) |
|
|
(1.5 |
) |
|
|
1.3 |
|
|
|
Total |
|
$ |
5,861.9 |
|
|
$ |
5,735.0 |
|
|
|
2.2 |
|
% |
|
3.0 |
|
% |
|
(2.5 |
) |
% |
|
1.7 |
|
% |
Page 14 of 24
RECONCILIATION OF REPORTED NET SALES % CHANGE TO
CONSTANT CURRENCY % CHANGE
(unaudited)
|
|
For the Three Months Ended |
|
|
|||||||||||
|
|
September 30, 2018 |
|
|
|||||||||||
|
|
|
|
|
|
|
Foreign |
|
|
|
Constant |
|
|
||
|
|
|
|
|
|
|
Exchange |
|
|
|
Currency |
|
|
||
|
|
% Change |
|
|
|
Impact |
|
|
|
% Change |
|
|
|||
|
Geographic Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
1.5 |
|
% |
|
|
(0.2 |
) |
% |
|
|
1.7 |
|
% |
|
EMEA |
|
(2.3 |
) |
|
|
|
(2.3 |
) |
|
|
|
- |
|
|
|
Asia Pacific |
|
5.4 |
|
|
|
|
(2.2 |
) |
|
|
|
7.6 |
|
|
|
Total |
|
1.3 |
|
% |
|
|
(1.0 |
) |
% |
|
|
2.3 |
|
% |
|
Product Categories |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
0.8 |
|
% |
|
|
(0.2 |
) |
% |
|
|
1.0 |
|
% |
|
EMEA |
|
(0.6 |
) |
|
|
|
(3.2 |
) |
|
|
|
2.6 |
|
|
|
Asia Pacific |
|
2.5 |
|
|
|
|
(2.9 |
) |
|
|
|
5.4 |
|
|
|
Total |
|
0.8 |
|
|
|
|
(1.3 |
) |
|
|
|
2.1 |
|
|
|
Hips |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
5.9 |
|
|
|
|
(0.3 |
) |
|
|
|
6.2 |
|
|
|
EMEA |
|
(6.4 |
) |
|
|
|
(2.3 |
) |
|
|
|
(4.1 |
) |
|
|
Asia Pacific |
|
6.7 |
|
|
|
|
(1.9 |
) |
|
|
|
8.6 |
|
|
|
Total |
|
2.8 |
|
|
|
|
(1.1 |
) |
|
|
|
3.9 |
|
|
|
S.E.T |
|
2.4 |
|
|
|
|
(0.7 |
) |
|
|
|
3.1 |
|
|
|
Dental |
|
(0.6 |
) |
|
|
|
||||||||