07.01.06
$3.3 Billion ($41B Total)
Key Executives:
J. Raymond Elliott, Chairman, CEO and President
Sam R. Leno, CFO and Executive VP of Financial & Corporate Services
Sheryl L. Conley, President, Americas and Chief Marketing Officer
Cheryl Blanchard, Sr. VP, R&D and Chief Scientific Officer
Laura O’Donnell, Chief Compliance Officer
No. of Employees: 6,700
World Headquarters: Warsaw, IN
While the orthopedic industry has brought all the major players some heady challenges in 2005—and continues to do so—Zimmer still managed to grow its business by double digits in 2005, with a 10% increase from 2004, bringing the total net sales up to $3.3 billion. With its previous acquisitions of Centerpulse and Implex paid off, the company—with operations in 24+ countries and distribution to 100+ countries—even ended the year with net cash of $164 million.
Staying ahead of the curve has led Zimmer’s top executives to carefully evaluate its corporate model and strategies in the past year. As a result, a new organizational structure was established, creating global businesses focused on markets and customers; this will be accomplished through both internal growth and acquisitions.
“It’s time to move past the integration and build our future with a new organization structure,” said Ray Elliott, chairman, president and CEO of Zimmer. “We are blessed with a great team in a great marketplace and we are making these changes from a position of strength.”
In addition to its own internal initiatives, Zimmer announced in November that the state of Indiana would grant more than $5 million over the next 10 years in tax credits and other incentives to support the company’s R&D endeavors. Along with expansion of its facilities, including a $24 million investment for an expanded R&D facility in Warsaw, IN, Zimmer expects to add about 275 new workers to its roster by 2010.
The company’s product lines have been benefiting from aging populations—among other factors—needing more procedures and demanding top-notch products. Sales of Zimmer’s Trabecular Metal Technology illustrate how the company has capitalized on this market, as the technology brought more than $100 million in sales in 2005, a 40% increase from 2004.
Most of the company’s overall sales are still coming from the United States, as 2005 saw $1.9 billion from this region. European sales contributed 27% of total sales, and Asia added 14% (with Japan being the most lucrative Asian market).
The reconstructive market was the company’s cash cow, contributing $2.7 billion in 2005—all categories (eg, knees, hips, extremities and dental) increased sales. The company’s other markets, including trauma, spine and orthopedic surgical products, posted increases as well.
Zimmer’s strategy of continuously rolling out new products has been paying off, too. In 2005, new products accounted for 21%, or $695 million, of all sales. This year, the company is looking forward to sales stemming from products incorporating Trabecular Metal Technology, the VerSys Epoch Composite Full Coat Hip Prosthesis, the NexGen MIS Tibial Plate, various trauma products (eg, Zimmer’s Periarticular Locking Plates, the Sirus Intramedullary Nail System) and alternative bearing surfaces such as ceramic-on-ceramic and metal-on-metal.
In addition, Zimmer is broadening its portfolio by offering women the Gender Solutions Knee Implants, which were just approved by the FDA in May. And in December 2005, Zimmer received FDA approval for its Trilogy AB Ceramic-on-Ceramic Acetabular System, which is a spin-off from the company’s Trilogy system, worth approximately $150 million in sales in 2005.
Some challenges remain, however. Since March 2005, the US Department of Justice has been investigating Zimmer, along with four other orthopedic companies, regarding its relationships with orthopedic surgeons as well as possible antitrust violations. If the company is found by the DOJ to be in violation of any laws, 2006 and beyond could be impacted.
Key Executives:
J. Raymond Elliott, Chairman, CEO and President
Sam R. Leno, CFO and Executive VP of Financial & Corporate Services
Sheryl L. Conley, President, Americas and Chief Marketing Officer
Cheryl Blanchard, Sr. VP, R&D and Chief Scientific Officer
Laura O’Donnell, Chief Compliance Officer
No. of Employees: 6,700
World Headquarters: Warsaw, IN
While the orthopedic industry has brought all the major players some heady challenges in 2005—and continues to do so—Zimmer still managed to grow its business by double digits in 2005, with a 10% increase from 2004, bringing the total net sales up to $3.3 billion. With its previous acquisitions of Centerpulse and Implex paid off, the company—with operations in 24+ countries and distribution to 100+ countries—even ended the year with net cash of $164 million.
Staying ahead of the curve has led Zimmer’s top executives to carefully evaluate its corporate model and strategies in the past year. As a result, a new organizational structure was established, creating global businesses focused on markets and customers; this will be accomplished through both internal growth and acquisitions.
“It’s time to move past the integration and build our future with a new organization structure,” said Ray Elliott, chairman, president and CEO of Zimmer. “We are blessed with a great team in a great marketplace and we are making these changes from a position of strength.”
In addition to its own internal initiatives, Zimmer announced in November that the state of Indiana would grant more than $5 million over the next 10 years in tax credits and other incentives to support the company’s R&D endeavors. Along with expansion of its facilities, including a $24 million investment for an expanded R&D facility in Warsaw, IN, Zimmer expects to add about 275 new workers to its roster by 2010.
The company’s product lines have been benefiting from aging populations—among other factors—needing more procedures and demanding top-notch products. Sales of Zimmer’s Trabecular Metal Technology illustrate how the company has capitalized on this market, as the technology brought more than $100 million in sales in 2005, a 40% increase from 2004.
Most of the company’s overall sales are still coming from the United States, as 2005 saw $1.9 billion from this region. European sales contributed 27% of total sales, and Asia added 14% (with Japan being the most lucrative Asian market).
The reconstructive market was the company’s cash cow, contributing $2.7 billion in 2005—all categories (eg, knees, hips, extremities and dental) increased sales. The company’s other markets, including trauma, spine and orthopedic surgical products, posted increases as well.
Zimmer’s strategy of continuously rolling out new products has been paying off, too. In 2005, new products accounted for 21%, or $695 million, of all sales. This year, the company is looking forward to sales stemming from products incorporating Trabecular Metal Technology, the VerSys Epoch Composite Full Coat Hip Prosthesis, the NexGen MIS Tibial Plate, various trauma products (eg, Zimmer’s Periarticular Locking Plates, the Sirus Intramedullary Nail System) and alternative bearing surfaces such as ceramic-on-ceramic and metal-on-metal.
In addition, Zimmer is broadening its portfolio by offering women the Gender Solutions Knee Implants, which were just approved by the FDA in May. And in December 2005, Zimmer received FDA approval for its Trilogy AB Ceramic-on-Ceramic Acetabular System, which is a spin-off from the company’s Trilogy system, worth approximately $150 million in sales in 2005.
Some challenges remain, however. Since March 2005, the US Department of Justice has been investigating Zimmer, along with four other orthopedic companies, regarding its relationships with orthopedic surgeons as well as possible antitrust violations. If the company is found by the DOJ to be in violation of any laws, 2006 and beyond could be impacted.