WARSAW, Ind., May 11, 2020 /PRNewswire/ -- Zimmer Biomet
Holdings, Inc. (NYSE and SIX: ZBH) today reported financial
results for the quarter ended March 31, 2020. The
Company reported first quarter net sales of $1.784 billion, a decrease of 9.7% from the prior
year period, and a decrease of 8.9% on a constant currency basis –
both consistent with the preliminary results disclosed in the
Company's press release on April 6,
2020. Net loss for the first quarter was $509 million, including goodwill
impairment. Net earnings on an adjusted basis were
$354 million.
Diluted loss per share was $2.46
for the first quarter. Adjusted diluted earnings per share
were $1.70 for the first quarter, a
decrease of 9.1% from the prior year period.
"While our full first quarter results have been impacted by the
global spread of COVID-19 and the deferral of elective procedures,
our operational performance prior to the COVID-19 disruption was
trending ahead of our expectations," said Bryan Hanson, President and CEO of Zimmer
Biomet. "Over the past two years, we have made significant
strides in reshaping and evolving Zimmer Biomet. This
progress has better positioned us to address the COVID-19
challenge. We have an innovative and mobilized team,
operational scale and increased financial flexibility – all of
which we are using to support healthcare professionals and
patients. I continue to be so proud of our global team and
our collective, unyielding commitment to the ZB mission to better
the lives of people around the world."
First quarter performance was negatively impacted by COVID-19,
which reached a pandemic level in March and resulted in a
significant and sudden global decline in elective procedure
volumes.
Please see the attached schedules accompanying this press
release for additional details on performance in the quarter,
including sales by Zimmer Biomet's three geographies and five
product categories.
Geographic and Product Category Sales
The following sales table provides results by geography and
product category for the three-month period ended March 31, 2020, as well as the percentage change
compared to the prior year period, on both a reported basis and a
constant currency basis.
NET SALES - THREE
MONTHS ENDED MARCH 31, 2020
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
Net
|
|
|
|
|
|
|
|
Currency
|
|
|
|
Sales
|
|
|
% Change
|
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
1,101
|
|
|
|
(7.8)
|
|
%
|
|
|
(7.7)
|
|
%
|
EMEA
|
|
398
|
|
|
|
(14.2)
|
|
|
|
|
(11.7)
|
|
|
Asia
Pacific
|
|
285
|
|
|
|
(10.4)
|
|
|
|
|
(9.5)
|
|
|
Total
|
$
|
1,784
|
|
|
|
(9.7)
|
|
%
|
|
|
(8.9)
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
380
|
|
|
|
(7.1)
|
|
%
|
|
|
(7.0)
|
|
%
|
EMEA
|
|
153
|
|
|
|
(13.1)
|
|
|
|
|
(10.3)
|
|
|
Asia
Pacific
|
|
97
|
|
|
|
(11.4)
|
|
|
|
|
(9.7)
|
|
|
Total
|
|
630
|
|
|
|
(9.3)
|
|
|
|
|
(8.3)
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
233
|
|
|
|
(5.9)
|
|
|
|
|
(5.8)
|
|
|
EMEA
|
|
111
|
|
|
|
(16.4)
|
|
|
|
|
(13.9)
|
|
|
Asia
Pacific
|
|
89
|
|
|
|
(14.0)
|
|
|
|
|
(13.5)
|
|
|
Total
|
|
433
|
|
|
|
(10.5)
|
|
|
|
|
(9.7)
|
|
|
S.E.T
*
|
|
333
|
|
|
|
(6.5)
|
|
|
|
|
(5.8)
|
|
|
Dental, Spine &
CMFT**
|
|
252
|
|
|
|
(12.4)
|
|
|
|
|
(11.8)
|
|
|
Other
|
|
136
|
|
|
|
(11.6)
|
|
|
|
|
(11.0)
|
|
|
Total
|
$
|
1,784
|
|
|
|
(9.7)
|
|
%
|
|
|
(8.9)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Sports Medicine,
Extremities and Trauma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
Craniomaxillofacial and Thoracic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow and Balance Sheet
Operating cash flow for the first quarter was $451 million and free cash flow was $325 million. In the first quarter, the
Company paid $50 million in dividends
and declared a dividend of $0.24 per
share. The Company also recently refinanced $1.5 billion in debt that came due April 1, 2020, renegotiated the terms of its
$1.5 billion revolver and secured an
additional $1.0 billion credit
facility.
Financial Guidance
Zimmer Biomet expects the decline in elective procedure volumes
observed in the final weeks of the first quarter to continue to
have a significant negative impact in the second quarter of
2020. Given the uncertainty around the scope and duration of
COVID-19 and its ongoing impact on the deferral of elective
procedures, the Company is currently unable to quantify the
expected impact on its results of operations, financial condition
and cash flows, which could be material, for 2020 and is therefore
not providing full-year financial guidance.
Conference Call
The Company will conduct its first quarter 2020 investor
conference call today, May 11, 2020,
at 8:30 a.m. Eastern Time. The
audio webcast can be accessed via Zimmer Biomet's Investor
Relations website at https://investor.zimmerbiomet.com. It
will be archived for replay following the conference
call.
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 orthopedic 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 change information for the three-month period ended
March 31, 2020 is presented on a GAAP
(reported) basis and on a constant currency basis. Constant
currency percentage changes exclude the effects of foreign currency
exchange rates. They are calculated by translating current
and prior-period sales at the same predetermined exchange
rate. The translated results are then used to determine
year-over-year percentage increases or decreases.
Net earnings and diluted earnings per share for the three-month
period ended March 31, 2020 are
presented on a GAAP (reported) basis and on an adjusted
basis. Adjusted earnings and adjusted diluted earnings per
share exclude the effects of certain inventory and
manufacturing-related charges including charges to discontinue
certain product lines; intangible asset amortization; goodwill
impairment; restructuring and other cost reduction initiative
expenses; quality remediation expenses; acquisition, integration
and related expenses; certain litigation gains and charges;
expenses to establish initial compliance with the European Union
Medical Device Regulation; other charges; any related effects on
our income tax provision associated with these items; tax
adjustments relating to the impacts of tax only amortization in
Switzerland; and other certain tax
adjustments.
Free cash flow is an additional non-GAAP measure that is
presented in this press release. Free cash flow is computed by
deducting additions to instruments and other property, plant and
equipment from net cash provided by operating activities.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in
this press release. This press release also contains supplemental
reconciliations of additional non-GAAP financial measures that the
Company presents in other contexts. These additional non-GAAP
financial measures are computed from the most directly comparable
GAAP financial measure as indicated in the applicable
reconciliation.
Management uses non-GAAP financial measures internally to
evaluate the performance of the business. Additionally,
management believes these non-GAAP measures provide meaningful
incremental information to investors to consider when evaluating
the performance of the Company. Management believes these
measures offer the ability to make period-to-period comparisons
that are not impacted by certain items that can cause dramatic
changes in reported income but that do not impact the fundamentals
of our operations. The non-GAAP measures enable the
evaluation of operating results and trend analysis by allowing a
reader to better identify operating trends that may otherwise be
masked or distorted by these types of items that are excluded from
the non-GAAP measures. In addition, constant currency sales
changes, adjusted operating profit, adjusted diluted earnings per
share and free cash flow are used as performance metrics in our
incentive compensation programs.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995,
including statements regarding the impact of the COVID-19 pandemic
on our business, and any statements about our forecasts,
expectations, plans, intentions, strategies or prospects. All
statements other than statements of historical or current fact are,
or may be deemed to be, forward-looking statements. Such
statements are based upon the current beliefs, expectations and
assumptions of management and are subject to significant risks,
uncertainties and changes in circumstances that could cause actual
outcomes and results to differ materially from the forward-looking
statements. These risks, uncertainties and changes in
circumstances include, but are not limited to: the effects of
the COVID-19 global pandemic and other adverse public health
developments on the global economy, our business and operations and
the business and operations of our suppliers and customers,
including the deferral of elective procedures and our ability to
collect accounts receivable; the risks and uncertainties related to
our ability to successfully execute our restructuring plans; the
success of our quality and operational excellence initiatives,
including ongoing quality remediation efforts at our Warsaw North
Campus facility; the ability to remediate matters identified in
inspectional observations or warning letters issued by U.S. Food
and Drug Administration (FDA), while continuing to satisfy the
demand for our products; compliance with the Deferred Prosecution
Agreement entered into in January
2017; the impact of substantial indebtedness on our ability
to service our debt obligations and/or refinance amounts
outstanding under our debt obligations at maturity on terms
favorable to us, or at all; the ability to retain the independent
agents and distributors who market our products; dependence on a
limited number of suppliers for key raw materials and outsourced
activities; the possibility that the anticipated synergies and
other benefits from mergers and acquisitions will not be realized,
or will not be realized within the expected time periods; the risks
and uncertainties related to our ability to successfully integrate
the operations, products, employees and distributors of acquired
companies; the effect of the potential disruption of management's
attention from ongoing business operations due to integration
matters related to mergers and acquisitions; the effect of mergers
and acquisitions on our relationships with customers, suppliers and
lenders and on our operating results and businesses generally;
challenges relating to changes in and compliance with governmental
laws and regulations affecting our U.S. and international
businesses, including regulations of the FDA and foreign government
regulators, such as more stringent requirements for regulatory
clearance of products; the outcome of government investigations;
competition; pricing pressures; changes in customer demand for our
products and services caused by demographic changes or other
factors; the impact of healthcare reform measures; reductions in
reimbursement levels by third-party payors and cost containment
efforts of healthcare purchasing organizations; dependence on new
product development, technological advances and innovation; shifts
in the product category or regional sales mix of our products and
services; supply and prices of raw materials and products; control
of costs and expenses; the ability to obtain and maintain adequate
intellectual property protection; breaches or failures of our
information technology systems or products, including by
cyberattack, unauthorized access or theft; the ability to form and
implement alliances; changes in tax obligations arising from tax
reform measures, including European Union rules on state aid, or
examinations by tax authorities; product liability, intellectual
property and commercial litigation losses; changes in general
industry and market conditions, including domestic and
international growth rates; changes in general domestic and
international economic conditions, including interest rate and
currency exchange rate fluctuations; and the impact of the ongoing
financial and political uncertainty on countries in the Euro zone
on the ability to collect accounts receivable in affected
countries. A further list and description of these risks and
uncertainties and other factors can be found in our Annual Report
on Form 10-K for the year ended December 31,
2019, including in the sections captioned "Cautionary Note
Regarding Forward-Looking Statements" and "Item 1A. Risk Factors,"
and our subsequent filings with the Securities and Exchange
Commission (SEC). Copies of these filings are available
online at www.sec.gov, www.zimmerbiomet.com or on request from
us. These factors should not be construed as
exhaustive and should be read in conjunction with the other
cautionary statements that are included in our filings with the
SEC. Forward-looking statements speak only as of the
date they are made, and we expressly disclaim any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise. Readers of this press release are cautioned not to
rely on these forward-looking statements since there can be no
assurance that these forward-looking statements will prove to be
accurate. This cautionary note is applicable to all
forward-looking statements contained in this press release.
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020 and 2019
|
|
(in millions,
except per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Net
Sales
|
$
|
1,783.8
|
|
|
$
|
1,975.5
|
|
Cost of products
sold, excluding intangible asset amortization
|
|
487.1
|
|
|
|
553.4
|
|
Intangible asset
amortization
|
|
147.6
|
|
|
|
143.4
|
|
Research and
development
|
|
98.4
|
|
|
|
101.7
|
|
Selling, general and
administrative
|
|
828.9
|
|
|
|
796.4
|
|
Goodwill
impairment
|
|
612.0
|
|
|
|
-
|
|
Restructuring and
other cost reduction initiatives
|
|
45.0
|
|
|
|
4.7
|
|
Quality
remediation
|
|
16.4
|
|
|
|
19.7
|
|
Acquisition,
integration and related
|
|
4.4
|
|
|
|
6.0
|
|
Operating
expenses
|
|
2,239.8
|
|
|
|
1,625.3
|
|
Operating (Loss)
Profit
|
|
(456.0)
|
|
|
|
350.2
|
|
Other income
(expense), net
|
|
3.0
|
|
|
|
(0.5)
|
|
Interest expense,
net
|
|
(50.9)
|
|
|
|
(58.0)
|
|
(Loss) earnings
before income taxes
|
|
(503.9)
|
|
|
|
291.7
|
|
Provision for income
taxes
|
|
5.2
|
|
|
|
45.5
|
|
Net (Loss)
Earnings
|
|
(509.1)
|
|
|
|
246.2
|
|
Less: Net (loss)
earnings attributable to noncontrolling interest
|
|
(0.6)
|
|
|
|
0.1
|
|
Net (Loss)
Earnings of Zimmer Biomet Holdings, Inc.
|
$
|
(508.5)
|
|
|
$
|
246.1
|
|
(Loss) Earnings
Per Common Share
|
|
|
|
|
|
|
|
Basic
|
$
|
(2.46)
|
|
|
$
|
1.20
|
|
Diluted
|
$
|
(2.46)
|
|
|
$
|
1.20
|
|
Weighted Average
Common Shares Outstanding
|
|
|
|
|
|
|
|
Basic
|
|
206.5
|
|
|
|
204.4
|
|
Diluted
|
|
206.5
|
|
|
|
205.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in millions,
unaudited)
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,433.6
|
|
|
$
|
617.9
|
|
Receivables,
net
|
|
|
1,039.1
|
|
|
|
1,363.9
|
|
Inventories
|
|
|
2,463.2
|
|
|
|
2,385.0
|
|
Other current
assets
|
|
|
435.0
|
|
|
|
357.1
|
|
Total current
assets
|
|
|
6,370.9
|
|
|
|
4,723.9
|
|
Property, plant and
equipment, net
|
|
|
2,065.5
|
|
|
|
2,077.4
|
|
Goodwill
|
|
|
8,951.2
|
|
|
|
9,599.7
|
|
Intangible assets,
net
|
|
|
7,077.7
|
|
|
|
7,257.6
|
|
Other
assets
|
|
|
1,047.6
|
|
|
|
980.1
|
|
Total
Assets
|
|
$
|
25,512.9
|
|
|
$
|
24,638.7
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
$
|
1,829.6
|
|
|
$
|
1,941.5
|
|
Current portion of
long-term debt
|
|
|
1,950.0
|
|
|
|
1,500.0
|
|
Other long-term
liabilities
|
|
|
2,126.4
|
|
|
|
2,083.0
|
|
Long-term
debt
|
|
|
7,724.2
|
|
|
|
6,721.4
|
|
Stockholders'
equity
|
|
|
11,882.7
|
|
|
|
12,392.8
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
25,512.9
|
|
|
$
|
24,638.7
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020 and 2019
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Cash flows
provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
|
$
|
(509.1)
|
|
|
$
|
246.2
|
|
Depreciation and
amortization
|
|
|
253.0
|
|
|
|
247.7
|
|
Share-based
compensation
|
|
|
16.5
|
|
|
|
20.3
|
|
Goodwill
impairment
|
|
|
612.0
|
|
|
|
-
|
|
Changes in operating
assets and liabilities, net of acquired assets and
liabilities
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
(45.4)
|
|
|
|
24.5
|
|
Receivables
|
|
|
289.7
|
|
|
|
50.7
|
|
Inventories
|
|
|
(96.0)
|
|
|
|
(50.7)
|
|
Accounts payable and
accrued expenses
|
|
|
(95.8)
|
|
|
|
(231.4)
|
|
Other assets and
liabilities
|
|
|
26.0
|
|
|
|
(23.7)
|
|
Net cash provided by
operating activities (1)
|
|
|
450.9
|
|
|
|
283.6
|
|
Cash flows
provided by (used in) investing activities
|
|
|
|
|
|
|
|
|
Additions to
instruments
|
|
|
(85.7)
|
|
|
|
(63.7)
|
|
Additions to other
property, plant and equipment
|
|
|
(40.2)
|
|
|
|
(37.8)
|
|
Net investment hedge
settlements
|
|
|
16.3
|
|
|
|
10.5
|
|
Investments in other
assets
|
|
|
(11.6)
|
|
|
|
(14.5)
|
|
Net cash used in
investing activities
|
|
|
(121.2)
|
|
|
|
(105.5)
|
|
Cash flows
provided by (used in) financing activities
|
|
|
|
|
|
|
|
|
Proceeds from senior
notes
|
|
|
1,497.1
|
|
|
|
-
|
|
Proceeds from term
loans
|
|
|
-
|
|
|
|
200.0
|
|
Payments on term
loans
|
|
|
-
|
|
|
|
(310.0)
|
|
Dividends paid to
stockholders
|
|
|
(49.5)
|
|
|
|
(49.0)
|
|
Proceeds from employee
stock compensation plans
|
|
|
54.5
|
|
|
|
44.4
|
|
Net cash flows from
unremitted collections from factoring programs
|
|
|
12.4
|
|
|
|
(16.4)
|
|
Business combination
contingent consideration payments
|
|
|
(3.5)
|
|
|
|
-
|
|
Debt issuance
costs
|
|
|
(12.2)
|
|
|
|
-
|
|
Other financing
activities
|
|
|
(6.0)
|
|
|
|
(4.2)
|
|
Net cash provided by
(used in) financing activities
|
|
|
1,492.8
|
|
|
|
(135.2)
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(6.8)
|
|
|
|
1.1
|
|
Increase in cash and
cash equivalents
|
|
|
1,815.7
|
|
|
|
44.0
|
|
Cash and cash
equivalents, beginning of period
|
|
|
617.9
|
|
|
|
542.8
|
|
Cash and cash
equivalents, end of period
|
|
$
|
2,433.6
|
|
|
$
|
586.8
|
|
|
|
|
|
|
|
|
|
|
(1)
2019 reflects approximately $168 million paid related to a patent
litigation matter
|
|
|
|
|
|
|
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
NET SALES BY
GEOGRAPHY
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020 and 2019
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
% (Dec)
|
|
|
Volume
/ Mix
|
|
|
Price
|
|
|
Foreign
Exchange
|
|
|
Americas
|
|
$
|
1,101.3
|
|
|
$
|
1,194.1
|
|
|
|
(7.8)
|
|
%
|
|
(5.0)
|
|
%
|
|
(2.7)
|
|
%
|
|
(0.1)
|
|
%
|
EMEA
|
|
|
398.1
|
|
|
|
463.9
|
|
|
|
(14.2)
|
|
|
|
(9.5)
|
|
|
|
(2.2)
|
|
|
|
(2.5)
|
|
|
Asia
Pacific
|
|
|
284.4
|
|
|
|
317.5
|
|
|
|
(10.4)
|
|
|
|
(8.4)
|
|
|
|
(1.1)
|
|
|
|
(0.9)
|
|
|
Total
|
|
$
|
1,783.8
|
|
|
$
|
1,975.5
|
|
|
|
(9.7)
|
|
%
|
|
(6.6)
|
|
%
|
|
(2.3)
|
|
%
|
|
(0.8)
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
NET SALES BY
PRODUCT CATEGORY
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020 and 2019
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
% (Dec)
|
|
|
Volume
/ Mix
|
|
|
Price
|
|
|
Foreign
Exchange
|
|
|
Knees
|
|
$
|
629.8
|
|
|
$
|
694.1
|
|
|
|
(9.3)
|
|
%
|
|
(5.9)
|
|
%
|
|
(2.4)
|
|
%
|
|
(1.0)
|
|
%
|
Hips
|
|
|
432.6
|
|
|
|
483.4
|
|
|
|
(10.5)
|
|
|
|
(6.7)
|
|
|
|
(3.0)
|
|
|
|
(0.8)
|
|
|
S.E.T
|
|
|
333.6
|
|
|
|
356.8
|
|
|
|
(6.5)
|
|
|
|
(4.1)
|
|
|
|
(1.7)
|
|
|
|
(0.7)
|
|
|
Dental, Spine &
CMFT
|
|
|
251.7
|
|
|
|
287.3
|
|
|
|
(12.4)
|
|
|
|
(9.9)
|
|
|
|
(1.9)
|
|
|
|
(0.6)
|
|
|
Other
|
|
|
136.1
|
|
|
|
153.9
|
|
|
|
(11.6)
|
|
|
|
(8.6)
|
|
|
|
(2.4)
|
|
|
|
(0.6)
|
|
|
Total
|
|
$
|
1,783.8
|
|
|
$
|
1,975.5
|
|
|
|
(9.7)
|
|
%
|
|
(6.6)
|
|
%
|
|
(2.3)
|
|
%
|
|
(0.8)
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
REPORTED NET SALES % CHANGE TO
|
CONSTANT CURRENCY
% CHANGE
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
March 31,
2020
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
Constant
|
|
|
|
|
|
|
|
|
Exchange
|
|
|
|
Currency
|
|
|
|
% Change
|
|
|
|
Impact
|
|
|
|
% Change
|
|
|
Geographic
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(7.8)
|
|
%
|
|
|
(0.1)
|
|
%
|
|
|
(7.7)
|
|
%
|
EMEA
|
|
(14.2)
|
|
|
|
|
(2.5)
|
|
|
|
|
(11.7)
|
|
|
Asia
Pacific
|
|
(10.4)
|
|
|
|
|
(0.9)
|
|
|
|
|
(9.5)
|
|
|
Total
|
|
(9.7)
|
|
%
|
|
|
(0.8)
|
|
%
|
|
|
(8.9)
|
|
%
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(7.1)
|
|
%
|
|
|
(0.1)
|
|
%
|
|
|
(7.0)
|
|
%
|
EMEA
|
|
(13.1)
|
|
|
|
|
(2.8)
|
|
|
|
|
(10.3)
|
|
|
Asia
Pacific
|
|
(11.4)
|
|
|
|
|
(1.7)
|
|
|
|
|
(9.7)
|
|
|
Total
|
|
(9.3)
|
|
|
|
|
(1.0)
|
|
|
|
|
(8.3)
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(5.9)
|
|
|
|
|
(0.1)
|
|
|
|
|
(5.8)
|
|
|
EMEA
|
|
(16.4)
|
|
|
|
|
(2.5)
|
|
|
|
|
(13.9)
|
|
|
Asia
Pacific
|
|
(14.0)
|
|
|
|
|
(0.5)
|
|
|
|
|
(13.5)
|
|
|
Total
|
|
(10.5)
|
|
|
|
|
(0.8)
|
|
|
|
|
(9.7)
|
|
|
S.E.T
|
|
(6.5)
|
|
|
|
|
(0.7)
|
|
|
|
|
(5.8)
|
|
|
Dental, Spine &
CMFT
|
|
(12.4)
|
|
|
|
|
(0.6)
|
|
|
|
|
(11.8)
|
|
|
Other
|
|
(11.6)
|
|
|
|
|
(0.6)
|
|
|
|
|
(11.0)
|
|
|
Total
|
|
(9.7)
|
|
%
|
|
|
(0.8)
|
|
%
|
|
|
(8.9)
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
REPORTED TO ADJUSTED RESULTS
|
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020 and 2019
|
|
(in millions,
except per share amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2020
|
|
|
|
Cost of
products
sold,
excluding
intangible
asset
amortization
|
|
|
Intangible
asset
amortization
|
|
|
Research
and
development
|
|
|
Selling,
general and
administrative
|
|
|
Goodwill
impairment
|
|
|
Restructuring
and other
cost
reduction
initiatives
|
|
|
Quality
remediation
|
|
|
Acquisition,
integration
and related
|
|
|
Other
income
(expense),
net
|
|
|
Provision
for
income
taxes
|
|
|
Net
(Loss)
Earnings
of
Zimmer
Biomet
Holdings,
Inc.
|
|
|
Diluted
(loss)
earnings
per
common
share
|
|
As
Reported
|
|
$
|
487.1
|
|
|
$
|
147.6
|
|
|
$
|
98.4
|
|
|
$
|
828.9
|
|
|
$
|
612.0
|
|
|
$
|
45.0
|
|
|
$
|
16.4
|
|
|
$
|
4.4
|
|
|
$
|
3.0
|
|
|
$
|
5.2
|
|
|
$
|
(508.5)
|
|
|
$
|
(2.46)
|
|
Inventory and
manufacturing-related
charges(1)
|
|
|
(0.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.2
|
|
|
|
(1.6)
|
|
|
|
(0.01)
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(147.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30.1
|
|
|
|
117.5
|
|
|
|
0.57
|
|
Goodwill
impairment(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(612.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
612.0
|
|
|
|
2.96
|
|
Restructuring and
other cost reduction
initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(45.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11.4
|
|
|
|
33.6
|
|
|
|
0.16
|
|
Quality
remediation(5)
|
|
|
0.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.4)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.6
|
|
|
|
12.3
|
|
|
|
0.06
|
|
Acquisition,
integration and
related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.4)
|
|
|
|
-
|
|
|
|
0.9
|
|
|
|
3.5
|
|
|
|
0.02
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(79.8)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18.0
|
|
|
|
61.8
|
|
|
|
0.30
|
|
European Union
Medical Device
Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(11.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2.2
|
|
|
|
8.8
|
|
|
|
0.04
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.9)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
1.8
|
|
|
|
4.8
|
|
|
|
0.02
|
|
Tax adjustments
relating to the impacts
of tax only
amortization in
Switzerland(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(16.9)
|
|
|
|
16.9
|
|
|
|
0.08
|
|
Other certain tax
adjustments(11)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7.2
|
|
|
|
(7.2)
|
|
|
|
(0.03)
|
|
Effect of
dilutive
shares assuming net
earnings(12)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01)
|
|
As
Adjusted
|
|
$
|
487.0
|
|
|
$
|
-
|
|
|
$
|
87.4
|
|
|
$
|
743.2
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3.7
|
|
|
$
|
65.7
|
|
|
$
|
353.9
|
|
|
$
|
1.70
|
|
FOR THE THREE
MONTHS ENDED MARCH 31, 2019
|
|
|
|
Cost of
products
sold,
excluding
intangible
asset
amortization
|
|
|
Intangible
asset
amortization
|
|
|
Research
and
development
|
|
|
Selling,
general and
administrative
|
|
|
Restructuring
and other
cost
reduction
initiatives
|
|
|
Quality
remediation
|
|
|
Acquisition,
integration
and related
|
|
|
Provision
for
income
taxes
|
|
|
Net Earnings
attributable to
noncontrolling
interest
|
|
|
Net
Earnings
of
Zimmer
Biomet
Holdings,
Inc.
|
|
|
Diluted
earnings
per
common
share
|
|
As
Reported
|
|
$
|
553.4
|
|
|
$
|
143.4
|
|
|
$
|
101.7
|
|
|
$
|
796.4
|
|
|
$
|
4.7
|
|
|
$
|
19.7
|
|
|
$
|
6.0
|
|
|
$
|
45.5
|
|
|
$
|
0.1
|
|
|
$
|
246.1
|
|
|
$
|
1.20
|
|
Inventory and
manufacturing-r
elated charges(1)
|
|
|
(2.0)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.6
|
|
|
|
-
|
|
|
|
(1.6)
|
|
|
|
(0.01)
|
|
Intangible asset
amortization(2)
|
|
|
-
|
|
|
|
(143.4)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23.9
|
|
|
|
-
|
|
|
|
119.5
|
|
|
|
0.58
|
|
Restructuring and
other
cost reduction initiatives(4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.7)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.1
|
|
|
|
-
|
|
|
|
3.6
|
|
|
|
0.02
|
|
Quality
remediation(5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19.7)
|
|
|
|
-
|
|
|
|
4.2
|
|
|
|
-
|
|
|
|
15.5
|
|
|
|
0.08
|
|
Acquisition,
integration and
related(6)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6.0)
|
|
|
|
1.3
|
|
|
|
-
|
|
|
|
4.7
|
|
|
|
0.02
|
|
Litigation(7)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.7)
|
|
|
|
-
|
|
|
|
0.9
|
|
|
|
-
|
|
Litigation settlement
gain(13)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.2)
|
|
|
|
-
|
|
|
|
(18.3)
|
|
|
|
(0.09)
|
|
European Union
Medical
Device Regulation(8)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.6)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.2
|
|
|
|
-
|
|
|
|
1.4
|
|
|
|
0.01
|
|
Other
charges(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(22.7)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.4
|
|
|
|
0.6
|
|
|
|
17.7
|
|
|
|
0.09
|
|
Other certain tax
adjustments(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5.3
|
|
|
|
-
|
|
|
|
(5.3)
|
|
|
|
(0.03)
|
|
As
Adjusted
|
|
$
|
551.4
|
|
|
$
|
-
|
|
|
$
|
100.1
|
|
|
$
|
799.0
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
81.6
|
|
|
$
|
0.7
|
|
|
$
|
384.2
|
|
|
$
|
1.87
|
|
|
|
(1)
|
Inventory and
manufacturing-related charges include excess and obsolete inventory
charges on certain product lines we intend to discontinue and other
inventory and manufacturing-related charges.
|
|
|
(2)
|
We exclude intangible
asset amortization from our non-GAAP financial measures because we
internally assess our performance against our peers without this
amortization. Due to various levels of acquisitions among our
peers, intangible asset amortization can vary significantly from
company to company.
|
|
|
(3)
|
In 2020, we
recognized goodwill impairment charges of $470.0 million and $142.0
million related to our EMEA and Dental reporting units,
respectively.
|
|
|
(4)
|
In December 2019, our
Board of Directors approved, and we initiated, a new global
restructuring program that includes a reorganization of key
businesses and an overall effort to reduce costs in order to
accelerate decision-making and focus the organization on priorities
to drive growth. We have reclassified $4.7 million in the
three month period ended March 31, 2019, from the "Acquisition,
integration and related" financial statement line item to the
"Restructuring and other cost reduction initiatives" financial
statement line item, which amount was primarily attributable to
project costs related to our supply chain optimization
initiative.
|
|
|
(5)
|
We are addressing
inspectional observations on Form 483 and a Warning Letter issued
by the U.S. Food and Drug Administration ("FDA") following its
previous inspections of our Warsaw North Campus facility, among
other matters. This quality remediation has required us to
devote significant financial resources and is for a discrete period
of time. The majority of the expenses are related to
consultants who are helping us to update previous documents and
redesign certain processes.
|
|
|
(6)
|
The acquisition,
integration and related gains and expenses we have excluded from
our non-GAAP financial measures resulted from various
acquisitions. The acquisition, integration and related gains
and expenses include the following types of gains and
expenses:
|
|
- Consulting and professional fees related to
third-party integration consulting performed in a variety of areas,
such as tax, compliance, logistics and human resources, and legal
fees related to the consummation of mergers and
acquisitions.
- Employee termination benefits related to
terminating employees with overlapping responsibilities in various
areas of our business.
- Dedicated project personnel expenses which
include the salary, benefits, travel expenses and other costs
directly associated with employees who are 100 percent dedicated to
our integration of acquired businesses and employees who have been
notified of termination, but are continuing to work on transferring
their responsibilities.
- Contract termination expenses related to
terminated contracts, primarily with sales agents and distribution
agreements.
- Other various expenses to relocate
facilities, integrate information technology, losses incurred on
assets resulting from the applicable acquisition, and other various
expenses.
- Gains or expenses related to changes in the
fair value of contingent consideration.
|
(7)
|
We are involved in
routine patent litigation, product liability litigation, commercial
litigation and other various litigation matters. We review
litigation matters from both a qualitative and quantitative
perspective to determine if excluding the losses or gains will
provide our investors with useful incremental information.
Litigation matters can vary in their characteristics, frequency and
significance to our operating results. The litigation charges
and gains excluded from our non-GAAP financial measures in the
periods presented relate to product liability matters where we have
received numerous claims on specific products, patent litigation
and commercial litigation related to a common matter in multiple
jurisdictions. In regards to the product liability matters,
due to the complexities involved and claims filed in multiple
districts, the expenses associated with these matters are
significant to our operating results. Once the litigation
matter has been excluded from our non-GAAP financial measures in a
particular period, any additional expenses or gains from changes in
estimates are also excluded, even if they are not significant, to
ensure consistency in our non-GAAP financial measures from
period-to-period.
|
|
|
(8)
|
The European Union
Medical Device Regulation imposes significant additional premarket
and postmarket requirements. The new regulations provide a
transition period until May 2021 for currently-approved medical
devices to meet the additional requirements. For certain
devices, this transition period can be extended until May
2024. We are excluding from our non-GAAP financial measures
the incremental costs incurred to establish initial compliance with
the regulations related to our currently-approved medical
devices. The incremental costs primarily include third-party
consulting necessary to supplement our internal
resources.
|
|
|
(9)
|
We have incurred
other various expenses from specific events or projects that we
consider highly variable or that have a significant impact to our
operating results that we have excluded from our non-GAAP
measures. These include costs related to legal entity,
distribution and manufacturing optimization, including contract
terminations, as well as our costs of complying with our Deferred
Prosecution Agreement ("DPA") with the U.S. government related to
certain Foreign Corrupt Practices Act matters involving Biomet and
certain of its subsidiaries. Under the DPA, which has a
three-year term, we are subject to oversight by an independent
compliance monitor, which monitorship commenced in August
2017. The excluded costs include the fees paid to the
independent compliance monitor and to external legal counsel
assisting in the matter.
|
|
|
(10)
|
Represents tax
adjustments relating to the impacts of tax only amortization
resulting from Swiss Tax Reform as well as certain restructuring
transactions in Switzerland.
|
|
|
(11)
|
Other certain tax
adjustments relate to various discrete tax period
adjustments.
|
|
|
(12)
|
Diluted share count
used in Adjusted Diluted EPS:
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
|
|
|
|
Diluted
shares
|
|
206.5
|
|
Dilutive shares
assuming net earnings
|
|
1.7
|
|
Adjusted diluted
shares
|
|
208.2
|
|
|
|
(13)
|
In the first quarter
of 2019, we settled a patent infringement lawsuit out of court,
and the other party agreed to pay us an upfront, lump-sum amount
for a non-exclusive license to the patent.
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
NET CASH PROVIDED BY OPERATING
|
|
ACTIVITIES TO FREE
CASH FLOW
|
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2020 and 2019
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2020
|
|
|
2019
|
|
Net cash provided by
operating activities
|
$
|
450.9
|
|
|
$
|
283.6
|
|
Additions to
instruments
|
|
(85.7)
|
|
|
|
(63.7)
|
|
Additions to other
property, plant and equipment
|
|
(40.2)
|
|
|
|
(37.8)
|
|
Free cash
flow
|
$
|
325.0
|
|
|
$
|
182.1
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
GROSS PROFIT & MARGIN TO ADJUSTED GROSS
|
PROFIT &
MARGIN
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2020 and 2019
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
Net Sales
|
$
|
1,783.8
|
|
|
$
|
1,975.5
|
|
|
Cost of products
sold, excluding intangible asset amortization
|
|
487.1
|
|
|
|
553.4
|
|
|
Intangible asset
amortization
|
|
147.6
|
|
|
|
143.4
|
|
|
Gross
Profit
|
$
|
1,149.1
|
|
|
$
|
1,278.7
|
|
|
|
|
|
|
|
|
|
|
|
Inventory and
manufacturing-related charges
|
|
0.6
|
|
|
|
2.0
|
|
|
Quality
remediation
|
|
(0.5)
|
|
|
|
-
|
|
|
Intangible asset
amortization
|
|
147.6
|
|
|
|
143.4
|
|
|
Adjusted gross
profit
|
$
|
1,296.8
|
|
|
$
|
1,424.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
64.4
|
|
%
|
|
64.7
|
|
%
|
Inventory and
manufacturing-related charges
|
|
-
|
|
|
|
0.1
|
|
|
Quality
remediation
|
|
-
|
|
|
|
-
|
|
|
Intangible asset
amortization
|
|
8.3
|
|
|
|
7.3
|
|
|
Adjusted gross
margin
|
|
72.7
|
|
%
|
|
72.1
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES
|
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2020 and 2019
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2020
|
|
|
2019
|
|
Operating
expenses
|
$
|
2,239.8
|
|
|
$
|
1,625.3
|
|
Cost of products
sold, excluding intangible asset amortization
|
|
487.1
|
|
|
|
553.4
|
|
Intangible asset
amortization
|
|
147.6
|
|
|
|
143.4
|
|
Goodwill
impairment
|
|
612.0
|
|
|
|
-
|
|
Restructuring and
other cost reduction initiatives
|
|
45.0
|
|
|
|
4.7
|
|
Quality
remediation
|
|
16.4
|
|
|
|
19.7
|
|
Acquisition,
integration and related
|
|
4.4
|
|
|
|
6.0
|
|
Litigation
|
|
79.8
|
|
|
|
(1.8)
|
|
Litigation settlement
gain
|
|
-
|
|
|
|
(23.5)
|
|
European Union
Medical Device Regulation
|
|
11.0
|
|
|
|
1.6
|
|
Other
charges
|
|
5.9
|
|
|
|
22.7
|
|
Adjusted operating
expenses
|
$
|
830.6
|
|
|
$
|
899.1
|
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
OPERATING PROFIT & MARGIN TO ADJUSTED OPERATING PROFIT &
MARGIN
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2020 and 2019
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
Operating (loss)
profit
|
$
|
(456.0)
|
|
|
$
|
350.2
|
|
|
Inventory and
manufacturing-related charges
|
|
0.6
|
|
|
|
2.0
|
|
|
Intangible asset
amortization
|
|
147.6
|
|
|
|
143.4
|
|
|
Goodwill
impairment
|
|
612.0
|
|
|
|
-
|
|
|
Restructuring and
other cost reduction initiatives
|
|
45.0
|
|
|
|
4.7
|
|
|
Quality
remediation
|
|
15.9
|
|
|
|
19.7
|
|
|
Acquisition,
integration and related
|
|
4.4
|
|
|
|
6.0
|
|
|
Litigation
|
|
79.8
|
|
|
|
(1.8)
|
|
|
Litigation settlement
gain
|
|
-
|
|
|
|
(23.5)
|
|
|
European Union
Medical Device Regulation
|
|
11.0
|
|
|
|
1.6
|
|
|
Other
charges
|
|
5.9
|
|
|
|
22.7
|
|
|
Adjusted operating
profit
|
$
|
466.2
|
|
|
$
|
525.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit margin
|
|
(25.6)
|
|
%
|
|
17.7
|
|
%
|
Inventory and
manufacturing-related charges
|
|
-
|
|
|
|
0.1
|
|
|
Intangible asset
amortization
|
|
8.3
|
|
|
|
7.3
|
|
|
Goodwill
impairment
|
|
34.3
|
|
|
|
-
|
|
|
Restructuring and
other cost reduction initiatives
|
|
2.5
|
|
|
|
0.2
|
|
|
Quality
remediation
|
|
0.9
|
|
|
|
1.0
|
|
|
Acquisition,
integration and related
|
|
0.2
|
|
|
|
0.3
|
|
|
Litigation
|
|
4.5
|
|
|
|
(0.1)
|
|
|
Litigation settlement
gain
|
|
-
|
|
|
|
(1.2)
|
|
|
European Union
Medical Device Regulation
|
|
0.6
|
|
|
|
0.1
|
|
|
Other
charges
|
|
0.4
|
|
|
|
1.2
|
|
|
Adjusted operating
profit margin
|
|
26.1
|
|
%
|
|
26.6
|
|
%
|
ZIMMER BIOMET
HOLDINGS, INC.
|
RECONCILIATION OF
EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE
|
FOR THE THREE MONTHS ENDED
MARCH 31, 2020 and 2019
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
Effective tax
rate
|
|
(1.0)
|
|
%
|
|
15.6
|
|
%
|
Tax effect of
adjustments made to earnings
before taxes(1)
|
|
18.7
|
|
|
|
0.1
|
|
|
Tax adjustments
relating to the impacts of tax
only amortization in Switzerland
|
|
(3.4)
|
|
|
|
-
|
|
|
Other certain tax
adjustments
|
|
1.4
|
|
|
|
1.8
|
|
|
Adjusted effective
tax rate
|
|
15.7
|
|
%
|
|
17.5
|
|
%
|
|
|
|
|
|
|
|
|
|
(1) Includes inventory and
manufacturing-related charges; intangible asset amortization;
goodwill impairment;
restructuring and other cost reduction initiatives; quality
remediation; acquisition, integration and related;
litigation; litigation settlement gain; European Union Medical
Device Regulation; and other charges
|
ZIMMER BIOMET
HOLDINGS, INC.
|
|
RECONCILIATION OF
DEBT TO NET DEBT
|
|
AS OF MARCH 31,
2020 and DECEMBER 31, 2019
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
|
December 31,
2019
|
|
Debt, both current
and long-term
|
$
|
9,674.2
|
|
|
$
|
8,221.4
|
|
Cash and cash
equivalents
|
|
(2,433.6)
|
|
|
|
(617.9)
|
|
Net debt
|
$
|
7,240.6
|
|
|
$
|
7,603.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
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SOURCE Zimmer Biomet Holdings, Inc.