ZBH Zimmer Biomet Holdings Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2024

 

 

ZIMMER BIOMET HOLDINGS, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-16407	13-4151777
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
345 East Main Street
Warsaw, Indiana				46580
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (574) 373-3333

 

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		ZBH		New York Stock Exchange
2.425% Notes due 2026		ZBH 26		New York Stock Exchange
1.164% Notes due 2027		ZBH 27		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

 

On October 30, 2024, Zimmer Biomet Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended September 30, 2024. A copy of the press release is attached as Exhibit 99.1 and the information set forth therein is incorporated herein by reference and constitutes a part of this report.

 

The information contained in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” with the Securities and Exchange Commission for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

 

 

Item 9.01 Financial Statements and Exhibits.

 

 

EXHIBIT INDEX
Exhibit No.		Description
99.1		Press release dated October 30, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 30, 2024

 

	ZIMMER BIOMET HOLDINGS, INC.
	By:	/s/ Chad F. Phipps
	Name:	Chad F. Phipps
	Title:	Senior Vice President, General Counsel and Secretary

 

 

 

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345 E. Main St.
Warsaw, IN 46580
www.zimmerbiomet.com	Exhibit 99.1

 

 

Media	Investors
Heather Zoumas-Lubeski	David DeMartino
(445) 248-0577	(646) 531-6115
heather.zoumaslubeski@zimmerbiomet.com	david.demartino@zimmerbiomet.com
	Zach Weiner
	(908) 591-6955
	zach.weiner@zimmerbiomet.com

 

Zimmer Biomet Announces

Third Quarter 2024 Financial Results

(WARSAW, IN) October 30, 2024 — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2024. The Company reported third quarter net sales of $1.824 billion, an increase of 4.0% over the prior year period, and an increase of 4.1% on a constant currency1 basis. Net earnings for the third quarter were $249.1 million, or $353.2 million on an adjusted1 basis.

Diluted earnings per share were $1.23 for the third quarter, and adjusted1 diluted earnings per share were $1.74.

 

 

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“We are pleased with the strong performance we delivered in the third quarter, despite our ERP implementation challenges,” said Ivan Tornos, Zimmer Biomet’s President and Chief Executive Officer. “I am proud of the team and how they came together to manage the ERP issues and mitigate the negative impact on the Company’s performance for the year, positioning us to focus on our exciting innovation pipeline and planned new product introductions. We look forward to delivering on our strategic priorities and advancing our mission to help millions of people alleviate pain and improve their quality of life.”

Recent Highlights

 

 

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Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three and nine-month periods ended September 30, 2024, as well as the percentage change compared to the applicable prior year period, on both a reported basis and a constant currency basis.

 

NET SALES - THREE MONTHS ENDED SEPTEMBER 30, 2024
(in millions, unaudited)
										Constant
	Net									Currency
	Sales				% Change					% Change
Geographic Results
United States	$	1,052.3				2.0		%			2.0		%
International		771.9				6.9					7.1
Total	$	1,824.2				4.0		%			4.1		%
Product Categories
Knees
United States	$	425.4				2.9		%			2.9		%
International		319.7				9.1					9.2
Total		745.1				5.5					5.5
Hips
United States		254.5				4.9					4.9
International		227.0				1.9					2.4
Total		481.5				3.5					3.7
S.E.T. *		454.2				7.3					7.3
Other		143.4				(9.7	)				(9.5	)
Total	$	1,824.2				4.0		%			4.1		%
* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

 

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NET SALES - NINE MONTHS ENDED SEPTEMBER 30, 2024
(in millions, unaudited)
									Constant
	Net								Currency
	Sales				% Change				% Change
Geographic Results
United States	$	3,257.7				3.1		%		3.1		%
International		2,397.7				4.5				7.1
Total	$	5,655.4				3.7		%		4.8		%
Product Categories
Knees
United States	$	1,324.6				2.0		%		2.0		%
International		1,009.7				7.3				9.4
Total		2,334.3				4.2				5.1
Hips
United States		768.3				2.6				2.6
International		710.8				(0.4	)			2.8
Total		1,479.1				1.1				2.7
S.E.T. *		1,376.4				5.9				6.7
Other		465.6				3.0				4.3
Total	$	5,655.4				3.7		%		4.8		%
* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

 

Amounts reported in millions are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Percentages presented are calculated from the underlying unrounded amounts.

 

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Financial Guidance

The Company is updating its full-year 2024 financial guidance to reduce and narrow its previous projected ranges for revenue growth and adjusted1 diluted EPS:

Projected Year Ending December 31, 2024
	Previous Guidance	Updated Guidance
2024 Reported Revenue Change	4.0% - 5.0%	3.5% - 4.0%
Foreign Currency Exchange Impact	(1.0)%	(0.75)%
2024 Constant Currency Revenue Change	5.0% - 6.0%	4.25% - 4.75%
Adjusted Diluted EPS(1)	$8.00 - $8.15	$7.95 - $8.05

 

(1)

This measure is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See “Forward-Looking Non-GAAP Financial Measures” below, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.

 

Conference Call

The Company will conduct its third quarter investor conference call today, October 30, 2024, at 8:30 a.m. ET. 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

Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation.

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow on LinkedIn at www.linkedin.com/company/zimmerbiomet or X / Twitter at www.twitter.com/zimmerbiomet.

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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 or any other website referenced herein is not incorporated by reference into, and is not a part of, this document.

Note on Non-GAAP Financial Measures

This press release and our commentary in our investor conference call today include 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.

Net sales change information for the three and nine-month periods ended September 30, 2024 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 and nine-month periods ended September 30, 2024 and 2023 are presented on a GAAP (reported) basis and on an adjusted basis. These adjusted financial measures exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in the press release.

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

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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.

Forward-Looking Non-GAAP Financial Measures

This press release also includes certain forward-looking non-GAAP financial measures for the year ending December 31, 2024. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of certain charges related to initial compliance with the European Union Medical Device Regulation; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; and certain legal and tax matters. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management's plans may change. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

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 financial guidance, statements regarding macro pressures, including the impact of such pressures on our business, and any statements about our forecasts, expectations, plans, intentions, strategies or prospects. All statements other than statements of historical or current

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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: competition; pricing pressures; dependence on new product development, technological advances and innovation; changes in customer demand for our products and services caused by demographic changes, obsolescence, development of different therapies or other factors; shifts in the product category or regional sales mix of our products and services; the effects of business disruptions affecting us, our suppliers, customers or payors, either alone or in combination with other risks on our business and operations; the risks and uncertainties related to our ability to successfully execute our restructuring plans; control of costs and expenses; our ability to attract, retain and develop the highly skilled employees, senior management, independent agents and distributors we need to support our business; 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; the ability to form and implement alliances; dependence on a limited number of suppliers for key raw materials and other inputs and for outsourced activities; the risk of disruptions in the supply of materials and components used in manufacturing or sterilizing our products; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; delays, further difficulties and additional expense incurred to remediate problems with our enterprise resource planning system updates; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration (“FDA”) and other government regulators, such as more stringent requirements for regulatory clearance of products; the outcome of government investigations; the impact of healthcare reform and cost containment measures, including efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, through reductions in reimbursement levels, repayment demands and otherwise; 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; changes in tax obligations arising from examinations by tax authorities and from changes in tax laws in jurisdictions where we do business, including as a result of the “base erosion and profit shifting” project undertaken by the Organisation for Economic

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Co-operation and Development and otherwise; challenges to the tax-free nature of the ZimVie Inc. ("ZimVie") spinoff transaction and the subsequent liquidation of our retained interest in ZimVie; the risk of additional tax liability due to the recategorization of our independent agents and distributors to employees; the risk that material impairment of the carrying value of our intangible assets, including goodwill, could negatively affect our operating results; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; changes in general industry and market conditions, including domestic and international growth, inflation and currency exchange rates; the domestic and international business impact of political, social and economic instability, tariffs, trade restrictions and embargoes, sanctions, wars, disputes and other conflicts, including on our ability to operate in, export to or from or collect accounts receivable in affected countries; 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 other government regulators relating to medical products, healthcare fraud and abuse laws and data privacy and security laws; the success of our quality and operational excellence initiatives; the ability to remediate matters identified in inspectional observations or warning letters issued by the FDA and other regulators, while continuing to satisfy the demand for our products; product liability, intellectual property and commercial litigation losses; and the ability to obtain and maintain adequate intellectual property protection. 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, 2023, 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.

 

Note: Amounts reported in millions within this press release are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.

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ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, except per share amounts, unaudited)
	2024				2023
Net Sales	$	1,824.2			$	1,753.6
Cost of products sold, excluding intangible asset amortization		538.6				518.6
Intangible asset amortization		148.2				145.0
Research and development		111.6				116.9
Selling, general and administrative		709.7				674.9
Restructuring and other cost reduction initiatives		32.2				24.3
Acquisition, integration, divestiture and related		4.4				7.3
Operating expenses		1,544.7				1,487.0
Operating Profit		279.5				266.6
Other income, net		5.1				3.8
Interest expense, net		(54.3	)			(51.1	)
Earnings before income taxes		230.3				219.2
(Benefit) provision for income taxes		(18.9	)			56.4
Net Earnings		249.2				162.8
Less: Net earnings attributable to noncontrolling interest		0.2				0.2
Net Earnings of Zimmer Biomet Holdings, Inc.	$	249.1			$	162.7
Earnings Per Common Share
Basic	$	1.23			$	0.78
Diluted	$	1.23			$	0.77
Weighted Average Common Shares Outstanding
Basic		202.3				208.9
Diluted		203.0				210.0

 

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ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, except per share amounts, unaudited)
	2024				2023
Net Sales	$	5,655.4			$	5,454.1
Cost of products sold, excluding intangible asset amortization		1,604.5				1,545.0
Intangible asset amortization		434.3				416.6
Research and development		328.9				345.4
Selling, general and administrative		2,182.9				2,116.6
Restructuring and other cost reduction initiatives		198.1				90.6
Acquisition, integration, divestiture and related		9.9				16.4
Operating expenses		4,758.6				4,530.6
Operating Profit		896.7				923.5
Other income, net		7.0				10.3
Interest expense, net		(156.1	)			(150.9	)
Earnings before income taxes		747.6				782.8
Provision for income taxes		82.5				177.4
Net Earnings		665.1				605.4
Less: Net earnings attributable to noncontrolling interest		0.8				0.6
Net Earnings of Zimmer Biomet Holdings, Inc.	$	664.3			$	604.8
Earnings Per Common Share
Basic	$	3.25			$	2.89
Diluted	$	3.24			$	2.88
Weighted Average Common Shares Outstanding
Basic		204.4				209.0
Diluted		205.2				210.1

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ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)
		September 30,				December 31,
		2024				2023
Assets
Cash and cash equivalents		$	569.0			$	415.8
Receivables, net			1,481.5				1,442.4
Inventories			2,368.7				2,385.2
Other current assets			444.8				366.1
Total current assets			4,864.0				4,609.5
Property, plant and equipment, net			2,107.2				2,060.4
Goodwill			8,912.3				8,818.5
Intangible assets, net			4,665.3				4,856.4
Other assets			1,171.6				1,152.1
Total Assets		$	21,720.3			$	21,496.9
Liabilities and Stockholders' Equity
Current liabilities		$	1,858.4			$	1,957.5
Current portion of long-term debt			1,713.0				900.0
Other long-term liabilities			1,028.1				1,283.4
Long-term debt			4,737.7				4,867.9
Stockholders' equity			12,383.2				12,488.1
Total Liabilities and Stockholders' Equity		$	21,720.3			$	21,496.9

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ZIMMER BIOMET HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, unaudited)
		2024				2023
Cash flows provided by (used in) operating activities
Net earnings		$	665.1			$	605.4
Depreciation and amortization			732.7				710.5
Share-based compensation			79.9				74.5
Changes in operating assets and liabilities, net of acquired assets and liabilities
Income taxes			(181.2	)			23.4
Receivables			(40.1	)			15.5
Inventories			(38.0	)			(212.2	)
Accounts payable and accrued liabilities			(204.7	)			(219.5	)
Other assets and liabilities			(20.5	)			(4.5	)
Net cash provided by operating activities			993.1				993.2
Cash flows provided by (used in) investing activities
Additions to instruments			(188.4	)			(232.8	)
Additions to other property, plant and equipment			(152.3	)			(228.3	)
Net investment hedge settlements			19.3				27.2
Business combination investments, net of acquired cash			(116.3	)			(32.9	)
Acquisition of intangible assets			(119.6	)			(98.4	)
Other investing activities			(39.7	)			7.0
Net cash used in investing activities			(596.9	)			(558.1	)
Cash flows provided by (used in) financing activities
Net payments on revolving facilities			(50.0	)			(20.0	)
Proceeds from senior notes			700.0				-
Redemption of senior notes			-				(86.3	)
Payment on term loan			-				(33.9	)
Dividends paid to stockholders			(148.0	)			(150.7	)
Proceeds from employee stock compensation plans			81.6				81.8
Business combination contingent consideration payments			(3.5	)			(10.3	)
Deferred business combination payments			(8.8	)			(4.0	)
Repurchase of common stock			(795.8	)			(281.9	)
Other financing activities			(19.4	)			(6.8	)
Net cash used in financing activities			(243.9	)			(512.1	)
Effect of exchange rates on cash and cash equivalents			1.0				(6.5	)
Change in cash and cash equivalents			153.3				(83.5	)
Cash and cash equivalents, beginning of year			415.8				375.7
Cash and cash equivalents, end of period		$	569.0			$	292.1

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED NET SALES % CHANGE TO
CONSTANT CURRENCY % CHANGE
(unaudited)
	For the Three Months Ended
	September 30, 2024 vs. 2023
						Foreign					Constant
						Exchange					Currency
	% Change					Impact					% Change
Geographic Results
United States		2.0		%			-		%			2.0		%
International		6.9					(0.2	)				7.1
Total		4.0		%			(0.1	)	%			4.1		%
Product Categories
Knees
United States		2.9		%			-		%			2.9		%
International		9.1					(0.1	)				9.2
Total		5.5					-					5.5
Hips
United States		4.9					-					4.9
International		1.9					(0.5	)				2.4
Total		3.5					(0.2	)				3.7
S.E.T.		7.3					-					7.3
Other		(9.7	)				(0.2	)				(9.5	)
Total		4.0		%			(0.1	)	%			4.1		%

 

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED NET SALES % CHANGE TO
CONSTANT CURRENCY % CHANGE
(unaudited)
	For the Nine Months Ended
	September 30, 2024 vs. 2023
						Foreign					Constant
						Exchange					Currency
	% Change					Impact					% Change
Geographic Results
United States		3.1		%			-		%			3.1		%
International		4.5					(2.6	)				7.1
Total		3.7		%			(1.1	)	%			4.8		%
Product Categories
Knees
United States		2.0		%			-		%			2.0		%
International		7.3					(2.1	)				9.4
Total		4.2					(0.9	)				5.1
Hips
United States		2.6					-					2.6
International		(0.4	)				(3.2	)				2.8
Total		1.1					(1.6	)				2.7
S.E.T.		5.9					(0.8	)				6.7
Other		3.0					(1.3	)				4.3
Total		3.7		%			(1.1	)	%			4.8		%

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, except per share amounts, unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024
		Cost of products sold, excluding intangible asset amortization				Intangible asset amortization				Research and development				Selling, general and administrative				Restructuring and other cost reduction initiatives				Acquisition, integration, divestiture and related				Other income, net				(Benefit) provision for income taxes				Net Earnings of Zimmer Biomet Holdings, Inc.				Diluted earnings per common share
As Reported		$	538.6			$	148.2			$	111.6			$	709.7			$	32.2			$	4.4			$	5.1			$	(18.9	)		$	249.1			$	1.23
Inventory and manufacturing-related charges(1)			(9.4	)			-				-				-				-				-				-				3.0				6.4				0.03
Intangible asset amortization(2)			-				(148.2	)			-				-				-				-				-				33.2				115.0				0.57
Restructuring and other cost reduction initiatives(3)			-				-				-				-				(32.2	)			-				-				(2.6	)			34.8				0.17
Acquisition, integration, divestiture and related(4)			-				-				-				-				-				(4.4	)			-				0.4				4.0				0.02
Litigation(5)			-				-				-				0.1				-				-				-				0.7				(0.8	)			-
European Union Medical Device Regulation(6)			-				-				(7.6	)			-				-				-				-				1.8				5.8				0.03
Other charges(7)			-				-				-				1.0				-				-				(1.7	)			(0.6	)			(2.1	)			(0.01	)
Other certain tax adjustments(8)			-				-				-				-				-				-				-				59.0				(59.0	)			(0.29	)
As Adjusted		$	529.2			$	-			$	104.0			$	710.7			$	-			$	-			$	3.4			$	76.0			$	353.2			$	1.74

 

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023
		Cost of products sold, excluding intangible asset amortization				Intangible asset amortization				Research and development				Selling, general and administrative				Restructuring and other cost reduction initiatives				Acquisition, integration, divestiture and related				Other income, net				(Benefit) provision for income taxes				Net Earnings of Zimmer Biomet Holdings, Inc.				Diluted earnings per common share
As Reported		$	518.6			$	145.0			$	116.9			$	674.9			$	24.3			$	7.3			$	3.8			$	56.4			$	162.7			$	0.77
Inventory and manufacturing-related charges(1)			(7.5	)			-				-				-				-				-				-				3.7				3.8				0.02
Intangible asset amortization(2)			-				(145.0	)			-				-				-				-				-				28.8				116.2				0.55
Restructuring and other cost reduction initiatives(3)			-				-				-				-				(24.3	)			-				-				4.2				20.1				0.10
Acquisition, integration, divestiture and related(4)			-				-				-				-				-				(7.3	)			-				0.1				7.2				0.03
European Union Medical Device Regulation(6)			-				-				(13.3	)			-				-				-				-				3.0				10.3				0.05
Other charges(7)			-				-				-				0.2				-				-				(0.3	)			(2.5	)			2.0				0.01
Other certain tax adjustments(8)			-				-				-				-				-				-				-				(24.3	)			24.3				0.12
As Adjusted		$	511.1			$	-			$	103.5			$	675.1			$	-			$	-			$	3.5			$	69.4			$	346.5			$	1.65

 

 

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, except per share amounts, unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
		Cost of products sold, excluding intangible asset amortization				Intangible asset amortization				Research and development				Selling, general and administrative				Restructuring and other cost reduction initiatives				Acquisition, integration, divestiture and related				Other income, net				Provision for income taxes				Net Earnings of Zimmer Biomet Holdings, Inc.				Diluted earnings per common share
As Reported		$	1,604.5			$	434.3			$	328.9			$	2,182.9			$	198.1			$	9.9			$	7.0			$	82.5			$	664.3			$	3.24
Inventory and manufacturing-related charges(1)			(13.2	)			-				-				-				-				-				-				5.0				8.2				0.04
Intangible asset amortization(2)			-				(434.3	)			-				-				-				-				-				90.4				343.9				1.68
Restructuring and other cost reduction initiatives(3)			-				-				-				-				(198.1	)			-				-				34.5				163.6				0.80
Acquisition, integration, divestiture and related(4)			-				-				-				-				-				(9.9	)			-				1.4				8.5				0.04
Litigation(5)			-				-				-				-				-				-				-				0.7				(0.7	)			-
European Union Medical Device Regulation(6)			-				-				(20.9	)			-				-				-				-				4.9				16.0				0.08
Other charges(7)			-				-				-				0.9				-				-				4.7				1.3				2.5				0.01
Other certain tax adjustments(8)			-				-				-				-				-				-				-				38.5				(38.5	)			(0.19	)
As Adjusted		$	1,591.3			$	-			$	308.0			$	2,183.9			$	-			$	-			$	11.7			$	259.3			$	1,167.9			$	5.69

 

 

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023
		Cost of products sold, excluding intangible asset amortization				Intangible asset amortization				Research and development				Selling, general and administrative				Restructuring and other cost reduction initiatives				Acquisition, integration, divestiture and related				Other income, net				Provision for income taxes				Net Earnings of Zimmer Biomet Holdings, Inc.				Diluted earnings per common share
As Reported		$	1,545.0			$	416.6			$	345.4			$	2,116.6			$	90.6			$	16.4			$	10.3			$	177.4			$	604.8			$	2.88
Inventory and manufacturing-related charges(1)			(13.4	)			-				-				-				-				-				-				7.8				5.6				0.03
Intangible asset amortization(2)			-				(416.6	)			-				-				-				-				-				84.9				331.7				1.58
Restructuring and other cost reduction initiatives(3)			-				-				-				-				(90.6	)			-				-				20.5				70.1				0.33
Acquisition, integration, divestiture and related(4)			-				-				-				-				-				(16.4	)			-				0.4				16.0				0.08
Litigation(5)			-				-				-				3.8				-				-				-				(0.9	)			(2.9	)			(0.02	)
European Union Medical Device Regulation(6)			-				-				(42.6	)			-				-				-				-				9.9				32.7				0.16
Other charges(7)			-				-				-				1.0				-				-				(9.8	)			(7.1	)			(3.7	)			(0.02	)
Other certain tax adjustments(8)			-				-				-				-				-				-				-				(71.7	)			71.7				0.34
As Adjusted		$	1,531.5			$	-			$	302.8			$	2,121.4			$	-			$	-			$	0.5			$	221.2			$	1,126.1			$	5.36

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING
ACTIVITIES TO FREE CASH FLOW
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, unaudited)
	Three Months Ended September 30,							Nine Months Ended September 30,
	2024				2023			2024			2023
Net cash provided by operating activities	$	395.7			$	337.5		$	993.1		$	993.2
Additions to instruments		(41.2	)			(64.5	)		(188.4	)		(232.8	)
Additions to other property, plant and equipment		(44.5	)			(84.3	)		(152.3	)		(228.3	)
Free cash flow	$	310.0			$	188.7		$	652.4		$	532.1

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF GROSS PROFIT & MARGIN
TO ADJUSTED GROSS PROFIT & MARGIN
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
Net Sales	$	1,824.2			$	1,753.6			$	5,655.4			$	5,454.1
Cost of products sold, excluding intangible asset amortization		538.6				518.6				1,604.5				1,545.0
Intangible asset amortization		148.2				145.0				434.3				416.6
Gross Profit	$	1,137.4			$	1,090.0			$	3,616.6			$	3,492.5
Inventory and manufacturing-related charges		9.4				7.5				13.2				13.4
Intangible asset amortization		148.2				145.0				434.3				416.6
Adjusted gross profit	$	1,295.0			$	1,242.5			$	4,064.1			$	3,922.4
Gross margin		62.4		%		62.2		%		63.9		%		64.0		%
Inventory and manufacturing-related charges		0.5				0.4				0.2				0.3
Intangible asset amortization		8.1				8.3				7.7				7.6
Adjusted gross margin		71.0		%		70.9		%		71.9		%		71.9		%

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF OPERATING PROFIT & MARGIN TO ADJUSTED OPERATING PROFIT & MARGIN
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(in millions, unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
Operating profit	$	279.5			$	266.6			$	896.7			$	923.5
Inventory and manufacturing-related charges		9.4				7.5				13.2				13.4
Intangible asset amortization		148.2				145.0				434.3				416.6
Restructuring and other cost reduction initiatives		32.2				24.3				198.1				90.6
Acquisition, integration, divestiture and related		4.4				7.3				9.9				16.4
Litigation		(0.1	)			-				-				(3.8	)
European Union Medical Device Regulation		7.6				13.3				20.9				42.6
Other charges		(1.0	)			(0.2	)			(0.9	)			(1.0	)
Adjusted operating profit	$	480.2			$	463.8			$	1,572.3			$	1,498.4
Operating profit margin		15.3		%		15.2		%		15.9		%		16.9		%
Inventory and manufacturing-related charges		0.5				0.4				0.2				0.3
Intangible asset amortization		8.1				8.3				7.7				7.6
Restructuring and other cost reduction initiatives		1.8				1.4				3.5				1.7
Acquisition, integration, divestiture and related		0.2				0.4				0.2				0.3
Litigation		-				-				-				(0.1	)
European Union Medical Device Regulation		0.4				0.8				0.4				0.8
Other charges		(0.1	)			-				-				-
Adjusted operating profit margin		26.3		%		26.4		%		27.8		%		27.5		%

 

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 and 2023
(unaudited)
	Three Months Ended September 30,									Nine Months Ended September 30,
	2024				2023					2024				2023
Effective tax rate		(8.2	)	%		25.7		%			11.0		%		22.7		%
Tax effect of adjustments made to earnings before taxes(1)		0.3				2.1					2.1				2.8
Other certain tax adjustments (2)		25.6				(11.1	)				5.1				(9.1	)
Adjusted effective tax rate		17.7		%		16.7		%			18.2		%		16.4		%
(1) Includes inventory and manufacturing-related charges; intangible asset amortization; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; litigation; European Union Medical Device Regulation; and other charges
(2) Other certain tax adjustments are related to certain significant and discrete tax adjustments including intercompany transactions between jurisdictions, ongoing impacts of tax only amortization resulting from certain restructuring transactions, impacts of significant tax reform including Swiss reform, and certain favorable tax settlements.

 

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ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF DEBT TO NET DEBT
AS OF SEPTEMBER 30, 2024 and DECEMBER 31, 2023
(in millions, unaudited)
	September 30, 2024				December 31, 2023
Debt, both current and long-term	$	6,450.7			$	5,767.9
Cash and cash equivalents		(569.0	)			(415.8	)
Net debt	$	5,881.7			$	5,352.1

 

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v3.24.3

Document and Entity Information	Oct. 30, 2024
Document Information [Line Items]
Document Type	8-K
Entity Central Index Key	0001136869
Entity Registrant Name	ZIMMER BIOMET HOLDINGS, INC.
Amendment Flag	false
Entity File Number	001-16407
Document Period End Date	Oct. 30, 2024
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-4151777
Entity Address, Address Line One	345 East Main Street
Entity Address, Postal Zip Code	46580
Entity Address, City or Town	Warsaw
City Area Code	(574)
Local Phone Number	373-3333
Entity Address, State or Province	IN
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	ZBH
Security Exchange Name	NYSE
Title of 12(b) Security	Common Stock, $0.01 par value
2.425% Notes due 2026 [Member]
Document Information [Line Items]
Trading Symbol	ZBH 26
Security Exchange Name	NYSE
Title of 12(b) Security	2.425% Notes due 2026
1.164% Notes due 2027 [Member]
Document Information [Line Items]
Trading Symbol	ZBH 27
Security Exchange Name	NYSE
Title of 12(b) Security	1.164% Notes due 2027

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