ZimVie (Nasdaq:ZIMV) shares ticked up today on first-quarter financial results despite the announcement of a workforce reduction.
Shares of ZimVie rose 22.8% at $9.47 apiece in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — fell 0.5%.
The Westminster, Colorado-based dental and spine company said it recently initiated additional restructuring activities. It aims to better position the organization for future success based on the current business environment.
Through these initiatives, ZimVie hopes to reduce its global cost structure and streamline its organizational infrastructure. As a result, the company expects an approximate 5% global workforce reduction. (The company’s most recent annual report listed 2,700 employees, so the layoff could be equivalent to roughly 135 workers.)
The job cuts come in addition to reductions in discretionary spending.
ZimVie projects approximately $17 million to $20 million in annualized net savings by 2024 as a result of these actions.
“I am pleased with the progress our team is making to evolve our product portfolio and shift our focus from operational enhancements to innovation and commercial execution,” said Vafa Jamali, president and CEO of ZimVie. “We have introduced several new dental product launches year-to-date, opened our expanded, state-of-the-art, North America training institute at our flagship Dental facility in Palm Beach Gardens, Florida, and have had a number of commercial wins in spine.
“Concurrently, we have taken definitive actions to continue reducing operating expenses to improve our operating profile. I am optimistic about the future of ZimVie.”
The numbers behind ZimVie’s first quarter
For the quarter, ZimVie posted losses of $29.97 million. That equals losses of $1.14 per share on sales of $225.1 million for the three months ended March 31, 2023.
ZimVie reported about a $4 million bottom-line slide further into the red. The company saw sales decline by 4.1%.
Changes in foreign exchange rates largely drove third-party dental sale declines. However, demand increases for dental implants and digital dentistry offerings partially offset that. ZimVie attributed its increased net loss to lower net sales, as well as spending related to higher corporate expenses. The company pointed to corporate activity ramp-ups and income tax expenses as the sources there.
Adjusted to exclude one-time items, earnings per share totaled 25¢, landing 20¢ ahead of Wall Street. Sales topped projections, too, as analysts expected revenues of $209 million.
ZimVie now expects revenues for 2023 to range between $835 million and $860 million. That marks a $10 million increase at both ends from the previous range of $825 million to $850 million. The company also raised its adjusted EPS guidance by 10¢ at both ends. It changed from 30¢ to 50¢ to a range between 40¢ and 60¢.
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