8-K
false 0001876588 0001876588 2024-02-28 2024-02-28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 28, 2024

 

 

ZimVie Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-41242   87-2007795
(State or Other Jurisdiction
of Incorporation)
 

(Commission

File Number)

  (IRS Employer
Identification No.)

 

10225 Westmoor Drive  
Westminster, Colorado     80021
(Address of Principal Executive Offices)     (Zip Code)

Registrant’s Telephone Number, Including Area Code: 303 443-7500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.01 per share   ZIMV   The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On February 28, 2024, ZimVie Inc. (the “Company”) issued a press release reporting its financial results for the quarter and year ended December 31, 2023. The press release is attached hereto as Exhibit 99.1 and the information set forth therein is incorporated herein by reference and constitutes a part of this report.

Item 7.01 Regulation FD Disclosure.

On February 28, 2024, the Company also made available a presentation that contains supplemental financial information. A copy of the presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and the information set forth therein is incorporated herein by reference.

The information contained in Item 2.02 and Item 7.01 of this report, including Exhibit 99.1 and Exhibit 99.2 hereto, is being furnished and shall not be deemed to be “filed” with the Securities and Exchange Commission for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits

 

EXHIBIT INDEX

Exhibit No.

  

Description

99.1    Press release dated February 28, 2024
99.2    Presentation dated February 28, 2024
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

      ZimVie Inc.
Date: February 28, 2024     By:  

/s/ Heather Kidwell

     

Name: Heather Kidwell

Title: Senior Vice President, Chief Legal, Compliance and Human Resources Officer and Corporate Secretary

EX-99.1

Exhibit 99.1

 

LOGO

ZimVie Reports Fourth Quarter and Full Year 2023 Financial Results

 

 

FY 2023 Third Party Net Sales from Continuing Operations of $457.2 million

 

 

FY 2023 Third Party Net Sales from Discontinued Operations of $409.2 million

 

 

Updated Reporting Framework: Continuing Operations consists of the Dental Business and the majority of Corporate while Discontinued Operations consists of the Spine Business

 

 

Advancing plan to complete sale of Spine Business for $375M in total consideration; sale remains on track to be completed in 1H 2024

WESTMINSTER, Colorado, February 28, 2024 (GLOBE NEWSWIRE) – ZimVie Inc. (Nasdaq: ZIMV), a global life sciences leader in the dental and spine markets, today reported financial results for the quarter and year ended December 31, 2023. Management will host a corresponding conference call today, February 28, 2024, at 4:30 p.m. Eastern Time.

“We had significant accomplishments in 2023. We invested to further differentiate our portfolio which helped us make gains in the markets we serve, and we improved our operating efficiency through restructuring and cost reduction initiatives,” said Vafa Jamali, President and Chief Executive Officer. “In addition, we successfully executed an agreement to sell our spine business and transform ZimVie into a pure play dental company with a comprehensive and industry leading portfolio. We are optimistic about the future of ZimVie as a purely dental focused company with a strong capital structure.”

Fourth Quarter 2023 Financial Results: Continuing Operations

Third party net sales for the fourth quarter of 2023 were $113.1 million, a decrease of 2.4% on a reported basis and (3.6%) on a constant currency[1] basis, versus the fourth quarter of 2022.

Net loss for the fourth quarter of 2023 was ($22.2) million, a change of ($6.8) million versus a net loss of ($15.4) million in the fourth quarter of 2022, and as a percentage of net sales was (19.6%).

Adjusted net income[1] for the fourth quarter of 2023 was $2.6 million, an increase of $0.7 million versus the same prior year period.

Basic and diluted EPS were ($0.83) and adjusted diluted EPS[1] was $0.10 for the fourth quarter of 2023. Weighted average shares outstanding for each of basic and adjusted diluted EPS was 26.6 million.

Adjusted EBITDA[1] for the fourth quarter of 2023 was $13.9 million, or 12.3% of third party net sales, which is an increase of 160 basis points from the fourth quarter 2022 margin of 10.7%.

Cash and cash equivalents at the end of the fourth quarter of 2023 were $71.5 million.

Fourth Quarter 2023 Financial Results: Discontinued Operations

Third party net sales from Discontinued Operations for the fourth quarter of 2023 were $100.5 million, a decrease of 10.6% on a reported basis and 10.6% on a constant currency[1] basis, versus the fourth quarter of 2022.

Net loss from Discontinued Operations was ($312.7) million, a change of ($297.7) million versus net loss of ($15.0) million in the fourth quarter of 2022.

Adjusted net income[1] from Discontinued Operations for the fourth quarter of 2023 was $2.9 million, an increase of $0.5 million versus the same prior year period.

Basic and diluted EPS from Discontinued Operations were ($11.76). Adjusted diluted EPS[1] was $0.11 for the fourth quarter of 2023. Weighted average shares outstanding for each of basic and adjusted diluted EPS was 26.6 million.


Adjusted EBITDA[1] from Discontinued Operations for the fourth quarter of 2023 was $15.5 million, or 15.4% of net sales to Discontinued Operations, a decrease of $0.2 million and 1.1%, respectively, from the fourth quarter of 2022.

Cash and cash equivalents from Discontinued Operations at the end of the fourth quarter of 2023 were $16.3 million.

Full Year 2023 Financial Results: Continuing Operations

Third party net sales for the full year 2023 were $457.2 million, a decrease of 0.5% on a reported basis and 0.6% on a constant currency[1] basis, versus the full year 2022.

Net loss for the full year 2023 was ($56.0) million, a decrease of $9.1 million versus the net loss of ($46.9) million in the full year 2022, and as a percentage of third-party net sales was (12.3%).

Adjusted net income[1] for the full year 2023 was $5.8 million, a decrease of $10.1 million versus the prior year.

Basic and diluted EPS were ($2.12) and adjusted diluted EPS[1] was $0.22 for the full year 2023. Weighted average shares outstanding for each of basic EPS and diluted EPS were 26.5 million.

Adjusted EBITDA[1] for the full year 2023 was $50.8 million, or 11.1% of third-party net sales, a decrease of $6.3 million and a decrease of 130 basis points from 12.4% in 2022.

Full Year 2023 Financial Results: Discontinued Operations

Third party net sales from Discontinued Operations were $409.2 million, a decrease of 9.0% on a reported basis and 9.2% on a constant currency[1] basis, versus the full year 2022.

Net loss from Discontinued Operations for the full year 2023 was ($337.2) million, a change of ($320.2) million versus the net loss of ($17.0) million in the full year 2022, and as a percentage of third-party net sales attributable to Discontinued Operations was (82.4%). Adjusted net income[1] attributable to Discontinued Operations for the full year 2023 was $12.7 million, a decrease of $19.3 million versus the prior year. The increase in net loss was primarily due to a $289.5M write-down of the Spine disposal group to fair value.

Basic and diluted EPS from Discontinued Operations were ($12.75) and adjusted diluted EPS[1] was $0.48 for the full year 2023. Weighted average shares outstanding for each of basic EPS and diluted EPS was 26.5 million.

Adjusted EBITDA[1] from Discontinued Operations for the full year 2023 was $65.6 million, or 16.0% of third-party net sales.

First Quarter 2024 Financial Guidance:

 

Projected Quarter Ending March 31, 2024

   Guidance

Net Sales: Continuing Operations

   $115M-$118M

Net Sales: Discontinued Operations

   $89-$91M

 

2


Management Raises Financial Targets for Continuing Operations for the 12 Month Period Post-Spine Sale:

 

Year 1 Post-Close

   Guidance

Net Sales

   $455M+

Adjusted EBITDA Margin[2]

   15%+

Net Debt

   <$200M[2][4]

 

[1]

This is a non-GAAP financial measure. Refer to “Note on Non-GAAP Financial Measures” and the reconciliations in this release for further information.

[2]

This is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. Refer to “Forward-Looking Non-GAAP Financial Measures” in this release, which identifies the information that is unavailable without unreasonable efforts and provides additional information. It is probable that this forward-looking non-GAAP financial measure may be materially different from the corresponding GAAP financial measure.

[3]

Represents projected net debt one year following the closing of the sale of the spine business and excludes proceeds from expected future repayment of seller note to ZimVie.

Financial Information

The financial information included in this release for periods prior to March 1, 2022 is derived from the financial statements and records of the Dental and Spine businesses of Zimmer Biomet due to the fact that during such periods, ZimVie was still a wholly-owned subsidiary of, and operated under those businesses of, Zimmer Biomet.

Conference Call

ZimVie will host a conference call today, February 28, 2024, at 4:30 p.m. ET to discuss its fourth quarter and full year 2023 financial results. To access the call, please register online at https://investor.zimvie.com/events-presentations/event-calendar. A live and archived audio webcast will also be available on this site.

About ZimVie

ZimVie is a global life sciences leader in the dental and spine markets that develops, manufactures, and delivers a comprehensive portfolio of products and solutions designed to support dental tooth replacement and restoration procedures and treat a wide range of spine pathologies. In March 2022 the company became an independent, publicly traded spin-off of the dental and spine business units of Zimmer Biomet to breathe new life, dedicated energy, and strategic focus to its portfolio of trusted brands and products. From its headquarters in Westminster, Colorado, and additional facilities around the globe, the company serves customers in over 70 countries worldwide with a robust offering of dental and spine solutions including differentiated product platforms supported by extensive clinical evidence. For more information about ZimVie, please visit us at www.ZimVie.com. Follow @ZimVie on Twitter, Facebook, LinkedIn, or Instagram.

Note on Non-GAAP Financial Measures

This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

Adjusted EBITDA is a non-GAAP financial measure provided in this release for certain periods, and is calculated by excluding certain items from net loss from Continuing Operations or Discontinued Operations, as applicable, on a GAAP basis, as detailed in the reconciliations presented later in this press release. Adjusted EBITDA margin is Adjusted EBITDA divided by third party net sales from Continuing Operations or Discontinued Operations, as applicable, for the applicable period.

Sales change information in this release is presented on a GAAP (reported) basis and on a constant currency basis. Constant currency percentage changes exclude the effects of foreign currency exchange rates. They are calculated by translating current and prior-period sales from Continuing Operations or Discontinued Operations, as applicable, at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases.

 

3


Net loss and diluted loss per share in this release are presented on a GAAP (reported) basis and on an adjusted basis. Adjusted net income and adjusted diluted earnings per share exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in this press release.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in this press release.

Management uses non-GAAP financial measures internally to evaluate the performance of the business. Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the company. Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations. The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures.

Forward-Looking Non-GAAP Financial Measures

This press release also includes certain forward-looking non-GAAP financial measures for the quarter ending March 31, 2024 and the twelve-month period following the closing of the sale of the spine business. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. For example, the timing of certain transactions is difficult to predict because management’s plans may change. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including, among others, any statements about our expectations, plans, intentions, strategies, or prospects. We generally use the words “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees,” “seeks,” “should,” “could,” “would,” “predicts,” “potential,” “strategy,” “future,” “opportunity,” “work toward,” “intends,” “guidance,” “confidence,” “positioned,” “design,” “strive,” “continue,” “track,” “look forward to,” “optimistic” and similar expressions to identify forward-looking statements. All statements other than statements of historical or current fact are, or may be deemed to be forward-looking statements. Such statements are based upon the current beliefs, expectations, and assumptions of management and are subject to significant risks, uncertainties, and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: uncertainties as to the timing of the sale of our spine business and the risk that the transaction may not be completed in a timely manner or at all; the possibility that any or all of the conditions to the consummation of the sale of our spine business may not be satisfied or waived; the effect of the announcement or pendency of the transaction on our ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners; management’s attention being diverted from our ongoing business operations due to the sale of our spine business; uncertainties and matters related to the sale of our spine business beyond the control of management; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; pricing pressures from competitors, customers, dental practices and insurance providers; changes in customer demand for our products and services caused by demographic changes or other factors; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration and foreign government regulators, such as more stringent requirements for regulatory clearance of products; competition; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors; cost containment efforts sponsored by government agencies, legislative bodies, the private sector and healthcare group purchasing organizations, including the volume-based procurement process in China; control of costs and expenses; dependence on a limited

 

4


number of suppliers for key raw materials and outsourced activities; the ability to obtain and maintain adequate intellectual property protection; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; the ability to retain the independent agents and distributors who market our products; our ability to attract, retain and develop the highly skilled employees we need to support our business; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; a determination by the Internal Revenue Service that the distribution or certain related transactions should be treated as taxable transactions; financing transactions undertaken in connection with the separation and risks associated with additional indebtedness; the impact of the separation on our businesses and the risk that the separation and the results thereof may be more difficult, time-consuming and/or costly than expected, which could impact our relationships with customers, suppliers, employees and other business counterparties; restrictions on activities following the distribution in order to preserve the tax-free treatment of the distribution; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability, intellectual property and commercial litigation losses; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including inflation and interest rate and currency exchange rate fluctuations; the effects of the COVID-19 global pandemic and other adverse public health developments on the global economy, our business and operations and the business and operations of our suppliers and customers, including the deferral of elective procedures and our ability to collect accounts receivable; and the impact of the ongoing financial and political uncertainty on countries in the Euro zone on the ability to collect accounts receivable in affected countries. You are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Media Contact Information:

ZimVie

Laura Driscoll • Laura.Driscoll@ZimVie.com

(774) 284-1606

Investor Contact Information:

Gilmartin Group LLC

Marissa Bych • Marissa@gilmartinir.com

 

5


ZIMVIE INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

 

     (unaudited)        
     For the Three Months
Ended December 31,
    For the Years Ended
December 31,
 
     2023     2022     2023     2022  

Net Sales

        

Third party, net

   $ 113,066     $ 115,798     $ 457,197     $ 459,681  

Related party, net

     —        747       236       3,611  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Sales

     113,066       116,545       457,433       463,292  

Cost of products sold, excluding intangible asset amortization

     (42,573     (42,197     (166,819     (165,960

Related party cost of products sold, excluding intangible asset amortization

     —        (731     (231     (3,386

Intangible asset amortization

     (6,134     (6,599     (26,512     (26,982

Research and development

     (6,893     (6,993     (26,162     (31,147

Selling, general and administrative

     (62,909     (66,820     (248,964     (253,158

Restructuring and other cost reduction initiatives

     717       (1,545     (4,489     (2,559

Acquisition, integration, divestiture and related

     (10,548     (4,221     (15,195     (26,587
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     (128,340     (129,106     (488,372     (509,779
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Loss

     (15,274     (12,562     (30,939     (46,487

Other income, net

     1,515       2,631       326       2,857  

Interest expense, net

     (4,976     (3,599     (20,234     (10,870
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (18,735     (13,530     (50,847     (54,500

(Provision) benefit for income taxes from continuing operations

     (3,428     (1,822     (5,202     7,596  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss from Continuing Operations of ZimVie Inc.

     (22,163     (15,352     (56,049     (46,904

Loss from discontinued operations, net of tax

     (312,689     (14,992     (337,233     (16,977
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss of ZimVie Inc.

   $ (334,852   $ (30,344   $ (393,282   $ (63,881
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic Loss Per Common Share:

        

Continuing operations

   $ (0.83   $ (0.59   $ (2.12   $ (1.80

Discontinued operations

     (11.76     (0.57     (12.75     (0.65
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

   $ (12.59   $ (1.16   $ (14.87   $ (2.45
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted Loss Per Common Share

        

Continuing operations

   $ (0.83   $ (0.59   $ (2.12   $ (1.80

Discontinued operations

     (11.76     (0.57     (12.75     (0.65
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

   $ (12.59   $ (1.16   $ (14.87   $ (2.45
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6


ZIMVIE INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

     As of December 31,  
     2023     2022  

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 71,511     $ 68,275  

Accounts receivable, less allowance for credit losses

     65,168       67,031  

Related party receivable

     —        3,154  

Inventories

     79,600       77,425  

Prepaid expenses and other current assets

     23,825       28,340  

Current assets of discontinued operations

     242,773       293,638  
  

 

 

   

 

 

 

Total Current Assets

     482,877       537,863  

Property, plant and equipment, net

     54,167       58,500  

Goodwill

     262,111       259,999  

Intangible assets, net

     114,354       138,685  

Other assets

     26,747       17,377  

Noncurrent assets of discontinued operations

     265,089       629,632  
  

 

 

   

 

 

 

Total Assets

   $ 1,205,345     $ 1,642,056  
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current Liabilities:

    

Accounts payable

   $ 27,785     $ 26,498  

Related party payable

     —        2,632  

Income taxes payable

     2,863       13,769  

Other current liabilities

     67,108       78,879  

Current liabilities of discontinued operations

     75,858       95,531  
  

 

 

   

 

 

 

Total Current Liabilities

     173,614       217,309  

Deferred income taxes

     265       2,152  

Lease liability

     9,080       9,960  

Other long-term liabilities

     9,055       8,925  

Non-current portion of debt

     508,797       532,233  

Noncurrent liabilities of discontinued operations

     95,041       112,873  
  

 

 

   

 

 

 

Total Liabilities

     795,852       883,452  
  

 

 

   

 

 

 

Commitments and Contingencies (Note 16)

    

Stockholders’ Equity:

    

Common stock, $0.01 par value, 150,000 shares authorized
Shares, issued and outstanding, of 27,076 and 26,222, respectively

     271       262  

Preferred stock, $0.01 par value, 15,000 shares authorized, 0 shares issued and outstanding

     —        —   

Additional paid in capital

     922,996       897,028  

Accumulated deficit

     (440,814     (47,532

Accumulated other comprehensive loss

     (72,960     (91,154
  

 

 

   

 

 

 

Total Stockholders’ Equity

     409,493       758,604  
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 1,205,345     $ 1,642,056  
  

 

 

   

 

 

 

 

7


ZIMVIE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     For the Years Ended
December 31,
 
     2023     2022  

Cash flows provided by operating activities:

    

Net loss of ZimVie Inc.

   $ (393,282   $ (63,881

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Depreciation and amortization

     121,686       122,789  

Share-based compensation

     27,020       30,289  

Deferred income tax provision

     (17,088     (70,422

Loss on disposal of fixed assets

     2,996       3,358  

Other non-cash items

     3,245       1,172  

Write-down of spine disposal group to fair value (Note 3)

     289,456       —   

Changes in operating assets and liabilities, net of acquired assets and liabilities:

    

Income taxes

     (15,054     5,485  

Accounts receivable

     21,083       (26,156

Related party receivables

     8,483       (8,483

Inventories

     25,446       10,210  

Prepaid expenses and other current assets

     5,340       (19,951

Accounts payable and accrued liabilities

     (24,759     21,842  

Related party payable

     (13,176     13,176  

Other assets and liabilities

     (4,248     5,200  
  

 

 

   

 

 

 

Net cash provided by operating activities

     37,148       24,628  
  

 

 

   

 

 

 

Cash flows used in investing activities:

    

Additions to instruments

     (5,978     (10,089

Additions to other property, plant and equipment

     (6,509     (16,457

Other investing activities

     (2,687     (2,117
  

 

 

   

 

 

 

Net cash used in investing activities

     (15,174     (28,663
  

 

 

   

 

 

 

Cash flows (used in) provided by financing activities:

    

Net transactions with Zimmer Biomet

     —        6,920  

Dividend paid to Zimmer Biomet

     —        (540,567

Proceeds from debt

     4,760       595,000  

Payments on debt

     (29,304     (58,544

Debt issuance costs

     —        (5,170

Payments related to tax withholding for share-based compensation

     (3,402     —   

Proceeds from stock option activity

     2,280       1,059  

Other financing activities

     —        (5
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (25,666     (1,307
  

 

 

   

 

 

 

Effect of exchange rates on cash and cash equivalents

     1,859       (5,456
  

 

 

   

 

 

 

(Decrease) increase in cash and cash equivalents

     (1,833     (10,798

Cash and cash equivalents, beginning of year

     89,601       100,399  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 87,768     $ 89,601  
  

 

 

   

 

 

 

Presentation includes cash of both continuing and discontinued operations

    

Supplemental cash flow information:

    

Income taxes paid, net

   $ 20,152     $ 25,730  

Interest paid

     37,709       17,283  

Derecognition of right-of-use assets

     (1,222     (14,174

Derecognition of lease liabilities

     1,225       15,303  

 

8


Net Sales Continuing Operations and Discontinued Operations ($ in thousands)

 

     For the Three Months Ended
December 31,
                    
     2023      2022      Change (%)     Foreign
Exchange
Impact
    Constant
Currency %
Change
 

United States

   $ 65,383      $ 67,535        -3.2     0.0     -3.2

International

     47,683        48,263        -1.2     2.9     -4.1
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Dental Third Party Sales (Continuing Operations of ZimVie Inc.)

     113,066        115,798        -2.4     1.2     -3.6
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Related Party Net Sales

     —         747        -100.0     —        —   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Dental Net Sales (Continuing Operations of ZimVie Inc.)

   $ 113,066      $ 116,545        -3.0     1.2     -4.2
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

United States

   $ 81,528      $ 90,902        -10.3     0.0     -10.3

International

     18,927        21,465        -11.8     0.1     -11.9
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Spine Third Party Sales (Discontinued Operations)

     100,455        112,367        -10.6     0.0     -10.6
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Related Party Net Sales

     —         208        -100.0     —        —   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Spine Net Sales (Discontinued Operations)

   $ 100,455      $ 112,575        -10.8     0.0     -10.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 
     For the Twelve Months Ended
December 31,
                    
     2023      2022      Change (%)     Foreign
Exchange
Impact
    Constant
Currency %
Change
 

United States

   $ 269,557      $ 272,726        -1.2     0.0     -1.2

International

     187,640        186,955        0.4     0.1     0.3
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Dental Third Party Sales (Continuing Operations of ZimVie Inc.)

     457,197        459,681        -0.5     0.0     -0.6
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Related Party Net Sales

     236        3,611        -93.5     —        —   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Dental Net Sales (Continuing Operations of ZimVie Inc.)

   $ 457,433      $ 463,292        -1.3     0.1     -1.4
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

United States

   $ 327,343      $ 357,416        -8.4     0.0     -8.4

International

     81,838        92,390        -11.4     0.6     -12.0
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Spine Third Party Sales (Discontinued Operations)

     409,181        449,806        -9.0     0.1     -9.2
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Related Party Net Sales

     103        764        -86.5     —        —   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Spine Net Sales (Discontinued Operations)

   $ 409,284      $ 450,570        -9.2     0.2     -9.4
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

9


Continuing Operations Q4 FY23 (in thousands, except per share data)

 

     For the Three Months Ended December 31, 2023  
     Net Sales      Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding
cost of
products sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Continuing Operations of ZimVie Inc.

   $ 113,066      $ (42,573   $ (85,767   $ (15,274   $ (22,163   $ (0.83

Restructuring and other cost reduction initiatives [1]

     —         —        (717     (717     (717     (0.03

Acquisition, integration, divestiture and related [2]

     —         —        10,548       10,548       10,548       0.41  

European union medical device regulation [3]

     —         —        347       347       347       0.01  

Other charges [4]

     —         278       286       564       564       0.02  

Intangible asset amortization

     —         —        6,134       6,134       6,134       0.23  

Spin-related share-based compensation expense [5]

     —         —        5,335       5,335       5,335       0.20  

Tax effect of above adjustments & other [6]

     —         —        —        —        2,524       0.09  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 113,066      $ (42,295   $ (63,834   $ 6,937     $ 2,572     $ 0.10  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred were primarily related to severance and professional fees. In June 2022 we initiated a restructuring plan and the expenses incurred were primarily related to employee termination benefits.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses increased by $6.3 million in 4Q 2023 compared to 4Q 2022, due primarily to increased costs related to the pending sale of our spine segment ($10.1 million), partially offset by decreases in separation-related professional fees ($2.0 million), separation-related employee costs ($0.3 million) and separation-related lease costs ($0.1 million).

[3]

Expenses incurred for initial compliance with the European Union (“EU”) Medical Device Regulation (“MDR”) for previously-approved products.

[4]

Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet, including the impact of accelerating the vesting of these awards in Q4 2023.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

 

10


Continuing Operations Q4 FY22 (in thousands, except per share data)

 

     For the Three Months Ended December 31, 2022  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding
cost of
products sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Continuing Operations of ZimVie Inc.

   $ 116,545     $ (42,928   $ (86,178   $ (12,561   $ (15,352   $ (0.59

Restructuring and other cost reduction initiatives [1]

     —        —        1,545       1,545       1,545       0.06  

Acquisition, integration, divestiture and related [2]

     —        —        4,221       4,221       4,221       0.16  

European union medical device regulation [3]

     —        —        1,005       1,005       1,005       0.04  

Intangible asset amortization

     —        —        6,599       6,599       6,599       0.25  

Related party

     (747     731       —        (16     (16     —   

Spin-related share-based compensation expense [4]

     —        —        856       856       856       0.03  

Other charges [5]

     —        1,875       —        1,875       1,875       0.07  

Tax effect of above adjustments & other [6]

     —        —        —        —        1,158       0.05  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 115,798     $ (40,322   $ (71,952   $ 3,524     $ 1,891     $ 0.07  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In June 2022 we initiated a restructuring plan and the expenses incurred were primarily related to employee termination benefits.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses decreased by $6.1 million in 4Q 2022 compared to 4Q 2021, due primarily to decreases in separation-related employee costs ($3.9 million) and separation-related lease costs ($0.5 million).

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet.

[5]

Expenses captured through allocations made for purposes of the GAAP carve-out financial statement results.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

 

11


Continuing Operations FY23 (in thousands, except per share data)

 

     For the Twelve Months Ended December 31, 2023  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding
cost of
products sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Continuing Operations of ZimVie Inc.

   $ 457,433     $ (167,050   $ (321,322   $ (30,939   $ (56,049   $ (2.12

Restructuring and other cost reduction initiatives [1]

     —        —        4,489       4,489       4,489       0.17  

Acquisition, integration, divestiture and related [2]

     —        —        15,195       15,195       15,195       0.57  

European union medical device regulation [3]

     —        —        2,574       2,574       2,574       0.10  

Related party

     (236     231       —        (5     (5     —   

Other charges [4]

     —        1,143       1,145       2,288       2,288       0.09  

Intangible asset amortization

     —        —        26,512       26,512       26,512       1.00  

Spin-related share-based compensation expense [5]

     —        —        7,679       7,679       7,679       0.29  

Tax effect of above adjustments & other [6]

     —        —        —        —        3,152       0.12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 457,197     $ (165,676   $ (263,728   $ 27,793     $ 5,835     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses decreased by $11.4 million in 2023 compared to 2022, due primarily to decreases in separation-related professional fees ($8.2 million), separation-related employee costs ($5.3 million), separation-related lease costs ($3.2 million) and contingent consideration ($2.8 million), partially offset by increased costs related to the pending sale of our spine segment ($11.6 million).

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet, including the impact of accelerating the vesting of these awards in Q4 2023.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

 

12


Continuing Operations FY22 (in thousands, except per share data)

 

     For the Twelve Months Ended December 31, 2022  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding
cost of
products sold
    Operating (Loss)
Income
    Net (Loss)
Income
    Diluted EPS  

Continuing Operations of ZimVie Inc.

   $ 463,292     $ (169,346   $ (340,433   $ (46,487   $ (46,904   $ (1.80

Pre vs. post-spin Cost Structure Differences [1]

     —        —        5,271       5,271       5,271       0.20  

Restructuring and other cost reduction initiatives [2]

     —        —        2,559       2,559       2,559       0.10  

Acquisition, integration, divestiture and related [3]

     —        —        26,587       26,587       26,587       1.02  

European union medical device regulation [4]

     —        —        3,146       3,146       3,146       0.12  

Intangible asset amortization

     —        —        26,982       26,982       26,982       1.03  

Related party

     (3,611     3,386       —        (225     (225     (0.01

Spin-related share-based compensation expense [5]

     —        1,331       10,386       11,717       11,717       0.45  

Tax effect of above adjustments & other [6]

     —        —        —        —        (13,196     (0.50
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 459,681     $ (164,629   $ (265,502   $ 29,550     $ 15,937     $ 0.61  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

Reflects certain items captured in the GAAP carve-out financial statements that have not continued post-spin, including, but not limited to, facilities that did not convey with ZimVie in the spin, redundant personnel costs incurred as a result of the spin, and the difference between the pre-spin allocations of Zimmer Biomet’s corporate costs in accordance with GAAP, versus the expected post-spin corporate costs for ZimVie.

[2]

In June 2022 we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits.

[3]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses increased by $15.6 million in 2022 compared to 2021, due primarily to increases in separation-related professional fees ($7.9 million), separation-related employee costs ($2.7 million), separation-related lease costs ($2.7 million) and contingent consideration ($1.3 million).

[4]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

 

13


Reconciliation of Adjusted EBITDA ($ in thousands) – Continuing Operations

RECONCILIATION OF ADJUSTED EBITDA ($ in thousands)

 

     For the Three Months Ended
December 31,
     For the Twelve Months Ended
December 31,
 
Continuing Operations of ZimVie Inc.    2023      2022      2023      2022  

Net Sales

           

Total Third Party Sales

   $ 113,066      $ 115,798      $ 457,197      $ 459,681  

Related Party Sales

     —         747        236        3,611  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Net Sales

   $ 113,066      $ 116,545      $ 457,433      $ 463,292  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net Loss

   $ (22,163    $ (15,352    $ (56,049    $ (46,904

Interest expense, net

     4,976        3,599        20,234        10,870  

Income tax benefit (provision)

     3,428        1,822        5,202        (7,596

Depreciation and amortization

     7,908        9,017        34,507        37,198  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     (5,851      (914      3,894        (6,432

Share-based compensation

     9,316        4,660        23,476        25,821  

Restructuring and other cost reduction initiatives [1]

     (717      1,545        4,489        2,559  

Acquisition, integration, divestiture and related [2]

     10,548        4,221        15,195        26,587  

Related party loss

     —         (16      (5      (225

European union medical device regulation [3]

     347        1,005        2,574        3,146  

Pre vs. post-spin Cost Structure Differences [4]

     —         —         —         5,271  

Other charges [5]

     278        1,875        1,143        336  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 13,921      $ 12,376      $ 50,766      $ 57,063  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net Loss Margin [6]

     -19.6      -13.3      -12.3      -10.2

Adjusted EBITDA Margin [7]

     12.3      10.7      11.1      12.4

 

[1]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits. 

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses increased by $6.3 million in 4Q 2023 compared to 4Q 2022, due primarily to increased costs related to the pending sale of our spine segment ($10.1 million), partially offset by decreases in separation-related professional fees ($2.0 million), separation-related employee costs ($0.3 million) and separation-related lease costs ($0.1 million). Acquisition, integration, divestiture and related expenses decreased by $11.4 million in 2023 compared to 2022, due primarily to decreases in separation-related professional fees ($8.2 million), separation-related employee costs ($5.3 million), separation-related lease costs ($3.2 million) and contingent consideration ($2.8 million), partially offset by increased costs related to the pending sale of our spine segment ($11.6 million).

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Reflects certain items captured in the GAAP carve-out financial statements that have not continued post-spin, including, but not limited to, facilities that did not convey with ZimVie in the spin, redundant personnel costs incurred as a result of the spin, and the difference between the pre-spin allocations of Zimmer Biomet’s corporate costs in accordance with GAAP, versus the expected post-spin corporate costs for ZimVie.

[5]

Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions.

[6]

Net Loss Margin is calculated as Net Loss divided by third party net sales for the applicable period. 

[7]

Adjusted EBITDA Margin is Adjusted EBITDA divided by third party net sales for the applicable period.

 

14


Discontinued Operations Q4 FY23 (in thousands, except per share data)

 

     For the Three Months Ended December 31, 2023  
     Net Sales      Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding cost
of products
sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Discontinued Operations

   $ 100,455      $ (27,648   $ (369,052   $ (296,245   $ (312,689   $ (11.76

Restructuring and other cost reduction initiatives [1]

     —         —        2,423       2,423       2,423       0.09  

Acquisition, integration, divestiture and related [2]

     —         —        (203     (203     (203     (0.01

European union medical device regulation [3]

     —         —        778       778       778       0.03  

Other charges [4]

     —         251       801       1,052       1,052       0.04  

Intangible asset amortization

     —         —        11,431       11,431       11,431       0.43  

Spin-related share-based compensation expense [5]

     —         —        1,014       1,014       1,014       0.04  

Tax effect of above adjustments & other [6]

     —         —        —        —        9,648       0.36  

Write-down of spine disposal group to fair value [7]

     —         —        289,456       289,456       289,456       10.89  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 100,455      $ (27,397   $ (63,352   $ 9,706     $ 2,910     $ 0.11  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 and November 2022, we initiated restructuring plans and the expenses incurred under these plans were primarily related to employee termination benefits and the exit of our spine products operations in China because of an unsuccessful VBP bid.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses in 4Q 2023 were comparable to 4Q 2022.

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet, including the impact of accelerating the vesting of these awards in Q4 2023.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

[7]

We performed an impairment analysis of the spine segment in December 2023 on a held-for-sale basis, and the fair value of consideration to be received upon closure of the transaction was less than the carrying value of the spine segment’s net assets.

 

15


Discontinued Operations Q4 FY22 (in thousands, except per share data)

 

     For the Three Months Ended December 31, 2022  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding cost
of products
sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Discontinued Operations

   $ 112,575     $ (31,349   $ (93,076   $ (11,850   $ (14,992   $ (0.57

Restructuring and other cost reduction initiatives [1]

     —        —        3,323       3,323       3,323       0.13  

Acquisition, integration, divestiture and related [2]

     —        —        (239     (239     (239     (0.01

European union medical device regulation [3]

     —        —        2,506       2,506       2,506       0.10  

Intangible asset amortization

     —        —        14,089       14,089       14,089       0.54  

Related party

     (208     198       —        (10     (10     —   

Spin-related share-based compensation expense [4]

     —        —        214       214       214       0.01  

Tax effect of above adjustments & other [5]

     —        —        —        —        (2,445     (0.10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 112,367     $ (31,151   $ (73,183   $ 8,033     $ 2,446     $ 0.10  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In June 2022 and November 2022, we initiated restructuring plans and the expenses incurred under these plans were primarily related to employee termination benefits and the exit of our spine products operations in China because of an unsuccessful VBP bid. We also incurred expenses in 2022 from the Zimmer Biomet initiated restructuring plans in the fourth quarters of 2019 and 2021 and the restructuring costs we incurred under those plans were primarily related to employee termination benefits, contract terminations and retention period compensation and benefits.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses decreased by $1.9 million in 4Q 2022 compared to 4Q 2021, due primarily to a decrease in separation-related professional fees ($5.0 million), partially offset by an increase in separation-related employee costs ($2.5 million).

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet.

[5]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

 

16


Discontinued Operations FY23 (in thousands, except per share data)

 

     For the Twelve Months Ended December 31, 2023  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding cost
of products
sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Discontinued Operations

   $ 409,284     $ (113,964   $ (630,024   $ (334,704   $ (337,232   $ (12.75

Restructuring and other cost reduction initiatives[1]

     —        —        13,068       13,068       13,068       0.49  

Acquisition, integration, divestiture and related[2]

     —        —        175       175       175       0.01  

European medical device regulation[3]

           —        4,259       4,259       4,259       0.16  

Related party

     (103     97       —        (6     (6     —   

Other charges[4]

     —        2,768       4,554       7,322       7,322       0.28  

Intangible asset amortization

     —        —        52,840       52,840       52,840       2.00  

Spin-related share-based compensation expense[5]

     —        —        1,600       1,600       1,600       0.06  

Tax effect of above adjustments & other[6]

     —        —        —        —        (18,804     (0.71

Write-down of spine disposal group to fair value[7]

     —        —        289,456       289,456       289,456       10.94  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 409,181     $ (111,099   $ (264,072   $ 34,010     $ 12,677     $ 0.48  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 and November 2022 we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits and the exit of our spine products operations in China because of an unsuccessful VBP bid. We also incurred expenses in 2022 from the Zimmer Biomet initiated restructuring plans in the fourth quarters of 2019 and 2021 and the restructuring costs we incurred under those plans were primarily related to employee termination benefits, contract terminations and retention period compensation and benefits.

[2]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses decreased by $2.7 million in 2023 compared to 2022, due primarily to decreases in separation-related professional fees ($2.8 million).

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet, including the impact of accelerating the vesting of these awards in Q4 2023.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

[7]

We performed an impairment analysis of the spine segment in December 2023 on a held-for-sale basis, and the fair value of consideration to be received upon closure of the transaction was less than the carrying value of the spine segment’s net assets.

 

17


Discontinuing Operations FY22 (in thousands, except per share data)

 

     For the Twelve Months Ended December 31, 2022  
     Net Sales     Cost of
products sold,
excluding
intangible asset
amortization
    Operating
expenses,
excluding cost
of products
sold
    Operating
(Loss) Income
    Net (Loss)
Income
    Diluted EPS  

Discontinued Operations

   $ 450,570     $ (131,440   $ (367,886   $ (48,756   $ (16,977   $ (0.65

Pre vs. post-spin Cost Structure Differences [1]

     —        (164     4,890       4,726       4,726       0.18  

Restructuring and other cost reduction initiatives [2]

     —        —        8,795       8,795       8,795       0.34  

Acquisition, integration, divestiture and related [3]

     —        —        2,850       2,850       2,850       0.11  

European union medical device regulation [4]

     —        —        6,917       6,917       6,917       0.27  

Intangible asset amortization

     —        —        53,885       53,885       53,885       2.07  

Related party

     (764     721       —        (43     (43     —   

Spin-related share-based compensation expense [5]

     —        333       2,596       2,929       2,929       0.11  

Tax effect of above adjustments & other [6]

     —        —        —        —        (25,443     (0.99

Favorable Puerto Rico Tax Filing [7]

     —        —        —        —        (5,712     (0.22
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted

   $ 449,806     $ (130,550   $ (287,953   $ 31,303     $ 31,927     $ 1.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

Reflects certain items captured in the GAAP carve-out financial statements that have not continued post-spin, including, but not limited to, facilities that did not convey with ZimVie in the spin, redundant personnel costs incurred as a result of the spin, and the difference between the pre-spin allocations of Zimmer Biomet’s corporate costs in accordance with GAAP, versus the expected post-spin corporate costs for ZimVie.

[2]

In June 2022 and November 2022, we initiated restructuring plans and the expenses incurred under these plans were primarily related to employee termination benefits and the exit of our spine products operations in China because of an unsuccessful VBP bid. We also incurred expenses in 2022 from the Zimmer Biomet initiated restructuring plans in the fourth quarters of 2019 and 2021 and the restructuring costs we incurred under those plans were primarily related to employee termination benefits, contract terminations and retention period compensation and benefits.

[3]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses decreased by $10.0 million in 2022 compared to 2021, due primarily to decreases in separation-related professional fees ($9.9 million).

[4]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[5]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet.

[6]

Reflects the tax effect of the adjustments from reported to adjusted, as well as an adjustment for management’s expectation of ZimVie’s statutory tax rate based on current tax law and adjusted pre-tax income.

[7]

Tax benefit in Q3 2022 from a favorable Puerto Rico tax ruling related to the intercompany sale of intellectual property prior to the spin.

 

18


Reconciliation of Adjusted EBITDA ($ in thousands) – Discontinued Operations

RECONCILIATION OF ADJUSTED EBITDA ($ in thousands)

 

     For the Three Months Ended
December 31,
    For the Twelve Months Ended
December 31,
 
Discontinued Operations    2023     2022     2023     2022  

Net Sales

        

Total Third Party Sales

   $ 100,455     $ 112,367     $ 409,181     $ 449,806  

Related Party Sales

     —        208       103       764  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Sales

   $ 100,455     $ 112,575     $ 409,284     $ 450,570  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

   $ (312,689   $ (14,992   $ (337,233   $ (16,977

Interest expense, net

     4,500       2,833       16,422       7,409  

Income tax benefit (provision)

     10,670       305       (14,350     (38,442

Depreciation and amortization

     18,690       21,303       87,179       85,591  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     (278,829     9,449       (247,982     37,581  

Share-based compensation

     1,575       649       3,544       4,468  

Write-down of spine disposal group to fair value [1]

     289,456       —        289,456       —   

Restructuring and other cost reduction initiatives [2]

     2,423       3,323       13,068       8,795  

Acquisition, integration, divestiture and related [3]

     (203     (239     175       2,850  

Related party loss

     —        (10     (6     (43

European union medical device regulation [4]

     778       2,506       4,259       6,917  

Other charges [5]

     311       —        3,108       4,912  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 15,511     $ 15,678     $ 65,622     $ 65,480  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss Margin [6]

     -311.3     -13.3     -82.4     -3.8

Adjusted EBITDA Margin [7]

     15.4     14.0     16.0     14.6

 

[1]

We performed an impairment analysis of the spine segment in December 2023 on a held-for-sale basis, and the fair value of consideration to be received upon closure of the transaction was less than the carrying value of the spine segment’s net assets.

[2]

In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 and November 2022, we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits and the exit of our spine products operations in China because of an unsuccessful volume-based procurement program bid. We also incurred expenses in 2022 from the Zimmer Biomet initiated restructuring plans in the fourth quarters of 2019 and 2021 and the restructuring costs we incurred under those plans were primarily related to employee termination benefits, contract terminations and retention period compensation and benefits. 

[3]

Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses in 4Q 2023 were comparable to 4Q 2022. Acquisition, integration, divestiture and related expenses decreased by $2.7 million in 2023 compared to 2022, due primarily to decreases in separation-related professional fees ($2.8 million).

[4]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[5]

The 2023 amounts represent inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions. The 2022 amounts represent expenses captured through allocations made for purposes of the GAAP carve-out financial statement results.

[6]

Net Loss Margin is calculated as Net Loss divided by third party net sales for the applicable period. 

[7]

Adjusted EBITDA Margin is Adjusted EBITDA divided by third party net sales for the applicable period.

 

19


Reconciliation of Cost of Products Sold, excluding intangible asset amortization, R&D, and SG&A ($ in thousands)

 

     Continuing Operations     Percentage of
Third Party
Net Sales
    Discontinued
Operations
    Percentage of
Third Party
Net Sales
 
For the Three Months Ended December 31,    2023     2022     2023     2022     2023     2022     2023     2022  

Cost of products sold, excluding intangible asset amortization

   $ (42,573   $ (42,197     -37.7     -36.4   $ (27,648   $ (31,151     -27.5     -27.7

Other charges [1]

     278       1,875       0.2     1.6     251       —        0.2     0.0

Spin-related share-based compensation expense [2]

     —        —        0.0     0.0     —        —        0.0     0.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted cost of products sold, excluding intangible asset amortization

   $ (42,295   $ (40,322     -37.5     -34.8   $ (27,397   $ (31,151     -27.3     -27.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Continuing Operations     Percentage of
Third Party
Net Sales
    Discontinued
Operations
    Percentage of
Third Party
Net Sales
 
For the Twelve Months Ended December 31,    2023     2022     2023     2022     2023     2022     2023     2022  

Cost of products sold, excluding intangible asset amortization

   $ (166,819   $ (165,960     -36.5     -36.1   $ (113,867   $ (130,719     -27.9     -29.1

Other charges [1]

     1,143       —        0.3     0.0     2,768       (164     0.6     0.0

Spin-related share-based compensation expense [2]

     —        1,331       0.0     0.3     —        333       0.1     0.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted cost of products sold, excluding intangible asset amortization

   $ (165,676   $ (164,629     -36.2     -35.8   $ (111,099   $ (130,550     -27.2     -29.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Continuing Operations     Percentage of
Third Party
Net Sales
    Discontinued
Operations
    Percentage of
Third Party
Net Sales
 
For the Three Months Ended December 31,    2023     2022     2023     2022     2023     2022     2023     2022  

Research and development

   $ (6,893   $ (6,993     -6.1     -6.0   $ (5,767   $ (8,261     -5.7     -7.4

European union medical device regulation [3]

     347       1,005       0.3     0.9     778       2,506       0.8     2.2

Spin-related share-based compensation expense [2]

     80       80       0.1     0.1     120       20       0.1     0.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted research and development

   $ (6,466   $ (5,908     -5.7     -5.1   $ (4,869   $ (5,735     -4.8     -5.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Continuing Operations     Percentage of
Third Party
Net Sales
    Discontinued
Operations
    Percentage of
Third Party
Net Sales
 
For the Three Months Ended December 31,    2023     2022     2023     2022     2023     2022     2023     2022  

Selling, general and administrative

   $ (62,909   $ (66,820     -55.6     -57.7   $ (60,178   $ (67,642     -59.9     -60.2

Other charges [1]

     286       —        0.3     0.0     801       —        0.8     0.0

Spin-related share-based compensation expense [2]

     5,255       776       4.6     0.7     894       194       0.9     0.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted selling, general and administrative

   $ (57,368   $ (66,044     -50.7     -57.0   $ (58,483   $ (67,448     -58.2     -60.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

20


     Continuing Operations     Percentage of
Third Party
Net Sales
    Discontinued Operations     Percentage of
Third Party
Net Sales
 
For the Twelve Months Ended December 31,    2023     2022     2023     2022     2023     2022     2023     2022  

Selling, general and administrative

   $ (248,964   $ (253,158     -54.5     -55.1   $ (247,926   $ (270,812     -60.6     -60.2

Pre vs. post-spin Cost Structure Differences [4]

     —        5,271       0.0     1.1     —        —        0.0     0.0

Other charges [1]

     1,145       —        0.3     0.0     4,554       4,890       1.1     1.1

Spin-related share-based compensation expense [2]

     7,359       8,630       1.6     1.9     1,420       2,157       0.3     0.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted selling, general and administrative

   $ (240,460   $ (239,257     -52.6     -52.0   $ (241,952   $ (263,765     -59.1     -58.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

[1]

The 2023 amounts represent inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions. The 2022 amounts represent expenses captured through allocations made for purposes of the GAAP carve-out financial statement results.

[2]

Spin-related share-based compensation expense from grants provided due to the successful separation from Zimmer Biomet, including the impact of accelerating the vesting of these awards in Q4 2023.

[3]

Expenses incurred for initial compliance with the EU MDR for previously-approved products.

[4]

Reflects certain items captured in the GAAP carve-out financial statements that have not continued post-spin, including, but not limited to, facilities that did not convey with ZimVie in the spin, redundant personnel costs incurred as a result of the spin, and the difference between the pre-spin allocations of Zimmer Biomet’s corporate costs in accordance with GAAP, versus the expected post-spin corporate costs for ZimVie.

 

21

EX-99.2

Slide 1

Corporate Overview February 2024 Exhibit 99.2


Slide 2

Forward-looking statements and Non-GAAP measures Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995   This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning ZimVie’s expectations, plans, prospects and product and service offerings, including expected benefits, opportunities and other prospects if the spine business is divested. Such statements are based upon the current beliefs, expectations, and assumptions of management and are subject to significant risks, uncertainties, and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: uncertainties as to the timing of the sale of the spine business and the risk that the transaction may not be completed in a timely manner or at all; the possibility that any or all of the conditions to the consummation of the sale of the spine business may not be satisfied or waived; the effect of the announcement or pendency of the transaction on ZimVie’s ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners; and risks related to diverting management’s attention from ZimVie’s ongoing business operations and uncertainties and matters beyond the control of management. For a list and description of other such risks, uncertainties, and changes in circumstances, see ZimVie’s periodic reports filed with the U.S. Securities and Exchange Commission (the “SEC”). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in ZimVie’s filings with the SEC. Forward-looking statements speak only as of the date they are made, and ZimVie disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary note is applicable to all forward-looking statements contained in this presentation.   Forward-Looking Non-GAAP Financial Measures   This presentation also includes certain forward-looking non-GAAP financial measures including adjusted EBITDA margin, net debt, and free cash flow conversion for the period ending one year after the proposed closing of the sale of our spine business, and over the long-term following the proposed closing of the sale of our spine business. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the GAAP measures cannot be reliably estimated and the reconciliations cannot be performed without unreasonable effort due to their dependence on future uncertainties, such as the timing of certain transactions, including the proposed sale of our spine business, and adjusting items that the Company cannot reasonably predict at this time but which may have a material impact on our future GAAP results.  


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ZimVie: A global dental leader Powerful, market-leading portfolio of premium implants, biomaterials, and digital dentistry with exposure to MSD/HSD growth end-markets Well positioned to accelerate growth within large, attractive, and underserved markets through differentiated technologies Opportunity to improve operating leverage through leaner cost structure and optimized product manufacturing Opportunity to improve cash flow conversion rates through a disciplined financial framework Continue to build customer intimacy and expand portfolio adoption through our global direct sales force & specialty partners


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Addressing a significant, unmet need for tooth replacement 8 Million An estimated 8 million US patients seek treatment for tooth loss annually 25% Only 25% receive tooth replacement Leading player in the following attractive dental segments 2021 Market Opportunity 2021-2026E(1) CAGR Dental implants Biomaterials Digital solutions $5B $2B $1B Mid Single Digit Mid Single Digit High Single Digit (1) Estimates are not precise and based on company estimates.


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Diversified dental portfolio addresses end-to-end patient needs Increase Penetration of Implants through Continued Innovation and Commercial Execution Implant Growth: Innovation & Execution Leverage Leadership Position to Drive Implant Conversion Biomaterials Pull-Through Scale ZimVie Presence Across Geographies with Low Share Geographic Expansion Drive Digital Workflow Adoption and Implant Penetration Digital Dentistry Pull-Through Large unmet need in tooth replacement creates significant opportunity for long-term market penetration, expansion and growth


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Delivering fully integrated and end-to-end implant-based tooth replacement solutions Driving Premium Implant Growth Through Innovation Leveraging Biomaterials Leadership Position Digital Dentistry Driving Implant Adoption Comprehensive line of premium implant systems, meeting the varying needs of oral surgeons / dental clinicians with a wide range of indications Leading biomaterial solutions increase the size of our patient pool that can qualify for tooth replacement A fully integrated and efficient workflow with predictable outcomes increases adoption Surface Treatment Bone-level / Tissue-level Tapered or Straight Material (Titanium, Zirconia) Abutment Connection Various Width and Heights Types of Biomaterials: Allografts – bone substitute derived from human donors Xenografts / Synthetics – bone substitute derived from animals or biocompatible materials Membranes – membrane for guided bone regeneration procedures Virtual treatment planning CAD/CAM workflow systems Guided surgery Intra-oral scanners Grooves and Texturing Crestal Options


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Financial profile and outlook Net Sales Adjusted EBITDA Margin FY 2023* Year 1 Post-Close** Transition year in 2024 to build a strong foundation for long-term performance $457.2M 11.1%(1) $455M+ 15%+(2) Net Debt ~$421.0M(3) Drivers of financial progress Sales growth above market Operational simplification and efficiency Best-in-class portfolio Commercial excellence <$200M(4) * Reflects FY 2023 continuing operations results. ** Year 1 Post-Close refers to one year following the close of ZimVie’s anticipated sale of its spine business. ZimVie announced a definitive agreement to sell its spine business to H.I.G. Capital on December 18, 2023, for $375M in total consideration. (1) This is a Non-GAAP financial measure. Refer to the reconciliation in the Appendix for further information. (2) This is a Non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. Refer to “Forward-Looking Statements and Non-GAAP Measures” slide of this presentation, which identifies the information that is unavailable without unreasonable efforts and provides additional information. (3) Represents net debt at December 31, 2023.  Net debt is a non-GAAP financial measure, and is reconciled to total debt, the most directly comparable GAAP measure, as follows, as of December 31, 2023: Total debt of $508.8 million, less cash and cash equivalents of $87.8 million, equaling $421.0 million. (4) Represents projected net debt one year following the closing of the sale of the spine business.  This is a forward-looking non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. Refer to “Forward-Looking Statements and Non-GAAP Financial Measures” slide of this presentation, which identifies the information that is unavailable without unreasonable efforts and provides additional information. December 31, 2023 Year 1 Post-Close


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Long-term outlook Leverage innovation to grow above market Drive progress across the business to create long-term shareholder value Achieve 20%+ Adj EBITDA margin(1) 80%+ FCF Conversion(1)(2) Achieve 2x operating leverage Innovation pipeline poised to accelerate growth in faster growing end markets Focused operational and commercial efficiency programs underway Build upon already solid Dental free cash flow conversion profile Enable flexible capital allocation strategy This is a non-GAAP financial measure for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. Refer to “Forward-Looking Statements and Non-GAAP Financial Measures” slide of this presentation, which identifies the information that is unavailable without unreasonable efforts and provides additional information. Excluding corporate costs.


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Appendix


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Reconciliation of Adjusted EBITDA (in thousands) (1) In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment, and in July 2023, we took additional actions. The expenses incurred under this plan were primarily related to severance and professional fees. In June 2022 we initiated restructuring plans and the expenses incurred were primarily related to employee termination benefits. (2) Acquisition, integration, divestiture, and related expenses include costs incurred to prepare for and complete the separation from our former parent (such as professional fees, transition services agreements, costs to stand up our corporate organization and infrastructure), changes in the fair value of contingent consideration for acquisitions closed prior to the separation date and costs related to the evaluation of strategic options for our portfolio. Acquisition, integration, divestiture and related expenses increased by $6.3 million in 4Q 2023 compared to 4Q 2022, due primarily to increased costs related to the pending sale of our spine segment ($10.1 million), partially offset by decreases in separation-related professional fees ($2.0 million), separation-related employee costs ($0.3 million) and separation-related lease costs ($0.1 million). Acquisition, integration, divestiture and related expenses decreased by $11.4 million in 2023 compared to 2022, due primarily to decreases in separation-related professional fees ($8.2 million), separation-related employee costs ($5.3 million), separation-related lease costs ($3.2 million) and contingent consideration ($2.8 million), partially offset by increased costs related to the pending sale of our spine segment ($11.6 million). (3) Expenses incurred for initial compliance with the EU MDR for previously-approved products. (4) Reflects certain items captured in the GAAP carve-out financial statements that have not continued post-spin, including, but not limited to, facilities that did not convey with ZimVie in the spin, redundant personnel costs incurred as a result of the spin, and the difference between the pre-spin allocations of Zimmer Biomet’s corporate costs in accordance with GAAP, versus the expected post-spin corporate costs for ZimVie. (5) Inventory write-offs resulting from restructuring activities and property, plant, and equipment step-up amortization from prior acquisitions. (6) Net Loss Margin is calculated as Net Loss divided by third party net sales for the applicable period. (7) Adjusted EBITDA Margin is Adjusted EBITDA divided by third party net sales for the applicable period. For the Three Months Ended December 31, For the Twelve Months Ended December 31, Continuing Operations of ZimVie Inc. 2023 2022 2023 2022 Net Sales Total Third Party Sales 113,066 $ 115,798 $ 457,197 $ 459,681 $ Related Party Sales - 747 236 3,611 Total Net Sales 113,066 $ 116,545 $ 457,433 $ 463,292 $ Net Loss (22,163) $ (15,352) $ (56,049) $ (46,904) $ Interest expense, net 4,976 3,599 20,234 10,870 Income tax benefit (provision) 3,428 1,822 5,202 (7,596) Depreciation and amortization 7,908 9,017 34,507 37,198 EBITDA (5,851) (914) 3,894 (6,432) Share-based compensation 9,316 4,660 23,476 25,821 Restructuring and other cost reduction initiatives [1] (717) 1,545 4,489 2,559 Acquisition, integration, divestiture and related [2] 10,548 4,221 15,195 26,587 Related party loss - (16) (5) (225) European union medical device regulation [3] 347 1,005 2,574 3,146 Pre vs. post-spin Cost Structure Differences [4] - - - 5,271 Other charges [5] 278 1,875 1,143 336 Adjusted EBITDA 13,921 $ 12,376 $ 50,766 $ 57,063 $ Net Loss Margin [6] -19.6% -13.3% -12.3% -10.2% Adjusted EBITDA Margin [7] 12.3% 10.7% 11.1% 12.4%