Latest news with #Paragon28
Yahoo
06-05-2025
- Business
- Yahoo
Zimmer Biomet flags $60m-$80m tariff impact on 2025 profits
Zimmer Biomet has adjusted its 2025 earnings forecast to $7.90-$8.10 per share, down from previous estimates falling between $8.15-$8.35, due to the Trump administration's tariffs. The orthopaedic giant's stock fell by almost 12% after revealing on 5 May that tariffs would contribute to a $60m-$80m drag on its operating profit in 2025. Zimmer elaborated on the revised projections in its Q1 2025 earnings call. During the quarter, the company achieved around $1.9bn in net sales, indicative of a 1.1% increase on a constant currency basis. Zimmer's chief financial officer and finance, operations and supply chain EVP Suketu Upadhyay noted that while the tariff situation 'remains fluid', the company anticipates an impact of a '$60m to $80m' headwind to operating profit in 2025, with the 'majority' of the impact falling in the second half of the year. Upadhyay said: 'This estimate contemplates our latest view of mitigation efforts currently underway and that the announced European reciprocal tariffs will go into effect after the 90-day stay period.' Along with Zimmer's recent $1.2bn acquisition of Paragon 28 earlier this year, due to tariffs, the company anticipates its full-year operating margins to be down by 100 to 150 basis points versus 2024. Upadhyay added: 'I will note that our 2025 impact should not be used as a run rate for 2026 due to a variety of factors, and that our estimate around the impact of tariffs in 2025 could change as the macro environment continues to unfold.' While noting that the majority of its manufacturing is undertaken within the US, Zimmer also has manufacturing sites in the Chinese cities of Jintan and Zhejiang. Trump's tariffs have heavily targeted China, with levies rising since the nation imposed 34% tariffs in response to those Trump announced would come into force on Chinese imports on 9 April. While the president has since stated that levies for goods imported from the country will 'come down substantially' yet 'won't be zero', they remain at 145% for now. To mitigate some of the tariff impact, Upadhyay also shared that Zimmer is optimising 'in our view of country of origin', potentially alluding to a diminishment in its China-based manufacturing activities. Other players in the medtech space are attempting to factor in the impact the Trump administration's current tariff measures may have on their bottom line in 2025. Anticipating that its 2025 revenues may take a hit of around $500m, imaging giant GE HealthCare has downshifted its earnings per share profit to fall within the $3.90-$4.10 per share range, down from previous guidance between $4.61 and $4.75 per share.
Yahoo
06-05-2025
- Business
- Yahoo
ZBH Q1 Earnings Beat, Operating Margin Dips, Stock Down in Premarket
Zimmer Biomet Holdings, Inc. ZBH posted first-quarter 2025 adjusted earnings per share (EPS) of $1.81, which beat the Zacks Consensus Estimate by 2.3%. The adjusted figure, however, declined 6.7% year over year. The quarter's adjustments included certain amortization, restructuring and other cost reduction initiatives, inventory and manufacturing-related charges and European Union Medical Device Regulation-related charges, among others. On a reported basis, the company registered earnings of 91 cents per share, up 8.3% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar). Following the announcement, shares of ZBH edged down 1.8% in pre-market trading today. First-quarter net sales of $1.91 billion increased 1.1% (up 2.3% at constant exchange rate or CER) year over year. The figure exceeded the Zacks Consensus Estimate by 1%. During the first quarter, sales generated in the United States totaled $1.11 billion (up 1.3% year over year), while International sales grossed $795.5 million (up 0.7% year over year and 3.7% at CER). Our model projected first-quarter revenues in the United States to be $1.09 billion and International sales to be $793.8 million. The company currently reports through four product categories — Knees, Hips, S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic) and Technology & Data, Bone Cement and Surgical. Sales in the unit improved 1.9% year over year at CER to $792.9 million. Our model estimate was pegged at $806 million. recorded 2.4% growth in the first quarter at CER to reach $495.8 million. Our model estimate was $486.1 million for the same. Revenues in the unit were up 4.9% year over year at CER to $470.5 million. Our model estimate was $454.1 million. (historically referred to as "Other") revenues decreased 3.5% to $149.9 million at CER in the first quarter. Our model estimate was $146 million. Zimmer Biomet Holdings, Inc. price-consensus-eps-surprise-chart | Zimmer Biomet Holdings, Inc. Quote Adjusted gross margin, after excluding the impact of intangible asset amortization, was 71.2%, reflecting a contraction of 168 basis points (bps) in the first quarter. Selling, general and administrative expenses rose 3.1% to $758.8 million. Research and development expenses rose 2.5% to $110.6 million. Adjusted operating margin contracted 254 bps to 25.7% in the quarter. Zimmer Biomet exited the first quarter with cash and cash equivalents of $1.38 billion compared with $525.5 million at the end of the fourth quarter of 2024. Cumulative net cash provided by operating activities at the end of the first quarter was $382.8 billion compared with $228 billion in the year-ago period. Zimmer Biomet provided its financial guidance for 2025 to include Paragon 28, currency and the impact from current tariff proposals. Reported revenue growth is expected to be in the band of 5.7%-8.2% year over year (earlier guidance was 1%-3.5%). The company currently expects foreign exchange to have an adverse impact of 0%-0.5% on revenues (1.5%-2%). Adjusted EPS for the full year is expected in the range of $7.90-$8.10 ($8.15-$8.35). The Zacks Consensus Estimate for 2025 adjusted EPS is pegged at $8.22 on revenues of $7.88 billion. Zimmer Biomet ended the first quarter of 2025 with earnings and revenues exceeding the respective Zacks Consensus Estimate. However, the year-over-year decline in adjusted earnings was disappointing. The quarter's performance benefited from ZBH's diversified portfolio outside of core orthopedics and the company's strategic investments in attractive, higher-growth segments. Barring the Technology & Data, Bone Cement and Surgical segment, all other business divisions reported year-over-year CER growth. Performance across the geographic regions was solid as well. However, contraction in the operating margins was discouraging. The company is gaining momentum in U.S. Hips, supported by its enhanced portfolio, including the Z1 Triple-Taper Femoral Hip System, HAMMR Automated Impactor and navigation capabilities. Strong early surgeon interest in the new Oxford Cementless Partial Knee positions the business for accelerated growth in the second half of the year. The recent acquisition of Paragon 28 is expected to drive innovation and diversification, expanding the S.E.T. business into the high-growth foot and ankle segment with advanced technologies and a dedicated commercial channel. Zimmer Biomet currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Veeva Systems VEEV and Masimo MASI. AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter fiscal 2025 adjusted EPS of 3 cents in contrast to the Zacks Consensus Estimate of a loss of 13 cents. You can see the complete list of today's Zacks #1 Rank stocks here. Revenues of $72 million beat the Zacks Consensus Estimate by 2%. ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite's 10.5%. The company's earnings beat estimates in each of the trailing four quarters, the average surprise being 70.9%. Veeva Systems, sporting a Zacks Rank #1 at present, posted fourth-quarter fiscal 2025 adjusted EPS of $1.75, which exceeded the Zacks Consensus Estimate by 10.1%. Revenues of $720.9 million surpassed the Zacks Consensus Estimate by 3.2%. VEEV has an estimated long-term earnings growth rate of 26.6% compared with the industry's 20.8%. The company's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.9%. Masimo, currently sporting a Zacks Rank #1, is scheduled to report first-quarter 2025 earnings on May 6. MASI has an estimated earnings yield of 3.5% for fiscal 2025 compared with the industry's 3.6%. The company's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.4%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AngioDynamics, Inc. (ANGO) : Free Stock Analysis Report Masimo Corporation (MASI) : Free Stock Analysis Report Veeva Systems Inc. (VEEV) : Free Stock Analysis Report Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Reuters
05-05-2025
- Business
- Reuters
Zimmer Biomet lowers 2025 profit forecast on acquisition costs, tariff uncertainty
May 5 (Reuters) - Zimmer Biomet Holdings (ZBH.N), opens new tab on Monday lowered its full-year adjusted profit forecast, as the medical device maker anticipates a hit from its recent acquisition of Paragon 28 , currency volatility, and proposed tariffs. Investors and analysts are closely monitoring how medical device makers will handle any impact from the Trump administration's tariffs and whether they expect benefits from foreign currency fluctuations. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. Earlier this year, Zimmer said that it would acquire medical device firm Paragon 28 for $1.1 billion, to expand its portfolio of orthopedic surgical devices. Zimmer expects 2025 adjusted profit per share in the range of $7.90 to $8.10, compared with its prior view of $8.15 to $8.35 per share. Analysts were expecting annual profit of $8.19 per share, according to data compiled by LSEG. The Warsaw, Indiana-based company expects currency swings to have a negligible to marginally positive effect on its 2025 revenue, revising its initial forecast of a 1.5% to 2% negative impact to a range of 0% to 0.5%. Last week, peer Stryker Corp (SYK.N), opens new tab reduced its 2025 profit outlook and said it anticipated a $200 million tariff impact in the year. However, Zimmer's first-quarter profit and revenue both came in slightly above expectations, due to strong demand for its devices used in hip and knee procedures. Combined sales at Zimmer's hips and knees units came in at $1.29 billion, compared to $1.28 billion, a year ago. On an adjusted basis, the company posted a profit of $1.81 per share for the quarter ended March 31, topping estimates of $1.77 per share. Zimmer's first-quarter revenue came in at $1.91 billion, slightly ahead of estimates of $1.90 billion.
Yahoo
05-05-2025
- Business
- Yahoo
Zimmer Biomet lowers 2025 profit forecast on acquisition costs, tariff uncertainty
(Reuters) -Zimmer Biomet Holdings on Monday lowered its full-year adjusted profit forecast, as the medical device maker anticipates a hit from its recent acquisition of Paragon 28, currency volatility, and proposed tariffs. Investors and analysts are closely monitoring how medical device makers will handle any impact from the Trump administration's tariffs and whether they expect benefits from foreign currency fluctuations. Earlier this year, Zimmer said that it would acquire medical device firm Paragon 28 for $1.1 billion, to expand its portfolio of orthopedic surgical devices. Zimmer expects 2025 adjusted profit per share in the range of $7.90 to $8.10, compared with its prior view of $8.15 to $8.35 per share. Analysts were expecting annual profit of $8.19 per share, according to data compiled by LSEG. The Warsaw, Indiana-based company expects currency swings to have a negligible to marginally positive effect on its 2025 revenue, revising its initial forecast of a 1.5% to 2% negative impact to a range of 0% to 0.5%. Last week, peer Stryker Corp reduced its 2025 profit outlook and said it anticipated a $200 million tariff impact in the year. However, Zimmer's first-quarter profit and revenue both came in slightly above expectations, due to strong demand for its devices used in hip and knee procedures. Combined sales at Zimmer's hips and knees units came in at $1.29 billion, compared to $1.28 billion, a year ago. On an adjusted basis, the company posted a profit of $1.81 per share for the quarter ended March 31, topping estimates of $1.77 per share. Zimmer's first-quarter revenue came in at $1.91 billion, slightly ahead of estimates of $1.90 billion. Sign in to access your portfolio
Yahoo
05-05-2025
- Business
- Yahoo
Zimmer Biomet Announces First Quarter 2025 Financial Results
First quarter net sales of $1.909 billion increased 1.1% and 2.3% on a constant currency1 basis First quarter diluted earnings per share were $0.91; adjusted1 diluted earnings per share were $1.81 Company updates full-year 2025 reported revenue guidance to include the Paragon 28 acquisition and currency expectations, and full-year 2025 adjusted1 earnings per share guidance to include Paragon 28, currency and the impact from current tariff proposals WARSAW, Ind., May 5, 2025 /PRNewswire/ -- Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended March 31, 2025. The Company reported first quarter net sales of $1.909 billion, an increase of 1.1% over the prior year period, and an increase of 2.3% on a constant currency1 basis. Net earnings for the first quarter were $182.0 million, or $361.1 million on an adjusted1 basis. Diluted earnings per share were $0.91 for the first quarter, and adjusted1 diluted earnings per share were $1.81.1 Reconciliations of these measures to the corresponding U.S. generally accepted accounting principles measures are included in this press release. "We are proud of our team's continued execution and performance to start the year, as we delivered solid first quarter results and advanced our bold innovation agenda," said Ivan Tornos, Zimmer Biomet's President and Chief Executive Officer. "We're excited about the momentum in U.S. Hips, fueled by our revamped portfolio inclusive of the Z1™ Triple-Taper Femoral Hip System, HAMMR® Automated Hip Surgical Impactor System, as well as navigation capabilities, and believe the early enthusiasm from surgeons for our new Oxford® Cementless Partial Knee positions us well to accelerate growth in the second half of the year. The recently completed acquisition of Paragon 28 is another bold step toward our innovation and diversification ambitions, expanding our S.E.T. business with leading technologies and a dedicated commercial channel in the high-growth foot and ankle segment." Recent Highlights Completed the acquisition of Paragon 28, Inc., a leading medical device company focused exclusively on the foot and ankle orthopedic segment, further strengthening Zimmer Biomet's position in this high-growth space. Showcased a broad portfolio of innovations at the 2025 American Academy of Orthopaedic Surgeons (AAOS) annual meeting, including a comprehensive hip portfolio anchored by the new Z1™ Triple-Taper Femoral Hip System, along with the latest technologies for knee and upper extremity reconstruction and key robotic solutions. In addition, Zimmer Biomet debuted ZBX™, its new Ambulatory Surgery Center (ASC) offering to surgeons and institutions looking to expand their orthopedic footprint. Received U.S. Food and Drug Administration (FDA) 510(k) clearance of Persona® Revision SoluTion™ Femur, a revision knee implant component offering an alternative for patients with sensitivities to certain metals. The product will be commercially available in the U.S. in Q3 2025. Launched the You'll Be Back Campaign with Chief Movement Officer Arnold Schwarzenegger, providing millions of people living with joint pain with an online community that empowers them with resources to make informed choices about their mobility. Announced upcoming changes to Zimmer Biomet's Board of Directors, effective at the Company's annual meeting of stockholders on May 29, 2025, including the retirement of Non-Executive Chairman Christopher Begley; the appointment of President and CEO Ivan Tornos as Chairman of the Board upon Mr. Begley's retirement; and the naming of Michael Farrell as Lead Independent Director upon Mr. Begley's retirement. Appointed Jehanzeb Noor as Senior Vice President, Chief Strategy, Innovation and Business Development Officer, and Kristen Cardillo as Senior Vice President, Chief Communications Officer, to the Zimmer Biomet Executive Leadership Team. Named one of the 2025 World's Most Ethical Companies® by Ethisphere. Geographic and Product Category Sales The following sales table provides results by geography and product category for the three-month period ended March 31, 2025, as well as the percentage change compared to the applicable prior year period, on both a reported basis and a constant currency basis. NET SALES - THREE MONTHS ENDED MARCH 31, 2025 (in millions, unaudited) ConstantNet CurrencySales % Change% Change Geographic Results United States $ 1,113.61.3% 1.3% International795.50.7 3.7 Total $ 1,909.11.1% 2.3% Product Categories Knees United States $ 459.00.2% 0.2% International333.91.2 4.2 Total792.90.6 1.9 Hips United States264.33.7 3.7 International231.5(2.0) 1.0 Total495.80.9 2.4 S.E.T. *470.53.9 4.9 Technology & Data, Bone Cement and Surgical **149.9(4.7) (3.5) Total $ 1,909.11.1% 2.3%* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic ** Historically referred to as "Other" Amounts reported in millions are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Percentages presented are calculated from the underlying unrounded amounts. Financial Guidance The Company is updating its full-year 2025 reported revenue guidance to include the Paragon 28, Inc. ("Paragon 28") acquisition and currency expectations, and full-year 2025 adjusted earnings per share guidance to include Paragon 28, currency and the impact from current tariff proposals: Projected Year Ending December 31, 2025 Previous Guidance Updated Guidance 2025 Reported Revenue Change 1.0% - 3.5% 5.7% - 8.2% Foreign Currency Exchange Impact (2.0)% - (1.5)% 0.0% - 0.5% 2025 Constant Currency Revenue Change N/A 5.7% - 7.7% 2025 Organic Constant Currency Revenue Change(1) 3.0% - 5.0% 3.0% - 5.0% Adjusted Diluted EPS(2) $8.15 - $8.35 $7.90 - $8.10(1) Excludes the projected impact of the Paragon 28 acquisition. Reconciliation of this measure to the most directly comparable GAAP financial measure is included in this press release. (2) These measures are non-GAAP financial measures for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See "Forward-Looking Non-GAAP Financial Measures" below, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures. Conference Call The Company will conduct its first quarter investor conference call today, May 5, 2025, at 8:30 a.m. ET. The audio webcast can be accessed via Zimmer Biomet's Investor Relations website at It will be archived for replay following the conference call. About the Company Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation. For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit or follow on LinkedIn at or X / Twitter at Website Information We routinely post important information for investors on our website, in the "Investor Relations" section. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website or any other website referenced herein is not incorporated by reference into, and is not a part of, this document. Note on Non-GAAP Financial Measures This press release and our commentary in our investor conference call today include non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP. Net sales change information for the three-month period ended March 31, 2025 is presented on a GAAP (reported) basis and on a constant currency basis. Projected net sales change information for the year ended December 31, 2025, is also presented on an organic constant currency basis. Constant currency percentage changes exclude the effects of foreign currency exchange rates. They are calculated by translating current and prior-period sales at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases. In addition to excluding the projected effects of foreign currency exchange rates, projected 2025 organic constant currency revenue change also excludes the projected impact on net sales from the April 2025 acquisition of Paragon 28. Net earnings and diluted earnings per share for the three-month periods ended March 31, 2025 and 2024 are presented on a GAAP (reported) basis and on an adjusted basis. These adjusted financial measures exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in the press release. Free cash flow is an additional non-GAAP measure that is presented in this press release. Free cash flow is computed by deducting additions to instruments and other property, plant and equipment from net cash provided by operating activities. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release. This press release also contains supplemental reconciliations of additional non-GAAP financial measures that the Company presents in other contexts. These additional non-GAAP financial measures are computed from the most directly comparable GAAP financial measure as indicated in the applicable reconciliation. Management uses non-GAAP financial measures internally to evaluate the performance of the business. Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company. Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations. The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures. In addition, constant currency revenue, adjusted operating profit, adjusted diluted earnings per share and free cash flow are used as performance metrics in our incentive compensation programs. Forward-Looking Non-GAAP Financial Measures This press release and our commentary in our investor conference call today also include certain forward-looking non-GAAP financial measures for the year ending December 31, 2025. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of certain charges related to initial compliance with the European Union Medical Device Regulation; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; and certain legal and tax matters. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management's plans may change. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial guidance, statements regarding macro pressures, including the impact of such pressures on our business, and any statements about our forecasts, expectations, plans, intentions, strategies or prospects. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: competition; pricing pressures; dependence on new product development, technological advances and innovation; changes in customer demand for our products and services caused by demographic changes, obsolescence, development of different therapies or other factors; our ability to attract, retain, develop and maintain adequate succession plans for the highly skilled employees, senior management, independent agents and distributors we need to support our business; shifts in the product category or regional sales mix of our products and services; the risks and uncertainties related to our ability to successfully execute our restructuring plans; control of costs and expenses; risks related to the ability to realize the anticipated benefits of the acquisition of Paragon 28, including the possibility that the expected benefits from the transaction will not be realized or will not be realized within the expected time period; the risk that the businesses of Paragon 28 will not be integrated successfully; disruption from the proposed transaction making it more difficult to maintain business and operational relationships, including with customers, vendors, service providers, independent sales representatives, agents or agencies; the effects of business disruptions affecting us, our suppliers, customers or payors, either alone or in combination with other risks on our business and operations; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management's attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; unplanned delays, disruptions and expenses attributable to our enterprise resource planning and other system updates; the ability to form and implement alliances; dependence on a limited number of suppliers for key raw materials and other inputs and for outsourced activities; the risk of disruptions in the supply of materials and components used in manufacturing or sterilizing our products; breaches or failures of our (or of our business partners' or other third parties') information technology systems or products, including by cyberattack, unauthorized access or theft; the outcome of government investigations; the impact of healthcare reform and cost containment measures, including efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, through reductions in reimbursement levels, repayment demands and otherwise; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; changes in tax obligations arising from examinations by tax authorities and from changes in tax laws in jurisdictions where we do business, including as a result of the "base erosion and profit shifting" project undertaken by the Organisation for Economic Co-operation and Development and otherwise; challenges to the tax-free nature of the ZimVie Inc. spinoff transaction and the subsequent liquidation of our retained interest in ZimVie Inc.; the risk of additional tax liability due to the recategorization of our independent agents and distributors to employees; changes in tariffs relating to imports to the U.S. and other countries; the risk that material impairment of the carrying value of our intangible assets, including goodwill, could negatively affect our operating results; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; changes in general industry and market conditions, including domestic and international growth, inflation and currency exchange rates; the domestic and international business impact of political, social and economic instability, tariffs, trade restrictions and embargoes, sanctions, wars, disputes and other conflicts, including on our ability to operate in, export from or collect accounts receivable in affected countries; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration ("FDA") and other government regulators relating to medical products, healthcare fraud and abuse laws and data privacy and cybersecurity laws; the success of our quality and operational excellence initiatives; the ability to remediate matters identified in inspectional observations issued by the FDA and other regulators, while continuing to satisfy the demand for our products; product liability, intellectual property and commercial litigation losses; and the ability to obtain and maintain adequate intellectual property protection. A further list and description of these risks and uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2024, including in the sections captioned "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors," and our subsequent filings with the Securities and Exchange Commission (SEC). Copies of these filings are available online at or on request from us. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this press release are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary note is applicable to all forward-looking statements contained in this press release. Note: Amounts reported in millions within this press release are computed based on the actual amounts. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts. ZIMMER BIOMET HOLDINGS, CONSOLIDATED STATEMENTS OF EARNINGSFOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024(in millions, except per share amounts, unaudited) 2025 2024Net Sales $ 1,909.1 $ 1,889.2Cost of products sold, excluding intangible asset amortization549.8512.3Intangible asset amortization151.0142.1Research and development110.6107.9Selling, general and administrative758.8736.2Restructuring and other cost reduction initiatives36.0124.4Acquisition, integration, divestiture and related10.60.4Operating expenses1,616.81,623.3Operating Profit292.3265.9Other income (expense), net2.9(0.1)Interest expense, net(66.2)(50.7)Earnings before income taxes229.0215.1Provision for income taxes46.542.3Net Earnings182.6172.8Less: Net earnings attributable to noncontrolling interest0.60.4Net Earnings of Zimmer Biomet Holdings, Inc. $ 182.0 $ 172.4Earnings Per Common ShareBasic $ 0.92 $ 0.84Diluted $ 0.91 $ 0.84Weighted Average Common Shares OutstandingBasic198.9205.2Diluted199.7206.2 ZIMMER BIOMET HOLDINGS, CONSOLIDATED BALANCE SHEETS(in millions, unaudited)March 31, December 31,2025 2024Assets Cash and cash equivalents$ 1,384.5 $ 525.5Receivables, net 1,533.41,480.7Inventories 2,244.22,235.3Other current assets 428.2430.1Total current assets 5,590.24,671.5Property, plant and equipment, net 2,064.92,048.8Goodwill 8,988.68,951.1Intangible assets, net 4,468.04,598.4Other assets 1,072.11,095.5Total Assets$ 22,183.9 $ 21,365.3Liabilities and Stockholders' Equity Current liabilities$ 1,695.0 $ 1,587.9Current portion of long-term debt 600.0863.0Other long-term liabilities 908.91,096.6Long-term debt 6,576.35,341.6Stockholders' equity 12,403.812,476.2Total Liabilities and Stockholders' Equity$ 22,183.9 $ 21,365.3 ZIMMER BIOMET HOLDINGS, CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024(in millions, unaudited) 2025 2024Cash flows provided by (used in) operating activities Net earnings$ 182.6 $ 172.8Depreciation and amortization 254.4238.6Share-based compensation 19.629.0Changes in operating assets and liabilities, net of acquired assets and liabilities Income taxes (15.6)(8.6)Receivables (18.8)(22.7)Inventories (3.0)(55.3)Accounts payable and accrued liabilities (36.4)(119.4)Other assets and liabilities (0.1)(6.4)Net cash provided by operating activities 382.8228.0Cash flows provided by (used in) investing activities Additions to instruments (59.7)(82.0)Additions to other property, plant and equipment (44.6)(55.1)Net investment hedge settlements 1.010.2Acquisition of intangible assets (2.4)(43.3)Other investing activities (0.3)(24.8)Net cash used in investing activities (106.0)(195.0)Cash flows provided by (used in) financing activities Net payments on revolving facilities -70.0Proceeds from senior notes 1,748.1-Redemption of senior notes (863.0)-Dividends paid to stockholders (47.8)(49.4)Proceeds from employee stock compensation plans 16.756.4Business combination contingent consideration payments (17.4)(1.5)Debt issuance costs (16.1)-Deferred business combination payments -(1.5)Repurchase of common stock (229.8)(113.6)Other financing activities (15.2)(10.5)Net cash provided by (used in) financing activities 575.4(50.1)Effect of exchange rates on cash and cash equivalents 7.0(5.7)Change in cash and cash equivalents 859.1(22.7)Cash and cash equivalents, beginning of year 525.5415.8Cash and cash equivalents, end of period$ 1,384.5 $ 393.0 ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF REPORTED NET SALES % CHANGE TO CONSTANT CURRENCY % CHANGE (unaudited)For the Three Months EndedMarch 31, 2025 vs. 2024ForeignConstantExchangeCurrency% ChangeImpact% Change Geographic ResultsUnited States1.3% -% 1.3% International0.7 (3.0) 3.7 Total1.1% (1.2)% 2.3% Product CategoriesKneesUnited States0.2% -% 0.2% International1.2 (3.0) 4.2 Total0.6 (1.3) 1.9 HipsUnited States3.7 - 3.7 International(2.0) (3.0) 1.0 Total0.9 (1.5) 2.4 S.E.T.3.9 (1.0) 4.9 Technology & Data, Bone Cement and Surgical(4.7) (1.2) (3.5) Total1.1% (1.2)... % 2.3% ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF PROJECTED FULL-YEAR 2025 REPORTED REVENUE CHANGE TO ORGANIC CONSTANT CURRENCY REVENUE CHANGE (unaudited)Projected Full-year 2025Reported revenue change 5.7 - 8.2 % Less: Foreign currency exchange impact 0.0 - 0.5Less: Paragon 28 2.7Organic constant currency revenue change 3.0 - 5.0 % ZIMMER BIOMET HOLDINGS, OF REPORTED TO ADJUSTED RESULTSFOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024(in millions, except per share amounts, unaudited)FOR THE THREE MONTHS ENDED MARCH 31, 2025Cost of products sold, excluding intangible asset amortization Intangible asset amortization Research and development Restructuring and other cost reduction initiatives Acquisition, integration, divestiture and related Interest expense, net Provision for income taxes Net Earnings of Zimmer Biomet Holdings, Inc. Diluted earnings per common shareAs Reported$ 549.8 $ 151.0 $ 110.6 $ 36.0 $ 10.6 $ (66.2) $ 46.5 $ 182.0 $ 0.91Inventory and manufacturing-related charges(1) (6.2)-----2.14.10.02Intangible asset amortization(2) -(151.0)----28.2122.80.61Restructuring and other cost reduction initiatives(3) ---(36.0)--7.228.80.14Acquisition, integration, divestiture and related(4) ----(10.6)-1.98.70.04European Union Medical Device Regulation(5) --(4.4)---0.93.50.02Other charges(6) -----4.82.72.10.01Other certain tax adjustments(7) ------(9.2)9.20.05As Adjusted$ 543.6 $ - $ 106.2 $ - $ - $ (61.4) $ 80.3 $ 361.2 $ 1.81 FOR THE THREE MONTHS ENDED MARCH 31, 2024Cost of products sold, excluding intangible asset amortization Intangible asset amortization Research and development Selling, general and administrative Restructuring and other cost reduction initiatives Acquisition, integration, divestiture and related Other income (expense), net Provision for income taxes Net Earnings of Zimmer Biomet Holdings, Inc. Diluted earnings per common shareAs Reported$ 512.3 $ 142.1 $ 107.9 $ 736.2 $ 124.4 $ 0.4 $ (0.1) $ 42.3 $ 172.4 $ 0.84Inventory and manufacturing-related charges(1) (1.1)------0.80.3-Intangible asset amortization(2) -(142.1)-----27.8114.30.55Restructuring and other cost reduction initiatives(3) ----(124.4)--27.896.60.47Acquisition, integration, divestiture and related(4) -----(0.4)-0.4--European Union Medical Device Regulation(5) --(5.7)----1.34.40.02Other charges(6) ---0.2--2.30.51.60.01Other certain tax adjustments(7) -------(10.0)10.00.05As Adjusted$ 511.2 $ - $ 102.2 $ 736.4 $ - $ - $ 2.1 $ 90.9 $ 399.7 $ 1.94(1) Inventory and manufacturing-related charges include excess and obsolete inventory charges on certain product lines we intend to discontinue, the acceleration of depreciation and fixed overhead costs expensed immediately related to a manufacturing plant shutdown, and other inventory and manufacturing-related charges or gains. (2) We exclude intangible asset amortization as well as deferred tax rate changes on our intangible assets from our non-GAAP financial measures because we internally assess our performance against our peers without this amortization. Due to various levels of acquisitions among our peers, intangible asset amortization can vary significantly from company to company. (3) In December 2019, 2021 and 2023, and in February 2025, we initiated global restructuring programs that included a reorganization of key businesses and an overall effort to reduce costs in order to accelerate decision-making, focus the organization on priorities to drive growth and, in the case of the December 2021 program, to prepare for the spinoff of ZimVie, Inc. ("ZimVie"). Restructuring and other cost reduction initiatives also include other cost reduction and optimization initiatives that have the goal of reducing costs across the organization. The costs include employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as consulting fees, project management expenses, retention period salaries and benefits and relocation costs. (4) The acquisition, integration, divestiture and related gains and expenses we have excluded from our non-GAAP financial measures resulted from various acquisitions, post-separation costs we have incurred related to ZimVie and gains related to a transition services agreement for services we provide to ZimVie and a transition manufacturing and supply agreement for products we supply to ZimVie for a limited period. (5) The European Union Medical Device Regulation imposes significant additional premarket and postmarket requirements. The new regulations provided a transition period until May 2021 for previously-approved medical devices to meet the additional requirements. For certain devices, this transition period was extended until May 2024. A conditional extension of the transition period has been implemented until December 2027 and 2028 depending on the legacy medical device's risk class. We are excluding from our non-GAAP financial measures the incremental costs incurred to establish initial compliance with the regulations related to our previously-approved medical devices. The incremental costs primarily relate to temporary personnel and third-party professionals necessary to supplement our internal resources. (6) We have incurred other various expenses from specific events or projects that we consider highly variable or that have a significant impact to our operating results that we have excluded from our non-GAAP measures. These include gains and losses from changes in fair value on our equity investments, among other various costs. In addition, in February 2025 we issued senior notes in order to have the necessary cash-on-hand to acquire Paragon 28 once regulatory approval was received. We have excluded from our non-GAAP financial measures the interest on this debt related to the principal amount of the estimated purchase price and acquisition-related costs. (7) Other certain tax adjustments are related to certain significant and discrete tax adjustments including intercompany transactions between jurisdictions, ongoing impacts of tax only amortization resulting from certain restructuring transactions and impacts of significant tax reform including Swiss reform. ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024 (in millions, unaudited)Three Months Ended March 31,2025 2024 Net cash provided by operating activities $ 382.8 $ 228.0 Additions to instruments(59.7)(82.0) Additions to other property, plant and equipment(44.6)(55.1) Free cash flow $ 278.5 $ 90.9 ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF GROSS PROFIT & MARGIN TO ADJUSTED GROSS PROFIT & MARGIN FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024 (in millions, unaudited)Three Months Ended March 31,2025 2024 Net Sales $ 1,909.1 $ 1,889.2 Cost of products sold, excluding intangible asset amortization549.8512.3 Intangible asset amortization151.0142.1 Gross Profit $ 1,208.3 $ 1,234.8Inventory and manufacturing-related charges6.21.1 Intangible asset amortization151.0142.1 Adjusted gross profit $ 1,365.5 $ 1,378.0 Gross margin63.3%65.4% Inventory and manufacturing-related charges0.30.1 Intangible asset amortization7.97.5 Adjusted gross margin71.5%72.9% ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF OPERATING PROFIT & MARGIN TO ADJUSTED OPERATING PROFIT & MARGIN FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024 (in millions, unaudited)Three Months Ended March 31,2025 2024 Operating profit $ 292.3 $ 265.9 Inventory and manufacturing-related charges6.21.1 Intangible asset amortization151.0142.1 Restructuring and other cost reduction initiatives36.0124.4 Acquisition, integration, divestiture and related10.60.4 European Union Medical Device Regulation4.45.7 Other charges-(0.2) Adjusted operating profit $ 500.5 $ 539.4 Operating profit margin15.3%14.1% Inventory and manufacturing-related charges0.30.1 Intangible asset amortization7.97.5 Restructuring and other cost reduction initiatives1.96.6 Acquisition, integration, divestiture and related0.6- European Union Medical Device Regulation0.20.3 Adjusted operating profit margin26.2%28.6% ZIMMER BIOMET HOLDINGS, INC. RECONCILIATION OF EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024 (unaudited)Three Months Ended March 31,2025 2024 Effective tax rate20.3%19.7% Tax effect of adjustments made to earnings before taxes(1)1.93.4 Other certain tax adjustments (2)(4.0)(4.6) Adjusted effective tax rate18.2%18.5%(1) Includes inventory and manufacturing-related charges; intangible asset amortization; restructuring and other cost reduction initiatives; acquisition, integration, divestiture and related; litigation; European Union Medical Device Regulation; and other charges (2) Other certain tax adjustments are related to certain significant and discrete tax adjustments including intercompany transactions between jurisdictions, ongoing impacts of tax only amortization resulting from certain restructuring transactions, and impacts of significant tax reform including Swiss reform. ZIMMER BIOMET HOLDINGS, OF DEBT TO NET DEBTAS OF MARCH 31, 2025 and DECEMBER 31, 2024(in millions, unaudited) March 31, 2025 December 31, 2024Debt, both current and long-term $ 7,176.3 $ 6,204.6Cash and cash equivalents(1,384.5)(525.5)Net debt $ 5,791.8 $ 5,679.1 Media Investors Heather Zoumas-Lubeski David DeMartino (445) 248-0577 (646) 531-6115 Weiner(908) View original content to download multimedia: SOURCE Zimmer Biomet Holdings, Inc.
