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Zimmer Holdings, Inc. Reports Second Quarter 2012 Financial Results

WARSAW, Ind., July 26, 2012 /PRNewswire/ --

Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter ended June 30, 2012.  The Company reported second quarter net sales of $1,125 million, a decrease of 1.1% reported and an increase of 1.8% constant currency over the second quarter of 2011.  Diluted earnings per share for the quarter were $1.22 reported and $1.34 adjusted, an increase of 10.7% adjusted over the prior year period.

"In the quarter, Zimmer improved operating margins and delivered double-digit growth in adjusted earnings per share.  This performance was driven by the ongoing benefits of our commercial and operational excellence programs and disciplined use of capital," said David Dvorak, Zimmer President and CEO.  "Moving through 2012, we expect to accelerate revenue growth through ongoing new product introductions and to continue to drive improved leverage in operating margins."

Net earnings for the second quarter were $214.5 million on a reported basis and $235.6 million on an adjusted basis, an increase of 1.4% adjusted over the prior year period.  Operating cash flow for the second quarter was $231.5 million

During the quarter the Company returned $138.2 million to stockholders in the form of cash dividends of $31.7 million and repurchases of 1.67 million shares for $106.5 million.  At the end of the second quarter, $1,251.9 million of share repurchase authorization remained available under the current program, which expires on December 31, 2014.

Guidance
The Company updated its full-year reported revenue guidance and narrowed its constant currency revenue and EPS guidance for full-year 2012.  Full-year revenues are expected to increase between 2.5% and 3.5% on a constant currency basis from 2011.  The Company now estimates that foreign currency translation will decrease revenues between 2.0% and 2.5% for the full year 2012, resulting in reported revenue growth between 0% and 1.5%.  Previously, the Company had estimated foreign currency translation would decrease revenues by approximately 1.5% to 2.0%. 

Full-year 2012 diluted earnings per share are projected to be in a range of $4.75 to $4.85 on a reported basis and $5.25 to $5.35 on an adjusted basis.  Prior guidance for full-year 2012 reported and adjusted diluted earnings per share was $4.70 to $4.90 and $5.20 to $5.40, respectively.  

Conference Call
The Company will conduct its second quarter 2012 investor conference call today, July 26, 2012, at 8:00 a.m. Eastern Time.  The live audio webcast can be accessed via Zimmer's Investor Relations website at http://investor.zimmer.com.  It will be archived for replay following the conference.

Individuals who wish to dial into the conference call may do so at (888) 878-3901.  International callers should dial (706) 634-9520.  A digital recording will be available two hours after the completion of the conference call from July 26, 2012, to August 9, 2012.  To access the recording, US/Canada callers should dial (855) 859-2056 or (800) 585-8367, or for International callers, dial (404) 537-3406, and enter the conference ID 95075993.

Sales Tables
The following tables provide sales results by geographic segment and product category, as well as the percentage change compared to the prior year quarter and six months on both a reported and constant currency basis.

NET SALES - THREE MONTHS ENDED JUNE 30, 2012


(in millions, unaudited)

































Constant




Net



Reported


Currency




Sales



 % Growth


% Growth

Geographic Segments











   Americas

$

614



1

%


1

%


   Europe


305



(6)



3



   Asia Pacific


206



1



2



       Total


1,125



(1)



2


Product Categories











Reconstructive











   Americas


449



-



-



   Europe


240



(6)



3



   Asia Pacific


154



2



3



       Total


843



(2)



2
















Knees












   Americas


265



(1)



-




   Europe


117



(9)



-




   Asia Pacific


79



4



6




       Total


461



(2)



1
















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