Hospital & Healthcare Management/ Healthcare Market Report/ Zimmer Holdings, Inc Reports Third Quarter 2010 Financial Results
– Net Sales of $965 million represent a decrease of 1.1% reported (0.5% constant currency)
– Diluted EPS for the third quarter were $0.96 reported, an increase of 37.1% over the prior year period, and $0.96 adjusted, an increase of 9.1% over the prior year period
– Company updates full-year sales and adjusted EPS guidance
WARSAW, Ind., Oct. 28 :- Zimmer Holdings, Inc. today reported financial results for the quarter ended September 30, 2010. The Company reported third quarter net sales of $965 million, a decrease of 1.1% reported and 0.5% constant currency from the third quarter of 2009. Diluted earnings per share for the quarter were $0.96 on both a reported and an adjusted basis, an increase of 9.1% adjusted over the prior year period.
"The Company delivered solid earnings and cash flow performance in a quarter affected by challenging global economic conditions," said David Dvorak, Zimmer President and CEO. "We believe that our continued progress with new product introductions across our businesses will position us for an improved performance in the fourth quarter and accelerated growth beyond 2010 as the economy strengthens."
Net earnings for the third quarter were $191.1 million on a reported basis and $192.4 million on an adjusted basis, an increase of 2.2% adjusted over the prior year period. Operating cash flow for the third quarter was $320.3 million. Net earnings for the first nine months of 2010 were $562.0 million on a reported basis and $621.0 million on an adjusted basis, an increase of 1.2% adjusted over the prior year period.
During the quarter, the Company utilized $225.6 million of cash to acquire 4.2 million shares. At the end of the third quarter, $1.3 billion of share repurchase authorization remained available under the current program, which expires on December 31, 2013.
The Company provided fourth quarter revenue and adjusted EPS guidance and updated its full-year sales and adjusted EPS guidance for 2010. Fourth quarter revenues are expected to grow in the range of 0% to 2% on a constant currency basis. As a result, the Company now expects 2010 full-year revenues to increase approximately 2% on a constant currency basis, which compares with prior guidance of between 3% and 5%. Assuming foreign currency exchange rates remain near recent levels, the Company estimates that foreign currency translation will increase revenues for the full year 2010 by 0.5%. Fourth quarter adjusted diluted earnings per share are projected to be in the range of $1.17 to $1.22. As a result, full-year 2010 adjusted diluted earnings per share are now projected to be in the range of $4.24 to $4.29, which is within the prior guidance of $4.15 to $4.35.
The Company will conduct its third quarter 2010 investor conference call today, October 28, 2010, 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) 881-6248. International callers should dial (706) 634-6422. A digital recording will be available two hours after the completion of the conference call from October 28, 2010 to November 11, 2010. To access the recording, U.S./Canada callers should dial (800) 642-1687, or for International callers, dial (706) 645-9291, and enter the Conference ID, 15446106.
About the Company
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer designs, develops, manufactures and markets orthopaedic reconstructive, spinal and trauma devices, dental implants, and related surgical products. Zimmer has operations in more than 25 countries around the world and sells products in more than 100 countries. Zimmer’s 2009 sales were approximately $4.1 billion. The Company is supported by the efforts of more than 8,000 employees worldwide.
We routinely post important information for investors on our website, www.zimmer.com, in the "Investor Relations" section. We intend to 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
As used in this press release, the term "adjusted" refers to operating performance measures that exclude inventory step-up, the provision for certain Durom® Acetabular Component product claims, net curtailment and settlement and acquisition, integration, realignment and other expenses. The term "constant currency" refers to any financial measure that excludes the effect of changes in foreign currency exchange rates. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measure are included in this press release. Management uses this non-GAAP information internally to evaluate the performance of the business and believes that it provides useful information to investors by offering the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results, the ability to better identify operating trends that may otherwise be masked or distorted by these types of items and to perform related trend analysis, and a higher degree of transparency of certain items.
SOURCE Zimmer Holdings, Inc.