ZimVie’s Second-Quarter Sales Slip 4%

ZimVie Inc.’s growing pains continued in the second quarter, as the firm posted losses in net sales, common shares, and net income.

Net sales fell 4.1% to 224.9 million and net loss climbed $14.7 million to $23.4 million, due primarily to lower overall sales, higher costs of dental products sold (from the transition to more expensive products), increased general and administrative costs (from the ramp-up of corporate activities after the spinoff and more marketing and medical education events), higher restructuring expenses, and a lower income tax benefit. These items were partially offset by lower cost of spinal products sold due to reduced inventory charges, lower selling, general, administrative, and R&D costs due to restructuring initiatives and cost containment measures.

Adjusted net income for the three months ended June 30 fell $13.3 million to $4.3 million, and basic/diluted EPS came to $0.89. Adjusted EBITDA was $29.7 million, or 13.2% of third party net sales, a $1.5 million decrease and 20-basis points, respectively, from Q2 2022, and was primarily driven by lower third party net sales. Cash and cash equivalents at the end of Q2 2023 were $66.2 million and reflect the prepayment of principal debt payments through the second quarter of 2024.

Despite the losses, ZimVie President/CEO Vafa Jamali remains optimistic about the firm’s future. “I am pleased with our solid second quarter performance and remain optimistic about the underappreciated, significant opportunities in our portfolio and end markets,” he said. “We continue to strengthen the foundation for long-term growth in both business segments.”
 
Dental sales grew 0.5% to $118.7 million, driven by increased demand for ZimVie’s digital dentistry offerings. Spine revenue decrased 7.8% to $106.2 million due to continued competitive pressures in the spine market and lower net sales in China, though the loss was partially offset by spine product net sales retained by Zimmer Biomet Holdings in the same period last year in certain geographies where the separation and transition activities extended beyond the spinoff date.

Spun off from Zimmer Biomet Holdings in March 2022, ZimVie develops, manufactures, and delivers a portfolio of products and solutions designed to support dental tooth replacement and restoration procedures and treat a wide range of spine pathologies.