Zimmer Reports Second Quarter 2005 Financial Results
Quarter Highlights
- Net Sales of $847 million represents an increase of 15% (includes 2% increase due to changes in foreign exchange rates)
- 15% Sales increases in all three geographic segments--Americas, Europe and Asia Pacific
- Worldwide Reconstructive Sales increased 16% (includes 2% increase due to changes in foreign exchange rates) with Americas Reconstructive Sales increasing 17%
- Spine and Dental both increased sales in excess of 20%
- Record profit margins--78% gross, 33% operating and 23% net reported; 78% gross, 34% operating and 24% net adjusted*
- Diluted EPS were $0.76 reported, and $0.80 adjusted*, an increase of 38% adjusted* over prior year
- Operating cash flow of $244 million, total debt reduced to $268 million and cash on hand of $95 million, resulting in net debt* of $173 million
- Increasing the Company's 2005 EPS guidance by $0.07 to $2.93 reported and $3.07 adjusted*
(WARSAW, IN) July 27, 2005 -- Zimmer Holdings, Inc. (NYSE and SWX: ZMH) today reported financial results for the quarter ended June 30, 2005. For the quarter, the Company announced net sales of $847 million and diluted earnings per share of $0.76 reported and $0.80 adjusted*, exceeding First Call estimates of $842 million and $0.75 adjusted*, respectively. Reported results include acquisition and integration expenses and inventory step-up, as applicable.
"We had a strong and balanced quarter with 15 percent sales growth in each of our geographic segments and above market performance, with greater than 20 percent growth, in both Spine and Dental," said Ray Elliott, Zimmer Chairman, President and CEO. "Almost a quarter of a billion dollars of operating cash flow this period creates the potential to become net debt free again early in the fourth quarter--only two years from the date of our Centerpulse acquisition."
Zimmer said it continues to be pleased by the product, market and expense synergy opportunities realized as a result of the Centerpulse acquisition. With 2,594 integration milestones complete, the Company is three-quarters of the way through its comprehensive plan and is confident it will exceed $100 million in annual synergy expense savings.
