WESTMINSTER, Colo., March 01, 2023 (GLOBE NEWSWIRE) — ZimVie Inc. (Nasdaq: ZIMV), a global life sciences leader in the dental and spine markets, today reported financial results for the fourth quarter and full year ended December 31, 2022. Management will host a corresponding conference call today, March 1, 2023, at 4:30 p.m. Eastern Time.
“Our team has been diligently focused on accelerating independence from our prior parent, and despite a difficult macroenvironment, we launched several innovative products and drove significant operational progress in our first year as a company. We remain focused on innovating around our core platforms and driving adoption of our clinically differentiated solutions,” said Vafa Jamali, President and Chief Executive Officer of ZimVie.
Recent Business Highlights
- Launched T3® PRO Tapered Implant, Next-Generation TSX™ Implant, and Encode® Emergence Healing Abutment designed to optimize restorative care and aesthetics
- Launched RealGUIDE™ CAD and FULL SUITE software modules enhancing digital dentistry platform
- Surpassed 200,000 Mobi-C implants worldwide
- Received positive policy decision from Highmark applicable to The Tether™, ZimVie’s differentiated, non-fusion spinal device for the treatment of idiopathic scoliosis, expanding coverage to 4+ million lives and following a positive policy decision from Anthem in mid-2022
- Signed a partnership and global development agreement with Brainlab AG. to integrate minimally invasive Vital™ and Virage™ systems and Brainlab AG.’s industry leading portfolio of spine imaging, planning, navigation, and robotic assisted solutions
Recent Operational Highlights
- Successfully completed 3 ERP conversions
- Refreshed core IT systems, including successful transition of over 230 applications
- Exited, downsized, or transformed 5 facilities worldwide
- Reduced excess inventory to improve cash on hand
- Paid all 2023 debt principal payments in advance as part of ongoing initiative to reduce leverage
Fourth Quarter 2022 Financial Results
Third party net sales for the fourth quarter of 2022 were $228.2 million, a decrease of (12.4%) on a reported basis and (9.1%) on a constant currency[1] basis, versus the fourth quarter of 2021. Third party dental segment net sales of $115.8 million decreased by ($9.6) million, or (7.6%) on a reported basis and (2.9%) on a constant currency[1] basis, driven by a general slowdown of customer purchases due to macroeconomic pressures and in anticipation of volume-based procurement (“VBP”) in China. Third party spine segment net sales of $112.3 million decreased by ($22.9) million, or (16.9%) on a reported basis and (14.8%) in constant currency[1], driven by the exit of a number of unprofitable markets in late 2021, the discontinuation of certain products and brands, a slowdown of customer purchases in China in anticipation of VBP, operational disruptions resulting from an ERP implementation, other IT systems projects, and continued competitive pressures in the spine market. Both segments were unfavorably impacted by one less selling day in the fourth quarter of 2022.
Net loss for the fourth quarter of 2022 was ($30.3) million, a decrease of $30.3 million versus the net loss of ($60.7) million in the fourth quarter of 2021, and as a percentage of third-party net sales was (13.3%). The decrease in net loss was primarily due to prior year brand rationalization charges that did not recur, lower inventory charges and lower SG&A costs due to lower variable selling costs on lower net sales as well as cost savings initiatives, partially offset by the net loss impact associated with the revenue declines noted above. Adjusted net income[1] for the fourth quarter of 2022 was $4.3 million, an increase of $13.6 million versus the same prior year period.
Basic and diluted EPS were ($1.16) and adjusted diluted EPS[1] was $0.16 for the fourth quarter of 2022. Weighted average shares outstanding for basic and diluted EPS was 26.1 million.
Adjusted EBITDA[1] for the fourth quarter of 2022 was $28.1 million, or 12.3%, a 70 basis point increase from the fourth quarter of 2021.
Cash and cash equivalents at the end of the fourth quarter of 2022 were $89.6 million and reflect the advanced payment in 2022 of the 2023 required principal payments under our credit agreement.
Full Year 2022 Financial Results
Third party net sales for the full year 2022 were $909.5 million, a decrease of (9.8%) on a reported basis and (6.8%) on a constant currency[1] basis, versus the full year 2021. Third party dental segment net sales of $459.7 million decreased by ($8.8) million, or (1.9%) on a reported basis but increased 2.6% on a constant currency[1] basis. Third party spine segment net sales of $449.8 million decreased by ($90.5) million, or (16.8%) on a reported basis and (14.9%) on a constant currency[1] basis, driven by the exit of a number of unprofitable markets in late 2021, the discontinuation of certain products and brands, the impact of the third party net sales retained by Zimmer Biomet Holdings, Inc. (“Zimmer Biomet”) until we completed our separation activities in certain markets at the end of the third quarter of 2022, distributor bulk orders in the first quarter of 2021 that did not recur, the surge in COVID-19 cases in the first half of 2022 related to the Omicron variant, a slowdown of customer purchases in China in anticipation of VBP, operational disruptions resulting from an ERP implementation and other IT systems projects, continued competitive pressures in the spine market and changes in foreign currency exchange rates.
Net loss for the full year 2022 was ($63.9) million, a decrease of $31.4 million versus the net loss of ($95.3) million in the full year 2021, and as a percentage of third-party net sales was (7.0%). The decrease in net loss was primarily due to prior year brand rationalization charges that did not recur, lower inventory charges and lower SG&A costs due to lower variable selling costs on lower net sales as well as cost savings initiatives, partially offset by the decline in spine third party net sales. Adjusted net income[1] for the full year 2022 was $47.9 million, an increase of $10.8 million versus the prior year.
Basic and diluted EPS were ($2.45) and adjusted diluted EPS[1] was $1.84 for the full year 2022. Weighted average shares outstanding for basic EPS and diluted EPS was 26.1 million.
Adjusted EBITDA[1] for the full year 2022 was $122.5 million, or 13.5% of third-party net sales, a decrease of ($9.1) million but an expansion of 50 basis points from 13.0% in 2021.
Full Year 2023 Financial Guidance:
[1] This is a non-GAAP financial measure. Refer to “Note on Non-GAAP Financial Measures” and the reconciliations in this release for further information.
[2] This is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. Refer to “Forward-Looking Non-GAAP Financial Measures” in this release, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.
Financial Information
The financial information included in this release for periods prior to March 1, 2022 is derived from the financial statements and records of the dental and spine businesses of Zimmer Biomet due to the fact that during such periods, ZimVie was still a wholly-owned subsidiary of, and operated under those businesses of, Zimmer Biomet.
Conference Call
ZimVie will host a conference call today, March 1, 2023, at 4:30 p.m. ET to discuss its fourth quarter and full-year 2022 financial results. To access the call, please register online at https://investor.zimvie.com/events-presentations/event-calendar. A live and archived audio webcast will also be available on this site.
About ZimVie
ZimVie is a global life sciences leader in the dental and spine markets that develops, manufactures, and delivers a comprehensive portfolio of products and solutions designed to support dental tooth replacement and restoration procedures and treat a wide range of spine pathologies. In March 2022 the company became an independent, publicly traded spin-off of the dental and spine business units of Zimmer Biomet to breathe new life, dedicated energy, and strategic focus to its portfolio of trusted brands and products. From its headquarters in Westminster, Colorado, and additional facilities around the globe, the company serves customers in over 70 countries worldwide with a robust offering of dental and spine solutions including differentiated product platforms supported by extensive clinical evidence. For more information about ZimVie, please visit us at www.ZimVie.com. Follow @ZimVie on Twitter, Facebook, LinkedIn, or Instagram.
Note on Non-GAAP Financial Measures
This press release includes 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.
Adjusted EBITDA is a non-GAAP financial measure provided in this release for certain periods, and is calculated by excluding certain items from net income (loss) on a GAAP basis, as detailed in the reconciliations presented later in this press release. Adjusted EBITDA margin is Adjusted EBITDA divided by third party net sales for the applicable period.
Sales change information in this release is presented on a GAAP (reported) basis and on a 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.
Net income (loss) and diluted earnings (loss) per share in this release are presented on a GAAP (reported) basis and on an adjusted basis. Adjusted net income (loss) and adjusted diluted earnings per share 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 this press release.
Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in this press release.
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.
Forward-Looking Non-GAAP Financial Measures
This press release also includes certain forward-looking non-GAAP financial measures for the year ending December 31, 2023. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. 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 federal securities laws, including, among others, any statements about our expectations, plans, intentions, strategies, or prospects. We generally use the words “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees,” “seeks,” “should,” “could,” “would,” “predicts,” “potential,” “strategy,” “future,” “opportunity,” “work toward,” “intends,” “guidance,” “confidence,” “positioned,” “design,” “strive,” “continue,” “track,” “look forward to” and similar expressions to identify forward-looking statements. 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: the effects of the COVID-19 global pandemic and other adverse public health developments on the global economy, our business and operations and the business and operations of our suppliers and customers, including the deferral of elective procedures and our ability to collect accounts receivable; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; pricing pressures from competitors, customers, dental practices and insurance providers; changes in customer demand for our products and services caused by demographic changes or other factors; 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 and foreign government regulators, such as more stringent requirements for regulatory clearance of products; competition; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors; cost containment efforts sponsored by government agencies, legislative bodies, the private sector and healthcare group purchasing organizations, including the volume-based procurement process in China; control of costs and expenses; dependence on a limited number of suppliers for key raw materials and outsourced activities; the ability to obtain and maintain adequate intellectual property protection; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; the ability to retain the independent agents and distributors who market our products; our ability to attract, retain and develop the highly skilled employees we need to support our business; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; a determination by the Internal Revenue Service that the distribution or certain related transactions should be treated as taxable transactions; financing transactions undertaken in connection with the separation and risks associated with additional indebtedness; the impact of the separation on our businesses and the risk that the separation and the results thereof may be more difficult, time-consuming and/or costly than expected, which could impact our relationships with customers, suppliers, employees and other business counterparties; restrictions on activities following the distribution in order to preserve the tax-free treatment of the distribution; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability, intellectual property and commercial litigation losses; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including inflation and interest rate and currency exchange rate fluctuations; and the impact of the ongoing financial and political uncertainty on countries in the Euro zone on the ability to collect accounts receivable in affected countries. You 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. 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.
Media Contact Information:
ZimVie
Laura Driscoll • [email protected]
(774) 284-1606
Investor Contact Information:
Gilmartin Group LLC
Marissa Bych • [email protected]