
ZimVie’s 3Q23 Better than Tepid Expectations, but Elective Procedure Headwinds in Dental Likely to Worsen and U.S. Spine Competition Unlikely to Abate
11-2-23 (by: Scott Gleason) ZimVie , a company focusing on the dental and spine markets, has released its financial results for the third quarter ending September 30, 2023 revenue of $202.9 million, reflecting a 4.9% decrease when compared to the same period in 2022. Investors had been anticipating total revenue of $198.5 million. Management highlighted new products including its recent launch of its Biotivity dental barrier membrane and its Azure line of dental solutions. It also highlighted its recent FDA approval for its pivotal study for its Mobi-C artificial disc for cervical arthroplasty combined with fusion. Management noted on the call that it did not expect the impact of competition in the U.S. spine market to abate, but highlighted opportunities for international growth.
Dental sales reached $105.3 million, exhibiting a modest 0.2% growth on a reported basis. U.S. sales declined year-over-year and could be a sign of more challenging elective procedure trends as reported by peers such as Align Technology. Spine sales accounted for $97.6 million, a decrease of $10.6 million (9.8%) on a reported basis. The company cited competitive pressures and the exit from spine product activities in China, which impacted global spine sales by 2.6%.
Adjusted net income for the third quarter of 2023 amounted to $2.2 million, representing a decrease of $10.7 million when compared to the same period in the previous year. Adjusted diluted EPS were $0.08 for the third quarter of 2023 compared to consensus forecasts of ($0.02). Adjusted EBITDA for the third quarter of 2023 reached $25.8 million, constituting 12.7% of third-party net sales, a 110-basis point decrease from the third quarter of 2022. At the end of the third quarter of 2023, ZimVie had cash and cash equivalents balance of $75.4 million.
ZimVie provided an update to its full-year 2023 financial guidance, which remains consistent with previous guidance. Net Sales are expected to fall within the range of $850 million to $870 million. At the mid-point, the guidance implies 4Q23 revenue of $207 million. Adjusted EBITDA Margin is anticipated to be in the range of 13.5% to 14.0%. Adjusted EPS is forecasted to range from $0.60 to $0.70.