WARSAW, Ind., Jan. 26, 2012 /PRNewswire/ --
- Net Sales of $1.17 billion for the fourth quarter increased by 2.9% reported over the prior year period (2.4% constant currency)
- Diluted EPS for the fourth quarter were $0.87 reported, an increase of 383.3% over the prior year period, and $1.36 adjusted, an increase of 7.1% over the prior year period
- Net Sales of $4.45 billion for the full year represent an increase of 5.5% reported over the prior year (2.6% constant currency)
- Diluted EPS for the full year were $4.03 reported, an increase of 35.7% over the prior year, and $4.80 adjusted, an increase of 10.9% over the prior year
Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter and year ended December 31, 2011. The Company reported fourth quarter net sales of $1.17 billion, an increase of 2.9% reported and 2.4% constant currency over the fourth quarter of 2010. Diluted earnings per share for the quarter were $0.87 reported and $1.36 adjusted, an increase of 7.1% adjusted over the prior year period. Full-year net sales were $4.45 billion, an increase of 5.5% reported and an increase of 2.6% constant currency over the prior year. Diluted earnings per share for the year were $4.03 reported and $4.80 adjusted, an increase of 10.9% adjusted over the prior year.
“Zimmer achieved a solid finish to 2011, driven by above-market performance in our Europe, Middle East and Africa and Asia Pacific businesses, as well as the ongoing positive contribution of innovative and proprietary product introductions across our musculoskeletal portfolio,” said David Dvorak, Zimmer President and CEO. “We expect to deliver sustained growth in sales, earnings and cash flow in 2012 through continued execution of the Company’s strategic priorities, including growth initiatives, transformation programs and disciplined capital allocation.”
Net earnings for the fourth quarter were $156.6 million on a reported basis and $245.0 million on an adjusted basis, a decrease of 2.2% adjusted from the prior year period. Operating cash flow for the fourth quarter was $393.1 million. Net earnings for the full year 2011 were $760.8 million on a reported basis and $905.6 million on an adjusted basis, an increase of 3.9% adjusted over the prior year period. Operating cash flow for the full year was $1,176.9 million.
In the fourth quarter, the Company recorded an additional $108.0 million provision for known and anticipated worldwide claims related to the Durom® Acetabular Component. Adjusted 2011 figures in this release exclude the impact of this provision.
During the quarter, the Company utilized $143.3 million of cash to acquire 2.7 million shares of common stock. Consequently, for the full year 2011, the Company utilized $1.05 billion of cash to acquire 18.9 million shares. As previously announced, the Board of Directors has approved a new share repurchase program that authorizes purchases of up to $1.5 billion of the Company’s common stock through December 31, 2014.
The Company announced during the fourth quarter that it is initiating a quarterly cash dividend in 2012. The initial quarterly dividend of $0.18 per share will be paid on or about April 27, 2012, to stockholders of record on March 30, 2012.
The Company completed the acquisition of ExtraOrtho, Inc., including its external fixation line, XtraFix® External Fixation System, in the fourth quarter.
Guidance
The Company expects full-year revenues for 2012 to increase between 2% and 4% on a constant currency basis. The Company estimates that foreign currency translation will decrease revenues by approximately 1% for the full year 2012, resulting in reported revenue growth between 1% and 3%. Full-year 2012 diluted earnings per share are projected to be in a range of $4.75 to $4.95 on a reported basis and $5.20 to $5.40 on an adjusted basis.
In 2012, the Company expects to continue global restructuring and transformation initiatives designed to streamline business operations and support functions. Savings from these initiatives will enable the Company to accelerate investments in innovation and commercialization of new products and technologies, expand global sales channels and drive sustained growth in earnings and cash flow. The programs to be completed in 2012 are expected to generate annualized pre-tax savings of more than $80 million, including $30 million to $40 million to be realized in 2012.
The Company expects to record 2012 pre-tax charges of approximately $100 million as details of the various programs are finalized and implemented. In addition, the Company expects to incur approximately $10 million in certain acquisition and integration costs connected with the acquisitions of ExtraOrtho, Inc., Synvasive Technology, Inc. and third party distributors around the world.
Conference Call
The Company will conduct its fourth quarter 2011 investor conference call today, January 26, 2012, 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 January 26, 2012, to February 9, 2012. To access the recording, US/Canada callers should dial (855) 859-2056 or (800) 585-8367, or for International callers, dial (404) 537-3406, and enter the conference ID 36686191. A copy of this press release and other financial and statistical information about the periods to be presented in the conference call will be accessible through the Zimmer website at http://investor.zimmer.com.
Sales Tables
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 full year on both a reported and constant currency basis.
