Zimmer Holdings Inc. (ZMH, Financial) filed Quarterly Report for the period ended 2012-09-30.
Zimmer Holdings Inc has a market cap of $11.1 billion; its shares were traded at around $65.99 with a P/E ratio of 12.3 and P/S ratio of 2.5. The dividend yield of Zimmer Holdings Inc stocks is 1.1%. Zimmer Holdings Inc had an annual average earning growth of 16.1% over the past 10 years. GuruFocus rated Zimmer Holdings Inc the business predictability rank of 2.5-star.
Our non-GAAP adjusted net earnings for the three and nine month periods ended September 30, 2012 were $202.1 million and $669.0 million, respectively, compared to $197.2 million and $660.6 million in the same prior year periods, respectively. Our non-GAAP adjusted diluted earnings per share for the three and nine month periods ended September 30, 2012 were $1.15 and $3.79, respectively, compared to $1.04 and $3.44 in the same prior year periods, respectively.
Cash flows provided by operating activities were $783.9 million for the nine month period ended September 30, 2012, compared to $783.8 million in the same prior year period. The principal source of cash from operating activities was net earnings. Non-cash items included in net earnings accounted for another $317.1 million of operating cash. All other items of operating cash flows reflect a use of $133.8 million of cash, compared to a use of $141.4 million in the same 2011 period. Favorable operating cash flows in the 2012 period included the timing of tax payments and trade accounts payable, which were offset by increased product liability payments.
Cash flows used in investing activities were $367.5 million for the nine month period ended September 30, 2012, compared to $411.1 million in the same prior year period. Additions to instruments decreased in the 2012 period compared to the 2011 period as the 2011 period reflected purchases for significant product launches, such as our Continuum Acetabular System. Spending on other property, plant and equipment has increased slightly in the 2012 period relative to the 2011 period, reflecting cash outlays necessary to complete new product-related investments and replace older machinery and equipment. We invest some of our cash and cash equivalents in highly-rated debt securities. The purchases and any sales or maturities of these investments are reflected as cash flows from investing activities. The timing of these investments can vary from quarter to quarter depending on the maturity of the debt securities and other cash and cash equivalent needs. Investments in other assets increased in the 2012 period compared to the 2011 period primarily related to the acquisition of Synvasive and other smaller acquisitions.
Our ability to collect accounts receivable in some countries depends in part upon the financial stability of these hospital and healthcare sectors and the respective countries national economic and healthcare systems. Most notably, in Europe healthcare is typically sponsored by the government. Since we sell products to public hospitals in those countries, we are indirectly exposed to government budget constraints. The ongoing financial crisis in the Euro zone impacts the indirect credit exposure we have to those governments through their public hospitals. We have experienced an increasing number of days sales outstanding in some European countries. As of September 30, 2012, in Greece, Italy, Portugal and Spain, countries that have been widely recognized as presenting the highest risk, our gross short-term and long-term trade accounts receivable combined were $206.6 million. With allowances for doubtful accounts of $10.1 million recorded in those countries, the net balance was $196.5 million, representing 24 percent of our total consolidated short-term and long-term trade accounts receivable balance, net. Italy and Spain account for $186.5 million of that net amount. We are actively monitoring the situations in these countries. We maintain contact with these customers on a regular basis. We continue to receive payments, albeit at a slower rate than in the past. We believe our allowance for doubtful accounts is adequate in these countries, as ultimately we believe the governments in these countries will be able to pay. As evidence of this, in Spain we received significant payments in the quarter ended September 30, 2012, to settle certain past due accounts receivable. To the extent the respective governments ability to fund their public hospital programs deteriorates, we may have to record significant bad debt expenses in the future.
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Zimmer Holdings Inc has a market cap of $11.1 billion; its shares were traded at around $65.99 with a P/E ratio of 12.3 and P/S ratio of 2.5. The dividend yield of Zimmer Holdings Inc stocks is 1.1%. Zimmer Holdings Inc had an annual average earning growth of 16.1% over the past 10 years. GuruFocus rated Zimmer Holdings Inc the business predictability rank of 2.5-star.
Highlight of Business Operations:
Net earnings of Zimmer Holdings, Inc. decreased 7 percent to $178.1 million for the three month period ended September 30, 2012, compared to $191.5 million in the same prior year period. Net earnings slightly decreased to $602.2 million for the nine month period ended September 30, 2012, compared to $604.2 million in the same prior year period. The declines in net earnings were due to the changes in revenues and expenses discussed above. For the three month period ended September 30, 2012, basic earnings per share were flat and diluted earnings per share increased 1 percent compared to the same prior year period. For the nine month period ended September 30, 2012, basic and diluted earnings per share both increased 8 percent compared to the same prior year period. The disproportional change in earnings per share as compared with net earnings is attributed to the effect of 2012 and 2011 share repurchases.Our non-GAAP adjusted net earnings for the three and nine month periods ended September 30, 2012 were $202.1 million and $669.0 million, respectively, compared to $197.2 million and $660.6 million in the same prior year periods, respectively. Our non-GAAP adjusted diluted earnings per share for the three and nine month periods ended September 30, 2012 were $1.15 and $3.79, respectively, compared to $1.04 and $3.44 in the same prior year periods, respectively.
Cash flows provided by operating activities were $783.9 million for the nine month period ended September 30, 2012, compared to $783.8 million in the same prior year period. The principal source of cash from operating activities was net earnings. Non-cash items included in net earnings accounted for another $317.1 million of operating cash. All other items of operating cash flows reflect a use of $133.8 million of cash, compared to a use of $141.4 million in the same 2011 period. Favorable operating cash flows in the 2012 period included the timing of tax payments and trade accounts payable, which were offset by increased product liability payments.
Cash flows used in investing activities were $367.5 million for the nine month period ended September 30, 2012, compared to $411.1 million in the same prior year period. Additions to instruments decreased in the 2012 period compared to the 2011 period as the 2011 period reflected purchases for significant product launches, such as our Continuum Acetabular System. Spending on other property, plant and equipment has increased slightly in the 2012 period relative to the 2011 period, reflecting cash outlays necessary to complete new product-related investments and replace older machinery and equipment. We invest some of our cash and cash equivalents in highly-rated debt securities. The purchases and any sales or maturities of these investments are reflected as cash flows from investing activities. The timing of these investments can vary from quarter to quarter depending on the maturity of the debt securities and other cash and cash equivalent needs. Investments in other assets increased in the 2012 period compared to the 2011 period primarily related to the acquisition of Synvasive and other smaller acquisitions.
Our ability to collect accounts receivable in some countries depends in part upon the financial stability of these hospital and healthcare sectors and the respective countries national economic and healthcare systems. Most notably, in Europe healthcare is typically sponsored by the government. Since we sell products to public hospitals in those countries, we are indirectly exposed to government budget constraints. The ongoing financial crisis in the Euro zone impacts the indirect credit exposure we have to those governments through their public hospitals. We have experienced an increasing number of days sales outstanding in some European countries. As of September 30, 2012, in Greece, Italy, Portugal and Spain, countries that have been widely recognized as presenting the highest risk, our gross short-term and long-term trade accounts receivable combined were $206.6 million. With allowances for doubtful accounts of $10.1 million recorded in those countries, the net balance was $196.5 million, representing 24 percent of our total consolidated short-term and long-term trade accounts receivable balance, net. Italy and Spain account for $186.5 million of that net amount. We are actively monitoring the situations in these countries. We maintain contact with these customers on a regular basis. We continue to receive payments, albeit at a slower rate than in the past. We believe our allowance for doubtful accounts is adequate in these countries, as ultimately we believe the governments in these countries will be able to pay. As evidence of this, in Spain we received significant payments in the quarter ended September 30, 2012, to settle certain past due accounts receivable. To the extent the respective governments ability to fund their public hospital programs deteriorates, we may have to record significant bad debt expenses in the future.
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