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Press Release: Zimmer Biomet Announces Fourth Quarter and Full-Year 2020 Financial Results

· 02/05/2021 06:30
NET SALES - THREE MONTHS ENDED DECEMBER 31, 2020 (in millions, unaudited) Constant Net Currency Sales % Change % Change Geographic Results Americas* $ 1,283.9 (0.3) % (0.3) % EMEA 408.3 (13.2) (17.5) Asia Pacific 393.1 7.1 2.0 Total $ 2,085.3 (1.9) % (3.7) % Product Categories Knees Americas* $ 457.2 0.8 % 0.8 % EMEA 142.5 (20.8) (24.1) Asia Pacific 137.4 8.1 2.9 Total 737.1 (3.1) (4.8) Hips Americas* 269.7 1.0 1.0 EMEA 115.9 (12.2) (16.2) Asia Pacific 118.5 6.2 1.3 Total 504.1 (1.3) (3.4) S.E.T ** 375.9 (1.5) (3.3) Dental, Spine & CMFT*** 314.0 2.6 0.8 Other 154.2 (7.5) (9.3) Total $ 2,085.3 (1.9) % (3.7) % * The Americas net sales in the three months ended December 31, 2020 include the benefit of expanded strategic sales, favorable bulk orders and shipment timing ** Sports Medicine, Extremities and Trauma *** Craniomaxillofacial and Thoracic NET SALES - YEAR ENDED DECEMBER 31, 2020 (in millions, unaudited) Constant Net Currency Sales % Change % Change Geographic Results Americas $4,335.4 (11.1) % (11.0) % EMEA 1,391.3 (20.4) (21.3) Asia Pacific 1,297.8 (4.5) (6.0) Total $7,024.5 (12.0) % (12.4) % Product Categories Knees Americas $1,461.1 (12.9) % (12.8) % EMEA 487.0 (25.6) (26.2) Asia Pacific 441.7 (7.8) (9.1) Total 2,389.8 (15.0) (15.3) Hips Americas 941.5 (7.4) (7.3) EMEA 407.8 (18.4) (19.3) Asia Pacific 401.2 (3.4) (4.9) Total 1,750.5 (9.4) (9.9) S.E.T * 1,322.0 (8.4) (8.8) Dental, Spine & CMFT** 1,043.7 (10.1) (10.6) Other 518.5 (18.4) (18.8) Total $7,024.5 (12.0) % (12.4) % * Sports Medicine, Extremities and Trauma ** Craniomaxillofacial and Thoracic-- Acquisition of A&E Medical Corp., a privately-held company that manufactures and sells innovative and differentiated products in the sternal closure market; expanded Zimmer Biomet's sternal closure portfolio to be one of the most comprehensive in a space growing at a high single digit percentage rate annually; revenues are recorded in the Company's Dental, Spine and CMFT segment. -- Launch of a large-scale, multimedia, direct-to-patient campaign, "Don't Let Pain Gain on You", in the U.S., focused on education and support for patients around elective procedures like joint replacement surgery, especially during the COVID pandemic. -- Partnership with Hospital for Special Surgery (HSS) to advance innovation on the mymobility(R) with Apple Watch(R) remote care management system that will enable patients and practices around the world to leverage HSS' expertise in orthopedic patient care through Zimmer Biomet's platform. -- Formal launch of the Zimmer Biomet Foundation, a philanthropic 501(c)(3) organization that further strengthens the Company's ongoing commitment to empowering diverse and underserved communities, supporting STEM education, enabling community health and providing disaster relief; launch included announcement of a partnership with the National Association for the Advancement of Colored People (NAACP) Empowerment Programs, Inc., with a commitment of $2 million over the next three years to support partnered efforts with NAACP to end racial injustice and advance diversity and equality. -- In conjunction with Q4 earnings, announcement of the intention to pursue a plan to spin off the Company's Spine and Dental businesses to form a new and independent, publicly traded company ("NewCo"); planned transaction will enhance the focus of both Zimmer Biomet and NewCo to meet the needs of patients and customers and achieve faster growth and greater value for all stakeholders.

Zimmer Biomet Announces Fourth Quarter and Full-Year 2020 Financial Results

- Fourth quarter net sales of $2.085 billion decreased 1.9%, 3.7% on a constant currency basis

- Fourth quarter diluted earnings per share were $1.59; adjusted diluted earnings per share were $2.11

- Full-year net sales of $7.025 billion decreased 12.0%,12.4% on a constant currency basis

- Full-year diluted loss per share was $0.67; adjusted diluted earnings per share were $5.67

- Company separately announces intent to spin off Spine and Dental businesses

PR Newswire

WARSAW, Ind., Feb. 5, 2021

WARSAW, Ind., Feb. 5, 2021 /PRNewswire/ -- Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter and year ended December 31, 2020. The Company reported fourth quarter net sales of $2.085 billion, a decrease of 1.9% from the prior year period, and a decrease of 3.7% on a constant currency basis. Net sales for the full year were $7.025 billion, a decrease of 12.0% from the prior year, and a decrease of 12.4% on a constant currency basis. Net earnings for the fourth quarter were $333.7 million, or $440.7 million on an adjusted basis, and for the full year net loss was $138.9 million and net earnings on an adjusted basis were $1,181.6 million.

Diluted earnings per share were $1.59 for the fourth quarter, an increase of 3.2% over the prior year period. Adjusted diluted earnings per share were $2.11 for the fourth quarter, a decrease of 8.3% from the prior year period. Full-year diluted loss per share was $0.67 and full-year adjusted diluted earnings per share were $5.67, a decrease of 28.0% from the prior year.

"The fourth quarter saw continued pressure from COVID and its impact on the recovery of elective procedures, yet our core business remained strong as did our operational execution to close out 2020," said Bryan Hanson, President and CEO of Zimmer Biomet. "Against that backdrop, we continue the transformation of our business in order to drive growth and increase shareholder value, as underscored by today's announcement that we intend to spin off our Spine and Dental businesses. This transaction will position us to prioritize resources, simplify our operating models and deliver greater value through two independent publicly traded companies. Our team remains confident and focused as we continue to deliver on our mission and serve patients, providers and our customers."

Please see the attached schedules accompanying this press release for additional details on performance in the quarter and full-year 2020, including sales by Zimmer Biomet's three geographies and five product categories.

Recent Highlights

Aligned with Zimmer Biomet's active portfolio management strategy and the ongoing transformation of the business, key recent highlights include:

Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three-month period and year ended December 31, 2020, as well as the percentage change compared to the prior year periods, on both a reported basis and a constant currency basis.

Cash Flow and Balance Sheet

Cash provided by operating activities for the fourth quarter was $425.1 million and free cash flow was $328.5 million. At December 31, 2020, the Company had $802.1 million in cash and cash equivalents on the balance sheet. In the fourth quarter, the Company paid $49.8 million in dividends and declared a dividend of $0.24 per share. Cash provided by operating activities for the full year was $1.205 billion and free cash flow was $795.3 million. In the full year, the Company paid $198.5 million in dividends and declared dividends of $0.96 per share. As previously announced, Zimmer Biomet 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. No borrowings are outstanding under these credit facilities.

Financial Guidance

There continues to be uncertainty around the ongoing impact of COVID-19. Therefore, 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 full year 2021 and is not providing financial guidance at this time.

Conference Call

The Company will conduct its fourth quarter and full-year 2020 investor conference call today, February 5, 2021, 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

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.

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