Zimmer Reports Second Quarter 2007 Financial Results

 

  • Net Sales of $971 million represents an increase of 10% reported (8% constant currency) 
  • Worldwide Reconstructive Sales increased 11% reported (9% constant currency) and Asia Pacific Sales increased 11% reported (10% constant currency) 
  • Zimmer Dental Sales increased 22% reported (19% constant currency) and  Extremities Sales increased 35% reported (33% constant currency) 
  • Diluted EPS were $0.97 reported and $0.98 adjusted, increases of 20% and 18%, respectively, over prior year period 
  • Company reaffirms third and fourth quarter sales and adjusted earnings per share guidance

 

(WARSAW, IN)  July 25, 2007 -- Zimmer Holdings, Inc. (NYSE and SWX: ZMH) today reported financial results for the quarter ended June 30, 2007.   For the quarter, the Company announced net sales of $971 million, an increase of 10% reported and 8% constant currency over the prior year period.  Diluted earnings per share for the quarter were $0.97 reported and $0.98 adjusted, an increase of 20% reported and 18% adjusted and in line with First Call consensus estimates.

“This was a solid quarter for Zimmer and we are pleased that we achieved double digit sales growth in our Asia Pacific geographic segment, our Americas and Asia Pacific reconstructive categories, and our extremities and dental businesses,” said David Dvorak, Zimmer Holdings President and CEO.  “We are continuing to execute on our Enable, Innovate and Grow strategic initiatives to build on our leadership in the reconstructive area and to accelerate growth in our other business units.”

The Company said it is continuing to roll out its Zimmer® Gender Solutions™ Knee and that the product is being well received by surgeons and their patients.  Second quarter sales significantly increased from the first quarter, even though distribution of the product thus far has been largely focused on existing Zimmer accounts in the U.S.  Now that most Zimmer accounts have been addressed, the Company said it will concentrate its efforts on increasing U.S. market share while expanding availability in Europe and Asia Pacific. 

The Gender Solutions Knee design is part of the NexGen® Complete Knee Solution, the Company’s flagship knee brand.  The Company said that more than 1,000,000 NexGen knees have been implanted in the U.S. alone since the system was first introduced.

“The Gender Solutions Knee was the first product designed to address the specific differences between female and male knee anatomy,” said Dvorak.  “This concept and the science behind it clearly resonate with patients and surgeons.  We are moving forward with our program to apply the same thinking to our hip replacement products and have released our Zimmer® Gender Solutions™ M/L Taper Stem with Kinectiv TM Technology to the product’s developing surgeons.  The first procedures were performed in April and we are now gradually ramping up availability.  Additionally, we are continuing our drive toward the 2008 release of the Zimmer Gender Solutions VerSys® Epoch® Hip Prosthesis.”

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Note on Non-GAAP Financial Measures

As used in this press release, the term “adjusted” refers to operating performance measures that exclude acquisition, integration and other expenses. The term “constant currency” refers to any financial measure that excludes the effect of changes in foreign currency exchange rates.  Reconciliations of these non-GAAP measures to the most directly comparable GAAP measure are included in this press release. 

 

ZimmerSafeHarbor Statement

This press release contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 based on current expectations, estimates, forecasts and projections about the orthopaedics industry, management's beliefs and assumptions made by management. Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” and “seeks” or the negative of such terms or other variations on such terms or comparable terminology. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, our ability to successfully integrate acquired businesses, the outcome of the Department of Justice investigations announced in March 2005 and June 2006, price and product competition, rapid technological development, demographic changes, dependence on new product development, the mix of our products and services, supply and prices of raw materials and products, customer demand for our products and services, control of costs and expenses, our ability to form and implement alliances, international growth, governmental laws and regulations affecting our U.S. and international businesses, including tax obligations and risks, product liability and intellectual property litigation losses, reimbursement levels from third-party payors, general industry and market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations.  For a further list and description of such risks and uncertainties, see our periodic reports filed with the U.S. Securities and Exchange Commission.  We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be set forth in our periodic reports.   Readers of this document are cautioned not to place undue reliance on these forward-looking statements, since, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in this document.

Contact

Media
Brad Bishop
574-372-4291
bradley.bishop@zimmer.com

Investor Relations
James T. Crines
574-372-4264
james.crines@zimmer.com

Sean O'Hara
574-371-8032
sean.f.ohara@zimmer.com