Zimmer Announces Fourth Quarter Report
Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter and year ended Dec. 31, 2014. The company reported fourth quarter net sales of $1.22 billion, a decrease of 1.4 percent reported and an increase of 2.4 percent constant currency over the fourth quarter of 2013. Diluted earnings per share for the quarter were $0.91 reported and $1.71 adjusted, an increase of 3.0 percent adjusted over the prior year period. Full year net sales were $4.67 billion, an increase of 1.1 percent reported and 2.4 percent constant currency over the prior year. Diluted earnings per share for the year were $4.19 reported and $6.06 adjusted, an increase of 5.4 percent adjusted over the prior year.
“In the fourth quarter, Zimmer delivered solid growth across several of our product categories, with impressive contributions from our Asia Pacific and Europe, Middle East and Africa sales regions,” said David Dvorak, President and CEO of Zimmer. “Our commitments to innovation and focused execution have positioned Zimmer to act on the transformational opportunity to combine with Biomet. The combined entity will offer a more comprehensive and diversified musculoskeletal portfolio for our customers, as well as create operational synergies that will enhance value for our stockholders. We look forward to the expected closing of this transaction later this quarter.”
Net earnings for the fourth quarter were $156.6 million on a reported basis and $295.6 million on an adjusted basis, an increase of 2.4 percent adjusted over the prior year period. Operating cash flow for the fourth quarter was $354.2 million.
During the quarter, the company paid $37.2 million in dividends and declared a fourth quarter dividend of $0.22 per share, an increase of 10.0 percent over the prior year period.
The company expects revenues for the first quarter of 2015 to increase between 1.5 percent and 2.5 percent on a billing day and constant currency basis over the prior year period. The company estimates that foreign currency translation will decrease revenues by approximately 6.0 percent for the first quarter of 2015. First quarter 2015 diluted earnings per share are projected to be in a range of $1.12 to $1.14 on a reported basis and $1.58 to $1.60 on an adjusted cash basis. This adjusted range reflects estimated charges for amortization, inventory and manufacturing related expenses, quality and operational excellence initiatives, expenses related to the pending Biomet merger and special items of $107.0 million on a pre-tax basis, or approximately $0.46 per diluted share, on an after-tax basis in the first quarter of 2015. This guidance does not contemplate the projected accretion associated with the pending Biomet merger. Guidance for the full year 2015 will be provided after the closing of the transaction with Biomet, expected before the end of this quarter.
The company will conduct its fourth quarter 2014 investor conference call at 8 a.m. Jan. 29. 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 4696680. For a complete listing of international toll-free and local numbers, please visit http://investor.zimmer.com. A digital recording will be available one day after the completion of the conference call, from Jan. 30 to Feb. 28. To access the recording, U.S./Canada callers should dial (800) 406-7325, or +1 (303) 590-3030 for international dialers, and enter the Access Code ID 4696680.