Zimmer Inc. Reports Second Quarter 2011 Financial Results
Published: Jul 27, 2011
WARSAW, Ind., July 27, 2011 /PRNewswire/ -- Zimmer Holdings, Inc. (NYSE: ZMH; SIX: ZMH) today reported financial results for the quarter ended June 30, 2011. The Company reported second quarter net sales of $1,137million, an increase of 7.5% reported and 2.1% constant currency over the second quarter of 2010. Diluted earnings per share for the quarter were $1.06 reported and $1.21 adjusted, an increase of 11% adjusted over the prior year period.
"Zimmer again generated solid results in the second quarter, amid ongoing challenging global economic conditions," said David Dvorak, Zimmer President and CEO. "Our results reflect improved sales execution in support of new product introductions across our diverse geographic channels, as well as the positive impact of operational improvement initiatives and continued disciplined capital deployment."
Net earnings for the second quarter were $203.8 million on a reported basis and $232.5 million on an adjusted basis, an increase of 5.1% adjusted over the prior year period. Operating cash flow for the second quarter was $251.0 million.
In the second quarter, the Company recorded an additional $50 million provision for known and anticipated worldwide claims related to the previously announced voluntary suspension of marketing and distribution of the Durom® Acetabular Component in the United States. Adjusted 2011 figures in this release exclude the impact of this provision.
During the quarter, the Company utilized $121 million of cash to acquire 1.8 million shares. At the end of the second quarter, $848.6 million of share repurchase authorization remained available under the current program, which expires on December 31, 2013.
The Company updated its full-year revenue and adjusted EPS guidance for 2011. Full-year revenues for 2011 are now expected to increase between 2.5% and 3.5% on a constant currency basis from 2010. The Company estimates that foreign currency translation will increase revenues by approximately 3% for the full year 2011, resulting in reported revenue growth between 5.5% and 6.5%. This compares with prior revenue guidance of 2.0% to 4.0% constant currency and 5.0% to 7.0% reported growth over prior year. Full-year 2011 diluted earnings per share are now projected to be in a range of $4.25 to $4.35 on a reported basis and $4.70 to $4.80 on an adjusted basis, which represents a narrowing toward the top end of prior adjusted earnings guidance.
The Company will conduct its second quarter 2011 investor conference call today, July 27, 2011, at 8:00 a.m. Eastern Time. The live audio webcast can be accessed via Zimmer's Investor Relations website at http://investor.zimmer.com. It will be archived for replay following the conference.
Individuals who wish to dial into the conference call may do so at (888) 878-3901. International callers should dial (706) 634-9520. A digital recording will be available two hours after the completion of the conference call from July 27, 2011, to August 10, 2011. To access the recording, US/Canada callers should dial (800) 642-1687, or for International callers, dial (706) 645-9291, and enter the conference ID 76248595.
The following tables provide sales results by geographic segment and product category, as well as the percentage change compared to the prior year quarter and six months on both a reported and constant currency basis.