Business Context and Reporting Period
Zimmer Biomet Holdings, Inc. filed this Form 8-K on October 29, 2015, to report results of operations for the quarter ended September 30, 2015. The filing incorporates by reference an earnings release (Exhibit 99.1) and revised prior period financial statement information (Exhibit 99.2) correcting immaterial misstatements.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the attached earnings release (Exhibit 99.1) which is incorporated by reference but not reproduced in the provided text.
The company reports financial performance using both GAAP and non-GAAP measures. Non-GAAP metrics include:
- Revenue: Presented on reported (GAAP), pro forma reported, and adjusted pro forma constant currency bases.
- Earnings: Adjusted net earnings and adjusted diluted earnings per share exclude inventory step-up, merger-related expenses, intangible asset amortization, and special items.
Material Changes and Adjustments
The filing highlights the following material adjustments and methodologies:
- Pro Forma Adjustments: Prior year revenue is adjusted to reflect the inclusion of Biomet revenue on a GAAP basis. Adjusted pro forma revenue excludes the impact of divestiture remedies.
- Constant Currency: Growth rates exclude foreign currency exchange rate fluctuations by translating current and prior periods at predetermined rates.
- Special Items: Excluded from non-GAAP earnings are acquisition/integration costs, asset impairments, employee termination benefits, litigation matters, and restructuring expenses.
- Revisions: Prior period financial statements were revised to correct immaterial misstatements and out-of-period adjustments.
Guidance, Outlook, and Risks
The filing text does not contain specific forward-looking guidance, outlook figures, or detailed risk factors. Management commentary indicates that non-GAAP measures are used internally to evaluate performance, identify operating trends, and determine incentive compensation. The filing includes a standard disclaimer that the information is furnished, not filed, and makes no admission as to the materiality of the information.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific GAAP and non-GAAP revenue, earnings, and cash flow figures.
- Examine the reconciliation tables in Exhibit 99.1 to understand the magnitude of adjustments between GAAP and non-GAAP measures.
- Consult Exhibit 99.2 to assess the impact of the revised prior period financial statements on historical comparisons.
- Verify the specific components of "special items" and "divestiture remedies" excluded from adjusted metrics.