On February 4, 2020 Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) reported financial results for the quarter and year ended December 31, 2019 (Press release, Zimmer Holdings, FEB 4, 2020, View Source [SID1234553861]). The Company reported fourth quarter net sales of $2.126 billion, an increase of 2.6% over the prior year period, and an increase of 3.2% on a constant currency basis. Net sales for the full year were $7.982 billion, an increase of 0.6% over 2018 and an increase of 2.2% on a constant currency basis. Net earnings for the fourth quarter were $321 million and $478 million on an adjusted basis, and for the full year were $1.132 billion and $1.626 billion on an adjusted basis.

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Diluted earnings per share were $1.54 for the fourth quarter and $5.47 for the full year. Adjusted diluted earnings per share were $2.30 for the fourth quarter, an increase of 5.5% over the prior year period, and were $7.87 for the full year, an increase of 3.0% over 2018.

"In 2019 we continued to successfully execute our plan to reposition the company for success, driven by our global team’s focus on our One ZB mission and culture," said Bryan Hanson, President and CEO of Zimmer Biomet. "We continued to invest for growth and drove improved performance in 2019, especially in the second half of the year. We are operating from a position of strength for 2020 and beyond. I am proud of the entire ZB team and their unyielding commitment to the ZB mission and bettering the lives of patients around the world."

Key drivers in the fourth quarter included solid performance from the Americas and Asia Pacific, with continued strong results across our global Knee and Hip businesses. Additionally, ROSA Knee System sales accelerated from the third quarter of 2019.

Please see the attached schedules accompanying this press release for additional details on performance in the quarter, including sales by Zimmer Biomet’s three geographies and six product categories.

Recent Highlights

Fourth quarter launch, positive customer feedback and good momentum for the Persona Revision and Avenir Complete products
The Company began a number of restructuring initiatives, including reorganizing business units to create greater strategic alignment, increased efficiency and improved resource allocation for accelerated growth
Zimmer Biomet named 2019 Medtech Company of the Year by Medical Device and Diagnostic Industry (MD+DI)
Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three-month period and year ended December 31, 2019, as well as the percentage change compared to the prior year periods, on both a reported basis and a constant currency basis.

Cash Flow and Balance Sheet

Operating cash flow for the fourth quarter was $423 million and free cash flow was $295 million. In the fourth quarter, the Company paid down $161 million of debt, net of debt proceeds, paid $49 million in dividends and declared a dividend of $0.24 per share. Operating cash flow for the full year was $1.586 billion and free cash flow was $1.063 billion. In the full year, the Company paid down $716 million of debt, net of debt proceeds, paid $197 million in dividends and declared dividends of $0.96 per share.

Guidance

The Company is providing the following full-year 2020 financial guidance:

Projected Year Ending December 31, 2020

Expected to be negative in the first half of the year and slightly positive in the second half of the year based on current foreign currency exchange rates

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."

Conference Call

The Company will conduct its fourth quarter and full-year 2019 investor conference call today, February 4, 2020, at 8:30 a.m. Eastern Time. The audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at https://investor.zimmerbiomet.com. It will be archived for replay following the conference call.