Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001876588 | |
Entity File Number | 001-41242 | |
Entity Registrant Name | ZIMVIE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-2007795 | |
Entity Address, Address Line One | 10225 Westmoor Drive | |
Entity Address, City or Town | Westminster | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80021 | |
City Area Code | 303 | |
Local Phone Number | 443-7500 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ZIMV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,536,071 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Sales | ||||
Total Net Sales | $ 202,872 | $ 214,577 | $ 653,195 | $ 684,742 |
Cost of products sold, excluding intangible asset amortization | (65,248) | (58,311) | (210,466) | (223,332) |
Related party cost of products sold, excluding intangible asset amortization | 0 | (1,319) | (328) | (3,177) |
Intangible asset amortization | (20,615) | (19,357) | (61,787) | (60,178) |
Research and development | (11,457) | (14,502) | (40,062) | (47,437) |
Selling, general and administrative | (117,354) | (129,345) | (373,801) | (389,509) |
Restructuring and other cost reduction initiatives | (2,432) | (689) | (15,851) | (6,486) |
Acquisition, integration, divestiture and related | (1,945) | (7,727) | (5,024) | (25,455) |
Operating Expenses | (219,051) | (231,250) | (707,319) | (755,574) |
Operating Loss | (16,179) | (16,673) | (54,124) | (70,832) |
Other (expense) income, net | (65) | 615 | (372) | 977 |
Interest expense, net | (9,208) | (6,242) | (27,180) | (11,847) |
Loss Before Income taxes | (25,452) | (22,300) | (81,676) | (81,702) |
Income tax benefit | 20,363 | 23,131 | 23,246 | 48,165 |
Net (Loss) Income | $ (5,089) | $ 831 | $ (58,430) | $ (33,537) |
Net (Loss) Income Per Common Share - Basic | $ (0.19) | $ 0.03 | $ (2.21) | $ (1.29) |
Net (Loss) Income Per Common Share - Diluted | $ (0.19) | $ 0.03 | $ (2.21) | $ (1.29) |
Third Party Net [Member] | ||||
Net Sales | ||||
Total Net Sales | $ 202,872 | $ 213,274 | $ 652,856 | $ 681,323 |
Related Party Net [Member] | ||||
Net Sales | ||||
Total Net Sales | $ 0 | $ 1,303 | $ 339 | $ 3,419 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (Loss) Income | $ (5,089) | $ 831 | $ (58,430) | $ (33,537) |
Foreign currency cumulative translation adjustments, net of tax | (18,027) | (36,863) | (6,930) | (97,203) |
Total Other Comprehensive Loss | (18,027) | (36,863) | (6,930) | (97,203) |
Comprehensive Loss | $ (23,116) | $ (36,032) | $ (65,360) | $ (130,740) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 75,449 | $ 89,601 |
Accounts receivable, net of allowance for credit losses of $15,012 and $15,026, respectively | 153,947 | 168,961 |
Related Party Receivable | 0 | 8,483 |
Inventories | 213,738 | 233,854 |
Prepaid expenses and other current assets | 54,481 | 36,964 |
Total Current Assets | 497,615 | 537,863 |
Property, plant and equipment, net of accumulated depreciation of $395,857 and $392,888, respectively | 121,431 | 148,439 |
Goodwill | 259,138 | 259,999 |
Intangible assets, net | 591,465 | 654,965 |
Other assets | 38,272 | 40,790 |
Total Assets | 1,507,921 | 1,642,056 |
Current Liabilities: | ||
Accounts payable | 51,313 | 43,998 |
Related Party Payable | 0 | 13,176 |
Income taxes payable | 1,769 | 14,356 |
Other current liabilities | 118,135 | 145,779 |
Total Current Liabilities | 171,217 | 217,309 |
Deferred income taxes | 85,909 | 98,062 |
Lease liability | 17,301 | 22,287 |
Other long-term liabilities | 7,762 | 13,561 |
Non-current portion of debt | 515,533 | 532,233 |
Total Liabilities | 797,722 | 883,452 |
Commitments and Contingencies (Note 11) | ||
Stockholders' Equity: | ||
Common stock, $0.01 par value, 150,000 shares authorized Shares, issued and outstanding, of 26,534 and 26,222, respectively | 265 | 262 |
Preferred stock, $0.01 par value, 15,000 shares authorized, 0 shares issued and outstanding | 0 | 0 |
Additional paid in capital | 913,980 | 897,028 |
Accumulated deficit | (105,962) | (47,532) |
Accumulated other comprehensive loss | (98,084) | (91,154) |
Total Stockholders' Equity | 710,199 | 758,604 |
Total Liabilities and Stockholders' Equity | $ 1,507,921 | $ 1,642,056 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Equity, Attributable to Parent [Abstract] | ||
Accounts receivable, net of allowance for credit loss, current | $ 15,012 | $ 15,026 |
Property, plant and equipment, net of accumulated depreciation | $ 395,857 | $ 392,888 |
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 26,534,000 | 26,222,000 |
Common stock, shares outstanding | 26,534,000 | 26,222,000 |
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Deficit | Net Parent Company Investment | Accumulated Other Comprehensive (Loss) Income |
Beginning Balance at Dec. 31, 2021 | $ 1,451,377 | $ 0 | $ 0 | $ 0 | $ 1,494,157 | $ (42,780) |
Net (loss) income | (33,537) | 0 | 0 | (17,188) | (16,349) | 0 |
Net transactions with Zimmer Biomet Holdings, Inc., including separation adjustments | (70,430) | 0 | 0 | 0 | (70,430) | 0 |
Net considerations paid to Zimmer Biomet Holdings, Inc. in connection with distribution | (540,567) | 0 | 0 | 0 | (540,567) | 0 |
Reclassification of net parent company investment to additional paid-in capital | 0 | 261 | 866,550 | 0 | (866,811) | 0 |
Stock activity under stock plans | 50 | 0 | 50 | 0 | 0 | 0 |
Share-based compensation expense | 24,086 | 0 | 24,086 | 0 | 0 | 0 |
Other comprehensive loss | (97,203) | 0 | 0 | 0 | 0 | (97,203) |
Ending Balance at Sep. 30, 2022 | 733,776 | 261 | 890,686 | (17,188) | 0 | (139,983) |
Beginning Balance at Jun. 30, 2022 | 764,557 | 261 | 885,435 | (18,019) | 0 | (103,120) |
Net (loss) income | 831 | 0 | 0 | 831 | 0 | 0 |
Stock activity under stock plans | 54 | 0 | 54 | 0 | 0 | 0 |
Share-based compensation expense | 5,197 | 0 | 5,197 | 0 | 0 | 0 |
Other comprehensive loss | (36,863) | 0 | 0 | 0 | 0 | (36,863) |
Ending Balance at Sep. 30, 2022 | 733,776 | 261 | 890,686 | (17,188) | 0 | (139,983) |
Beginning Balance at Dec. 31, 2022 | 758,604 | 262 | 897,028 | (47,532) | 0 | (91,154) |
Net (loss) income | (58,430) | 0 | 0 | (58,430) | 0 | 0 |
Stock activity under stock plans | (341) | 3 | (344) | 0 | 0 | 0 |
Share-based compensation expense | 16,129 | 0 | 16,129 | 0 | 0 | 0 |
Employee stock purchase plan | 1,167 | 0 | 1,167 | 0 | 0 | 0 |
Other comprehensive loss | (6,930) | 0 | 0 | 0 | 0 | (6,930) |
Ending Balance at Sep. 30, 2023 | 710,199 | 265 | 913,980 | (105,962) | 0 | (98,084) |
Beginning Balance at Jun. 30, 2023 | 727,842 | 265 | 908,507 | (100,873) | 0 | (80,057) |
Net (loss) income | (5,089) | 0 | 0 | (5,089) | 0 | 0 |
Share-based compensation expense | 5,473 | 0 | 5,473 | 0 | 0 | 0 |
Employee stock purchase plan | 0 | 0 | 0 | 0 | 0 | 0 |
Other comprehensive loss | (18,027) | 0 | 0 | 0 | 0 | (18,027) |
Ending Balance at Sep. 30, 2023 | $ 710,199 | $ 265 | $ 913,980 | $ (105,962) | $ 0 | $ (98,084) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows provided by operating activities: | ||
Net loss | $ (58,430) | $ (33,537) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 95,088 | 92,469 |
Share-based compensation | 16,129 | 24,982 |
Deferred income tax provision | (11,967) | (51,775) |
Loss on disposal of fixed assets | 2,411 | 2,817 |
Other non-cash items | 2,762 | 900 |
Changes in operating assets and liabilities | ||
Income taxes | (34,061) | (113) |
Accounts receivable | 13,019 | (18,408) |
Related party receivable | 8,483 | (14,418) |
Inventories | 18,246 | 13,400 |
Prepaid expenses and other current assets | 4,187 | (18,534) |
Accounts payable and accrued liabilities | (18,216) | 12,562 |
Related party payable | (13,177) | 24,172 |
Other assets and liabilities | (8,780) | (989) |
Net cash used in operating activities | 15,694 | 33,528 |
Cash flows used in investing activities: | ||
Additions to instruments | (4,341) | (9,671) |
Additions to other property, plant and equipment | (5,340) | (11,483) |
Other investing activities | (2,762) | (1,950) |
Net cash used in investing activities | (12,443) | (23,104) |
Cash flows (used in) provided by financing activities: | ||
Net transactions with Zimmer Biomet | 0 | 6,920 |
Dividend paid to Zimmer Biomet | 0 | (540,567) |
Proceeds from debt | 4,760 | 595,000 |
Payments on debt | (22,291) | (41,012) |
Debt issuance costs | 0 | (5,170) |
Payments related to tax withholding for share-based compensation | (419) | 0 |
Proceeds from stock option activity | 1,167 | 0 |
Other financing activities | 0 | 37 |
Net cash (used in) provided by financing activities | (16,783) | 15,208 |
Effect of exchange rates on cash and cash equivalents | (620) | (10,023) |
(Decrease) increase in cash and cash equivalents | (14,152) | 15,609 |
Cash and cash equivalents, beginning of year | 89,601 | 100,399 |
Cash and cash equivalents, end of period | 75,449 | 116,008 |
Supplemental cash flow information: | ||
Income taxes paid, net | 19,090 | 9,189 |
Interest paid | 26,198 | 9,467 |
Derecognition of right-of-use assets | 0 | (14,174) |
Derecognition of lease liabilities | $ 0 | $ 15,303 |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Background, Nature of Business
Background, Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background, Nature of Business and Basis of Presentation | 1. Background, Nature of Business and Basis of Presentation Background On March 1, 2022, ZimVie Inc. ("ZimVie," "we," "us" and "our") and Zimmer Biomet Holdings, Inc. ("Zimmer Biomet" or "Parent") entered into a Separation and Distribution Agreement (the "Separation Agreement") , pursuant to which Zimmer Biomet agreed to spin off its dental and spine businesses into ZimVie, a new, publicly traded company. Zimmer Biomet effected the separation through a pro rata distribution of 80.3 % of the outstanding shares of common stock of ZimVie. Following the distribution on March 1, 2022, Zimmer Biomet stockholders as of the record date for the distribution owned 80.3 % of the outstanding shares of ZimVie common stock; Zimmer Biomet initially retained 19.7 % of the outstanding shares of ZimVie common stock. The distribution is intended to qualify as generally tax-free to Zimmer Biomet stockholders for United States ("U.S.") federal income tax purposes, except for any cash received by stockholders in lieu of fractional shares. The distribution on March 1, 2022 resulted in ZimVie becoming a standalone, publicly traded company, and it was completed pursuant to the Separation Agreement and other agreements with Zimmer Biomet related to the distribution, including, but not limited to a tax matters agreement, an employee matters agreement, a transition services agreement and transition manufacturing agreements. See Note 12 for further description of the impact of the distribution and post-spin activities with Zimmer Biomet. As of February 1, 2023, Zimmer Biomet had sold all of its 19.7 % ownership in ZimVie and is no longer considered a related party. Nature of Business ZimVie is a leading medical technology company dedicated to enhancing the quality of life for dental and spine patients worldwide. We develop, manufacture and market a comprehensive portfolio of products and solutions designed to support dental tooth replacement and restoration procedures and treat a wide range of spine pathologies. We are well-positioned in the growing global dental implant, biomaterials and digital dentistry market with a strong presence in the tooth replacement market with market leading positions in certain geographies. Our broad portfolio also addresses all areas of spine with market leadership in cervical disc replacement and vertebral body tethering to treat pediatric scoliosis. Our operations are principally managed on a products basis and include two operating segments, 1) the dental products segment, and 2) the spine products segment. In the dental products market, our core services include designing, manufacturing and distributing dental implant solutions. Dental reconstructive implants are for individuals who are totally without teeth or are missing one or more teeth, dental prosthetic products are aimed at providing a more natural restoration to resemble the original teeth, and dental regenerative products are for soft tissue and bone rehabilitation. Our key products include the T3® Implant, Tapered Screw-Vent Implant System, Trabecular Metal Dental Implant, BellaTek Encode Impression System and Puros Allograft Particulate. In the spine products market, our core services include designing, manufacturing and distributing medical devices and surgical instruments to deliver comprehensive solutions for individuals with back or neck pain caused by degenerative conditions, deformities or traumatic injury of the spine. We also provide devices that promote bone healing. Other differentiated products in our spine portfolio include Mobi-C® Cervical Disc, a motion-preserving alternative to fusion for patients with cervical disc disease, and The Tether, a novel non-fusion device for treatment of pediatric scoliosis. Basis of Presentation Prior to March 1, 2022, we existed and functioned as part of the consolidated business of Zimmer Biomet. The accompanying condensed consolidated financial statements are prepared on a standalone basis and, for periods prior to March 1, 2022, were prepared on a carveout basis from Zimmer Biomet’s consolidated financial statements and accounting records, and, accordingly, may not be indicative of the financial position, results of operations or cash flows had we operated as a standalone company during those periods, or comparable to our financial position subsequent to March 1, 2022. On March 1, 2022, ZimVie became a standalone publicly traded company, and our financial statements are now presented on a consolidated basis. The unaudited financial statements for all periods presented, including our historical results prior to March 1, 2022, are now referred to as "Condensed Consolidated Financial Statements," and have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles ("GAAP") for complete consolidated financial statements are not included herein. In our opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 ("Annual Report"). The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. Prior to the distribution, our equity balance in these condensed consolidated financial statements represented the excess of total assets over liabilities including the due to/from balances between us and Zimmer Biomet (referred to as "net parent investment" or "NPI") and accumulated other comprehensive loss. NPI was primarily impacted by contributions from Zimmer Biomet that were the result of treasury activities and net funding provided by or distributed to Zimmer Biomet. Following the distribution, certain functions that Zimmer Biomet provided to us prior to the distribution either continue to be provided to us by Zimmer Biomet under a transition services agreement or are being performed using our own resources or third-party service providers. Additionally, under manufacturing and supply agreements, we manufacture certain products for Zimmer Biomet and Zimmer Biomet manufactures certain products for us. We have incurred, and expect to continue to incur, certain costs to establish ourselves as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company. As of September 30, 2023 and December 31, 2022, we had $ 1.4 million and $ 1.5 million, respectively, in restricted cash. The restriction is on cash held in China as a result of ongoing litigation with a spine products distributor in China related to our decision to exit our spine products business in China (see Note 13 for further information). Accounting Pronouncements Recently Issued There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 2. Goodwill and Other Intangible Assets The following table summarizes the changes in the carrying amount of goodwill by historical reportable segment (in thousands): Dental Spine Total Balance at December 31, 2022 Goodwill, Gross $ 401,999 $ 1,089,400 $ 1,491,399 Accumulated impairment losses ( 142,000 ) ( 1,089,400 ) ( 1,231,400 ) Goodwill, Net 259,999 — 259,999 Currency translation ( 861 ) — ( 861 ) Balance at September 30, 2023 Goodwill, Gross 401,138 1,089,400 1,490,538 Accumulated impairment losses ( 142,000 ) ( 1,089,400 ) ( 1,231,400 ) Goodwill, Net $ 259,138 $ — $ 259,138 The components of identifiable intangible assets were as follows (in thousands): Technology Trademarks Customer Relationships Other Total As of December 31, 2022: Intangible assets subject to amortization: Gross carrying amount $ 844,730 $ 137,785 $ 364,917 $ 53,955 $ 1,401,387 Accumulated amortization ( 444,603 ) ( 63,012 ) ( 188,913 ) ( 49,894 ) ( 746,422 ) Total identifiable intangible assets $ 400,127 $ 74,773 $ 176,004 $ 4,061 $ 654,965 As of September 30, 2023: Intangible assets subject to amortization: Gross carrying amount $ 841,249 $ 137,110 $ 361,936 $ 53,918 $ 1,394,213 Accumulated amortization ( 476,465 ) ( 69,127 ) ( 206,284 ) ( 50,873 ) ( 802,748 ) Total identifiable intangible assets $ 364,784 $ 67,983 $ 155,652 $ 3,045 $ 591,465 Estimated annual amortization expense for the years ending December 31, 2023 through 2027 based on exchange rates in effect at December 31, 2022 is as follows (in millions): For the Years Ending December 31, 2023 (remaining) $ 14.1 2024 72.4 2025 70.6 2026 68.9 2027 63.6 Thereafter 301.9 Total $ 591.5 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | 3. Share-Based Compensation Conversion Awards Zimmer Biomet has share-based compensation plans under which it granted stock options, restricted stock units ("RSUs") and performance-based RSUs . In connection with the distribution, ZimVie employees with outstanding Zimmer Biomet share-based awards received replacement share-based awards. The ratio used to convert the Zimmer Biomet share-based awards was designed to preserve the aggregate intrinsic value of the award immediately after the distribution when compared to the aggregate intrinsic value of the award immediately prior to the distribution. Outstanding RSUs and performance-based RSUs were converted into 0.3 million ZimVie RSUs at a weighted average fair value of $ 31.55 , and outstanding stock options were converted into 2.1 million ZimVie stock options at a weighted average fair value of $ 14.76 . Due to the conversion, ZimVie incurred $ 21.3 million of incremental share-based compensation expense. Of this amount, $ 10.3 million was related to unvested and/or unexercised share-based awards and was recognized at the distribution date. The remaining $ 11.0 million is being recognized over the remainder of the share-based awards' weighted average vesting period of 2.5 years from the date of the distribution. ZimVie Awards The ZimVie Inc. 2022 Stock Incentive Plan was originally established effective as of March 1, 2022, and was amended effective May 12, 2023 (as amended, the "2022 Plan"). A total of 6.0 million shares of common stock are authorized for issuance under the 2022 Plan. Shares issued pursuant to converted Zimmer Biomet share-based awards do not count against this limit. At September 30, 2023, 3.4 million shares were available for future grants and awards under the 2022 Plan. The 2022 Plan provides for the grant of various types of awards including stock options, stock appreciation rights, performance shares, performance units, restricted stock and RSUs. Generally, awards have a three-year vesting period and stock options have a term of ten years . Vesting may accelerate upon retirement after the first anniversary date of the award if certain criteria are met. We recognize expense on a straight-line basis over the requisite service period, less awards expected to be forfeited using estimated forfeiture rates. Stock options are granted with an exercise price equal to the market price of our common stock on the date of grant, except in limited circumstances where local law may dictate otherwise. Share-based compensation expense was as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Share-based compensation expense recognized in: Cost of products sold, excluding intangible asset amortization $ 278 $ 118 $ 846 $ 2,204 Research and development 334 448 1,139 2,992 Selling, general and administrative 4,861 4,722 14,144 19,786 5,473 5,288 16,129 24,982 Tax benefit related to awards ( 1,374 ) ( 1,328 ) ( 4,053 ) ( 5,918 ) Total expense, net of tax $ 4,099 $ 3,960 $ 12,076 $ 19,064 For periods prior to the distribution, we specifically identified employees who were associated with our historical operations and calculated expense based upon the awards received under the Zimmer Biomet plans, as well as expense related to corporate or shared employees allocated to us on a proportional cost allocation method, primarily based on revenue. Stock option activity was as follows: Period Ended September 30, 2023 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Stock Options Price Life (Years) Value (in Millions) Outstanding at December 31, 2022 2,403,635 $ 26.74 Granted — — Exercised — — Forfeited ( 90,177 ) 24.14 Outstanding at September 30, 2023 2,313,458 $ 26.84 6.3 $ — Exercisable at September 30, 2023 1,598,522 $ 26.21 5.6 $ — We used a Black-Scholes option-pricing model to determine the fair value of our stock options. For new awards granted after the distribution: expected volatility of 52.29 % was derived from a peer group's combined historical volatility that was de-levered and re-levered for ZimVie as ZimVie does not have sufficient historical volatility based on the expected term of the underlying options; the expected term of the stock options of 6.0 years was determined using the simplified method; and the risk-free interest rate of 1.94 % was determined using the implied yield then available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options. The dividend yield was zero as ZimVie has no plans to pay a dividend for the foreseeable future. Aggregate intrinsic value was negligible at September 30, 2023. At September 30, 2023, we had unrecognized share-based compensation cost related to unvested stock options of $ 7.0 million , which is expected to be amortized over the remaining weighted average vesting period of approximately 1.5 years. RSU activity was as follows: Period Ended September 30, 2023 Weighted Average Number of Grant Date RSUs Fair Value Outstanding at December 31, 2022 1,382,500 $ 24.64 Granted 1,526,343 10.34 Vested ( 227,507 ) 28.25 Forfeited ( 146,547 ) 18.89 Outstanding at September 30, 2023 2,534,789 $ 17.01 RSUs granted in the nine months ended September 30, 2023 included 367,928 RSUs (at target) with performance-based vesting provisions ("PRSUs"). PRSUs may vest from 0 - 150 % of target based on the level of achievement of pre-defined performance metrics. PRSUs are payable in common shares and do not have the right to vote until vested. Compensation expense related to PRSUs is recognized over a 36 -month cliff vesting period, and is adjusted as needed for changes in the projected level of achievement of the performance metrics. At September 30, 2023, we had unrecognized share-based compensation cost related to unvested RSUs of $ 22.5 million , which is expected to be amortized into net income over the remaining weighted average vesting period of approximately 1.5 years. The total fair value of RSUs granted or vested during the three months ended September 30, 2023 and 2022 was negligible. The total fair value of RSUs granted during the nine months ended September 30, 2023 and 2022 was $ 15.8 million and $ 30.1 million , respectively. The total fair value of RSUs vested during the nine months ended September 30, 2023 and 2022 was $ 6.4 million and $ 1.1 million , respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 4. Earnings Per Share On March 1, 2022, 26.1 million ZimVie common shares were distributed in connection with the distribution. For comparative purposes, and to provide a more meaningful calculation for weighted average shares, this amount was assumed to be outstanding throughout all periods presented up to and including March 1, 2022 in the calculation of basic weighted average shares. For periods prior to the distribution, it was assumed that there were no dilutive equity instruments, as there were no equity awards of ZimVie outstanding prior to the distribution. The calculation of weighted average shares for the basic and diluted net (loss) income per common share is as follows (in thousands, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net (loss) income $ ( 5,089 ) $ 831 $ ( 58,430 ) $ ( 33,537 ) Weighted average shares outstanding for basic net (loss) income per common share 26,530 26,074 26,406 26,074 Effect of dilutive stock options and other equity awards (1) — 76 — — Weighted average shares outstanding for diluted net (loss) income per common share 26,530 26,150 26,406 26,074 Basic net (loss) income per common share $ ( 0.19 ) $ 0.03 $ ( 2.21 ) $ ( 1.29 ) Diluted net (loss) income per common share ( 0.19 ) 0.03 ( 2.21 ) ( 1.29 ) (1) Since we incurred a net loss in each of the three and nine months ended September 30, 2023 and in the nine months ended September 30, 2022, no dilutive stock options or other equity awards were included as diluted shares in those periods. For the three months ended September 30, 2023 and 2022 , a weighted average of 3.2 million and 3.8 million, respectively, and for the nine months ended September 30, 2023 and 2022, a weighted average of 3.3 million and 3.3 million, respectively, options to purchase shares of common stock were not included in the computation of diluted net (loss) income per share as the exercise prices of these options were greater than the average market price of the common stock. |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | 5. Balance Sheet Details Inventories consisted of the following (in thousands): September 30, 2023 December 31, 2022 Finished goods $ 176,458 $ 200,098 Work-in-progress 22,709 21,199 Raw materials 14,571 12,557 Inventories $ 213,738 $ 233,854 Amounts related to cost of products sold in the condensed consolidated statements of operations for excess and obsolete ("E&O") inventory, including certain product lines we intend to discontinue, were $ 6.2 million and $ 4.0 million in the three months ended September 30, 2023 and 2022, respectively, and were $ 7.3 million and $ 21.6 million in the nine months ended September 30, 2023 and 2022, respectively. Other current liabilities consisted of the following (in thousands): September 30, 2023 December 31, 2022 Other current liabilities: Salaries, wages and benefits $ 27,664 $ 47,812 License and service agreements 17,464 25,337 Lease liabilities 10,190 9,617 Other liabilities 62,817 63,013 Total other current liabilities $ 118,135 $ 145,779 |
Fair Value Measurements of Asse
Fair Value Measurements of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Assets and Liabilities | 6. Fair Value Measurements of Assets and Liabilities The fair value of foreign currency exchange forward contracts (see Note 8) are determined using Level 2 inputs. The carrying value of our debt (see Note 7) approximates fair value as it bears interest at floating rates. The carrying amounts of other financial instruments (i.e., cash and cash equivalents, restricted cash, bank time deposits, accounts receivable, net, and accounts payable) approximated their fair values at September 30, 2023 and December 31, 2022 due to their short-term nature. The fair values of acquisition-related contingent payments are estimated using Level 3 inputs. Contingent payments related to acquisitions consist of sales-based payments and are valued using discounted cash flow techniques. The fair value of sales-based payments is based upon probability-weighted future revenue estimates and increases as revenue estimates increase. See Note 3 to our consolidated financial statements included in our Annual Report for additional information regarding contingent payments related to acquisitions. The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Level 3 - Liabilities Contingent payments related to acquisitions Balance December 31, 2022 $ 13,250 Settlements ( 3,451 ) Balance September 30, 2023 $ 9,799 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt Our debt consisted of the following (in thousands): September 30, 2023 December 31, 2022 Term loan $ 518,925 $ 536,456 Debt issuance costs ( 3,392 ) ( 4,223 ) Total debt 515,533 532,233 Less: current portion — — Total debt due after one year $ 515,533 $ 532,233 We entered into a Credit Agreement, dated as of December 17, 2021 (the “Credit Agreement”), with JP Morgan Chase Bank, N.A., as administrative agent and syndication agent, and the lenders and issuing banks named therein. The Credit Agreement provides for revolving loans of up to $ 175.0 million (the “Revolver”) and term loan borrowings of up to $ 595.0 million (the “Term Loan” and, together with the Revolver, the “Credit Facility”). On March 31, 2023, we made an optional prepayment on the Term Loan of $ 10.5 million, which represented the aggregate amount of the mandatory scheduled principal payments due on March 31, 2024 and June 30, 2024. On September 29, 2023, we made an optional prepayment on the Term Loan of $ 7.0 million, which represented the amount of the mandatory scheduled principal payment due on September 30, 2024. As of September 30, 2023, $ 518.9 million was outstanding on the Term Loan following such payments, and there were no outstanding borrowings under the Revolver. As of September 30, 2023, our interest rate was the secured overnight financing rate plus the applicable margin of 1.75 % for term benchmark borrowings. Commitments under the Revolver are s ubject to a commitment fee on the unused portion of the Revolver of 25 basis points. Borrowings under the Credit Facility are collateralized by substantially all of our personal property, including intellectual property and certain real property, and we, along with our subsidiaries party to the Credit Facility, pledged our equity interests in our subsidiaries, subject to materiality thresholds and certain limitations with respect to foreign subsidiaries. The Credit Facility contains various covenants that restrict our ability to take certain actions, including incurrence of indebtedness, creation of liens, mergers or consolidations, dispositions of assets, making certain investments, prepayments or redemptions of subordinated debt, or making certain restricted payments. In addition, the Credit Facility contains financial covenants that require us to maintain a maximum consolidated total net leverage ratio of 6.00 to 1.00 . We were in compliance with all covenants as of September 30, 2023. See Note 10 to our consolidated financial statements included in our Annual Report for additional information on our Credit Agreement. In April 2023, we financed $ 4.8 million of our corporate insurance premium, all of which was repaid by June 30, 2023. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2023 | |
Derivatives [Abstract] | |
Derivatives | 8. Derivatives We enter into foreign currency exchange forward contracts with terms of one to three months in order to manage currency exposures related to monetary assets and liabilities denominated in a currency other than an entity’s functional currency. Any foreign currency remeasurement gains or losses recognized in earnings are generally offset with gains or losses on the foreign currency exchange forward contracts in the same reporting period. The amount of these (losses) gains is recorded in Other (expense) income, net. Outstanding contracts are recorded in our condensed consolidated balance sheet at fair value as of the end of the reporting period. The aggregate notional amounts of these contracts were $ 38.5 million as of September 30, 2023 and $ 69.1 million as of December 31, 2022. Current derivative assets of $ 0.1 million and $ 0.6 million as of September 30, 2023 and December 31, 2022 , respectively, were included in Prepaid expenses and other current assets on our condensed consolidated balance sheets. Current derivative liabilities of $ 0.4 million and $ 0.3 million as of September 30, 2023 and December 31, 2022, respectively, were included in Other current liabilities in our condensed consolidated balance sheets. Gains (losses) from these derivative instruments recognized in our condensed consolidated statements of operations in Other (expense) income , net were $ 0.6 million and $ 0.2 million for the three and nine months ended September 30, 2023, respectively, and $( 1.9 ) million and $( 3.3 ) million for the three and nine months ended September 30, 2022 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Our effective tax rate (“ETR”) on loss before income taxes was 80.0 % and 103.7 % for the three months ended September 30, 2023 and 2022, respectively, and 28.5 % and 59.0 % for the nine months ended September 30, 2023 and 2022, respectively. In the three and nine months ended September 30, 2023, the income tax benefit was higher than the 21 % U.S. federal statutory rate due to profit in inventory recorded prior to the distribution that is non-taxable as the inventory is sold post-separation to third parties, resulting in a significant benefit to the foreign rate differential, partially offset by additional expense for increasing valuation allowances. In the three and nine months ended September 30, 2022, the additional income tax benefit compared to the statutory rate was driven by the impact of losses recorded prior to the distribution that were calculated on a “carve-out” basis, which applied the accounting guidance as if we filed income tax returns on a standalone, separate return basis and are not reflective of the tax results we expect to generate in the future. The benefit was further driven by the profit in inventory recorded prior to the distribution, as well as recognition of a Puerto Rico withholding tax receivable available to offset income taxes of $ 5.7 million. During the nine months ended September 30, 2022 , income tax balances were adjusted to reflect the income tax positions after distribution, including those related to tax loss and credit carryforwards, other deferred tax assets and liabilities and valuation allowances. These separation-related adjustments resulted in a $ 3.9 million increase to the net deferred tax liability, primarily due to inventory and intangible assets transferred in the separation, tax rate changes and changes to the permanent reinvestment assertion in the post-separation environment. The increase in the net deferred tax liability was offset by a corresponding decrease in NPI. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Data | 10. Segment Data Net sales and operating profit (loss) by segment are as follows (in thousands): Net Sales Operating Profit (Loss) Three Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 Dental $ 105,311 $ 105,121 $ 22,808 $ 17,465 Spine 97,561 108,153 6,647 17,258 Segment Total 202,872 213,274 29,455 34,723 Related party transactions — 1,303 — ( 16 ) Expenses related to Parent products — — — ( 275 ) Intangible asset amortization — — ( 20,615 ) ( 19,357 ) Restructuring and other cost reduction initiatives — — ( 2,432 ) ( 689 ) Acquisition, integration, divestiture and related — — ( 1,945 ) ( 7,727 ) Other — — ( 20,642 ) ( 23,332 ) Total $ 202,872 $ 214,577 $ ( 16,179 ) $ ( 16,673 ) Net Sales Operating Profit (Loss) Nine Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Dental $ 344,130 $ 343,839 $ 69,074 $ 68,097 Spine 308,726 337,484 25,418 29,619 Segment Total 652,856 681,323 94,492 97,716 Related party transactions 339 3,419 11 ( 11,777 ) Expenses related to Parent products — — — ( 891 ) Intangible asset amortization — — ( 61,787 ) ( 60,178 ) Restructuring and other cost reduction initiatives — — ( 15,851 ) ( 6,486 ) Acquisition, integration, divestiture and related — — ( 5,024 ) ( 25,455 ) Other — — ( 65,965 ) ( 63,761 ) Total $ 653,195 $ 684,742 $ ( 54,124 ) $ ( 70,832 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies We are subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial and other matters that arise in the normal course of business. On a quarterly and annual basis, we review relevant information with respect to loss contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. We record liabilities for loss contingencies when it is probable that a loss has been incurred and the amount can be reasonably estimated. For matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. The recorded accrual balance for loss contingencies was $ 2.6 million and $ 9.5 mi llion as of September 30, 2023 and December 31, 2022, respectively. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued. Subject to certain exceptions specified in the Separation Agreement, we assumed the liability for, and control of, all pending and threatened legal matters related to our business, including liabilities for any claims or legal proceedings related to products that had been part of our business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Zimmer Biomet for any liability arising out of or resulting from such assumed legal matters. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions Prior to the distribution, we did not operate as a standalone business and had various relationships with Zimmer Biomet whereby Zimmer Biomet provided services to us. Following the distribution, certain functions that Zimmer Biomet provided to us prior to the distribution either continue to be provided to us by Zimmer Biomet under a transition services agreement or are being performed using our own resources or third-party service providers. The following disclosures summarize activities between us and Zimmer Biomet that are included in our condensed consolidated financial statements. Prior to Distribution Corporate Overhead and Other Allocations from Zimmer Biomet Zimmer Biomet provided certain services, which included, but were not limited to, executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology and other corporate departments. The expenses related to these services have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net trade sales, as applicable. When specific identification is not practicable, a proportional cost method was used primarily based on sales. Corporate allocations reflected in the condensed consolidated statements of operations are as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Cost of products sold $ — $ — $ — $ ( 78 ) Selling, general & administrative — — — 13,914 Management believes that the methods used to allocate expenses to ZimVie are a reasonable reflection of the utilization of services provided to, or the benefit derived by, ZimVie during the periods presented. However, the allocations may not necessarily reflect the condensed consolidated financial position, results of operations and cash flows in the future or what they would have been had ZimVie been a separate, standalone entity during the periods presented. Share-Based Compensation As discussed in Note 3, our employees participated in Zimmer Biomet’s share-based compensation plans, the costs of which were allocated and recorded in cost of products sold, R&D, and selling, general and administrative expenses in the condensed consolidated statements of operations. Share-based compensation benefit related to our employees prior to the distribution was $ 1.0 million for the nine months ended September 30, 2022 . There were no share-based compensation costs allocated during the three months ended September 30, 2022. In connection with the distribution, the awards held by employees were modified and resulted in incremental compensation expense as discussed in Note 3. Centralized Cash Management Zimmer Biomet used a centralized approach to cash management and financing of operations. The majority of our subsidiaries were party to Zimmer Biomet’s cash pooling arrangements with several financial institutions to maximize the availability of cash for general operating and investing purposes. Under these cash pooling arrangements, cash balances were swept regularly from our accounts. Cash transfers to and from Zimmer Biomet’s cash concentration accounts and the resulting balances at the end of each reporting period were reflected in NPI and net transactions with Zimmer Biomet in the condensed consolidated balance sheets and statements of cash flows, respectively. Prior to the distribution, we borrowed $ 595.0 million under our Credit Agreement and subsequently distributed $ 561.0 million of the proceeds to Zimmer Biomet. After this distribution and the impact of various transactions between the parties related to the separation, we had approximately $ 100 million of cash at distribution to operate as a standalone company. Manufacturing Services to Zimmer Biomet We have certain manufacturing facilities that also produce orthopedic products that continue to be sold by Zimmer Biomet after the separation. The condensed consolidated statements of operations reflect the sales of these orthopedic products to Zimmer Biomet as related party transactions in periods in which Zimmer Biomet was a related party as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Related party net sales $ — $ 1,303 $ 339 $ 3,419 Related party cost of products sold, excluding intangible asset amortization — 1,319 328 3,177 We will continue to sell these products to Zimmer Biomet in future periods pursuant to a transition manufacturing and supply agreement. As of February 1, 2023, Zimmer Biomet had sold all of its 19.7 % ownership in ZimVie and is no longer considered a related party. As such, transactions with Zimmer Biomet subsequent to February 1, 2023 are reported as third party transactions. Net Parent Company Investment As discussed in Note 1, NPI is primarily impacted by contributions from Zimmer Biomet, which are the result of treasury activity and net funding provided by or distributed to Zimmer Biomet. For the nine months ended September 30, 2023 and 2022 , net transactions with Zimmer Biomet reflected in the cash flows pre-distribution were nil and $ 6.9 million, respectively. There were no net transactions with Zimmer Biomet reflected in the cash flows pre-distribution during the three months ended September 30, 2023 and 2022. Activities that impacted the net transfers from Zimmer Biomet include corporate overhead, share-based compensation, debt agreements between the parties and other allocations and centralized cash management. For the nine months ended September 30, 2023 and 2022 , the total impact on NPI from these transactions was nil and $ 70.4 million, respectively. There were no a ctivities that impacted the net transfers from Zimmer Biomet including corporate overhead, share-based compensation, debt agreements between the parties and other allocations and centralized cash management during the three months ended September 30, 2023 and 2022. For all periods prior to the distribution, transfers between ZimVie and Zimmer Biomet affiliates were recognized in Net transactions with Zimmer Biomet. In connection with the distribution, certain net assets of approximately $ 79.0 million that were included in our pre-distribution balance sheet were retained by Zimmer Biomet, with the offset of the non-cash transaction reflected as a distribution within NPI. Separation-related adjustments were also recognized in Net transactions with Zimmer Biomet. After Distribution In connection with the distribution, ZimVie entered into various agreements that govern activity between the parties, including, but not limited to, the Separation Agreement, the Transition Services Agreement, interim operating model agreements, the Tax Matters Agreement, the Employee Matters Agreement and transition manufacturing and supply agreements. As of February 1, 2023, Zimmer Biomet had sold all of its 19.7 % ownership in ZimVie and is no longer considered a related party. The amounts due from and to Zimmer Biomet under the various agreements that were included in related party receivable or payable, as applicable, in our condensed consolidated balance sheets were as follows (in thousands): September 30, 2023 December 31, 2022 Related party receivable $ — $ 8,483 Related party payable — 13,176 The Separation Agreement sets forth our agreements with Zimmer Biomet regarding the principal actions taken in connection with the separation and the distribution. It also sets forth other agreements that govern aspects of our relationship with Zimmer Biomet following the separation and the distribution. The Separation Agreement provides for, among other things, (i) the assets transferred, the liabilities assumed and the contracts assigned to each of us and Zimmer Biomet as part of the separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the ZimVie businesses with us and financial responsibility for the obligations and liabilities of Zimmer Biomet’s remaining businesses with Zimmer Biomet, (iii) procedures with respect to claims subject to indemnification and related matters and governing our and Zimmer Biomet’s obligations and allocations of liabilities with respect to ongoing litigation matters and (iv) the allocation between us and Zimmer Biomet of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the distribution. The Separation Agreement also provides that, in order to obtain certain requisite governmental approvals, or for other business reasons, following the distribution date, Zimmer Biomet and certain of its affiliates will continue to operate certain activities relating to the ZimVie businesses in certain jurisdictions until the requisite approvals have been received or the occurrence of all other actions permitting the legal transfer of such activities, and we will receive, to the greatest extent possible, all of the economic benefits and burdens of such activities. The agreements that we entered into with Zimmer Biomet that govern aspects of ZimVie's relationship with Zimmer Biomet following the distribution are described in Note 18 to our consolidated financial statements included in our Annual Report. |
Restructuring and Other Cost Re
Restructuring and Other Cost Reduction Initiatives | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Cost Reduction Initiatives | 13. Restructuring and Other Cost Reduction Initiatives In April 2023, we initiated restructuring activities to better position our organization for future success based on the current business environment. In July 2023, we continued these activities and took additional actions. These activities have the objective of reducing our global cost structure and streamlining our organizational infrastructure across all regions, functions and levels. During the three and nine months ended September 30, 2023 , we recorded pre-tax charges of $ 1.3 million and $ 9.9 million, respectively, related to these actions. T he restructuring charges incurred in the three and nine months ended September 30, 2023 under this plan were primarily related to severance and professional fees. We anticipate total charges related to this plan of approximately $ 15 - 16 million will be incurred in 2023 and 2024, including projects in process or under final evaluation as of September 30, 2023. In June 2022, we initiated a restructuring plan with the objective of reducing costs and optimizing our global footprint. In addition, t he national volume-based procurement program for spine products in China took place in late September 2022, and we were not successful in our bid. After evaluating our alternatives, in the fourth quarter of 2022 we approved a plan to exit our spine products activities in China. During the three and nine months ended September 30, 2022, actions under the June 2022 plan resulted in pre-tax charges of $ 0.7 million and $ 2.4 million, respectively . During the three and nine months ended September 30, 2023, we recorded pre-tax charges of $ 1.1 million and $ 5.8 million , respectively, related to the actions under these plans. The restructuring charges incurred in the three and nine months ended September 30, 2023 under these plans were primarily related to accelerated depreciation, severance and impairment of assets. We have incurred pre-tax charges of $ 14.8 million from inception through September 30, 2023, and we anticipate total charges of approximat ely $ 18 - 19 million related to these plans. We anticipate incurring the remaining charges through the first half of 2024. In December 2019 and December 2021, Zimmer Biomet initiated restructuring plans (the "ZB Restructuring Plans") with an objective of reducing costs to allow further investment in higher priority growth opportunities. We incurred pre-tax charges related to the ZB Restructuring Plans of less than $ 0.1 million and $ 4.1 million in the three and nine months ended September 30, 2022, respectively. The restructuring charges incurred under these plans primarily related to employee termination benefits, contract terminations and retention period compensation and benefits. We have not incurred and do not expect to incur material expenses from the ZB Restructuring Plans after June 30, 2022. The following table summarizes the liabilities directly attributable to us that were recognized under the plans discussed above and excludes non-cash charges (in thousands): Nine Months Ended September 30, Employee Other Total Balance, December 31, 2022 $ 1,893 $ 2,173 $ 4,066 Additions 8,787 2,593 11,380 Cash payments ( 5,445 ) ( 3,793 ) ( 9,238 ) Balance, September 30, 2023 $ 5,235 $ 973 $ 6,208 Balance, December 31, 2021 $ 1,099 $ 1,150 $ 2,249 Additions 1,777 2,923 4,700 Non-cash adjustments — ( 320 ) ( 320 ) Cash payments ( 1,797 ) ( 1,724 ) ( 3,521 ) Balance, September 30, 2022 $ 1,079 $ 2,029 $ 3,108 We do not include charges for restructuring and other cost reduction initiatives in the operating profit of our reportable segments. |
Background, Nature of Busines_2
Background, Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business ZimVie is a leading medical technology company dedicated to enhancing the quality of life for dental and spine patients worldwide. We develop, manufacture and market a comprehensive portfolio of products and solutions designed to support dental tooth replacement and restoration procedures and treat a wide range of spine pathologies. We are well-positioned in the growing global dental implant, biomaterials and digital dentistry market with a strong presence in the tooth replacement market with market leading positions in certain geographies. Our broad portfolio also addresses all areas of spine with market leadership in cervical disc replacement and vertebral body tethering to treat pediatric scoliosis. Our operations are principally managed on a products basis and include two operating segments, 1) the dental products segment, and 2) the spine products segment. In the dental products market, our core services include designing, manufacturing and distributing dental implant solutions. Dental reconstructive implants are for individuals who are totally without teeth or are missing one or more teeth, dental prosthetic products are aimed at providing a more natural restoration to resemble the original teeth, and dental regenerative products are for soft tissue and bone rehabilitation. Our key products include the T3® Implant, Tapered Screw-Vent Implant System, Trabecular Metal Dental Implant, BellaTek Encode Impression System and Puros Allograft Particulate. In the spine products market, our core services include designing, manufacturing and distributing medical devices and surgical instruments to deliver comprehensive solutions for individuals with back or neck pain caused by degenerative conditions, deformities or traumatic injury of the spine. We also provide devices that promote bone healing. Other differentiated products in our spine portfolio include Mobi-C® Cervical Disc, a motion-preserving alternative to fusion for patients with cervical disc disease, and The Tether, a novel non-fusion device for treatment of pediatric scoliosis. |
Basis of Presentation | Basis of Presentation Prior to March 1, 2022, we existed and functioned as part of the consolidated business of Zimmer Biomet. The accompanying condensed consolidated financial statements are prepared on a standalone basis and, for periods prior to March 1, 2022, were prepared on a carveout basis from Zimmer Biomet’s consolidated financial statements and accounting records, and, accordingly, may not be indicative of the financial position, results of operations or cash flows had we operated as a standalone company during those periods, or comparable to our financial position subsequent to March 1, 2022. On March 1, 2022, ZimVie became a standalone publicly traded company, and our financial statements are now presented on a consolidated basis. The unaudited financial statements for all periods presented, including our historical results prior to March 1, 2022, are now referred to as "Condensed Consolidated Financial Statements," and have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles ("GAAP") for complete consolidated financial statements are not included herein. In our opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 ("Annual Report"). The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. Prior to the distribution, our equity balance in these condensed consolidated financial statements represented the excess of total assets over liabilities including the due to/from balances between us and Zimmer Biomet (referred to as "net parent investment" or "NPI") and accumulated other comprehensive loss. NPI was primarily impacted by contributions from Zimmer Biomet that were the result of treasury activities and net funding provided by or distributed to Zimmer Biomet. Following the distribution, certain functions that Zimmer Biomet provided to us prior to the distribution either continue to be provided to us by Zimmer Biomet under a transition services agreement or are being performed using our own resources or third-party service providers. Additionally, under manufacturing and supply agreements, we manufacture certain products for Zimmer Biomet and Zimmer Biomet manufactures certain products for us. We have incurred, and expect to continue to incur, certain costs to establish ourselves as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company. As of September 30, 2023 and December 31, 2022, we had $ 1.4 million and $ 1.5 million, respectively, in restricted cash. The restriction is on cash held in China as a result of ongoing litigation with a spine products distributor in China related to our decision to exit our spine products business in China (see Note 13 for further information). |
Accounting Pronouncements Recently Issued | Accounting Pronouncements Recently Issued There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our financial position, results of operations or cash flows. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill by Reportable Segment | The following table summarizes the changes in the carrying amount of goodwill by historical reportable segment (in thousands): Dental Spine Total Balance at December 31, 2022 Goodwill, Gross $ 401,999 $ 1,089,400 $ 1,491,399 Accumulated impairment losses ( 142,000 ) ( 1,089,400 ) ( 1,231,400 ) Goodwill, Net 259,999 — 259,999 Currency translation ( 861 ) — ( 861 ) Balance at September 30, 2023 Goodwill, Gross 401,138 1,089,400 1,490,538 Accumulated impairment losses ( 142,000 ) ( 1,089,400 ) ( 1,231,400 ) Goodwill, Net $ 259,138 $ — $ 259,138 |
Summary of Identifiable Intangible Assets | The components of identifiable intangible assets were as follows (in thousands): Technology Trademarks Customer Relationships Other Total As of December 31, 2022: Intangible assets subject to amortization: Gross carrying amount $ 844,730 $ 137,785 $ 364,917 $ 53,955 $ 1,401,387 Accumulated amortization ( 444,603 ) ( 63,012 ) ( 188,913 ) ( 49,894 ) ( 746,422 ) Total identifiable intangible assets $ 400,127 $ 74,773 $ 176,004 $ 4,061 $ 654,965 As of September 30, 2023: Intangible assets subject to amortization: Gross carrying amount $ 841,249 $ 137,110 $ 361,936 $ 53,918 $ 1,394,213 Accumulated amortization ( 476,465 ) ( 69,127 ) ( 206,284 ) ( 50,873 ) ( 802,748 ) Total identifiable intangible assets $ 364,784 $ 67,983 $ 155,652 $ 3,045 $ 591,465 |
Summary of Estimated Annual Amortization Expense Based on Exchange Rates | Estimated annual amortization expense for the years ending December 31, 2023 through 2027 based on exchange rates in effect at December 31, 2022 is as follows (in millions): For the Years Ending December 31, 2023 (remaining) $ 14.1 2024 72.4 2025 70.6 2026 68.9 2027 63.6 Thereafter 301.9 Total $ 591.5 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation | Share-based compensation expense was as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Share-based compensation expense recognized in: Cost of products sold, excluding intangible asset amortization $ 278 $ 118 $ 846 $ 2,204 Research and development 334 448 1,139 2,992 Selling, general and administrative 4,861 4,722 14,144 19,786 5,473 5,288 16,129 24,982 Tax benefit related to awards ( 1,374 ) ( 1,328 ) ( 4,053 ) ( 5,918 ) Total expense, net of tax $ 4,099 $ 3,960 $ 12,076 $ 19,064 |
Summary of Stock Option Activity | Stock option activity was as follows: Period Ended September 30, 2023 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Stock Options Price Life (Years) Value (in Millions) Outstanding at December 31, 2022 2,403,635 $ 26.74 Granted — — Exercised — — Forfeited ( 90,177 ) 24.14 Outstanding at September 30, 2023 2,313,458 $ 26.84 6.3 $ — Exercisable at September 30, 2023 1,598,522 $ 26.21 5.6 $ — |
Summary of Restricted Stock Unit Activity | RSU activity was as follows: Period Ended September 30, 2023 Weighted Average Number of Grant Date RSUs Fair Value Outstanding at December 31, 2022 1,382,500 $ 24.64 Granted 1,526,343 10.34 Vested ( 227,507 ) 28.25 Forfeited ( 146,547 ) 18.89 Outstanding at September 30, 2023 2,534,789 $ 17.01 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Weighted Average Shares for Basic and Diluted Net (Loss) Income per Common Share | The calculation of weighted average shares for the basic and diluted net (loss) income per common share is as follows (in thousands, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net (loss) income $ ( 5,089 ) $ 831 $ ( 58,430 ) $ ( 33,537 ) Weighted average shares outstanding for basic net (loss) income per common share 26,530 26,074 26,406 26,074 Effect of dilutive stock options and other equity awards (1) — 76 — — Weighted average shares outstanding for diluted net (loss) income per common share 26,530 26,150 26,406 26,074 Basic net (loss) income per common share $ ( 0.19 ) $ 0.03 $ ( 2.21 ) $ ( 1.29 ) Diluted net (loss) income per common share ( 0.19 ) 0.03 ( 2.21 ) ( 1.29 ) (1) Since we incurred a net loss in each of the three and nine months ended September 30, 2023 and in the nine months ended September 30, 2022, no dilutive stock options or other equity awards were included as diluted shares in those periods. |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventories | Inventories consisted of the following (in thousands): September 30, 2023 December 31, 2022 Finished goods $ 176,458 $ 200,098 Work-in-progress 22,709 21,199 Raw materials 14,571 12,557 Inventories $ 213,738 $ 233,854 |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following (in thousands): September 30, 2023 December 31, 2022 Other current liabilities: Salaries, wages and benefits $ 27,664 $ 47,812 License and service agreements 17,464 25,337 Lease liabilities 10,190 9,617 Other liabilities 62,817 63,013 Total other current liabilities $ 118,135 $ 145,779 |
Fair Value Measurements of As_2
Fair Value Measurements of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Reconciliation of Items Measured at Fair Value on Recurring Basis with Significant Unobservable Inputs (Level 3) | The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands): Level 3 - Liabilities Contingent payments related to acquisitions Balance December 31, 2022 $ 13,250 Settlements ( 3,451 ) Balance September 30, 2023 $ 9,799 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Our debt consisted of the following (in thousands): September 30, 2023 December 31, 2022 Term loan $ 518,925 $ 536,456 Debt issuance costs ( 3,392 ) ( 4,223 ) Total debt 515,533 532,233 Less: current portion — — Total debt due after one year $ 515,533 $ 532,233 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Net Sales and Operating Profit (Loss) by Segment | Net sales and operating profit (loss) by segment are as follows (in thousands): Net Sales Operating Profit (Loss) Three Months Ended September 30, Three Months Ended September 30, 2023 2022 2023 2022 Dental $ 105,311 $ 105,121 $ 22,808 $ 17,465 Spine 97,561 108,153 6,647 17,258 Segment Total 202,872 213,274 29,455 34,723 Related party transactions — 1,303 — ( 16 ) Expenses related to Parent products — — — ( 275 ) Intangible asset amortization — — ( 20,615 ) ( 19,357 ) Restructuring and other cost reduction initiatives — — ( 2,432 ) ( 689 ) Acquisition, integration, divestiture and related — — ( 1,945 ) ( 7,727 ) Other — — ( 20,642 ) ( 23,332 ) Total $ 202,872 $ 214,577 $ ( 16,179 ) $ ( 16,673 ) Net Sales Operating Profit (Loss) Nine Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Dental $ 344,130 $ 343,839 $ 69,074 $ 68,097 Spine 308,726 337,484 25,418 29,619 Segment Total 652,856 681,323 94,492 97,716 Related party transactions 339 3,419 11 ( 11,777 ) Expenses related to Parent products — — — ( 891 ) Intangible asset amortization — — ( 61,787 ) ( 60,178 ) Restructuring and other cost reduction initiatives — — ( 15,851 ) ( 6,486 ) Acquisition, integration, divestiture and related — — ( 5,024 ) ( 25,455 ) Other — — ( 65,965 ) ( 63,761 ) Total $ 653,195 $ 684,742 $ ( 54,124 ) $ ( 70,832 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Summary of Corporate Allocations Reflected in the Combined Statements of Operations | Corporate allocations reflected in the condensed consolidated statements of operations are as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Cost of products sold $ — $ — $ — $ ( 78 ) Selling, general & administrative — — — 13,914 |
Summary of Sale Transactions with Related Party | The condensed consolidated statements of operations reflect the sales of these orthopedic products to Zimmer Biomet as related party transactions in periods in which Zimmer Biomet was a related party as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Related party net sales $ — $ 1,303 $ 339 $ 3,419 Related party cost of products sold, excluding intangible asset amortization — 1,319 328 3,177 |
Summary of payments presented in condensed consolidated balance sheet | The amounts due from and to Zimmer Biomet under the various agreements that were included in related party receivable or payable, as applicable, in our condensed consolidated balance sheets were as follows (in thousands): September 30, 2023 December 31, 2022 Related party receivable $ — $ 8,483 Related party payable — 13,176 |
Restructuring and Other Cost _2
Restructuring and Other Cost Reduction Initiatives (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liabilities | The following table summarizes the liabilities directly attributable to us that were recognized under the plans discussed above and excludes non-cash charges (in thousands): Nine Months Ended September 30, Employee Other Total Balance, December 31, 2022 $ 1,893 $ 2,173 $ 4,066 Additions 8,787 2,593 11,380 Cash payments ( 5,445 ) ( 3,793 ) ( 9,238 ) Balance, September 30, 2023 $ 5,235 $ 973 $ 6,208 Balance, December 31, 2021 $ 1,099 $ 1,150 $ 2,249 Additions 1,777 2,923 4,700 Non-cash adjustments — ( 320 ) ( 320 ) Cash payments ( 1,797 ) ( 1,724 ) ( 3,521 ) Balance, September 30, 2022 $ 1,079 $ 2,029 $ 3,108 |
Background, Nature of Busines_3
Background, Nature of Business and Basis of Presentation - Additional Information (Details) $ in Millions | 9 Months Ended | |||
Mar. 01, 2022 | Sep. 30, 2023 USD ($) Segment | Feb. 01, 2023 | Dec. 31, 2022 USD ($) | |
Percentage of Common Stock Shares Outstanding | 80.30% | |||
Number of Operating Segments | Segment | 2 | |||
Restricted Cash | $ | $ 1.4 | $ 1.5 | ||
Zimmer Biomet | ||||
Percentage of Common Stock Shares Outstanding | 80.30% | |||
Zim Vie Inc | ||||
Percentage of Common Stock Shares Outstanding | 19.70% | |||
Percentage of ownership sold | 19.70% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Carrying Amount of Goodwill by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2023 | |
Goodwill [Line Items] | ||
Goodwill, Gross | $ 1,491,399 | $ 1,490,538 |
Accumulated impairment losses | (1,231,400) | (1,231,400) |
Goodwill, Net | 259,999 | 259,138 |
Currency translation | (861) | |
Spine [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 1,089,400 | 1,089,400 |
Accumulated impairment losses | (1,089,400) | (1,089,400) |
Goodwill, Net | 0 | 0 |
Currency translation | 0 | |
Dental [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 401,999 | 401,138 |
Accumulated impairment losses | (142,000) | (142,000) |
Goodwill, Net | 259,999 | $ 259,138 |
Currency translation | $ (861) |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,394,213 | $ 1,401,387 |
Accumulated amortization | (802,748) | (746,422) |
Intangible assets, net | 591,465 | 654,965 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 841,249 | 844,730 |
Accumulated amortization | (476,465) | (444,603) |
Intangible assets, net | 364,784 | 400,127 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 137,110 | 137,785 |
Accumulated amortization | (69,127) | (63,012) |
Intangible assets, net | 67,983 | 74,773 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 361,936 | 364,917 |
Accumulated amortization | (206,284) | (188,913) |
Intangible assets, net | 155,652 | 176,004 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 53,918 | 53,955 |
Accumulated amortization | (50,873) | (49,894) |
Intangible assets, net | $ 3,045 | $ 4,061 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Summary of Estimated Annual Amortization Expense Based on Exchange Rates (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining) | $ 14,100 | |
2024 | 72,400 | |
2025 | 70,600 | |
2026 | 68,900 | |
2027 | 63,600 | |
Thereafter | 301,900 | |
Total | $ 591,465 | $ 654,965 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 5,473 | $ 5,288 | $ 16,129 | $ 24,982 | ||
Unexercised stock option,Vested | $ 10,300 | |||||
Weighted average remaining vesting period | 2 years 6 months | |||||
Vesting period | 3 years | |||||
Expected Volatility | 52.29% | |||||
Expected term | 6 years | |||||
Risk-free interest rate | 1.94% | |||||
Dividend yield | 0% | |||||
Unrecognized share-based compensation cost related to unvested stock options | $ 7,000 | $ 7,000 | ||||
Weighted average vesting period of unrecognized share-based compensation costs | 1 year 6 months | |||||
2022 Stock Incentive Plan | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Common stock shares authorized | 6,000,000 | |||||
Shares available for future grants | 3,400,000 | 3,400,000 | ||||
Zim Vie Inc | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 21,300 | |||||
Stock option not yet recognized | $ 11,000 | $ 11,000 | ||||
Restricted Stock Units | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Weighted average fair value | $ 17.01 | $ 17.01 | $ 24.64 | |||
Number of RSUs, Granted | 1,526,343 | |||||
Unrecognized share-based compensation cost related to unvested stock options | $ 22,500 | $ 22,500 | ||||
Weighted average vesting period of unrecognized share-based compensation costs | 1 year 6 months | |||||
Total fair value of RSUs granted | $ 15,800 | 30,100 | ||||
Total fair value of RSUs vested | $ 6,400 | $ 1,100 | ||||
Restricted Stock Units | Zim Vie Inc | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Weighted average fair value | $ 31.55 | $ 31.55 | ||||
Performance Restricted stock units and RSU | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Conversion of Shares | 300,000 | |||||
Vesting period | 36 months | |||||
Number of RSUs, Granted | 367,928 | |||||
Performance Restricted stock units and RSU | Minimum [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Provision for Restricted stock unit vesting percentage | 0% | |||||
Performance Restricted stock units and RSU | Maximum [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Provision for Restricted stock unit vesting percentage | 150% | |||||
Employee Stock Option | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Weighted average fair value | $ 14.76 | |||||
Vesting period | 10 years | |||||
Employee Stock Option | Zim Vie Inc | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Conversion of Shares | 2,100,000 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total expense, pre-tax | $ 5,473 | $ 5,288 | $ 16,129 | $ 24,982 |
Tax benefit related to awards | (1,374) | (1,328) | (4,053) | (5,918) |
Total expense, net of tax | 4,099 | 3,960 | 12,076 | 19,064 |
Cost of Products Sold, Excluding Intangible Asset Amortization [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total expense, pre-tax | 278 | 118 | 846 | 2,204 |
Research and Development [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total expense, pre-tax | 334 | 448 | 1,139 | 2,992 |
Selling, General and Administrative [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total expense, pre-tax | $ 4,861 | $ 4,722 | $ 14,144 | $ 19,786 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Stock Options, Outstanding, Beginning Balance | shares | 2,403,635 |
Number of Stock Options, Granted | shares | 0 |
Number of Stock Options, Exercised | shares | 0 |
Number of Stock Options, Forfeited | shares | (90,177) |
Number of Stock Options, Outstanding, Ending Balance | shares | 2,313,458 |
Number of Stock Options, Exercisable | shares | 1,598,522 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 26.74 |
Weighted Average Exercise Price, Granted | $ / shares | 0 |
Weighted Average Exercise Price, Exercised | $ / shares | 0 |
Weighted Average Exercise Price, Forfeited | $ / shares | 24.14 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | 26.84 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 26.21 |
Weighted Average Remaining Contractual Life, Outstanding | 6 years 3 months 18 days |
Weighted Average Remaining Contractual Life, Exercisable | 5 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 0 |
Aggregate Intrinsic Value, Exercisable | $ | $ 0 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of RSUs, Outstanding, Beginning Balance | shares | 1,382,500 |
Number of RSUs, Granted | shares | 1,526,343 |
Number of RSUs, Vested | shares | (227,507) |
Number of RSUs, Forfeited | shares | (146,547) |
Number of RSUs, Outstanding, Ending balance | shares | 2,534,789 |
Weighted Average Grant Date Fair Value, Outstanding, Beginning Balance | $ / shares | $ 24.64 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 10.34 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 28.25 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 18.89 |
Weighted Average Grant Date Fair Value, Outstanding, Ending Balance | $ / shares | $ 17.01 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 01, 2022 | |
Earnings Per Share [Abstract] | |||||
Number of shares distributed | 26.1 | ||||
Weighted average number of shares excluded from computation of diluted net (loss) income per share | 3.2 | 3.8 | 3.3 | 3.3 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Weighted Average Shares for Basic and Diluted Net (Loss) Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (5,089) | $ 831 | $ (58,430) | $ (33,537) |
Weighted average shares outstanding for basic net (loss) income per common share | 26,530 | 26,074 | 26,406 | 26,074 |
Effect of dilutive stock options and other equity awards | 0 | 76 | 0 | 0 |
Weighted average shares outstanding for diluted net (loss) income per common share | 26,530 | 26,150 | 26,406 | 26,074 |
Net (Loss) Income Per Common Share - Basic | $ (0.19) | $ 0.03 | $ (2.21) | $ (1.29) |
Net (Loss) Income Per Common Share - Diluted | $ (0.19) | $ 0.03 | $ (2.21) | $ (1.29) |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | ||||
Expense (Benefit) charged to obsolete inventories | $ 6.2 | $ 4 | $ 7.3 | $ 21.6 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 176,458 | $ 200,098 |
Work in progress | 22,709 | 21,199 |
Raw materials | 14,571 | 12,557 |
Inventories | $ 213,738 | $ 233,854 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other current liabilities: | ||
Salaries, wages and benefits | $ 27,664 | $ 47,812 |
License and service agreements | 17,464 | 25,337 |
Lease liabilities | 10,190 | 9,617 |
Other liabilities | 62,817 | 63,013 |
Total other current liabilities | $ 118,135 | $ 145,779 |
Fair Value Measurements of As_3
Fair Value Measurements of Assets and Liabilities - Reconciliation of Items Measured at Fair Value on Recurring Basis with Significant Unobservable Inputs (Level 3) (Details) - Contingent Consideration to Acquisitions [Member] - Significant Unobservable Inputs (Level 3) [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair Value, Beginning Balance | $ 13,250 |
Settlements | (3,451) |
Fair Value, Ending Balance | $ 9,799 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Term loan | $ 518,925 | $ 536,456 |
Debt issuance costs | (3,392) | (4,223) |
Total debt | 515,533 | 532,233 |
Less: current portion | 0 | 0 |
Total debt due after one year | $ 515,533 | $ 532,233 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Dec. 17, 2021 | Apr. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
Line of Credit Facility [Line Items] | |||||
Scheduled principal payments description | On March 31, 2023, we made an optional prepayment on the Term Loan of $10.5 million, which represented the aggregate amount of the mandatory scheduled principal payments due on March 31, 2024 and June 30, 2024. On September 29, 2023, we made an optional prepayment on the Term Loan of $7.0 million, which represented the amount of the mandatory scheduled principal payment due on September 30, 2024. | ||||
Debt instrument description | As of September 30, 2023, our interest rate was the secured overnight financing rate plus the applicable margin of 1.75% for term benchmark borrowings. Commitments under the Revolver are subject to a commitment fee on the unused portion of the Revolver of 25 basis points. | ||||
Corporate insurance premium finance amount | $ 4,800,000 | ||||
Revolver | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility outstanding | $ 0 | ||||
Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Credit facility outstanding | $ 518,900,000 | ||||
Debt instrument periodic payment | $ 7,000,000 | $ 10,500,000 | |||
Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Proceeds from revolving loans | $ 175,000,000 | ||||
Borrowings under term loan credit agreements | $ 595,000,000 | ||||
Borrowing interest Rate | 1.75% | ||||
Debt instrument total net leverage ratio | 6 | ||||
Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument total net leverage ratio | 1 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Derivatives, Fair Value [Line Items] | |||||
Current derivative assets | $ 0.1 | $ 0.1 | $ 0.6 | ||
Derivative Asset, Current, Statement of Financial Position | Assets, Current | Assets, Current | Assets, Current | ||
Current derivative liabilities | $ 0.4 | $ 0.4 | $ 0.3 | ||
Derivative Liability, Current, Statement of Financial Position | Liabilities, Current | Liabilities, Current | Liabilities, Current | ||
Derivative gain (loss) on derivative instrument | $ 0.6 | $ (1.9) | $ 0.2 | $ (3.3) | |
Derivative, Loss, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (expense) income, net | Other (expense) income, net | Other (expense) income, net | Other (expense) income, net | |
Derivative notional amount | $ 38.5 | $ 38.5 | $ 69.1 | ||
Maximum [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Foreign currency exchange forward contracts term | 3 months | ||||
Minimum [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Foreign currency exchange forward contracts term | 1 month |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate on loss before income taxes | 80% | 103.70% | 28.50% | 59% |
Statutory tax rate | 21% | |||
Deferred tax liability increase in amount related to distribution | $ 3.9 | |||
Withholding tax receivable available to offset income taxes | $ 5.7 |
Segment Data - Summary of Net S
Segment Data - Summary of Net Sales and Operating Profit (Loss) by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue, Major Customer [Line Items] | ||||
Total Net Sales | $ 202,872 | $ 214,577 | $ 653,195 | $ 684,742 |
Operating Profit (Loss) | (16,179) | (16,673) | (54,124) | (70,832) |
Expenses related to Parent products | (275) | (891) | ||
Profit or loss from related party transactions | 0 | (16) | 11 | (11,777) |
Intangible asset amortization | (20,615) | (19,357) | (61,787) | (60,178) |
Restructuring and other cost reduction initiatives | (2,432) | (689) | (15,851) | (6,486) |
Acquisition, integration, divestiture and related | (1,945) | (7,727) | (5,024) | (25,455) |
Other | (20,642) | (23,332) | (65,965) | (63,761) |
Related Party | ||||
Revenue, Major Customer [Line Items] | ||||
Total Net Sales | 0 | 1,303 | 339 | 3,419 |
Spine | ||||
Revenue, Major Customer [Line Items] | ||||
Operating Profit (Loss) | 6,647 | 17,258 | 25,418 | 29,619 |
Spine | Sales [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total Net Sales | 97,561 | 108,153 | 308,726 | 337,484 |
Dental | ||||
Revenue, Major Customer [Line Items] | ||||
Operating Profit (Loss) | 22,808 | 17,465 | 69,074 | 68,097 |
Dental | Sales [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total Net Sales | 105,311 | 105,121 | 344,130 | 343,839 |
Segment Total | ||||
Revenue, Major Customer [Line Items] | ||||
Operating Profit (Loss) | 29,455 | 34,723 | 94,492 | 97,716 |
Segment Total | Sales [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total Net Sales | $ 202,872 | $ 213,274 | $ 652,856 | $ 681,323 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Amount of accrued loss contingency | $ 2.6 | $ 9.5 |
Related Party Transactions - Su
Related Party Transactions - Summary of Corporate Allocations Reflected in the Combined Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Selling, general & administrative | $ 117,354 | $ 129,345 | $ 373,801 | $ 389,509 |
Zimmer Biomet [Member] | ||||
Cost of products sold | 0 | 0 | 0 | (78) |
Selling, general & administrative | $ 0 | $ 0 | $ 0 | $ 13,914 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 01, 2023 | |
Share-based compensation benefit | $ 16,129 | $ 24,982 | |||
Related party cash after distribution | 100,000 | ||||
Net transactions with Zimmer Biomet Holdings Inc. | (70,430) | ||||
Dividend paid to Zimmer Biomet | 0 | 540,567 | |||
Zim Vie Inc | |||||
Percentage of ownership sold | 19.70% | ||||
Zimmer Biomet [Member] | |||||
Borrowings under term loan credit agreements | 595,000 | ||||
Proceeds from Related Party Debt | 561,000 | ||||
Net transactions with Zimmer Biomet reflected in the cash flows pre-distribution | $ 0 | $ 0 | 0 | 6,900 | |
Net transactions with Zimmer Biomet Holdings Inc. | 0 | 0 | 0 | 70,400 | |
Due from Related Parties | $ 79,000 | $ 79,000 | |||
Zimmer Biomet [Member] | Revision of Prior Period, Adjustment [Member] | |||||
Share-based compensation benefit | $ 0 | $ 1,000 |
Related Party Transactions - _2
Related Party Transactions - Summary of Sale Transactions with Related Party (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Related party net sales | $ 202,872 | $ 214,577 | $ 653,195 | $ 684,742 |
Zimmer Biomet [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party net sales | 0 | 1,303 | 339 | 3,419 |
Related party cost of products sold, excluding intangible asset amortization | $ 0 | $ 1,319 | $ 328 | $ 3,177 |
Related Party Transactions - _3
Related Party Transactions - Summary of Corporate Allocations Reflected in the Condensed Consolidated Balance sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related party receivable | $ 153,947 | $ 168,961 |
Related party payable | 51,313 | 43,998 |
Zimmer Biomet [Member] | ||
Related party receivable | 0 | 8,483 |
Related party payable | $ 0 | $ 13,176 |
Restructuring and Other Cost _3
Restructuring and Other Cost Reduction Initiatives - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 15 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | $ 2,432 | $ 689 | $ 15,851 | $ 6,486 | |
Restructuring Charges Pre-tax | 1,100 | 700 | 5,800 | 2,400 | $ 14,800 |
Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 19,000 | ||||
Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 18,000 | ||||
ZB Restructuring Plans [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges Pre-tax | $ 100 | $ 4,100 | |||
Severance And professional Fees [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges Pre-tax | $ 1,300 | 9,900 | |||
General Restructuring Plan [Member] | Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | 16,000 | ||||
General Restructuring Plan [Member] | Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges | $ 15,000 |
Restructuring and Other Cost _4
Restructuring and Other Cost Reduction Initiatives - Schedule of Restructuring Liabilities (Details) - Restructuring Plans Member - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve, Beginning Balance | $ 4,066 | $ 2,249 |
Additions | 11,380 | 4,700 |
Non Cash Adjustment | (320) | |
Cash payments | (9,238) | (3,521) |
Restructuring Reserve, Ending Balance | 6,208 | 3,108 |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve, Beginning Balance | 1,893 | 1,099 |
Additions | 8,787 | 1,777 |
Non Cash Adjustment | 0 | |
Cash payments | (5,445) | (1,797) |
Restructuring Reserve, Ending Balance | 5,235 | 1,079 |
Other Restructuring [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve, Beginning Balance | 2,173 | 1,150 |
Additions | 2,593 | 2,923 |
Non Cash Adjustment | (320) | |
Cash payments | (3,793) | (1,724) |
Restructuring Reserve, Ending Balance | $ 973 | $ 2,029 |