WARSAW, Ind., Jan. 29, 2015 /PRNewswire/ --
- Net Sales of $1.22 billion for
the fourth quarter represent a decrease of 1.4% reported from the
prior year period, an increase of 2.4% constant currency
- Diluted EPS for the fourth quarter were $0.91 reported, a decrease of 33.1% from the
prior year period, and $1.71
adjusted, an increase of 3.0% over the prior year period
- Net Sales of $4.67 billion for
the full year represent an increase of 1.1% reported over the prior
year, an increase of 2.4% constant currency
- Diluted EPS for the full year were $4.19 reported, a decrease of 5.4% from the prior
year, and $6.06 adjusted, an increase
of 5.4% over the prior year
- The Company provides sales and earnings guidance for the
first quarter of 2015
Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported
financial results for the quarter and year ended December 31, 2014. The Company reported
fourth quarter net sales of $1.22
billion, a decrease of 1.4% reported and an increase of 2.4%
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% adjusted over
the prior year period. Full year net sales were $4.67 billion, an increase of 1.1% reported and
2.4% 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% 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% 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% over the prior
year period.
Guidance
The Company expects revenues for the first
quarter of 2015 to increase between 1.5% and 2.5% 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% 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.
Conference Call
The Company will conduct its fourth
quarter 2014 investor conference call today, January 29, 2015, 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 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 January 30,
2015 to February 28,
2015. 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.
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.
NET SALES - THREE
MONTHS ENDED DECEMBER 31, 2014
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
Net
|
|
Reported
|
|
Currency
|
|
|
|
Sales
|
|
%
Change
|
|
%
Change
|
Geographic
Segments
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
678
|
|
|
(2)
|
%
|
|
(2)
|
%
|
|
Europe
|
|
337
|
|
|
(2)
|
|
|
7
|
|
|
Asia
Pacific
|
|
208
|
|
|
1
|
|
|
8
|
|
|
Total
|
|
1,223
|
|
|
(1)
|
|
|
2
|
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
Reconstructive
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
501
|
|
|
(2)
|
|
|
(1)
|
|
|
Europe
|
|
261
|
|
|
(3)
|
|
|
5
|
|
|
Asia
Pacific
|
|
149
|
|
|
(1)
|
|
|
7
|
|
|
Total
|
|
911
|
|
|
(2)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
307
|
|
|
-
|
|
|
-
|
|
|
|
Europe
|
|
134
|
|
|
(2)
|
|
|
6
|
|
|
|
Asia
Pacific
|
|
78
|
|
|
(1)
|
|
|
6
|
|
|
|
Total
|
|
519
|
|
|
(1)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
155
|
|
|
(5)
|
|
|
(4)
|
|
|
|
Europe
|
|
116
|
|
|
(5)
|
|
|
4
|
|
|
|
Asia
Pacific
|
|
67
|
|
|
(2)
|
|
|
6
|
|
|
|
Total
|
|
338
|
|
|
(4)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extremities
|
|
54
|
|
|
4
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
|
67
|
|
|
6
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trauma
|
|
80
|
|
|
(1)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spine
|
|
56
|
|
|
6
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surgical and
other
|
|
109
|
|
|
(6)
|
|
|
(2)
|
|
NET SALES - YEAR
ENDED DECEMBER 31, 2014
|
|
(in millions,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
Net
|
|
Reported
|
|
Currency
|
|
|
|
Sales
|
|
%
Change
|
|
%
Change
|
Geographic
Segments
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
2,594
|
|
|
(1)
|
%
|
|
(1)
|
%
|
|
Europe
|
|
1,269
|
|
|
5
|
|
|
5
|
|
|
Asia
Pacific
|
|
810
|
|
|
2
|
|
|
8
|
|
|
Total
|
|
4,673
|
|
|
1
|
|
|
2
|
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
|
Reconstructive
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
1,915
|
|
|
1
|
|
|
1
|
|
|
Europe
|
|
988
|
|
|
4
|
|
|
5
|
|
|
Asia
Pacific
|
|
593
|
|
|
2
|
|
|
7
|
|
|
Total
|
|
3,496
|
|
|
2
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
1,157
|
|
|
2
|
|
|
2
|
|
|
|
Europe
|
|
499
|
|
|
6
|
|
|
7
|
|
|
|
Asia
Pacific
|
|
310
|
|
|
1
|
|
|
6
|
|
|
|
Total
|
|
1,966
|
|
|
3
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
608
|
|
|
(2)
|
|
|
(2)
|
|
|
|
Europe
|
|
449
|
|
|
1
|
|
|
2
|
|
|
|
Asia
Pacific
|
|
269
|
|
|
2
|
|
|
8
|
|
|
|
Total
|
|
1,326
|
|
|
-
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extremities
|
|
204
|
|
|
5
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
|
243
|
|
|
1
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trauma
|
|
317
|
|
|
-
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spine
|
|
207
|
|
|
2
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surgical and
other
|
|
410
|
|
|
(5)
|
|
|
(3)
|
|
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 2014 sales were approximately
$4.7 billion. Zimmer is
supported by the efforts of more than 9,000 employees
worldwide.
Website Information
We routinely post important
information for investors on our website, www.zimmer.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
As used in this
press release, the term "adjusted" refers to operating performance
measures that exclude inventory step-up and other inventory and
manufacturing related charges, special items, the provision for
certain Durom® Acetabular Component product claims,
financing and other expenses related to the pending Biomet merger
and certain tax adjustments. Included in special items are
acquisition and integration costs and asset impairment charges
related to prior and pending acquisitions, as well as employee
termination benefits, consulting and professional fees, certain
litigation matters, dedicated personnel expenses, certain contract
terminations and asset impairment charges connected with global
restructuring and operational excellence initiatives. In
addition, projected adjusted diluted EPS excludes intangible asset
amortization and its related tax benefit. 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.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking
statements within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of
forward-looking terms such as "may," "will," "expects," "believes,"
"anticipates," "plans," "estimates," "projects," "assumes,"
"guides," "targets," "forecasts," and "seeks" or the negative of
such terms or other variations on such terms or comparable
terminology. Such forward-looking statements include, but are
not limited to, statements about the benefits of the proposed
merger between Zimmer and LVB Acquisition, Inc. ("LVB"), the parent
company of Biomet, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, the expected timing of completion of the transaction
and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of
Zimmer's management and are subject to significant risks and
uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties include, but
are not limited to: the possibility that the anticipated synergies
and other benefits from the proposed merger of Zimmer and LVB will
not be realized, or will not be realized within the expected time
periods; the inability to obtain regulatory approvals of the merger
(including the approval of antitrust authorities necessary to
complete the transaction) on the terms desired or anticipated; the
timing of such approvals and the risk that such approvals may
result in the imposition of conditions that could adversely affect
the combined company or the expected benefits of the transaction;
the risk that a condition to closing the transaction may not be
satisfied on a timely basis or at all; the risk that the proposed
transaction fails to close for any other reason; the risks and
uncertainties related to Zimmer's ability to successfully integrate
the operations, products and employees of Zimmer and Biomet; the
effect of the potential disruption of management's attention from
ongoing business operations due to the pending merger; the effect
of the announcement of the proposed merger on Zimmer's and Biomet's
relationships with their respective customers, vendors and lenders
and on their respective operating results and businesses generally;
risks relating to the value of the Zimmer shares to be issued in
the transaction; access to available financing (including financing
for the acquisition or refinancing of Zimmer's or Biomet's debt) on
reasonable terms, including the risk that any condition to the
closing of the financing committed for the proposed merger and
refinancing of Zimmer's debt is not satisfied; the outcome of any
legal proceedings related to the proposed merger; the risks and
uncertainties normally incidental to the orthopaedic industry,
including price and product competition; the success of the
companies' quality and operational excellence initiatives; changes
in customer demand for Zimmer's or Biomet's products and services
caused by demographic changes or other factors; the impact of
healthcare reform measures, including the impact of the U.S. excise
tax on medical devices; 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 Zimmer's or Biomet's 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; the ability to form and implement
alliances; challenges relating to changes in and compliance with
governmental laws and regulations, including regulations of the
U.S. Food and Drug Administration (the "FDA") and foreign
government regulators, such as more stringent requirements for
regulatory clearance of products; the ability to remediate matters
identified in any inspectional observations or warning letters
issued by the FDA; changes in tax obligations arising from tax
reform measures or examinations by tax authorities; product
liability and intellectual property litigation losses; the ability
to retain the independent agents and distributors who market
Zimmer's and Biomet's products; dependence on a limited number of
suppliers for key raw materials and outsourced activities; changes
in general industry and market conditions, including domestic and
international growth rates and general domestic and international
economic conditions, including interest rate and currency exchange
rate fluctuations; and the impact of the ongoing economic
uncertainty affecting countries in the Euro zone on the ability to
collect accounts receivable in affected countries. For a
further list and description of such risks and uncertainties, see
Zimmer's periodic reports filed with the U.S. Securities and
Exchange Commission (the "SEC"). Copies of these filings, as
well as subsequent filings, are available online at www.sec.gov,
www.zimmer.com or on request from Zimmer. Zimmer disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be set forth in its periodic
reports. Readers of this communication are cautioned not to
place undue reliance on these forward-looking statements, since,
while management believes the assumptions on which the
forward-looking statements are based are reasonable, there can be
no assurance that these forward-looking statements will prove to be
accurate. This cautionary statement is applicable to all
forward-looking statements contained in this communication.
Additional Information and Where to Find It
Zimmer
filed with the SEC, and the SEC declared effective on September 29, 2014, a registration statement on
Form S-4 that includes a consent solicitation statement of LVB that
also constitutes a prospectus of Zimmer. INVESTORS AND
SECURITYHOLDERS OF LVB ARE URGED TO READ THE CONSENT
SOLICITATION/PROSPECTUS AND OTHER FILINGS MADE WITH THE SEC IN
CONNECTION WITH THE MERGER CAREFULLY AND IN THEIR ENTIRETY, BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. The
registration statement and consent solicitation
statement/prospectus and other documents filed by Zimmer with the
SEC may be obtained free of charge at the SEC's website at
www.sec.gov or from Zimmer at www.zimmer.com. You may also
read and copy any reports, statements and other information filed
by Zimmer, LVB and Biomet with the SEC at the SEC public reference
room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the
SEC at (800) 732-0330 or visit the SEC's website for further
information on its public reference room. Certain executive
officers and directors of LVB have interests in the proposed
transaction that may differ from the interests of stockholders
generally, including benefits conferred under retention, severance
and change in control arrangements and continuation of director and
officer insurance and indemnification.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to appropriate
registration or qualification under the securities laws of such
jurisdiction. No offering of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of
the Securities Act of 1933, as amended.
ZIMMER HOLDINGS,
INC.
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE THREE
MONTHS ENDED DECEMBER 31, 2014 and 2013
|
(in millions,
except per share amounts, unaudited)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Net
Sales
|
$ 1,222.9
|
|
$ 1,240.7
|
|
Cost of products
sold
|
312.9
|
|
340.8
|
|
Gross
Profit
|
910.0
|
|
899.9
|
|
|
|
|
|
|
Research and
development
|
46.6
|
|
46.4
|
|
Selling, general and
administrative
|
458.9
|
|
477.0
|
|
Special
items
|
178.7
|
|
61.2
|
|
Operating
expenses
|
684.2
|
|
584.6
|
|
|
|
|
|
|
Operating
Profit
|
225.8
|
|
315.3
|
|
Other
expense
|
(19.1)
|
|
-
|
|
Interest
income
|
3.5
|
|
4.2
|
|
Interest
expense
|
(16.0)
|
|
(16.5)
|
|
Earnings before
income taxes
|
194.2
|
|
303.0
|
|
Provision for income
taxes
|
37.7
|
|
67.6
|
|
Net
earnings
|
156.5
|
|
235.4
|
|
Less: Net loss
attributable to noncontrolling interest
|
(0.1)
|
|
(0.5)
|
|
Net Earnings of
Zimmer Holdings, Inc.
|
$
156.6
|
|
$
235.9
|
|
|
|
|
|
|
Earnings Per
Common Share
|
|
|
|
|
Basic
|
$ 0.92
|
|
$ 1.38
|
|
Diluted
|
$ 0.91
|
|
$ 1.36
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding
|
|
|
|
|
Basic
|
169.5
|
|
170.7
|
|
Diluted
|
172.4
|
|
173.5
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$ 0.22
|
|
$ 0.20
|
|
ZIMMER HOLDINGS,
INC.
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
FOR THE YEAR ENDED
DECEMBER 31, 2014 and 2013
|
(in millions,
except per share amounts, unaudited)
|
|
|
|
|
|
|
2014
|
|
2013
|
|
Net
Sales
|
$ 4,673.3
|
|
$ 4,623.4
|
|
Cost of products
sold
|
1,249.8
|
|
1,286.1
|
|
Gross
Profit
|
3,423.5
|
|
3,337.3
|
|
|
|
|
|
|
Research and
development
|
188.3
|
|
204.2
|
|
Selling, general and
administrative
|
1,822.5
|
|
1,833.8
|
|
Certain
claims
|
21.5
|
|
47.0
|
|
Special
items
|
356.5
|
|
216.7
|
|
Operating
expenses
|
2,388.8
|
|
2,301.7
|
|
|
|
|
|
|
Operating
Profit
|
1,034.7
|
|
1,035.6
|
|
Other
expense
|
(39.6)
|
|
-
|
|
Interest
income
|
11.9
|
|
15.6
|
|
Interest
expense
|
(63.1)
|
|
(70.1)
|
|
Earnings before
income taxes
|
943.9
|
|
981.1
|
|
Provision for income
taxes
|
224.9
|
|
221.9
|
|
Net
earnings
|
719.0
|
|
759.2
|
|
Less: Net loss
attributable to noncontrolling interest
|
(1.1)
|
|
(1.8)
|
|
Net Earnings of
Zimmer Holdings, Inc.
|
$
720.1
|
|
$
761.0
|
|
|
|
|
|
|
Earnings Per
Common Share
|
|
|
|
|
Basic
|
$ 4.26
|
|
$ 4.49
|
|
Diluted
|
$ 4.19
|
|
$ 4.43
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding
|
|
|
|
|
Basic
|
169.0
|
|
169.6
|
|
Diluted
|
171.7
|
|
171.8
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$ 0.88
|
|
$ 0.80
|
|
ZIMMER
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
millions, unaudited)
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
|
|
2014
|
2013
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
|
$
1,083.3
|
$
1,080.6
|
Short-term investments
|
|
|
|
612.5
|
727.0
|
Receivables, net
|
|
|
|
912.1
|
936.6
|
Inventories
|
|
|
|
1,169.0
|
1,074.5
|
Other
current assets
|
|
|
|
512.1
|
379.0
|
Total current
assets
|
|
|
|
4,289.0
|
4,197.7
|
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
|
1,288.8
|
1,224.7
|
Goodwill
|
|
|
|
2,514.2
|
2,611.2
|
Intangible
assets, net
|
|
|
|
603.5
|
707.7
|
Other
assets
|
|
|
|
939.2
|
839.3
|
Total
Assets
|
|
|
|
$
9,634.7
|
$
9,580.6
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
$
1,038.0
|
$
1,031.6
|
Other long-term
liabilities
|
|
|
|
648.6
|
576.6
|
Long-term
debt
|
|
|
|
1,425.5
|
1,672.3
|
Stockholders'
equity
|
|
|
|
6,522.6
|
6,300.1
|
Total
Liabilities and Stockholders' Equity
|
|
$
9,634.7
|
$
9,580.6
|
ZIMMER
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE YEAR
ENDED DECEMBER 31, 2014 and 2013
|
(in
millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
2013
|
|
|
|
|
|
|
|
Cash flows
provided by (used in) operating activities
|
|
|
|
|
Net
earnings
|
|
|
|
$ 719.0
|
$ 759.2
|
|
Depreciation
and amortization
|
|
|
|
375.8
|
358.5
|
|
Share-based
compensation
|
|
|
|
49.4
|
48.5
|
|
Income tax
benefits from employee stock compensation plans
|
|
37.2
|
38.4
|
|
Excess income
tax benefits from employee stock compensation
plans
|
|
(11.1)
|
(8.6)
|
|
Inventory
step-up
|
|
|
|
5.4
|
8.0
|
|
Changes in
operating assets and liabilities, net of acquired assets and
liabilities
|
|
|
|
Income
taxes
|
|
|
|
(158.4)
|
(29.4)
|
|
Receivables
|
|
|
|
(40.4)
|
(74.3)
|
|
Inventories
|
|
|
|
(154.1)
|
(128.4)
|
|
Accounts payable and accrued
expenses
|
|
|
179.4
|
38.3
|
|
Other assets and
liabilities
|
|
|
|
50.6
|
(47.1)
|
|
Net cash
provided by operating activities
|
|
|
1,052.8
|
963.1
|
|
|
|
|
|
|
|
Cash flows
provided by (used in) investing activities
|
|
|
|
|
Additions to
instruments
|
|
|
|
(197.4)
|
(192.9)
|
|
Additions to
other property, plant and equipment
|
|
(144.9)
|
(100.0)
|
|
Purchases of
investments
|
|
|
|
(1,350.9)
|
(732.7)
|
|
Sales of
investments
|
|
|
|
1,282.2
|
830.8
|
|
Investments in
other assets
|
|
|
|
(58.4)
|
(87.7)
|
|
Net cash used
in investing activities
|
|
|
(469.4)
|
(282.5)
|
|
|
|
|
|
|
|
Cash flows
provided by (used in) financing activities
|
|
|
|
|
Payment of
senior notes
|
|
|
|
(250.0)
|
-
|
|
Net proceeds
(payments) under revolving credit facilities
|
|
2.3
|
(97.5)
|
|
Dividends paid
to stockholders
|
|
|
(145.5)
|
(132.4)
|
|
Proceeds from
employee stock compensation plans
|
|
284.7
|
474.8
|
|
Excess income
tax benefits from employee stock compensation
plans
|
|
11.1
|
8.6
|
|
Purchase of
additional shares from noncontrolling interest
|
|
-
|
(1.8)
|
|
Debt issuance
costs
|
|
|
|
(64.1)
|
-
|
|
Equity issuance
costs
|
|
|
|
(0.4)
|
-
|
|
Repurchase of
common stock
|
|
|
|
(400.5)
|
(719.0)
|
|
Net cash used
in financing activities
|
|
|
(562.4)
|
(467.3)
|
|
|
|
|
|
|
|
Effect of
exchange rates on cash and cash equivalents
|
|
(18.3)
|
(17.0)
|
|
|
|
|
|
|
|
|
Increase in
cash and cash equivalents
|
|
|
2.7
|
196.3
|
Cash and cash
equivalents, beginning of period
|
|
|
1,080.6
|
884.3
|
Cash and cash
equivalents, end of period
|
|
|
$
1,083.3
|
$
1,080.6
|
ZIMMER
HOLDINGS, INC.
|
NET SALES BY
GEOGRAPHIC SEGMENT
|
FOR THE
THREE MONTHS and YEAR ENDED DECEMBER 31, 2014 and
2013
|
(in
millions, unaudited)
|
|
|
Three Months
Ended December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
2014
|
2013
|
%
Inc/(Dec)
|
|
2014
|
2013
|
%
Inc/(Dec)
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$ 677.9
|
$ 692.1
|
(2)
|
%
|
$ 2,594.2
|
$ 2,619.8
|
(1)
|
%
|
Europe
|
337.2
|
342.6
|
(2)
|
|
1,269.5
|
1,212.6
|
5
|
|
Asia
Pacific
|
207.8
|
206.0
|
1
|
|
809.6
|
791.0
|
2
|
|
Total
|
$
1,222.9
|
$
1,240.7
|
(1)
|
|
$
4,673.3
|
$
4,623.4
|
1
|
|
ZIMMER
HOLDINGS, INC.
|
NET SALES BY
PRODUCT CATEGORY
|
FOR THE
THREE MONTHS and YEAR ENDED DECEMBER 31, 2014 and
2013
|
(in
millions, unaudited)
|
|
|
Three Months
Ended December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
2014
|
2013
|
%
Inc/(Dec)
|
|
2014
|
2013
|
%
Inc/(Dec)
|
|
|
|
|
|
|
|
|
|
|
|
Reconstructive
|
|
|
|
|
|
|
|
|
|
Knees
|
$ 518.6
|
$ 523.4
|
(1)
|
%
|
$ 1,965.8
|
$ 1,909.9
|
3
|
%
|
|
Hips
|
338.1
|
353.0
|
(4)
|
|
1,326.4
|
1,330.5
|
-
|
|
|
Extremities
|
53.9
|
51.9
|
4
|
|
204.3
|
193.8
|
5
|
|
|
|
910.6
|
928.3
|
(2)
|
|
3,496.5
|
3,434.2
|
2
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
66.8
|
63.1
|
6
|
|
242.8
|
239.3
|
1
|
|
Trauma
|
80.4
|
81.0
|
(1)
|
|
316.7
|
315.6
|
-
|
|
Spine
|
55.7
|
52.4
|
6
|
|
207.2
|
202.3
|
2
|
|
Surgical and
other
|
109.4
|
115.9
|
(6)
|
|
410.1
|
432.0
|
(5)
|
|
Total
|
$
1,222.9
|
$
1,240.7
|
(1)
|
|
$
4,673.3
|
$
4,623.4
|
1
|
|
ZIMMER HOLDINGS,
INC.
|
RECONCILIATION OF
REPORTED % GROWTH TO
|
CONSTANT CURRENCY
% GROWTH
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
December 31,
2014
|
|
|
|
|
|
|
Foreign
|
|
Constant
|
|
|
|
Reported
|
|
Exchange
|
|
Currency
|
|
|
|
%
Change
|
|
Impact
|
|
%
Change
|
Geographic
Segments
|
|
|
|
|
|
|
|
|
|
Americas
|
(2)
|
%
|
|
-
|
%
|
|
(2)
|
%
|
|
Europe
|
(2)
|
|
|
(9)
|
|
|
7
|
|
|
Asia
Pacific
|
1
|
|
|
(7)
|
|
|
8
|
|
|
Total
|
(1)
|
|
|
(3)
|
|
|
2
|
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
Reconstructive
|
|
|
|
|
|
|
|
|
|
Americas
|
(2)
|
|
|
(1)
|
|
|
(1)
|
|
|
Europe
|
(3)
|
|
|
(8)
|
|
|
5
|
|
|
Asia
Pacific
|
(1)
|
|
|
(8)
|
|
|
7
|
|
|
Total
|
(2)
|
|
|
(4)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
Americas
|
-
|
|
|
-
|
|
|
-
|
|
|
|
Europe
|
(2)
|
|
|
(8)
|
|
|
6
|
|
|
|
Asia
Pacific
|
(1)
|
|
|
(7)
|
|
|
6
|
|
|
|
Total
|
(1)
|
|
|
(3)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
Americas
|
(5)
|
|
|
(1)
|
|
|
(4)
|
|
|
|
Europe
|
(5)
|
|
|
(9)
|
|
|
4
|
|
|
|
Asia
Pacific
|
(2)
|
|
|
(8)
|
|
|
6
|
|
|
|
Total
|
(4)
|
|
|
(5)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extremities
|
4
|
|
|
(2)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
6
|
|
|
(3)
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trauma
|
(1)
|
|
|
(5)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spine
|
6
|
|
|
(3)
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surgical and
other
|
(6)
|
|
|
(4)
|
|
|
(2)
|
|
ZIMMER HOLDINGS,
INC.
|
RECONCILIATION OF
REPORTED % GROWTH TO
|
CONSTANT CURRENCY
% GROWTH
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
Ended
|
|
|
|
December 31,
2014
|
|
|
|
|
|
|
Foreign
|
|
Constant
|
|
|
|
Reported
|
|
Exchange
|
|
Currency
|
|
|
|
%
Change
|
|
Impact
|
|
%
Change
|
Geographic
Segments
|
|
|
|
|
|
|
|
|
|
Americas
|
(1)
|
%
|
|
-
|
%
|
|
(1)
|
%
|
|
Europe
|
5
|
|
|
-
|
|
|
5
|
|
|
Asia
Pacific
|
2
|
|
|
(6)
|
|
|
8
|
|
|
Total
|
1
|
|
|
(1)
|
|
|
2
|
|
Product
Categories
|
|
|
|
|
|
|
|
|
|
Reconstructive
|
|
|
|
|
|
|
|
|
|
Americas
|
1
|
|
|
-
|
|
|
1
|
|
|
Europe
|
4
|
|
|
(1)
|
|
|
5
|
|
|
Asia
Pacific
|
2
|
|
|
(5)
|
|
|
7
|
|
|
Total
|
2
|
|
|
(1)
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knees
|
|
|
|
|
|
|
|
|
|
|
Americas
|
2
|
|
|
-
|
|
|
2
|
|
|
|
Europe
|
6
|
|
|
(1)
|
|
|
7
|
|
|
|
Asia
Pacific
|
1
|
|
|
(5)
|
|
|
6
|
|
|
|
Total
|
3
|
|
|
(1)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hips
|
|
|
|
|
|
|
|
|
|
|
Americas
|
(2)
|
|
|
-
|
|
|
(2)
|
|
|
|
Europe
|
1
|
|
|
(1)
|
|
|
2
|
|
|
|
Asia
Pacific
|
2
|
|
|
(6)
|
|
|
8
|
|
|
|
Total
|
-
|
|
|
(1)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extremities
|
5
|
|
|
(1)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
1
|
|
|
(1)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trauma
|
-
|
|
|
(2)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spine
|
2
|
|
|
(1)
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surgical and
other
|
(5)
|
|
|
(2)
|
|
|
(3)
|
|
ZIMMER
HOLDINGS, INC.
|
Reconciliation of Net Earnings and Adjusted
Net Earnings
|
For the
Three Months Ended December 31, 2014 and 2013
|
(in
millions, unaudited)
|
|
|
|
|
|
|
|
Three
Months
|
|
|
Ended
December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Net Earnings of
Zimmer Holdings, Inc.
|
$ 156.6
|
|
$ 235.9
|
Inventory
step-up and other inventory
|
|
|
|
and manufacturing related charges
|
0.1
|
|
12.8
|
Special
items
|
|
178.7
|
|
61.2
|
Other expense
on Biomet merger financing
|
19.1
|
|
-
|
Taxes on above
items*
|
(58.9)
|
|
(21.3)
|
Adjusted Net
Earnings
|
$
295.6
|
|
$
288.6
|
|
|
|
|
|
* The tax
effect is calculated based upon the statutory rates for the
jurisdictions where the items
|
were incurred.
|
|
|
|
ZIMMER
HOLDINGS, INC.
|
Reconciliation of Net Earnings and Adjusted
Net Earnings
|
For the Year
Ended December 31, 2014 and 2013
|
(in
millions, unaudited)
|
|
|
|
|
|
|
|
Year
|
|
|
Ended
December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Net Earnings of
Zimmer Holdings, Inc.
|
$ 720.1
|
|
$ 761.0
|
Inventory
step-up and other inventory
|
|
|
|
and manufacturing related charges
|
21.2
|
|
70.5
|
Certain
claims
|
|
21.5
|
|
47.0
|
Special
items
|
|
356.5
|
|
216.7
|
Other expense
on Biomet merger financing
|
39.6
|
|
-
|
Taxes on above
items*
|
(117.9)
|
|
(106.8)
|
Adjusted Net
Earnings
|
$
1,041.0
|
|
$
988.4
|
|
|
|
|
|
* The tax
effect is calculated based upon the statutory rates for the
jurisdictions where the items
|
were incurred.
|
|
|
|
ZIMMER
HOLDINGS, INC.
|
Reconciliation of Diluted EPS and Adjusted
Diluted EPS
|
For the
Three Months Ended December 31, 2014 and 2013
|
(unaudited)
|
|
|
|
|
|
Three
Months
|
|
Ended
December 31,
|
|
2014
|
|
2013
|
|
|
|
|
Diluted
EPS
|
$
0.91
|
|
$
1.36
|
Inventory
step-up and other inventory
|
|
|
|
and manufacturing related charges
|
-
|
|
0.07
|
Special
items
|
1.03
|
|
0.35
|
Other expense
on Biomet merger financing
|
0.11
|
|
-
|
Taxes on above
items*
|
(0.34)
|
|
(0.12)
|
Adjusted
Diluted EPS
|
$
1.71
|
|
$
1.66
|
|
|
|
|
* The tax
effect is calculated based upon the statutory rates for the
jurisdictions where the items
|
were incurred.
|
|
|
|
ZIMMER
HOLDINGS, INC.
|
Reconciliation of Diluted EPS and Adjusted
Diluted EPS
|
For the Year
Ended December 31, 2014 and 2013
|
(unaudited)
|
|
|
|
|
|
Year
|
|
Ended
December 31,
|
|
2014
|
|
2013
|
|
|
|
|
Diluted
EPS
|
$
4.19
|
|
$
4.43
|
Inventory
step-up and other inventory
|
|
|
|
and manufacturing related charges
|
0.12
|
|
0.41
|
Certain
claims
|
0.13
|
|
0.27
|
Special
items
|
2.08
|
|
1.26
|
Other expense
on Biomet merger financing
|
0.23
|
|
-
|
Taxes on above
items*
|
(0.69)
|
|
(0.62)
|
Adjusted
Diluted EPS
|
$
6.06
|
|
$
5.75
|
|
|
|
|
* The tax
effect is calculated based upon the statutory rates for the
jurisdictions where the items
|
were incurred.
|
|
|
|
ZIMMER
HOLDINGS, INC.
|
Reconciliation of 2015 Projected Diluted
EPS
|
and
Projected Adjusted Diluted EPS
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected
Three Months Ended March 31, 2015:
|
High
|
|
Low
|
|
|
|
|
Diluted
EPS
|
$
1.14
|
|
$
1.12
|
Inventory
step-up and other inventory and manufacturing
related
|
|
|
|
charges, intangible asset amortization, special items and other
expense
|
0.63
|
|
0.63
|
Taxes on above
items*
|
(0.17)
|
|
(0.17)
|
Adjusted
Diluted EPS
|
$
1.60
|
|
$
1.58
|
|
|
|
|
|
|
|
|
* The tax
effect is calculated based upon the statutory rates for the
jurisdictions where the items
|
|
|
are projected to be
incurred.
|
|
|
|
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SOURCE Zimmer Holdings, Inc.