WARSAW, Ind. — Zimmer Holdings Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter ended June 30, 2014. The Company reported second quarter net sales of $1.18 billion, an increase of 1.2% reported and 0.9% constant currency over the second quarter of 2013. Diluted earnings per share for the quarter were $1.03 reported and $1.49 adjusted, an increase of 4.2% adjusted over the prior year period.
“The second quarter was marked by solid sales growth in a number of product categories and geographies, as we continued the ongoing commercialization of innovative new solutions and made further progress on our operational excellence programs,” said David Dvorak, President and CEO of Zimmer. “Our confidence in the opportunity to create value in the musculoskeletal market remains strong. In addition, we are excited about the progress we are making in working with the Biomet leadership team to plan our combination, and we continue to anticipate closing the merger in the first quarter of 2015.”
Net earnings for the second quarter were $176.5 million on a reported basis and $254.7 million on an adjusted basis, an increase of 4.6% adjusted over the prior year period. Operating cash flow for the second quarter was $254.1 million.
Also in the quarter, the Company paid $36.9 million in dividends and declared a second quarter dividend of $0.22 per share, an increase of 10% over the prior year period.
The Company updated its full-year revenue and EPS guidance for 2014. Full-year revenues are now expected to increase between 2.0% and 3.0% on a constant currency basis from 2013. Previously, the Company had estimated full-year revenues would increase between 3.0% and 5.0%, constant currency. The Company continues to expect foreign currency translation to decrease revenues by approximately 0.5% for the full year, resulting in reported revenue growth between 1.5% and 2.5%.
The Company now projects full-year 2014 diluted earnings per share to be in a range of $4.65 to $4.75 on a reported basis and $6.00 to $6.10 on an adjusted basis. Prior guidance for full-year 2014 reported and adjusted diluted earnings per share was $4.90 to $5.10 and $6.00 to $6.20, 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 $1.35 per diluted share, on an after-tax basis.