Replies to post #82583 on Biotech Values

[DewDiligence]

ZMH Reports 2Q09 Results

[ZMH and SYK are almost clones, so the annotations and hyperlinks in the immediately preceding post about SYK’s 2Q09 results apply almost equally well here. The two companies have similar proportions of sales ex-US and are similarly affected by currency swings. Their outlooks for the rest of 2009 are almost identical. The main difference between the two companies is that orthopedic implants comprise ~75% of ZMH’s sales vs ~60% of STK’s, which makes ZMH a “purer” play in orthopedics. (ZMH has a smattering of small business units that make up the other 25% of sales.) This PR is from July and I omitted the financial tables.]

http://finance.yahoo.com/news/Zimmer-Holdings-Inc-Reports-prnews-3336931499.html?x=0&.v=1

›- Net Sales of $1.02 billion represents a decrease of 5.5% reported (0.6% constant currency)

- Diluted EPS for the second quarter were $0.98 reported, a decrease of 1.0% from the prior year period, and $1.00 adjusted, a decrease of 2.9% from the prior year period

- Reaffirms full-year sales and adjusted EPS guidance

Thursday July 23, 2009, 7:00 am EDT

WARSAW, Ind., July 23 /PRNewswire-FirstCall/ -- Zimmer Holdings, Inc. (NYSE and SWX: ZMH ) today reported financial results for the quarter ended June 30, 2009. The Company reported second quarter net sales of $1.02 billion, a decrease of 5.5% reported and 0.6% constant currency from the second quarter of 2008. Diluted earnings per share for the quarter were $0.98 reported and $1.00 adjusted, a decrease of 2.9% adjusted from the prior year period.

"Our second quarter results provide further evidence that we are successfully stabilizing our business and making progress toward restoring positive momentum," said David Dvorak, Zimmer President and CEO. "We achieved sequential improvement in revenue on a day-rate basis for the quarter in six of our seven product categories, including Knees and Hips. We are once again reaffirming our 2009 sales and earnings guidance."

Net earnings for the second quarter were $210.1 million on a reported basis and $215.5 million on an adjusted basis, a decrease of 9.0% adjusted from the prior year period. Operating cash flow for the second quarter was $195.1 million. Net earnings for the first six months of 2009 were $412.3 million on a reported basis and $425.5 million on an adjusted basis, a decrease of 11.6% adjusted from the prior year period.

During the quarter, the Company utilized $36 million of cash to acquire 0.8 million shares under its $1.25 billion repurchase program. At the end of the quarter, $797 million of share repurchase authorization remained available under this program, which expires on December 31, 2009.

Guidance

The Company reaffirmed its full year 2009 sales and earnings guidance. Full year revenues for 2009 are expected to increase between 1% and 3% on a constant currency basis. Assuming foreign currency exchange rates remain consistent with current levels, the Company estimates that foreign currency translation will reduce revenue for 2009 by approximately 2.5%. Full year 2009 adjusted diluted earnings per share are projected to be in a range of $3.85 to $4.00.

Conference Call

The Company will conduct its second quarter 2009 investor conference call today, July 23, 2009, at 8:00 a.m. Eastern Time. The live audio webcast can be accessed via Zimmer's Investor Relations website at http://investor.zimmer.com. It will be archived for replay following the conference.

Individuals who wish to dial into the conference call may do so at [phone]. International callers should dial [phone]. A digital recording will be available two hours after the completion of the conference call from July 23, 2009 to August 6, 2009. To access the recording, U.S./Canada callers should dial [phone], and International callers should dial [phone], and enter the Conference ID, 16739971. A copy of this press release and other financial and statistical information about the periods to be presented in the conference call will be accessible through the Zimmer website at http://investor.zimmer.com.

Sales Tables [omitted—see actual PR]

The following tables provide sales results by geographic segment and product category, as well as the percentage change compared to the prior year quarter and six months on both a reported and constant currency basis. Beginning in 2009, the Company's Dental product category sales are no longer included within its Reconstructive products category. Prior year amounts related to Dental product category sales have been reclassified to conform to the 2009 presentation.‹