- Second quarter net sales from continuing operations of
$1.782 billion increased 1.0% and
6.0% on a constant currency1 basis
- Second quarter diluted earnings per share from continuing
operations were $0.73;
adjusted1 diluted earnings per share from continuing
operations were $1.82
- Company updates 2022 financial guidance, raising range for full
year outlook
WARSAW,
Ind., Aug. 2, 2022 /PRNewswire/ -- Zimmer Biomet
Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results
for the quarter ended June 30,
2022. The Company reported second quarter net sales from
continuing operations of $1.782
billion, an increase of 1.0% over the prior year period, and
an increase of 6.0% on a constant currency basis. Net
earnings from continuing operations for the second quarter were
$153.7 million, or $382.4 million on an adjusted1
basis.
Diluted earnings per share from continuing operations were
$0.73 for the second quarter, and
adjusted diluted earnings per share from continuing operations were
$1.82.
"Our performance in Q2 was well above our own internal
expectations due to stronger than anticipated COVID recovery in the
quarter and the continued execution from the ZB team across our
regions and segments. Despite expected increased pressure
from foreign exchange rates and inflation, we are once again
updating our guidance," said Bryan
Hanson, Chairman, President and CEO of Zimmer Biomet.
"We believe our focus on innovation and the transformation of our
business continues to position us well for long-term growth and
continued delivery for our shareholders."
1. Reconciliations of these measures to the
corresponding U.S. generally accepted accounting principles
measures are included in this press release.
Recent Highlights
Aligned with the ongoing transformation of Zimmer Biomet's
business, key second quarter highlights include:
- Certification in the U.S. by Great Place to Work, which
recognizes employers who create an outstanding employee
experience.
- Launch of new artificial intelligence (AI) capabilities within
Omni™ Suite, an intelligent operating room (OR) designed to
optimize surgical workflow and procedural efficiency by automating
manual tasks and streamlining unnecessary technology and redundant
hardware. Omni Suite's
first-of-its-kind AI feature further expands the AI capabilities of
ZBEdge™, a suite of integrated smart, digital and robotic
technologies designed to deliver transformative data-powered
clinical insights with the goal of improving patient outcomes.
- Appointment of Keri P. Mattox as
Chief Communications and Administration Officer to create a
function responsible for building and executing a comprehensive
strategy around Environmental, Social and Governance (ESG)
initiatives.
Geographic and Product Category Sales
The following sales tables provide results by geography and
product category for the three and six-month periods ended
June 30, 2022, 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 JUNE 30, 2022
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
Net
|
|
|
|
|
|
|
Currency
|
|
|
|
Sales
|
|
|
% Change
|
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
1,017.6
|
|
|
|
1.3
|
|
%
|
|
|
1.3
|
|
%
|
International
|
|
764.2
|
|
|
|
0.7
|
|
|
|
|
12.2
|
|
|
Total
|
$
|
1,781.8
|
|
|
|
1.0
|
|
%
|
|
|
6.0
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
398.4
|
|
|
|
4.5
|
|
%
|
|
|
4.5
|
|
%
|
International
|
|
306.5
|
|
|
|
7.8
|
|
|
|
|
20.1
|
|
|
Total
|
|
704.9
|
|
|
|
5.9
|
|
|
|
|
11.2
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
247.5
|
|
|
|
2.6
|
|
|
|
|
2.6
|
|
|
International
|
|
239.7
|
|
|
|
2.8
|
|
|
|
|
14.9
|
|
|
Total
|
|
487.2
|
|
|
|
2.7
|
|
|
|
|
8.6
|
|
|
S.E.T.
*
|
|
446.4
|
|
|
|
(3.4)
|
|
|
|
|
0.1
|
|
|
Other
|
|
143.3
|
|
|
|
(11.0)
|
|
|
|
|
(6.1)
|
|
|
Total
|
$
|
1,781.8
|
|
|
|
1.0
|
|
%
|
|
|
6.0
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Sports Medicine,
Extremities, Trauma, Craniomaxillofacial and Thoracic
|
|
|
NET SALES - SIX
MONTHS ENDED JUNE 30, 2022
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
Net
|
|
|
|
|
|
Currency
|
|
|
|
Sales
|
|
|
% Change
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
1,958.8
|
|
|
|
3.5
|
|
%
|
|
3.5
|
|
%
|
International
|
|
1,486.2
|
|
|
|
1.0
|
|
|
|
10.2
|
|
|
Total
|
$
|
3,445.0
|
|
|
|
2.4
|
|
%
|
|
6.4
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
777.9
|
|
|
|
7.9
|
|
%
|
|
7.9
|
|
%
|
International
|
|
589.8
|
|
|
|
5.5
|
|
|
|
15.1
|
|
|
Total
|
|
1,367.7
|
|
|
|
6.9
|
|
|
|
11.1
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
United
States
|
|
472.1
|
|
|
|
2.9
|
|
|
|
2.9
|
|
|
International
|
|
466.1
|
|
|
|
0.7
|
|
|
|
10.3
|
|
|
Total
|
|
938.2
|
|
|
|
1.8
|
|
|
|
6.6
|
|
|
S.E.T.
*
|
|
863.2
|
|
|
|
(1.9)
|
|
|
|
1.0
|
|
|
Other
|
|
275.9
|
|
|
|
(2.7)
|
|
|
|
1.5
|
|
|
Total
|
$
|
3,445.0
|
|
|
|
2.4
|
|
%
|
|
6.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Sports Medicine,
Extremities, Trauma, Craniomaxillofacial and Thoracic
|
|
|
|
Financial Guidance
The Company is updating its full-year 2022 financial guidance to
raise its previous projected ranges for revenue growth, foreign
currency exchange impact, adjusted operating profit margin and
adjusted diluted EPS from continuing operations:
Projected Year
Ending December 31, 2022
|
|
Previous
Guidance
|
Updated
Guidance
|
2022 Reported Revenue
Change
|
(1.5)% -
0.5%
|
(1.0)% -
1.0%
|
Foreign Currency
Exchange Impact
|
(3.5) %
|
(5.0) %
|
Adjusted Operating
Profit Margin(1)
|
26.5% -
27.5%
|
26.75% -
27.75%
|
Adjusted Tax
Rate(1)
|
16.0% -
16.5%
|
16.0% -
16.5%
|
Adjusted Diluted EPS
from Continuing Operations(1)
|
$6.65 -
$6.85
|
$6.70 -
$6.90
|
(1)
|
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."
|
Conference Call
The Company will conduct its second quarter investor conference
call today, August 2, 2022, 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 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 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 from continuing operations change information for the
three and six-month periods ended June 30,
2022 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 from continuing operations and diluted earnings per
share from continuing operations for the three and six-month
periods ended June 30, 2022 and 2021
are presented on a GAAP (reported) basis and on an adjusted
basis. Adjusted earnings from continuing operations and
adjusted diluted earnings per share from continuing operations
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 of
continuing operations 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 from continuing operations and free cash flow from continuing
operations 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, 2022. 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; quality remediation; acquisition,
integration, divestiture and related; certain legal and tax
matters; and discontinued operations. 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, the impact of the COVID-19 pandemic on our
business, including any continued recovery, 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 the COVID-19 global pandemic and other adverse public
health developments on the global economy, our business and
operations and the business and operations of our suppliers and
customers, including the deferral of elective surgical procedures
and our ability to collect accounts receivable; the failure of
vaccine rollouts and other strategies to mitigate or reverse the
impacts of the COVID-19 pandemic; the emergence of new pandemic
variants; the failure of elective surgical procedures to recover at
the levels or on the timeline anticipated; the risks and
uncertainties related to our ability to successfully execute our
restructuring plans; our ability to attract, retain and develop the
highly skilled employees we need to support our business; the
success of our quality and operational excellence initiatives,
including ongoing quality remediation efforts at our Warsaw North
Campus facility; the ability to remediate matters identified in
inspectional observations or warning letters issued by the U.S.
Food and Drug Administration (FDA), while continuing to satisfy the
demand for our products; the risks and uncertainties associated
with the spinoff of ZimVie Inc. (ZimVie), including, without
limitation, the tax-free nature of the transaction, the
tax-efficient nature of any subsequent disposal of any ZimVie
common stock we retain, possible disruptions in our relationships
with customers, suppliers and other business partners and the
possibility that the anticipated benefits and synergies of the
transaction, strategic and competitive advantages, and future
growth and other opportunities will not be realized within the
expected time periods or at all; 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; the ability to retain
the employees, independent agents and distributors who market our
products; dependence on a limited number of suppliers for key raw
materials and outsourced activities; 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; 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, such as
more stringent requirements for regulatory clearance of products;
the outcome of government and regulatory 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 sponsored by government agencies, legislative bodies, the
private sector and healthcare purchasing organizations, including
the volume-based procurement in China; 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, especially of titanium used in our
products, and products; control of costs and expenses; the ability
to obtain and maintain adequate intellectual property protection;
breaches or failures of our information technology systems or
products, including by cyberattack, unauthorized access or theft;
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, intellectual property and commercial litigation
losses; 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; the domestic
and international business impact of political, social and economic
instability, tariffs, trade embargoes, sanctions, wars, disputes
and other conflicts; the effects of inflation, including the
effects of different rates of inflation in different countries, on
our costs and the costs of our products; the effects of supply
chain continuity disruptions; and the impact of the ongoing
financial and political uncertainty on countries in EMEA relating
to the Russian-Ukrainian crisis and otherwise, on the ability to
collect accounts receivable in affected countries. 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, 2021, 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.
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
FOR THE THREE MONTHS
ENDED JUNE 30, 2022 and 2021
|
|
(in millions, except
per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
Net
Sales
|
$
|
1,781.8
|
|
|
$
|
1,763.3
|
|
Cost of products sold,
excluding intangible asset amortization
|
|
511.0
|
|
|
|
496.2
|
|
Intangible asset
amortization
|
|
133.0
|
|
|
|
132.9
|
|
Research and
development
|
|
99.4
|
|
|
|
165.0
|
|
Selling, general and
administrative
|
|
695.2
|
|
|
|
696.8
|
|
Intangible asset
impairment
|
|
3.0
|
|
|
|
16.3
|
|
Restructuring and other
cost reduction initiatives
|
|
57.0
|
|
|
|
18.8
|
|
Quality
remediation
|
|
7.8
|
|
|
|
11.0
|
|
Acquisition,
integration, divestiture and related
|
|
(5.5)
|
|
|
|
1.5
|
|
Operating
expenses
|
|
1,500.9
|
|
|
|
1,538.5
|
|
Operating
Profit
|
|
280.9
|
|
|
|
224.8
|
|
Other (expense) income,
net
|
|
(42.6)
|
|
|
|
8.0
|
|
Interest expense,
net
|
|
(38.8)
|
|
|
|
(54.7)
|
|
Earnings from
continuing operations before income taxes
|
|
199.5
|
|
|
|
178.1
|
|
Provision for income
taxes from continuing operations
|
|
45.5
|
|
|
|
33.3
|
|
Net Earnings from
continuing operations
|
|
154.0
|
|
|
|
144.8
|
|
Less: Net earnings
attributable to noncontrolling interest
|
|
0.3
|
|
|
|
0.6
|
|
Net Earnings from
Continuing Operations of Zimmer Biomet Holdings, Inc.
|
|
153.7
|
|
|
|
144.2
|
|
Loss from discontinued
operations, net of taxes
|
|
-
|
|
|
|
(2.3)
|
|
Net Earnings of
Zimmer Biomet Holdings, Inc.
|
$
|
153.7
|
|
|
$
|
141.9
|
|
|
|
|
|
|
|
Earnings Per Common
Share - Basic
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.73
|
|
|
$
|
0.69
|
|
Loss from discontinued
operations
|
|
-
|
|
|
|
(0.01)
|
|
Net Earnings Per
Common Share - Basic
|
$
|
0.73
|
|
|
$
|
0.68
|
|
Earnings Per Common
Share - Diluted
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.73
|
|
|
$
|
0.68
|
|
Loss from discontinued
operations
|
|
-
|
|
|
|
(0.01)
|
|
Net Earnings Per
Common Share - Diluted
|
$
|
0.73
|
|
|
$
|
0.67
|
|
Weighted Average
Common Shares Outstanding
|
|
|
|
|
|
Basic
|
|
209.6
|
|
|
|
208.6
|
|
Diluted
|
|
210.3
|
|
|
|
210.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2022 and 2021
|
|
(in millions, except
per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
Net
Sales
|
$
|
3,445.0
|
|
|
$
|
3,364.7
|
|
Cost of products sold,
excluding intangible asset amortization
|
|
1,011.0
|
|
|
|
932.5
|
|
Intangible asset
amortization
|
|
263.8
|
|
|
|
266.5
|
|
Research and
development
|
|
196.3
|
|
|
|
246.0
|
|
Selling, general and
administrative
|
|
1,379.7
|
|
|
|
1,353.8
|
|
Intangible asset
impairment
|
|
3.0
|
|
|
|
16.3
|
|
Restructuring and other
cost reduction initiatives
|
|
100.9
|
|
|
|
40.1
|
|
Quality
remediation
|
|
14.3
|
|
|
|
21.1
|
|
Acquisition,
integration, divestiture and related
|
|
(3.3)
|
|
|
|
4.9
|
|
Operating
expenses
|
|
2,965.7
|
|
|
|
2,881.2
|
|
Operating
Profit
|
|
479.3
|
|
|
|
483.5
|
|
Other (expense) income,
net
|
|
(98.7)
|
|
|
|
15.7
|
|
Interest expense,
net
|
|
(79.9)
|
|
|
|
(107.0)
|
|
Earnings from
continuing operations before income taxes
|
|
300.7
|
|
|
|
392.2
|
|
Provision for income
taxes from continuing operations
|
|
73.5
|
|
|
|
54.4
|
|
Net Earnings from
continuing operations
|
|
227.2
|
|
|
|
337.8
|
|
Less: Net earnings
attributable to noncontrolling interest
|
|
0.5
|
|
|
|
0.2
|
|
Net Earnings from
Continuing Operations of Zimmer Biomet Holdings, Inc.
|
|
226.7
|
|
|
|
337.6
|
|
(Loss) earnings from
discontinued operations, net of taxes
|
|
(58.8)
|
|
|
|
2.4
|
|
Net Earnings of
Zimmer Biomet Holdings, Inc.
|
$
|
167.9
|
|
|
$
|
340.0
|
|
|
|
|
|
|
|
Earnings Per Common
Share - Basic
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.08
|
|
|
$
|
1.62
|
|
(Loss) earnings from
discontinued operations
|
|
(0.28)
|
|
|
|
0.01
|
|
Net Earnings Per
Common Share - Basic
|
$
|
0.80
|
|
|
$
|
1.63
|
|
Earnings Per Common
Share - Diluted
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
1.08
|
|
|
$
|
1.60
|
|
(Loss) earnings from
discontinued operations
|
|
(0.28)
|
|
|
|
0.01
|
|
Net Earnings Per
Common Share - Diluted
|
$
|
0.80
|
|
|
$
|
1.61
|
|
Weighted Average
Common Shares Outstanding
|
|
|
|
|
|
Basic
|
|
209.4
|
|
|
|
208.3
|
|
Diluted
|
|
210.2
|
|
|
|
210.4
|
|
|
|
|
|
|
|
|
|
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in millions,
unaudited)
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
386.4
|
|
|
$
|
378.1
|
|
Receivables,
net
|
|
|
1,282.1
|
|
|
|
1,259.6
|
|
Inventories
|
|
|
2,122.7
|
|
|
|
2,148.0
|
|
Other current
assets
|
|
|
671.7
|
|
|
|
597.7
|
|
Current assets of
discontinued operations
|
|
|
-
|
|
|
|
501.6
|
|
Total current
assets
|
|
|
4,462.9
|
|
|
|
4,885.0
|
|
Property, plant and
equipment, net
|
|
|
1,796.6
|
|
|
|
1,836.6
|
|
Goodwill
|
|
|
8,868.9
|
|
|
|
8,919.4
|
|
Intangible assets,
net
|
|
|
5,304.4
|
|
|
|
5,533.6
|
|
Other assets
|
|
|
1,019.9
|
|
|
|
1,005.0
|
|
Noncurrent assets of
discontinued operations
|
|
|
-
|
|
|
|
1,276.8
|
|
Total
Assets
|
|
$
|
21,452.7
|
|
|
$
|
23,456.4
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
$
|
1,611.7
|
|
|
$
|
1,685.6
|
|
Current portion of
long-term debt
|
|
|
851.9
|
|
|
|
1,605.1
|
|
Current liabilities of
discontinued operations
|
|
|
-
|
|
|
|
177.2
|
|
Other long-term
liabilities
|
|
|
1,692.5
|
|
|
|
1,690.0
|
|
Long-term
debt
|
|
|
5,172.0
|
|
|
|
5,463.7
|
|
Noncurrent liabilities
of discontinued operations
|
|
|
-
|
|
|
|
168.4
|
|
Stockholders'
equity
|
|
|
12,124.6
|
|
|
|
12,666.4
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
21,452.7
|
|
|
$
|
23,456.4
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2022 and 2021
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows provided
by (used in) operating activities from continuing
operations
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
|
$
|
227.2
|
|
|
$
|
337.8
|
|
Depreciation and
amortization
|
|
|
466.5
|
|
|
|
471.5
|
|
Share-based
compensation
|
|
|
50.8
|
|
|
|
42.4
|
|
Intangible asset
impairment
|
|
|
3.0
|
|
|
|
16.3
|
|
Changes in operating
assets and liabilities, net of acquired assets and
liabilities
|
|
|
|
|
|
|
Income
taxes
|
|
|
13.0
|
|
|
|
(28.1)
|
|
Receivables
|
|
|
(81.8)
|
|
|
|
0.6
|
|
Inventories
|
|
|
(26.4)
|
|
|
|
(88.9)
|
|
Accounts payable and
accrued liabilities
|
|
|
(49.9)
|
|
|
|
(48.5)
|
|
Other assets and
liabilities
|
|
|
58.8
|
|
|
|
(60.6)
|
|
Net cash provided by
operating activities from continuing operations
|
|
|
661.2
|
|
|
|
642.5
|
|
Cash flows provided
by (used in) investing activities from continuing
operations
|
|
|
|
|
|
|
Additions to
instruments
|
|
|
(120.6)
|
|
|
|
(133.3)
|
|
Additions to other
property, plant and equipment
|
|
|
(77.3)
|
|
|
|
(50.4)
|
|
Net investment hedge
settlements
|
|
|
33.9
|
|
|
|
(9.6)
|
|
Business combination
investments, net of acquired cash
|
|
|
(99.8)
|
|
|
|
-
|
|
Investments in other
assets
|
|
|
(60.5)
|
|
|
|
(13.7)
|
|
Net cash used in
investing activities from continuing operations
|
|
|
(324.3)
|
|
|
|
(207.0)
|
|
Cash flows provided
by (used in) financing activities from continuing
operations
|
|
|
|
|
|
|
Proceeds from
revolving facility
|
|
|
220.0
|
|
|
|
-
|
|
Payments on revolving
facility
|
|
|
(220.0)
|
|
|
|
-
|
|
Redemption of senior
notes
|
|
|
(750.0)
|
|
|
|
(200.0)
|
|
Dividends paid to
stockholders
|
|
|
(100.5)
|
|
|
|
(99.8)
|
|
Proceeds from employee
stock compensation plans
|
|
|
45.0
|
|
|
|
91.5
|
|
Distribution from
ZimVie, Inc.
|
|
|
540.6
|
|
|
|
-
|
|
Business combination
contingent consideration payments
|
|
|
-
|
|
|
|
(6.5)
|
|
Other financing
activities
|
|
|
(3.5)
|
|
|
|
(9.3)
|
|
Net cash used in
financing activities from continuing operations
|
|
|
(268.4)
|
|
|
|
(224.1)
|
|
Cash flows provided
by (used in) discontinued operations
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
|
(71.5)
|
|
|
|
57.9
|
|
Net cash used in
investing activities
|
|
|
(7.2)
|
|
|
|
(25.2)
|
|
Net cash used in
financing activities
|
|
|
(68.1)
|
|
|
|
-
|
|
Net cash flows (used
in) provided by discontinued operations
|
|
|
(146.8)
|
|
|
|
32.7
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(13.8)
|
|
|
|
(3.8)
|
|
(Decrease) increase in
cash and cash equivalents
|
|
|
(92.1)
|
|
|
|
240.3
|
|
Cash and cash
equivalents, beginning of period (includes $100.4 and $27.4
at January 1, 2022 and 2021, respectively, of discontinued
operations cash)
|
|
|
478.5
|
|
|
|
802.1
|
|
Cash and cash
equivalents, end of period (includes $24.9 at June 30, 2021
of discontinued operations cash)
|
|
$
|
386.4
|
|
|
$
|
1,042.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
REPORTED NET SALES % CHANGE TO
|
CONSTANT CURRENCY %
CHANGE
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
June 30, 2022 vs.
2021
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
Constant
|
|
|
|
|
|
|
|
Exchange
|
|
|
|
Currency
|
|
|
|
% Change
|
|
|
|
Impact
|
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
1.3
|
|
%
|
|
|
-
|
|
%
|
|
|
1.3
|
|
%
|
International
|
|
0.7
|
|
|
|
|
(11.5)
|
|
|
|
|
12.2
|
|
|
Total
|
|
1.0
|
|
%
|
|
|
(5.0)
|
|
%
|
|
|
6.0
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
4.5
|
|
%
|
|
|
-
|
|
%
|
|
|
4.5
|
|
%
|
International
|
|
7.8
|
|
|
|
|
(12.3)
|
|
|
|
|
20.1
|
|
|
Total
|
|
5.9
|
|
|
|
|
(5.3)
|
|
|
|
|
11.2
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
2.6
|
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
International
|
|
2.8
|
|
|
|
|
(12.1)
|
|
|
|
|
14.9
|
|
|
Total
|
|
2.7
|
|
|
|
|
(5.9)
|
|
|
|
|
8.6
|
|
|
S.E.T.
|
|
(3.4)
|
|
|
|
|
(3.5)
|
|
|
|
|
0.1
|
|
|
Other
|
|
(11.0)
|
|
|
|
|
(4.9)
|
|
|
|
|
(6.1)
|
|
|
Total
|
|
1.0
|
|
%
|
|
|
(5.0)
|
|
%
|
|
|
6.0
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
REPORTED NET SALES % CHANGE TO
|
CONSTANT CURRENCY %
CHANGE
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
|
June 30, 2022
vs. 2021
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
Constant
|
|
|
|
|
|
|
|
Exchange
|
|
|
|
Currency
|
|
|
|
% Change
|
|
|
|
Impact
|
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
3.5
|
|
%
|
|
|
-
|
|
%
|
|
|
3.5
|
|
%
|
International
|
|
1.0
|
|
|
|
|
(9.2)
|
|
|
|
|
10.2
|
|
|
Total
|
|
2.4
|
|
%
|
|
|
(4.0)
|
|
%
|
|
|
6.4
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
7.9
|
|
%
|
|
|
-
|
|
%
|
|
|
7.9
|
|
%
|
International
|
|
5.5
|
|
|
|
|
(9.6)
|
|
|
|
|
15.1
|
|
|
Total
|
|
6.9
|
|
|
|
|
(4.2)
|
|
|
|
|
11.1
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
2.9
|
|
|
|
|
-
|
|
|
|
|
2.9
|
|
|
International
|
|
0.7
|
|
|
|
|
(9.6)
|
|
|
|
|
10.3
|
|
|
Total
|
|
1.8
|
|
|
|
|
(4.8)
|
|
|
|
|
6.6
|
|
|
S.E.T
|
|
(1.9)
|
|
|
|
|
(2.9)
|
|
|
|
|
1.0
|
|
|
Other
|
|
(2.7)
|
|
|
|
|
(4.2)
|
|
|
|
|
1.5
|
|
|
Total
|
|
2.4
|
|
%
|
|
|
(4.0)
|
|
%
|
|
|
6.4
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
REPORTED TO ADJUSTED RESULTS
|
|
FOR THE THREE MONTHS
ENDED JUNE, 2022 and 2021
|
|
(in millions, except
per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE THREE MONTHS
ENDED JUNE 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
(expense)
income,
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
|
|
$
|
511.0
|
|
|
$
|
133.0
|
|
|
$
|
99.4
|
|
|
$
|
695.2
|
|
|
$
|
3.0
|
|
|
$
|
57.0
|
|
|
$
|
7.8
|
|
|
$
|
(5.5)
|
|
|
$
|
(42.6)
|
|
|
$
|
45.5
|
|
|
$
|
153.7
|
|
|
$
|
0.73
|
|
Inventory and
manufacturing-related
charges(1)
|
|
|
(4.4)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.7
|
|
|
|
0.7
|
|
|
|
-
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(133.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
26.7
|
|
|
|
106.3
|
|
|
|
0.51
|
|
Intangible asset
impairment(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
2.2
|
|
|
|
0.01
|
|
Restructuring and
other cost reduction
initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(57.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11.8
|
|
|
|
45.2
|
|
|
|
0.21
|
|
Quality
remediation(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7.8)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.6
|
|
|
|
6.2
|
|
|
|
0.03
|
|
Acquisition,
integration, divestiture
and related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5.5
|
|
|
|
-
|
|
|
|
1.5
|
|
|
|
(7.0)
|
|
|
|
(0.03)
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.5)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.1
|
|
|
|
2.4
|
|
|
|
0.01
|
|
European Union
Medical Device
Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(13.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.0
|
|
|
|
10.1
|
|
|
|
0.05
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
41.7
|
|
|
|
1.1
|
|
|
|
41.6
|
|
|
|
0.20
|
|
Other certain tax
adjustments(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(21.0)
|
|
|
|
21.0
|
|
|
|
0.10
|
|
As
Adjusted
|
|
$
|
506.6
|
|
|
$
|
-
|
|
|
$
|
86.3
|
|
|
$
|
690.7
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(0.9)
|
|
|
$
|
75.8
|
|
|
$
|
382.4
|
|
|
$
|
1.82
|
|
FOR THE THREE MONTHS
ENDED JUNE 30, 2021
|
|
|
|
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
(expense)
income, 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
|
|
$
|
496.2
|
|
|
$
|
132.9
|
|
|
$
|
165.0
|
|
|
$
|
696.8
|
|
|
$
|
16.3
|
|
|
$
|
18.8
|
|
|
$
|
11.0
|
|
|
$
|
1.5
|
|
|
$
|
8.0
|
|
|
$
|
33.3
|
|
|
$
|
144.2
|
|
|
$
|
0.68
|
|
Inventory and
manufacturing-related
charges(1)
|
|
|
(7.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.4
|
|
|
|
2.7
|
|
|
|
0.01
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(132.9)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27.0
|
|
|
|
105.9
|
|
|
|
0.50
|
|
Intangible asset
impairment(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.1
|
|
|
|
14.2
|
|
|
|
0.07
|
|
Restructuring and
other cost
reduction initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(18.8)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.5
|
|
|
|
15.3
|
|
|
|
0.07
|
|
Quality
remediation(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.6
|
|
|
|
8.4
|
|
|
|
0.04
|
|
Acquisition,
integration, divestiture
and related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.5)
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
1.4
|
|
|
|
0.01
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
3.2
|
|
|
|
0.02
|
|
European Union
Medical Device
Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.2
|
|
|
|
7.4
|
|
|
|
0.04
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.1)
|
|
|
|
(3.0)
|
|
|
|
(1.6)
|
|
|
|
(0.01)
|
|
Other certain
tax adjustments(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17.0)
|
|
|
|
17.0
|
|
|
|
0.08
|
|
As
Adjusted
|
|
$
|
489.1
|
|
|
$
|
-
|
|
|
$
|
155.4
|
|
|
$
|
694.7
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4.9
|
|
|
$
|
55.6
|
|
|
$
|
318.1
|
|
|
$
|
1.51
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
REPORTED TO ADJUSTED RESULTS
|
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2022 and 2021
|
|
(in millions, except
per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE SIX MONTHS
ENDED JUNE 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
(expense)
income, 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
|
|
$
|
1,011.0
|
|
|
$
|
263.8
|
|
|
$
|
196.3
|
|
|
$
|
1,379.7
|
|
|
$
|
3.0
|
|
|
$
|
100.9
|
|
|
$
|
14.3
|
|
|
$
|
(3.3)
|
|
|
$
|
(98.7)
|
|
|
$
|
73.5
|
|
|
$
|
226.7
|
|
|
$
|
1.08
|
|
Inventory and
manufacturing-related
charges(1)
|
|
|
(15.3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11.3
|
|
|
|
4.0
|
|
|
|
0.02
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(263.8)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52.6
|
|
|
|
211.2
|
|
|
|
1.00
|
|
Intangible asset
impairment(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
2.2
|
|
|
|
0.01
|
|
Restructuring and
other cost
reduction initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(100.9)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18.2
|
|
|
|
82.7
|
|
|
|
0.39
|
|
Quality
remediation(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14.3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.1
|
|
|
|
11.2
|
|
|
|
0.05
|
|
Acquisition,
integration,
divestiture and related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.3
|
|
|
|
-
|
|
|
|
4.5
|
|
|
|
(7.8)
|
|
|
|
(0.04)
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(35.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8.0
|
|
|
|
27.1
|
|
|
|
0.13
|
|
European Union
Medical Device
Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(23.8)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5.3
|
|
|
|
18.5
|
|
|
|
0.09
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.2)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
102.2
|
|
|
|
2.5
|
|
|
|
104.9
|
|
|
|
0.50
|
|
Other certain tax
adjustments(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(39.1)
|
|
|
|
39.1
|
|
|
|
0.19
|
|
As
Adjusted
|
|
$
|
995.7
|
|
|
$
|
-
|
|
|
$
|
172.5
|
|
|
$
|
1,339.4
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3.5
|
|
|
$
|
140.7
|
|
|
$
|
719.8
|
|
|
$
|
3.42
|
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2021
|
|
|
|
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
(expense)
income, 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
|
|
$
|
932.5
|
|
|
$
|
266.5
|
|
|
$
|
246.0
|
|
|
$
|
1,353.8
|
|
|
$
|
16.3
|
|
|
$
|
40.1
|
|
|
$
|
21.1
|
|
|
$
|
4.9
|
|
|
$
|
15.7
|
|
|
$
|
54.4
|
|
|
$
|
337.6
|
|
|
$
|
1.60
|
|
Inventory and
manufacturing-related
charges(1)
|
|
|
(1.2)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9.8
|
|
|
|
(8.6)
|
|
|
|
(0.04)
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(266.5)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54.4
|
|
|
|
212.1
|
|
|
|
1.01
|
|
Intangible asset
impairment(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.3)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.1
|
|
|
|
14.2
|
|
|
|
0.07
|
|
Restructuring and
other cost
reduction initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8.5
|
|
|
|
31.6
|
|
|
|
0.15
|
|
Quality
remediation(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(21.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.9
|
|
|
|
16.2
|
|
|
|
0.08
|
|
Acquisition,
integration,
divestiture and related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.9)
|
|
|
|
-
|
|
|
|
1.8
|
|
|
|
3.1
|
|
|
|
0.01
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9.7)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
8.7
|
|
|
|
0.04
|
|
European Union
Medical Device
Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.6
|
|
|
|
12.5
|
|
|
|
0.06
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.4)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7.2)
|
|
|
|
(4.5)
|
|
|
|
(1.3)
|
|
|
|
(0.01)
|
|
Other certain tax
adjustments(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(18.5)
|
|
|
|
18.5
|
|
|
|
0.09
|
|
As
Adjusted
|
|
$
|
931.3
|
|
|
$
|
-
|
|
|
$
|
229.9
|
|
|
$
|
1,342.7
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
8.5
|
|
|
$
|
117.5
|
|
|
$
|
644.6
|
|
|
$
|
3.06
|
|
|
|
(1)
|
Inventory and
manufacturing-related charges include excess and obsolete inventory
charges on certain product lines we intend to discontinue,
incremental cost of products sold from stepping up inventory to its
fair value from its manufactured cost in business combination
accounting 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 the second quarters
of 2022 and 2021, we recognized $3.0 million and $16.3 million,
respectively, of in-process research and development ("IPR&D")
intangible asset impairments on certain IPR&D
projects.
|
(4)
|
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
planned spinoff of ZimVie. Restructuring and other cost
reduction initiatives also include other cost reduction 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 retention period salaries and benefits and relocation
costs.
|
(5)
|
We are addressing
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 has required us to
devote significant financial resources. The majority of the
expenses are related to consultants who are helping us to update
previous documents and redesign certain processes.
|
(6)
|
The acquisition,
integration, divestiture and related gains and expenses we have
excluded from our non-GAAP financial measures resulted from various
acquisitions and gains related to a transition services agreement
for services we will provide to ZimVie and a transition
manufacturing and supply agreement for products we will supply to
ZimVie for a limited period.
|
(7)
|
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 product liability matters where we have
received numerous claims on specific products, patent litigation
and commercial litigation related to a common matter in multiple
jurisdictions. In regards to the product liability matters,
due to the complexities involved and claims filed in multiple
districts, the expenses associated with these matters are
significant to our operating results. 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.
|
(8)
|
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. 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 include temporary
personnel and third-party professionals necessary to supplement our
internal resources.
|
(9)
|
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 legal entity, distribution and
manufacturing optimization, including contract terminations, and
gains and losses from changes in fair value on our equity
investments including our investment in ZimVie.
|
(10)
|
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 and impacts of significant
tax reform including Swiss reform.
|
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 SIX MONTHS ENDED
JUNE 30, 2022 and 2021
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net cash provided by
operating activities from continuing operations
|
$
|
345.5
|
|
|
$
|
419.0
|
|
|
$
|
661.2
|
|
|
$
|
642.5
|
|
Additions to
instruments
|
|
(64.2)
|
|
|
|
(61.1)
|
|
|
|
(120.6)
|
|
|
|
(133.3)
|
|
Additions to other
property, plant and equipment
|
|
(40.9)
|
|
|
|
(24.6)
|
|
|
|
(77.3)
|
|
|
|
(50.4)
|
|
Free cash flow from
continuing operations
|
$
|
240.4
|
|
|
$
|
333.3
|
|
|
$
|
463.3
|
|
|
$
|
458.8
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
GROSS PROFIT & MARGIN FROM CONTINUING OPERATIONS
|
TO ADJUSTED GROSS
PROFIT & MARGIN FROM CONTINUING OPERATIONS
|
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2022 and 2021
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Net Sales
|
$
|
1,781.8
|
|
|
$
|
1,763.3
|
|
|
$
|
3,445.0
|
|
|
$
|
3,364.7
|
|
|
Cost of products sold,
excluding intangible asset amortization
|
|
511.0
|
|
|
|
496.2
|
|
|
|
1,011.0
|
|
|
|
932.5
|
|
|
Intangible asset
amortization
|
|
133.0
|
|
|
|
132.9
|
|
|
|
263.8
|
|
|
|
266.5
|
|
|
Gross Profit
|
$
|
1,137.8
|
|
|
$
|
1,134.2
|
|
|
$
|
2,170.2
|
|
|
$
|
2,165.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and
manufacturing-related charges
|
|
4.4
|
|
|
|
7.1
|
|
|
|
15.3
|
|
|
|
1.2
|
|
|
Intangible asset
amortization
|
|
133.0
|
|
|
|
132.9
|
|
|
|
263.8
|
|
|
|
266.5
|
|
|
Adjusted gross
profit
|
$
|
1,275.2
|
|
|
$
|
1,274.2
|
|
|
$
|
2,449.3
|
|
|
$
|
2,433.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
63.9
|
|
%
|
|
64.3
|
|
%
|
|
63.0
|
|
%
|
|
64.4
|
|
%
|
Inventory and
manufacturing-related charges
|
|
0.2
|
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
-
|
|
|
Intangible asset
amortization
|
|
7.5
|
|
|
|
7.5
|
|
|
|
7.7
|
|
|
|
7.9
|
|
|
Adjusted gross
margin
|
|
71.6
|
|
%
|
|
72.3
|
|
%
|
|
71.1
|
|
%
|
|
72.3
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
OPERATING PROFIT & MARGIN FROM CONTINUING OPERATIONS TO
ADJUSTED OPERATING PROFIT & MARGIN FROM CONTINUING
OPERATIONS
|
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2022 and 2021
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Operating
profit
|
$
|
280.9
|
|
|
$
|
224.8
|
|
|
$
|
479.3
|
|
|
$
|
483.5
|
|
|
Inventory and
manufacturing-related charges
|
|
4.4
|
|
|
|
7.1
|
|
|
|
15.3
|
|
|
|
1.2
|
|
|
Intangible asset
amortization
|
|
133.0
|
|
|
|
132.9
|
|
|
|
263.8
|
|
|
|
266.5
|
|
|
Intangible asset
impairment
|
|
3.0
|
|
|
|
16.3
|
|
|
|
3.0
|
|
|
|
16.3
|
|
|
Restructuring and other
cost reduction initiatives
|
|
57.0
|
|
|
|
18.8
|
|
|
|
100.9
|
|
|
|
40.1
|
|
|
Quality
remediation
|
|
7.8
|
|
|
|
11.0
|
|
|
|
14.3
|
|
|
|
21.1
|
|
|
Acquisition,
integration, divestiture and related
|
|
(5.5)
|
|
|
|
1.5
|
|
|
|
(3.3)
|
|
|
|
4.9
|
|
|
Litigation
|
|
3.5
|
|
|
|
3.6
|
|
|
|
35.1
|
|
|
|
9.7
|
|
|
European Union Medical
Device Regulation
|
|
13.1
|
|
|
|
9.6
|
|
|
|
23.8
|
|
|
|
16.1
|
|
|
Other
charges
|
|
1.0
|
|
|
|
(1.5)
|
|
|
|
5.2
|
|
|
|
1.4
|
|
|
Adjusted operating
profit
|
$
|
498.2
|
|
|
$
|
424.1
|
|
|
$
|
937.4
|
|
|
$
|
860.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
margin
|
|
15.8
|
|
%
|
|
12.7
|
|
%
|
|
13.9
|
|
%
|
|
14.4
|
|
%
|
Inventory and
manufacturing-related charges
|
|
0.2
|
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
-
|
|
|
Intangible asset
amortization
|
|
7.5
|
|
|
|
7.5
|
|
|
|
7.7
|
|
|
|
7.9
|
|
|
Intangible asset
impairment
|
|
0.2
|
|
|
|
0.9
|
|
|
|
0.1
|
|
|
|
0.5
|
|
|
Restructuring and other
cost reduction initiatives
|
|
3.2
|
|
|
|
1.1
|
|
|
|
2.9
|
|
|
|
1.2
|
|
|
Quality
remediation
|
|
0.4
|
|
|
|
0.6
|
|
|
|
0.4
|
|
|
|
0.6
|
|
|
Acquisition,
integration, divestiture and related
|
|
(0.3)
|
|
|
|
0.1
|
|
|
|
(0.1)
|
|
|
|
0.1
|
|
|
Litigation
|
|
0.2
|
|
|
|
0.2
|
|
|
|
1.0
|
|
|
|
0.3
|
|
|
European Union Medical
Device Regulation
|
|
0.7
|
|
|
|
0.5
|
|
|
|
0.7
|
|
|
|
0.5
|
|
|
Other
charges
|
|
0.1
|
|
|
|
(0.1)
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
Adjusted operating
profit margin
|
|
28.0
|
|
%
|
|
24.0
|
|
%
|
|
27.2
|
|
%
|
|
25.6
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS TO ADJUSTED
EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS
|
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2022 and 2021
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
|
2022
|
|
|
2021
|
|
|
Effective tax
rate
|
|
22.8
|
|
%
|
|
18.7
|
|
%
|
|
|
24.5
|
|
%
|
|
13.9
|
|
%
|
Tax effect of
adjustments made to earnings before taxes(1)
|
|
4.2
|
|
|
|
5.7
|
|
|
|
|
4.7
|
|
|
|
6.2
|
|
|
Other certain tax
adjustments
|
|
(10.5)
|
|
|
|
(9.5)
|
|
|
|
|
(12.9)
|
|
|
|
(4.7)
|
|
|
Adjusted effective tax
rate
|
|
16.5
|
|
%
|
|
14.9
|
|
%
|
|
|
16.3
|
|
%
|
|
15.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
DEBT TO NET DEBT
|
|
AS OF JUNE 30, 2022
and DECEMBER 31, 2021
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
|
December 31,
2021
|
|
Debt, both current and
long-term
|
$
|
6,023.9
|
|
|
$
|
7,068.8
|
|
Cash and cash
equivalents
|
|
(386.4)
|
|
|
|
(378.1)
|
|
Net debt
|
$
|
5,637.5
|
|
|
$
|
6,690.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
Investors
|
Meredith
Weissman
|
Keri
Mattox
|
(703)
346-3127
|
(215)
275-2431
|
meredith.weissman@zimmerbiomet.com
|
keri.mattox@zimmerbiomet.com
|
|
|
|
Ezgi Yagci
|
|
(617)
549-2443
|
|
ezgi.yagci@zimmerbiomet.com
|
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SOURCE Zimmer Biomet Holdings, Inc.