Zimmer Biomet Reports Second Quarter 2017 Financial Results

WARSAW, Ind., July 27, 2017

Diluted earnings per share for the quarter were $0.90.  Adjusted diluted earnings per share for the quarter were $2.08, an increase of 3.0% over the prior year period.

"During the second quarter, we increased production output from our Warsaw North Campus manufacturing facility, and continued to drive efforts to achieve best-in-class quality systems.  Our sales growth fell short of our expectations, due in part to production delays of certain key brands and slower-than-expected sales recapture from previously affected customers in the United States.  These factors have informed our updated outlook for the full year," said Daniel P. Florin, Interim Chief Executive Officer, Senior Vice President and Chief Financial Officer of Zimmer Biomet.  "Looking forward, we remain focused on fully restoring product supply to enhance our commercial execution, while continuing to closely engage with our customers and take advantage of the opportunities in front of us."

"We have great confidence in Dan as he transitions into the role of Interim CEO. He has already begun to leverage his deep knowledge of Zimmer Biomet and decades of medical device industry experience to lead the Company during this period," said Larry C. Glasscock, Chairman of the Board of Zimmer Biomet.  "We have initiated a thorough search to identify the best candidate to serve as Zimmer Biomet's next CEO.  We are seeking a strong leader, whose strategic and operational track record aligns with Zimmer Biomet's commitment to growth and enhancing stockholder value."

Net earnings for the second quarter were $184.2 million, and $424.6 million on an adjusted basis, an increase of 4.3% over the prior year period.  Operating cash flow for the second quarter was $440.5 million.

In the quarter, the Company paid $48.4 million in dividends and declared a second quarter dividend of $0.24 per share.  The Company has made approximately $650 million of net debt repayments through the first half of 2017.

Guidance
The Company is updating its full-year 2017 constant currency revenue and adjusted earnings per share guidance.  For the full year, the Company now expects revenue in the range of $7.80 billion to $7.87 billion, representing constant currency revenue growth of 1.8% to 2.7% compared to the prior year, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Previously, the Company had expected full-year, constant currency revenue growth between 3.2% and 4.2%, inclusive of approximately 120 basis points of contribution from the LDR transaction.  Additionally, the Company now expects its full-year 2017 diluted earnings per share to be in a range of $4.15 to $4.35, and in a range of $8.20 to $8.30 on an adjusted basis.  Previously, the Company had expected full-year 2017 diluted earnings per share to be in a range of $4.68 to $4.88, and in a range of $8.50 to $8.60 on an adjusted basis.