ZimVie (ZIMV)2024-10-30 20:15Financial Performance - Total net sales for the three months ended September 30, 2024, were $103.2 million, a decrease of 2.0% compared to $105.3 million in the same period of 2023[84]. - For the nine months ended September 30, 2024, total net sales were $338.2 million, down 1.8% from $344.4 million in 2023[85]. - The company experienced a price decline of 1.1% in net sales for the nine months ended September 30, 2024, primarily due to pricing pressures in North America and China[85][87]. - Foreign exchange fluctuations had a small positive effect on year-over-year sales for the three months ended September 30, 2024, mainly due to the strengthening of the Euro[88]. Expenses - Research and development expenses increased to 6.7% of net sales in the three months ended September 30, 2024, compared to 5.4% in the same period of 2023[92]. - Selling, general and administrative expenses rose to 55.5% of net sales in the three months ended September 30, 2024, up from 53.7% in the prior year[89]. - Cost of products sold as a percentage of net sales decreased to 34.7% in the three months ended September 30, 2024, from 35.0% in the same period of 2023[89]. - Restructuring and other cost reduction initiatives recognized expenses of $0.7 million in the three months ended September 30, 2024, compared to $1.4 million in the same period of 2023[95]. Cash Flow and Liquidity - Cash and cash equivalents were $68.1 million as of September 30, 2024, down from $87.8 million at the end of 2023[103]. - Cash flows from operating activities were $(7.3) million for the nine months ended September 30, 2024, compared to $15.7 million in the same period of 2023[104]. - Cash flows from investing activities were $285.2 million for the nine months ended September 30, 2024, primarily from the sale of the spine segment[105]. - Cash flows used in financing activities were $295.4 million for the nine months ended September 30, 2024, including a $275.0 million prepayment on the Term Loan[106]. - The company believes available cash and cash equivalents will be sufficient to meet liquidity needs for at least the next 12 months[108]. Debt and Interest - As of September 30, 2024, the company had $221.9 million of floating rate debt subject to SOFR, with a potential $2.2 million decrease in annual pre-tax results from a 100 basis points increase in SOFR[113]. - Interest income increased due to the promissory note from the sale of the spine segment[98]. - Interest expense decreased due to a reduction in outstanding debt and interest rates[99]. Legal Matters - The company is subject to various claims and legal proceedings, but does not expect a material adverse impact on results of operations, cash flows, or financial position[119]. - The outcome of legal matters is unpredictable and could have a material adverse effect on financial position, results of operations, or cash flows[119]. Other Significant Events - The company recorded a gain of $11.3 million from the sale of its spine segment, which was completed on April 1, 2024, for a total purchase price of $377.2 million[75]. - The company initiated restructuring activities in January 2024 to better support its dental segment following the sale of the spine segment[80]. - Other income related to TSA income was $3.2 million and $6.6 million for the three and nine months ended September 30, 2024 and 2023, respectively[97]. - The effective tax rate (ETR) on loss before income taxes was 18.4% for Q3 2024 compared to (3.3%) for Q3 2023[100]. - There were no changes in internal control over financial reporting during the three months ended September 30, 2024[117].