BIOMET REPORTS 4TH QTR NET SALES INCREASED 7% TO $539,892,000.

Biomet, Inc. (NASDAQ:BMET), Warsaw, Ind., has announced that its board of directors declared a cash dividend of $0.30 per share, payable July 21, 2006, to shareholders of record at the close of business on July 14, 2006. Interim president and CEO Daniel P. Hann stated, "The declaration of this dividend is in response to the company's record financial performance during fiscal year 2006 and our anticipated results during fiscal year 2007."

During the fourth quarter of fiscal year 2006, net sales increased 7% to $539,892,000. Operating income decreased 5% to $147,601,000 from $155,734,000 and increased 5%, on an adjusted basis, to $166,501,000 from $158,178,000. Net income decreased 5% to $98,502,000 from $103,200,000 and increased 8%, as adjusted, to $113,002,000 from $104,794,000. Diluted earnings per share decreased 2% to $0.40 from $0.41 and increased 10%, as adjusted, to $0.46 per share from $0.42.

Biomet, Inc. reported record sales and adjusted earnings results (non-GAAP) today for its fiscal year 2006 and fourth quarter ended May 31, 2006. Adjusted results for the fourth quarter and fiscal year 2006, which are non-GAAP measures, exclude the following one-time items: $9 million in connection with the separation package payable to former president and CEO Dane A. Miller, Ph.D.; $5.4 million for expenses related to the company's review and reorganization of its EBI operations; $4.8 million related to the discontinuation of the Acumen Surgical Navigation product line and the company's investment in Z-KAT, Inc.; and $2.6 million for a cross-licensing and settlement agreement between Biomet Biologics, Inc. and Cytomedix, Inc. Adjusted results for fiscal year 2005, which are non-GAAP measures, exclude the impact of inventory step-up related to the March 2004 acquisition of Merck KGaA's interest in the Biomet Merck joint venture and the June 2004 acquisition of Interpore International, Inc. Dr. Miller's retirement was announced in a Biomet press release dated March 27, 2006, and the separation package is detailed in Biomet's form 8-K filed with the Securities and Exchange Commission on May 10, 2006. As a result of continued underperformance of the company's EBI subsidiary, during the fourth quarter the company conducted a management review and reorganization, including management changes resulting in severance pay agreements and relocation packages. Biomet discontinued the Acumen product line and is researching surgical navigation options in order to offer surgeons improved solutions. The agreement with Cytomedix provides Biomet Biologics with a worldwide license under the "Knighton" patent. The one-time items described above negatively impacted fourth quarter and fiscal year 2006 results in the following manner: $3.8 million charge to cost of goods sold; $15.1 million charge to selling, general and administrative expenses; and $2.9 million charge to other income expense. A reconciliation to comparable GAAP measures is included in this press release.

Net sales increased 10% worldwide, excluding the impact of foreign currency, which decreased fourth quarter revenues by approximately $11.7 million. International sales increased 11% on a constant currency basis, while domestic sales increased 9% during the fourth quarter. Unless otherwise noted, the following growth rates are quoted on a constant currency basis.

Reconstructive device sales increased 11% worldwide to $372,656,000 during the fourth quarter of fiscal year 2006, while domestic reconstructive device sales increased 13%. Knee sales increased 21% in the United States during the quarter and increased 15% worldwide. During the fourth quarter, Biomet continued to experience strong demand for new total knee devices, as well as the company's unicompartmental systems. Hip sales increased 10% worldwide and 9% in the United States during the fourth quarter. Biomet's broad platform of acetabular options continued to experience excellent surgeon acceptance during the quarter, including metal-on-metal, ceramic-on-ceramic, and second generation highly crosslinked polyethylene components. The company's titanium porous coated hip stems also contributed to the strong hip performance during the quarter.

Extremity sales increased 17% in the United States and 14% worldwide during the fourth quarter. Dental reconstructive implant sales increased 16% worldwide during the quarter and 9% in the United States. Sales of bone cements and accessories decreased 8% in the United States and decreased 17% worldwide during the fourth quarter. Fixation sales increased 5% worldwide to $64,168,000 during the fourth quarter of fiscal year 2006. Fixation sales increased 2% in the United States during the quarter. Lorenz Surgical's craniomaxillofacial fixation sales increased 18% worldwide and 14% in the United States during the fourth quarter. Internal fixation sales increased 7% worldwide and in the United States during the fourth quarter. External fixation sales were flat worldwide during the quarter and decreased 1% in the United States. During the fourth quarter, electrical stimulation device sales decreased 1% worldwide and in the United States.

During the fourth quarter of fiscal year 2006, spinal product sales increased 5% worldwide to $57,697,000 and increased 2% in the United States. Sales of spinal implants and orthobiologics for the spine increased 7% worldwide and 2% in the United States during the fourth quarter, while spinal stimulation sales increased 2% worldwide and in the United States.

Sales of the company's "other products" increased 10% worldwide to $45,371,000 and increased 4% in the United States during the fourth quarter. Arthroscopy sales increased 16% worldwide during the quarter and increased 5% in the United States. Sales of softgoods and bracing products increased 1% in the United States and decreased 2% worldwide during the fourth quarter.

Hann concluded, "Although the company, as a whole, underperformed our internal expectations during fiscal year 2006, Biomet's orthopedic reconstructive products and dental reconstructive implants continued to receive strong market demand. We continue to implement structural and management changes at EBI and we are confident that we will experience operational improvements at EBI throughout fiscal year 2007. Biomet is in the midst of several major product launches and the company has an extremely strong product development pipeline. Additionally, Biomet's management team has been actively reviewing all operations to ensure the company is well positioned for continued, profitable growth throughout the organization. Consequently, we remain comfortable with analysts' sales and earnings estimates of $513 million to $530 million and $0.43 to $0.45 per share for the first quarter of fiscal year 2007; and $2,150 million to $2,220 million and $1.85 to $1.95 per share for fiscal year 2007. This guidance does not incorporate the effect of FAS 123R, Share-Based Payment, which the company estimates to be $0.05 to $0.06 per share for fiscal year 2007."

Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. The company's product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, and dental reconstructive implants; fixation products, including electrical bone growth stimulators, internal and external orthopedic fixation devices, craniomaxillofacial implants and bone substitute materials; spinal products, including spinal stimulation devices, spinal hardware and orthobiologics; and other products, such as arthroscopy products and softgoods and bracing products. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in more than 100 countries.

For more information, call 574/372-1528 or visit http://www.biomet.com.