Zimmer Biomet(ZBH) - 2024 Q2 - Quarterly Results

Financial Performance - Second quarter net sales of $1.942 billion increased 3.9% and 5.6% on a constant currency basis[1] - Net sales for Q2 2024 increased to $1,942.0 million, up 3.9% from $1,869.6 million in Q2 2023[20] - Net sales for the first six months of 2024 reached $3,831.2 million, a 3.5% increase from $3,700.6 million in the same period of 2023[22] - Total constant currency net sales growth for the six months ended June 30, 2024, was 5.6%, with international growth at 8.5% and U.S. growth at 3.5%[25] - Net sales for the six months ended June 30, 2024, were $3,831.2 million, with adjusted gross profit of $2,769.1 million[34] Earnings and Profitability - Second quarter diluted earnings per share were $1.18; adjusted diluted earnings per share were $2.01[1] - Net earnings for the second quarter were $242.8 million, or $415.0 million on an adjusted basis[1] - Net earnings for Q2 2024 rose to $242.8 million, compared to $209.6 million in Q2 2023[20] - Operating profit for Q2 2024 grew to $351.3 million, up from $329.6 million in Q2 2023[20] - Net earnings for the first six months of 2024 were $415.2 million, down from $442.1 million in the same period of 2023[22] - Net earnings for the six months ended June 30, 2024, were $415.9 million, compared to $442.6 million in 2023[24] - Adjusted net earnings for the three months ended June 30, 2024, were $415.0 million, compared to $382.8 million in 2023[27][28] - Adjusted diluted earnings per share for the three months ended June 30, 2024, were $2.01, up from $1.82 in 2023[27][28] - Net Earnings for the six months ended June 30, 2024, were $415.2 million, with adjusted net earnings of $814.7 million[29] - Diluted earnings per common share for the six months ended June 30, 2024, were $2.01, with adjusted diluted earnings per share of $3.95[29] - Adjusted operating profit for Q2 2024 increased to $552.6 million, up from $514.3 million in Q2 2023[35] - Adjusted operating profit margin for Q2 2024 improved to 28.5%, compared to 27.5% in Q2 2023[36] - Operating profit margin for Q2 2024 was 18.1%, up from 17.6% in Q2 2023[36] Regional and Product Sales - United States net sales for the second quarter were $1,106.2 million, a 3.5% increase[4] - International net sales for the second quarter were $835.8 million, a 4.4% increase (8.5% on a constant currency basis)[4] - Knees product category sales totaled $801.1 million, a 3.9% increase (5.5% on a constant currency basis)[4] - Hips product category sales totaled $506.5 million, a 0.4% increase (2.8% on a constant currency basis)[4] - Knees product category showed a constant currency growth of 5.5%, with international growth at 11.5% and U.S. growth at 0.8%[25] - Hips product category had a constant currency growth of 2.8%, with international growth at 3.7% and U.S. growth at 1.8%[25] - S.E.T. product category grew by 7.3% in constant currency, while the Other category grew by 11.3%[25] Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2024, stood at $420.1 million, slightly up from $415.8 million at the end of 2023[23] - Net cash provided by operating activities for the six months ended June 30, 2024, was $597.4 million, down from $655.6 million in 2023[24] - Net cash used in investing activities for the six months ended June 30, 2024, was $442.0 million, compared to $392.5 million in 2023[24] - Cash and cash equivalents at the end of June 30, 2024, were $420.1 million, up from $319.8 million in 2023[24] - Net cash provided by operating activities for the six months ended June 30, 2024, was $597.4 million, with free cash flow of $342.4 million[33] - Cash and cash equivalents as of June 30, 2024, were $420.1 million, slightly lower than $415.8 million at the end of 2023[38] Debt and Assets - Total assets as of June 30, 2024, were $21,520.0 million, compared to $21,496.9 million at the end of 2023[23] - Long-term debt decreased to $3,956.7 million as of June 30, 2024, from $4,867.9 million at the end of 2023[23] - Net debt as of June 30, 2024, stood at $5,414.6 million, slightly higher than $5,352.1 million at the end of 2023[38] Expenses and Costs - Research and development expenses for Q2 2024 were $109.4 million, down from $118.1 million in Q2 2023[20] - Restructuring and other cost reduction initiatives for Q2 2024 increased to $41.5 million, up from $24.4 million in Q2 2023[20] - Intangible asset amortization for the six months ended June 30, 2024, was $286.1 million[29] - Restructuring and other cost reduction initiatives for the six months ended June 30, 2024, amounted to $165.9 million[29] - European Union Medical Device Regulation costs for the six months ended June 30, 2024, were $13.4 million[29] - Inventory and manufacturing-related charges for the six months ended June 30, 2024, were $3.8 million[29] - Other certain tax adjustments for the six months ended June 30, 2024, resulted in a $20.5 million benefit[29] - Intangible asset amortization for Q2 2024 was $144.0 million, up from $138.2 million in Q2 2023[35] - Restructuring and cost reduction initiatives cost $41.5 million in Q2 2024, compared to $24.4 million in Q2 2023[35] - European Union Medical Device Regulation costs decreased to $7.6 million in Q2 2024 from $15.2 million in Q2 2023[35] - Litigation charges in Q2 2024 were minimal at $0.1 million, compared to a credit of $3.8 million in Q2 2023[35] Guidance and Forecasts - The company updated 2024 reported revenue guidance to 4.0% - 5.0% due to currency expectations[7] - The company reaffirmed 2024 constant currency revenue growth guidance of 5.0% - 6.0%[7] - Adjusted diluted EPS guidance for 2024 remains unchanged at $8.00 - $8.15[7] Gross Margin and Profitability Metrics - Gross margin for the six months ended June 30, 2024, was 64.7%, with an adjusted gross margin of 72.3%[34] - Adjusted effective tax rate for Q2 2024 was 18.2%, down from 19.6% in the same period last year[37]