WARSAW, Ind., April 27, 2017 /PRNewswire/ -- Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended March 31, 2017. The Company reported first quarter net sales of $1.98 billion, an increase of 3.8% over the prior year period, and an increase of 4.5% on a constant currency basis. Excluding approximately 220 basis points of contribution from the LDR Holding Corporation acquisition, revenue increased by 2.3% over the first quarter of 2016. Diluted earnings per share for the quarter were $1.47 reported, an increase of 172.2% over the prior year period. Adjusted diluted earnings per share for the quarter were $2.13, an increase of 6.0% over the prior year period.
“Zimmer Biomet delivered first quarter revenue and adjusted earnings growth consistent with our expectations, as we positioned the Company for sales acceleration in the second half of the year,” said David Dvorak, President and CEO of Zimmer Biomet. “During the quarter, we made progress towards improving our global supply chain throughput, in concert with ongoing, focused investments to harmonize and optimize our global manufacturing and quality systems. We will continue driving these priorities as we progress through the balance of 2017, while leveraging our specialized sales channels and advancing the commercialization of differentiated clinical offerings.”
Net earnings for the first quarter were $299.4 million, an increase of 175.2% over the prior year period, and $433.4 million on an adjusted basis, an increase of 6.4% over the prior year period. Operating cash flow for the first quarter was $275.4 million.
In the quarter, the Company paid $48.1 million in dividends and declared a first quarter dividend of $0.24 per share.
Guidance
The Company updated its full-year 2017 constant currency revenue and adjusted earnings per share guidance. The Company now estimates full-year, constant currency revenue to increase between 3.2% and 4.2% compared to the prior year, inclusive of approximately 120 basis points of contribution from the LDR transaction. Previously, the Company had expected full-year, constant currency revenue to increase between 3.7% and 4.7%, inclusive of the LDR contribution. The Company now expects foreign currency translation to decrease revenue for the full year by approximately 1.2%. Previously, the Company had estimated foreign currency translation to decrease revenue by 1.5%. Therefore, the Company now expects full-year 2017 revenue to increase between 2.0% and 3.0% when compared to full-year 2016, or to be in a range of $7.835 billion to $7.915 billion. Previously, the Company had estimated revenue growth to be in a range of 2.2% to 3.2% when compared to full-year 2016, or to be in a range of $7.855 billion to $7.930 billion. Revenue growth, excluding the contribution from LDR on a constant currency basis, is also expected to be in a range of 2.0% to 3.0% for the full-year 2017. Previously, the Company had estimated full-year revenue growth to be in a range of 2.5% to 3.5% on a similar basis.
Additionally, the Company now expects its full-year 2017 diluted earnings per share to be in a range of $4.68 to $4.88, and in a range of $8.50 to $8.60 on an adjusted basis. Previously, the Company had expected diluted earnings per share to be in a range of $4.37 to $4.67 on a reported basis, and in a range of $8.50 to $8.68 on an adjusted basis.
Conference Call
The Company will conduct its first quarter 2017 investor conference call today, April 27, 2017, at 8:00 a.m. Eastern Time. The live 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.
Individuals in the U.S. and Canada who wish to dial into the conference call may do so by dialing (888) 312-9837 and entering conference ID 7278985. For a complete listing of international toll-free and local numbers, please visit http://investor.zimmerbiomet.com. A digital recording will be available 24 hours after the completion of the conference call, from April 28, 2017 to May 28, 2017. To access the recording, U.S. callers should dial (888) 203-1112 and international callers should dial +1 (719) 457-0820, and enter the Access Code ID 7278985.
Sales Table
The following first quarter sales table provides results by geography and product category, as well as the percentage change compared to the prior year quarter on a reported basis and a constant currency basis.
| Constant | |||||||||
| Net | Currency | ||||||||
| Sales | % Change | % Change | |||||||
| Geographic Results | |||||||||
| Americas | $ 1,235 | 4.9 | % | 4.7 | % | ||||
| EMEA | 453 | (0.7) | 3.1 | ||||||
| Asia Pacific | 289 | 6.9 | 5.9 | ||||||
| Total | $ 1,977 | 3.8 | % | 4.5 | % | ||||
| Product Categories | |||||||||
| Knees | |||||||||
| Americas | $ 429 | (0.1) | % | (0.2) | % | ||||
| EMEA | 168 | (3.4) | 0.9 | ||||||
| Asia Pacific | 105 | 5.0 | 3.1 | ||||||
| Total | 702 | (0.2) | 0.6 | ||||||
| Hips | |||||||||
| Americas | 246 | 0.2 | - | ||||||
| EMEA | 136 | (0.5) | 2.7 | ||||||
| Asia Pacific | 93 | 9.5 | 8.9 | ||||||
| Total | 475 | 1.7 | 2.4 | ||||||
| S.E.T (1) | 425 | 6.0 | 6.5 | ||||||
| Dental | 108 | (0.7) | 0.1 | ||||||
| Spine & CMF | 186 | 32.0 | 32.1 | ||||||
| Other | 81 | (1.8) | (1.2) | ||||||
| Total | $ 1,977 | 3.8 | % | 4.5 | % | ||||
| (1) Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma | |||||||||
About the Company
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.
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.
Sales growth information for the three-month period ended March 31, 2017 is presented on a GAAP (reported) basis and on a constant currency basis, as well as on a basis that excludes the contribution from the Company’s acquisition of LDR Holding Corporation in July 2016. Projected revenue growth information for the year ended December 31, 2017 is presented on a GAAP basis and on a constant currency basis, as well as on a basis that excludes the contribution from the LDR transaction.
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