Friday, November 6, 2015

News: Zimmer Biomet Holdings, Inc. Reports Third Quarter 2015 Financial Results -- Continued - P2

 ZIMMER BIOMET HOLDINGS, INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS 
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 and 2014 
 (in millions, unaudited) 
       
     
2015
2014 (1)
       
 Cash flows provided by (used in) operating activities 
   
 
 Net earnings 
   
$          19.5
$        565.5
 
 Depreciation and amortization 
   
428.1
283.2
 
 Share-based compensation 
   
198.8
37.0
 
 Income tax benefits from employee stock compensation plans 
 
77.7
32.7
 
 Excess income tax benefits from employee stock compensation plans 
(10.3)
(9.7)
 
 Inventory step-up 
   
137.1
5.0
 
 Gain on divestiture of assets 
   
(8.9)
-
 
 Changes in operating assets and liabilities, net of acquired assets and liabilities 
  
 
     Income taxes 
   
29.9
(140.2)
 
     Receivables 
   
29.4
(42.3)
 
     Inventories 
   
(196.5)
(132.7)
 
     Accounts payable and accrued expenses 
  
(251.5)
(2.9)
 
     Other assets and liabilities 
   
(23.7)
103.0
 
 Net cash provided by operating activities 
  
429.6
698.6
       
 Cash flows provided by (used in) investing activities 
   
 
 Additions to instruments 
   
(186.0)
(162.9)
 
 Additions to other property, plant and equipment 
 
(118.6)
(95.7)
 
 Purchases of investments 
   
(179.0)
(1,150.1)
 
 Sales of investments 
   
578.8
919.4
 
 Proceeds from divestiture of assets 
  
57.9
-
 
 Biomet acquisition, net of acquired cash 
  
(7,812.9)
-
 
 Investments in other assets 
   
(19.6)
(8.8)
 
 Net cash used in investing activities 
  
(7,679.4)
(498.1)
       
 Cash flows provided by (used in) financing activities 
   
 
 Proceeds from senior notes 
   
7,628.2
-
 
 Proceeds from term loan 
   
3,000.0
-
 
 Redemption of senior notes 
   
(2,740.0)
-
 
 Payments on term loan 
   
(150.0)
-
 
 Net proceeds under revolving credit facilities 
  
0.8
1.4
 
 Dividends paid to stockholders 
  
(112.3)
(108.0)
 
 Proceeds from employee stock compensation plans 
 
77.0
254.5
 
 Excess income tax benefits from employee stock compensation plans 
10.3
9.7
 
 Debt issuance costs 
   
(58.4)
(64.1)
 
 Repurchase of common stock 
   
-
(400.5)
 
 Net cash provided by (used in) financing activities 
 
7,655.6
(307.0)
       
 Effect of exchange rates on cash and cash equivalents 
 
(22.2)
(6.8)
     
 
 Increase (decrease) in cash and cash equivalents 
 
383.6
(113.3)
 Cash and cash equivalents, beginning of period 
  
1,083.3
1,080.6
 Cash and cash equivalents, end of period 
  
$     1,466.9
$        967.3
 
(1)  Reflects certain revisions to correct immaterial misstatements and other out-of-period adjustments.  For additional information, see Exhibit 99.2 to the Company's Form 8-K filed October 29, 2015 and the Company's Form 10-Q to be filed with the Securities and Exchange Commission.


 ZIMMER BIOMET HOLDINGS, INC. 
 NET SALES BY GEOGRAPHIC SEGMENT
 FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2015 and 2014 
 (in millions, unaudited) 
    
 Three Months Ended September 30
 
 Nine Months Ended September 30
 
      
    
2015
2014
% Inc
 
2015
2014
% Inc
 
            
 Americas 
$      1,133.5
$         637.9
77.7
%
$      2,458.2
$      1,916.3
28.3
%
 EMEA 
 
375.2
270.7
38.5
 
964.2
932.3
3.4
 
 Asia Pacific 
253.5
197.4
28.5
 
641.8
601.8
6.7
 
  
 Total  
$      1,762.2
$      1,106.0
59.3
 
$      4,064.2
$      3,450.4
17.8
 
            
            
            
            
 ZIMMER BIOMET HOLDINGS, INC. 
 NET SALES BY PRODUCT CATEGORY 
 FOR THE THREE and NINE MONTHS ENDED SEPTEMBER 30, 2015 and 2014 
 (in millions, unaudited) 
    
 Three Months Ended September 30
 
 Nine Months Ended September 30
 
      
    
2015
2014
% Inc
 
2015
2014
% Inc
 
            
 Knees 
 
$         632.0
$         443.3
42.5
%
$      1,564.8
$      1,398.9
11.8
%
 Hips 
  
434.5
315.6
37.6
 
1,066.8
988.3
7.9
 
 S.E.T 
 
371.0
208.6
77.8
 
811.1
634.1
27.9
 
 Dental 
 
103.4
53.9
91.9
 
220.2
176.0
25.1
 
 Spine & CMF 
147.7
51.0
189.8
 
256.1
151.5
69.1
 
 Other 
 
73.6
33.6
120.4
 
145.2
101.6
43.2
 
  
 Total 
$      1,762.2
$      1,106.0
59.3
 
$      4,064.2
$      3,450.4
17.8
 


ZIMMER BIOMET HOLDINGS, INC.
RECONCILIATION OF PRO FORMA REPORTED % GROWTH TO
ADJUSTED PRO FORMA CONSTANT CURRENCY % GROWTH
(unaudited)
     
              
   
For the Three Months Ended
   
September 30, 2015
              
            
Adjusted
            
Pro Forma
   
Pro Forma
    
Foreign
 
Constant
   
Reported
 
Divestiture
 
Exchange
 
Currency
   
% Change
 
Impact
 
Impact
 
% Change
Geographic Segments
           
 
Americas
(3.2)
%
 
(1.7)
%
 
(0.8)
%
 
(0.7)
%
 
EMEA
(14.7)
  
(1.2)
  
(15.2)
  
1.7
 
 
Asia Pacific
(9.0)
  
-
  
(13.7)
  
4.7
 
  
Total 
(6.7)
  
(1.3)
  
(6.1)
  
0.7
 
              
              
Product Categories
           
  
Knees
           
  
   Americas
(4.5)
  
(2.1)
  
(0.6)
  
(1.8)
 
  
   EMEA
(12.9)
  
(2.9)
  
(16.0)
  
6.0
 
  
   Asia Pacific
(6.6)
  
-
  
(15.6)
  
9.0
 
  
       Total
(6.7)
  
(1.9)
  
(6.5)
  
1.7
 
              
  
Hips
           
  
   Americas
(2.1)
  
-
  
(1.0)
  
(1.1)
 
  
   EMEA
(14.8)
  
-
  
(16.0)
  
1.2
 
  
   Asia Pacific
(13.4)
  
-
  
(13.1)
  
(0.3)
 
  
       Total
(7.9)
  
-
  
(7.6)
  
(0.3)
 
              
  
S.E.T
(4.9)
  
(0.6)
  
(5.3)
  
1.0
 
              
  
Dental
(6.6)
  
-
  
(5.7)
  
(0.9)
 
              
  
Spine & CMF
(2.7)
  
-
  
(3.0)
  
0.3
 
              
  
Other
(15.3)
  
(10.8)
  
(3.6)
  
(0.9)
 
              
  
       Total
(6.7)
  
(1.3)
  
(6.1)
  
0.7
 


 ZIMMER BIOMET HOLDINGS, INC. 
 Reconciliation of Net Earnings and Adjusted Net Earnings 
 For the Three Months Ended September 30, 2015 and 2014 
 (in millions, unaudited) 
     
  
 Three Months 
  
 Ended September 30 
  
2015
 
2014 (1)
Net Earnings of Zimmer Biomet Holdings, Inc.
$         22.2
 
$       173.1
Inventory step-up and other inventory 
   
   and manufacturing related charges
132.6
 
7.7
Certain claims
 
-
 
(0.3)
Intangible asset amortization
122.6
 
20.6
Special items
    
   Biomet-merger related
146.6
 
27.5
   Other special items
49.3
 
38.4
Biomet merger-related expenses in other expense
(11.9)
 
10.4
Taxes on above items (2)
(123.0)
 
(27.7)
Adjusted Net Earnings
$       338.4
 
$       249.7
     
     
 ZIMMER BIOMET HOLDINGS, INC. 
 Reconciliation of Net Earnings and Adjusted Net Earnings 
 For the Nine Months Ended September 30, 2015 and 2014 
 (in millions, unaudited) 
     
  
 Nine Months 
  
 Ended September 30 
  
2015
 
2014 (1)
Net Earnings of Zimmer Biomet Holdings, Inc.
$         20.0
 
$       566.5
Inventory step-up and other inventory 
   
   and manufacturing related charges
151.2
 
32.9
Certain claims
 
7.7
 
21.5
Intangible asset amortization
176.0
 
72.0
Special items
    
   Biomet-merger related
563.0
 
41.2
   Other special items
188.9
 
123.1
Biomet merger-related expenses in other expense                                    
33.1
 
20.4
Interest expense on Biomet merger financing
70.0
 
-
Taxes on above items (2)
(327.7)
 
(87.3)
Adjusted Net Earnings
$       882.2
 
$       790.3
 
(1)  Reflects certain revisions to correct immaterial misstatements and other out-of-period adjustments.  For additional information, see Exhibit 99.2 to the Company's Form 8-K filed October 29, 2015 and the Company's Form 10-Q to be filed with the Securities and Exchange Commission.
 
(2) The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred.


 ZIMMER BIOMET HOLDINGS, INC. 
 Reconciliation of Diluted EPS and Adjusted Diluted EPS 
 For the Three Months Ended September 30, 2015 and 2014 
 (unaudited) 
    
 
 Three Months 
 
 Ended September 30
 
2015
 
2014 (1)
Diluted EPS
$          0.11
 
$          1.01
Inventory step-up and other inventory 
   
   and manufacturing related charges
0.64
 
0.04
Intangible asset amortization
0.60
 
0.12
Special items
   
   Biomet-merger related
0.71
 
0.16
   Other special items
0.24
 
0.22
Biomet merger-related expenses in other expense
(0.06)
 
0.06
Taxes on above items (2)
(0.60)
 
(0.16)
Adjusted Diluted EPS
$          1.64
 
$          1.45
    
    
 ZIMMER BIOMET HOLDINGS, INC. 
 Reconciliation of Diluted EPS and Adjusted Diluted EPS 
 For the Nine Months Ended September 30, 2015 and 2014 
 (unaudited) 
    
 
 Nine Months 
 
 Ended September 30
 
2015
 
2014 (1)
Diluted EPS
$          0.11
 
$          3.30
Inventory step-up and other inventory 
   
   and manufacturing related charges
0.82
 
0.19
Certain claims
0.04
 
0.13
Intangible asset amortization
0.95
 
0.42
Special items
   
   Biomet-merger related
3.05
 
0.24
   Other special items
1.02
 
0.72
Biomet merger-related expenses in other expense                                                
0.18
 
0.12
Interest expense on Biomet merger financing
0.38
 
-
Taxes on above items (2)
(1.77)
 
(0.51)
Adjusted Diluted EPS
$          4.78
 
$          4.61
 
(1)  Reflects certain revisions to correct immaterial misstatements and other out-of-period adjustments.  For additional information, see Exhibit 99.2 to the Company's Form 8-K filed October 29, 2015 and the Company's Form 10-Q to be filed with the Securities and Exchange Commission.
 
(2) The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred.

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