WARSAW, Ind., Oct. 23, 2014 /PRNewswire/ -- Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter ended September 30, 2014. The Company reported third quarter net sales of $1.11 billion, an increase of 2.9% reported and 3.1% constant currency over the third quarter of 2013. Diluted earnings per share for the quarter were $0.96 reported and $1.35 adjusted, an increase of 8.0% adjusted over the prior year period.
“Zimmer’s third quarter was marked by solid revenue growth in key product categories and geographies, building on a strong prior year performance,” said David Dvorak, President and CEO of Zimmer. “Our financial results reflect the ongoing execution of our operational excellence initiatives, as demonstrated by continued margin expansion and accelerated earnings growth during the quarter. Looking to future quarters, we believe that our pending combination with Biomet, which we expect to close in the first quarter of 2015, will enhance stockholder value through the creation of a leading innovator in the global musculoskeletal market.”
Net earnings for the third quarter were $165.5 million on a reported basis and $232.6 million on an adjusted basis, an increase of 7.9% adjusted over the prior year period. Operating cash flow for the third quarter was $255.7 million.
During the quarter, the Company paid $37.1 million in dividends and declared a third quarter dividend of $0.22 per share, an increase of 10% over the prior year period.
Earlier this month, Zimmer announced the acquisition of Cambridge, Massachusetts-based ETEX Holdings, Inc. ETEX’s innovative bone substitute material products add more depth to a growing portfolio of solutions for the early stages of joint disease. Zimmer is committed to developing a comprehensive range of biologic therapies for patients suffering from musculoskeletal joint disease.
Guidance
The Company updated its full-year revenue and EPS guidance for 2014. Full-year revenues are now expected to increase approximately 2.25% on a constant currency basis from 2013. Previously, the Company had estimated full-year revenues would increase 2.0% to 3.0% constant currency. The Company now expects foreign currency translation to decrease revenues by approximately 0.75% for the full year, resulting in reported revenue growth of approximately 1.50%.
The Company now projects full-year 2014 diluted earnings per share to be approximately $4.65 on a reported basis and approximately $6.05 on an adjusted basis. Prior guidance for full-year 2014 reported and adjusted diluted earnings per share was $4.65 to $4.75 and $6.00 to $6.10, respectively. This updated guidance reflects estimated charges for inventory and manufacturing related expenses, quality and operational excellence initiatives, certain claims and special items of $250 million on a pre-tax basis, and an additional $70 million for expenses related to the pending Biomet merger, totaling $320 million or approximately $1.40 per diluted share, on an after-tax basis.
Conference Call
The Company will conduct its third quarter 2014 investor conference call today, October 23, 2014, 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 call.
Individuals in the U.S. and Canada who wish to dial into the conference call may do so by dialing (877) 941-1227 and entering conference ID 4696679.
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