Zimmer Biomet reported sharp sales declines across all product categories in the second quarter.
Eight takeaways from the company's latest earnings report:
1. Zimmer's net sales were $1.23 billion in the second quarter, down 38.3 percent from the same period in 2019.
2. Zimmer recorded a net loss of $206.6 million in the second quarter, with adjusted net earnings of $10.2 million. Second-quarter diluted loss per share was $1. Diluted earnings per share dropped 97.4 percent year over year, hitting $0.05.
3. In the Americas, net sales from knee products were $221 million, down 46.7 percent year over year. Total net sales from knees were down 46.8 percent year over year at $374.2 million.
4. Hip product net sales in the Americas were $170.7 million, representing a milder year-over-year decline of 32.6 percent. The global decrease for hips was 31.1 percent, leaving Zimmer with $329.7 million in overall net sales for that category in the second quarter.
5. The sports medicine, extremities and trauma category saw a 29.2 percent year-over-year drop in net sales, ending the second quarter with $252.6 million. Net sales for dental, spine and craniomaxillofacial and thoracic products were down nearly 38 percent at $182.5 million.
6. In the second quarter, Zimmer used $52.8 million of net cash in operating activities. Zimmer ended the quarter with $713.4 million in cash and cash equivalents on its balance sheet.
7. The company paid $49.6 million in dividends and declared a dividend of $0.24 per share in the second quarter, when it also refinanced $1.5 billion in debt due April 1. By renegotiating terms of its $1.5 billion revolver, Zimmer secured an additional $1 billion credit facility with no outstanding borrowings.
8. COVID-19 caused a worldwide decline in elective procedure volumes, hurting Zimmer Biomet's performance in the three months ended June 30 and leading the company to pull its full-year guidance. To position itself for long-term growth amid lingering fallout from the pandemic, Zimmer is "investing aggressively" in primary growth initiatives, as well as research and development programs, according to President and CEO Bryan Hanson.