On July 26, 2019 Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) reported financial results for the quarter ended June 30, 2019 (Press release, Zimmer Holdings, JUL 26, 2019, View Source [SID1234537794]). The Company reported second quarter net sales of $1.989 billion, a decrease of 0.9% from the prior year period, and an increase of 1.2% on a constant currency basis. Diluted earnings per share for the second quarter were $0.65, a decrease of 28% from the prior year period. Second quarter adjusted diluted earnings per share were $1.93, an increase of 0.5% over the prior year period. Net earnings for the second quarter were $134 million and $398 million on an adjusted basis.
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"My level of confidence in our turnaround increases with every quarter," said Bryan Hanson, President and CEO of Zimmer Biomet. "Our team is focused, engaged and has positioned the company for offense in the second half of 2019. I’m truly excited by the momentum we are seeing and we have updated our guidance to reflect the progress we made in the first half of the year."
Geographic and Product Category Sales
The following sales tables provide results by geography and product category for the three and six month periods ended June 30, 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 second quarter was $301 million and free cash flow was $161 million. The Company paid down $115 million of debt, paid $49 million in dividends in the quarter and declared a second quarter dividend of $0.24 per share.
Guidance
The Company had previously stated that it expected to achieve constant currency revenue in line with its weighted average market growth rate starting in 2020. Given the progress made in the turnaround, the Company now believes it will achieve this goal beginning in the third quarter of 2019, six months earlier than previously expected. The Company provided updated 2019 financial guidance for the following metrics. All other previous guidance items remain unchanged:
Projected Year Ending December 31, 2019
2019 sales growth vs prior year is provided on an as reported basis and includes 125 to 175 basis points of negative foreign exchange impact (vs. 100 to 150 basis points previously).
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 second quarter 2019 investor conference call today, July 26, 2019, 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.