• Full Year Revenue: $450 million.
• Fourth Quarter Revenue: $111.5 million, a decrease of 1.4% reported and 0.9% in constant currency.
• Fourth Quarter Operating Cash Flow: Over $21 million.
• Fourth Quarter Adjusted EBITDA: $18.4 million, 16.5% margin, 420 basis points improvement.
• Full Year Adjusted EBITDA: $60.0 million, 13.3% margin, 220 basis points improvement.
• Fourth Quarter Adjusted Earnings Per Share: $0.27, 170% increase from prior year.
• Full Year Adjusted Earnings Per Share: $0.62, 182% increase from prior year.
• Fourth Quarter Adjusted Cost of Products Sold: 35.0% of sales, 240 basis points decrease.
• Full Year Adjusted Cost of Products Sold: 35.8%, 40 basis points decrease.
• Full Year R&D Expense: $25.0 million, 5.6% of sales.
• Full Year SG&A Expense: $237.7 million.
• Cash Balance: $75 million at end of fourth quarter.
• Gross Debt: Approximately $220 million.
• Net Debt: Approximately $145 million.
• 2025 Revenue Guidance: $445 million to $460 million.
• 2025 Adjusted EBITDA Guidance: $65 million to $70 million.
• 2025 Adjusted Earnings Per Share Guidance: $0.80 to $0.95.
• 2025 Operating Cash Flow Guidance: $30 million to $40 million.
• First Quarter 2025 Revenue Guidance: $112 million to $114 million.

• Warning! GuruFocus has detected 4 Warning Signs with ZIMV.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ZimVie Inc (NASDAQ:ZIMV) successfully transitioned to a pure-play dental company by selling its Spine business, focusing on dental implants, biomaterials, and digital dentistry solutions.
• The company reported $450 million in full-year revenue for 2024, demonstrating strong financial performance.
• ZimVie Inc (NASDAQ:ZIMV) improved adjusted EBITDA margins by over 2 percentage points for the year, showcasing operational efficiency.
• The company generated over $21 million in operating cash flow in the fourth quarter, indicating strong cash management.
• ZimVie Inc (NASDAQ:ZIMV) significantly reduced its debt using proceeds from the sale of its Spine business, enhancing financial stability.

Negative Points

• Total third-party net sales for the fourth quarter decreased by 1.4% in reported rates, indicating a decline in sales performance.
• US third-party net sales for the fourth quarter declined by 1.5%, driven by weakness in implant sales and lower oral scanner sales.
• The company experienced softness in its end markets, impacting overall financial performance.
• ZimVie Inc (NASDAQ:ZIMV) faced challenges in the implant market, with pressure on more expensive cases and specialist-level procedures.
• The company's guidance for 2025 reflects a potential 1% decline to 2% reported growth, indicating cautious market expectations.

Q & A Highlights

Q: What caused the weakness in US implant sales during the last two weeks of December, and how did January and February perform? A: Vafa Jamali, President and CEO, explained that up to mid-December, sales were tracking well, but orders dried up in the last two weeks due to extended holidays. January returned to normal, and February showed stability, with no significant competitive issues affecting sales.

Q: What are the growth expectations for different product categories in 2025? A: Richard Heppenstall, CFO, stated that digital solutions and biomaterials are expected to continue performing well, with digital showing double-digit growth. Oral scanners, being low-margin distributor products, are expected to stabilize after Q1. The focus will be on implant growth, leveraging data-driven sales strategies.

Q: What are the expectations for the implant market recovery, and what factors could drive improvement? A: Vafa Jamali noted that recovery is needed in more expensive cases typically handled by specialists. Improvement is expected in the latter half of 2025, contingent on specialist volume returning. Financing availability for implants is currently too small to significantly impact the market.

Q: What are the drivers of margin improvement in 2025, and how will it progress throughout the year? A: Richard Heppenstall highlighted that gross margins improved in 2024 due to manufacturing efficiencies. For 2025, margins are expected to remain around 65%, with SG&A reductions following the end of transition service agreements. Margins will likely improve from Q1 to Q2, dip in Q3, and recover in Q4.

Q: What are the plans for the Valencia plant and capacity utilization in 2025? A: Vafa Jamali and Richard Heppenstall discussed plans to in-source third-party work to Valencia and Palm Beach Gardens, enhancing efficiency. Valencia has capacity for increased production, and in-sourcing will drive cost savings and better capacity utilization.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.