Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the quarter and year ended December 31, 2013. The Company reported fourth quarter net sales of $1.24 billion, an increase of 5.1% reported and 6.6% constant currency over the fourth quarter of 2012. Diluted earnings per share for the quarter were $1.36 reported and $1.66 adjusted, an increase of 9.9% adjusted over the prior year period. Full year net sales were $4.62 billion, an increase of 3.4% reported and 4.9% constant currency over the prior year. Diluted earnings per share for the year were $4.43 reported and $5.75 adjusted, an increase of 8.5% adjusted over the prior year.
"In the fourth quarter, Zimmer continued to deliver accelerated top line growth. These strong results were led by the successful commercialization of a number of innovative new offerings, including Persona® The Personalized Knee System and its accompanying suite of next-generation intelligent instruments," said David Dvorak, Zimmer President and CEO. "Zimmer will remain focused on developing clinically relevant solutions to better serve the evolving global healthcare landscape. We are confident that our strategy positions the Company for continued growth in 2014 and beyond, in concert with our ongoing commitments to quality and operational excellence and disciplined capital management."
Net earnings for the fourth quarter were $235.9 million on a reported basis and $288.6 million on an adjusted basis, an increase of 9.5% adjusted over the prior year period. Operating cash flow for the fourth quarter was $300.2 million. Net earnings for the full year 2013 were $761.0 million on a reported basis and $988.4 million on an adjusted basis, an increase of 6.0% adjusted over the prior year. Operating cash flow for the full year was $963.1 million.
In the quarter, the Company recorded pre-tax charges of $61.2 million in special items and $12.8 million in cost of products sold pertaining to global restructuring, quality and operational excellence initiatives, certain litigation and recent acquisitions. Adjusted fourth quarter 2013 figures in this release exclude the impact of these charges, which include $40.0 million related to quality and operational excellence initiatives in manufacturing, logistics and sales; $14.5 million connected with certain outstanding litigation matters; and $19.5 million in integration and other costs.
During the quarter, the Company utilized $240.6 million of cash to acquire 2.7 million shares. For the full year 2013, the Company utilized $718.8 million of cash to acquire 9.1 million shares. The Company issued 7.4 million shares during the year in connection with employee equity compensation plans, resulting in a net reduction of 1.7 million shares outstanding for the year. Further, the Company paid $34.0 million in cash dividends to stockholders during the quarter and $132.4 million in cash dividends for the full year 2013.
The Company expects full-year revenues for 2014 to increase between 3.0% and 5.0% on a constant currency basis. The Company estimates that foreign currency translation will decrease revenues by approximately 0.5% for the full year 2014, resulting in reported revenue growth between 2.5% and 4.5%. Full-year 2014 diluted earnings per share are projected to be in a range of $5.00 to $5.20 on a reported basis and $6.10 to $6.30 on an adjusted basis.