Biomet Announces Financial Results for First Quarter of Fiscal Year 2008.

WARSAW, Ind. -- Biomet, Inc. (NASDAQ:BMET) announced today financial results for its first fiscal quarter ended August 31, 2007.

* Net sales increased 9% to $552.3 million

* Worldwide reconstructive device sales increased 13% reported (12% constant currency, excluding instruments)

* Worldwide knee sales increased 13% reported (14% constant currency, excluding instruments)

* Worldwide dental sales increased 20% reported (17% constant currency)

On September 25, 2007, Biomet Inc. merged with LVB Acquisition Merger Sub, Inc., a wholly-owned subsidiary of LVB Acquisition, Inc. LVB Acquisition, Inc. is indirectly owned by investment partnerships directly or indirectly advised or managed by The Blackstone Group L.P., Goldman Sachs & Co., Kohlberg Kravis Roberts & Co. L.P. and TPG Capital. These financial results have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S. with the exception of the omission of all purchase accounting adjustments relating to the merger and related transactions therewith, as permitted by the debt documents governing our new senior secured credit facilities and the notes issued on the closing date of the merger.

During the first quarter of fiscal year 2008, net sales increased 9% to $552.3 million. Excluding the impact of foreign currency, net sales increased 6% worldwide. Excluding instruments (which the Company discontinued selling to distributors in the United States in the third quarter of fiscal 2007) and the impact of foreign currency, worldwide sales increased 7%.

During the first quarter of fiscal year 2008, the Company incurred significant special charges (pre-tax), including: 1) $112.8 million of additional compensation expense to settle in-the-money stock options of employees, as required by the Merger agreement; 2) $38.4 million of distributor fee expense associated with renegotiation of distribution agreements; 3) $29.6 million of investment banker fees associated with the Merger; 4) $26.9 million settlement with the Department of Justice; and 5) $16.4 million of additional legal and merger-related fees.

Reported operating loss for the first quarter of fiscal year 2008 was $60.2 million compared to operating income of $155.7 million for the first quarter of fiscal year 2007. Adjusted operating income was $163.9 million for the first quarter of fiscal year 2008 compared to $159.2 million for the first quarter of fiscal year 2007. Reported net loss for the first quarter of fiscal year 2008 was $42.9 million compared to net income of $104.4 million for the first quarter of fiscal year 2007. Adjusted net income for the first quarter of fiscal year 2008 was $109.2 million compared to adjusted net income for the first quarter of fiscal year 2007 of $106.8 million. Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") for the first quarter of fiscal year 2008 was $192.8 million as compared to $181.7 million in the first quarter of fiscal year 2007.

First Quarter Sales Performance

Reconstructive Products

During the first quarter of fiscal year 2008, reconstructive device sales increased 13% worldwide to $397.5 million compared to $351.8 million for the first quarter of fiscal year 2007. Reconstructive device sales in the United States increased 9% (12% excluding instruments) and international reconstructive device sales increased 18%. Excluding instruments and on a constant currency basis, worldwide reconstructive devices sales increased 12%. On a reported basis, knee sales increased 13% worldwide and increased 11% in the United States during the first quarter as compared to the prior year. Excluding instruments and on a constant currency basis, knee sales increased 14% worldwide and 15% in the United States.

Biomet continued to experience excellent market demand during the first quarter for its flagship knee products, including the Vanguard[TM] Complete Knee System, the Vanguard[TM] SSK Revision Knee System and the Oxford([R]) Partial Knee System. The Vanguard[TM] Complete Knee system is the most comprehensive total knee system on the market and offers full interchangeability of the system's components, to provide a precise fit for each patient. The Vanguard[TM] SSK (Super Stabilized Knee) Revision System features various modular options, offering surgeons the ability to customize the implant to address complex bone defects often present in revision cases. The Oxford([R]) Partial Knee System, the only free-floating mobile-bearing partial knee approved for sale in the United States, continues to receive excellent market acceptance with more than 2,000 domestic surgeons trained to date. Outside the United States, the Oxford([R]) System has experienced remarkable long-term clinical results, with 98% success reported at 10 years1 follow-up, a 95% success rate at 15 years2 and 92% success at 20 years3.

On a reported basis, hip sales increased 8% worldwide and 7% in the United States during the first quarter of fiscal year 2008 as compared to the first quarter of fiscal year 2007. Excluding instruments and on a constant currency basis, first quarter hip sales increased 7% worldwide and 8% in the United States. Biomet's broad product offering of bearing systems, including metal-on-metal, ceramic-on-ceramic, and highly crosslinked polyethylene options continued to receive strong demand. During the first quarter, the rollout for E-Poly[TM] hip cup liners was initiated. Biomet's E-Poly[TM] liners are the world's first Vitamin E stabilized highly crosslinked polyethylene products to be introduced to the market. Also contributing to first quarter hip sales growth were Biomet's titanium press-fit hip stems, led by the Taperloc([R]), Biomet's best-selling hip stem.

Extremity sales increased 17% worldwide during the first quarter of fiscal year 2008 and increased 14% in the United States. Extremity growth drivers for the first quarter included the Bio-Modular([R]) Shoulder System, the Copeland[TM] Humeral Resurfacing Head and the Discovery([R]) Elbow.

Dental reconstructive device sales increased 20% worldwide (17% on a constant currency basis) during the first quarter of fiscal year 2008 and increased 7% in the United States. Biomet 3i launched the NanoTite[TM] Tapered Implant System during the first quarter. The NanoTite[TM] technology incorporates a discrete crystalline deposition of nano-scale hydroxyapatite, which is applied to the OSSEOTITE([R]) surface substructure and is designed to provide a more rapid and predictable treatment for patients.

Sales of bone cements and accessories increased 6% worldwide during the first quarter of fiscal year 2008 and increased 6% in the United States.

Fixation Products

During the first quarter of fiscal year 2008, fixation sales decreased 3% worldwide to $59.1 million compared to $60.9 million for the first quarter of fiscal year 2007 and decreased 7% in the United States during the first quarter. Craniomaxillofacial sales increased 18% worldwide and 16% in the United States during the first quarter. Internal fixation sales increased 7% worldwide and 1% in the United States during the first quarter, while external fixation sales decreased 15% worldwide and 8% in the United States. Electrical stimulation device sales decreased 20% both worldwide and in the United States during the first quarter.

Spinal Products

Spinal product sales increased 3% worldwide to $53.5 million during the first quarter of fiscal year 2008 compared to $51.9 million for the first quarter of fiscal year 2007. Spinal product sales decreased 2% in the United States during the first quarter of fiscal year 2008. Sales of spinal implants and orthobiologics for the spine increased 7% worldwide and 7% in the United States during the first quarter, while spinal stimulation sales decreased 12% both worldwide and in the United States. Biomet Spine continued the rollout of the Polaris[TM] 5.5 Spine System during the first quarter to complete the national release. This system is a next generation pedicle screw system offered in a 5.5mm diameter top-loading rod system, which utilizes patented Helical Flange[TM] locking technology.

Other Products

Sales of the Company's "other products" decreased 3% worldwide to $42.2 million during the first quarter of fiscal year 2008 compared to $43.6 million during the first quarter of fiscal year 2007. Sales of "other products" decreased 13% in the United States during the first quarter of fiscal year 2008. Arthroscopy sales increased 7% worldwide during the first quarter and decreased 2% in the United States, while sales of softgoods and bracing products decreased 23% worldwide and 24% in the United States.

Biomet's President and Chief Executive Officer Jeffrey R. Binder stated, "Our first quarter results reflect accelerated growth across virtually all components of our reconstructive product category. I am particularly pleased with the strong momentum in our global knee franchise."

Mr. Binder further commented, "At the same time, we are working vigorously toward bolstering those areas in our business which are not performing to the same level. As we implement changes to drive improvements in performance, we maintain the Company's ongoing commitment to the development and production of the highest quality products for surgeons and their patients, delivered with outstanding service."

1Murray D.W., Goodfellow J.W., O'Connor J.J. The Oxford([R]) medial unicompartmental arthroplasty: a ten-year survival study. Journal of Bone and Joint Surgery (British). 80(6): 983-989, 1998.

2Price A.J., Svard U. The Oxford([R]) Medial Unicompartmental Knee Arthroplasty Fifteen-Year Survival Results From an independent series B.O.A. Meeting 2000, London

3Price, A., Svard U. 20-year survival & 10 year clinical results of the Oxford([R]) medical UKA. In: Proceedings of the American Academy of Orthopedic Surgeons Annual Meeting; March 22-26, 2006: Chicago, Ill.538.

Helical Flange[TM] is a trademark of the Jackson Group.

About Biomet

Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet's product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, autologous therapies 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 70 countries.

Contacts

For further information contact Daniel P. Florin, Senior Vice President and Chief Financial Officer at [phone] or Barbara Goslee, Director, Corporate Communications at [phone].

Forward-Looking Statements

The is press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements are often indicated by the use of words such as "will," "intend," "anticipate," "estimate," "expect," "plan" and similar expressions. Forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from those contemplated by the forward looking statements due to, among others, the following factors: the results of ongoing investigations by the United States Department of Justice; the ability to successfully implement new technologies; the Company's ability to sustain sales and earnings growth; the Company's success in achieving timely approval or clearance of its products with domestic and foreign regulatory entities; the stability of certain foreign economic markets; the impact of anticipated changes in the musculoskeletal industry and the ability of the Company to react to and capitalize on those changes; the ability of the Company to successfully implement its desired organizational changes; the impact of the Company's managerial changes; and other factors set forth in the Company's filings with the SEC, including the Company's most recent annual report on Form 10-K (as amended) and quarterly reports on Form 10-Q. Although the Company believes that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or non-occurrence of future events. There can be no assurance as to the accuracy of forward-looking statements contained in this press release. The inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company's objectives will be achieved. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements which speak only as of the date on which they were made.

Use of non-GAAP Financial Information

To supplement Biomet's consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP measures that exclude certain charges, including non-GAAP operating income, non-GAAP net income and non-GAPP net income per diluted share. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Biomet management believes that these non-GAAP measures provide useful information to investors; however, this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures to the corresponding GAAP measure is included in the tables below.

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Management uses non-GAAP financial measures, such as net sales, excluding the impact of foreign currency, operating income as adjusted, net income as adjusted, and diluted earnings per share as adjusted. The term "as adjusted", a non-GAAP financial measure, refers to financial performance measures that exclude the following charges for the first quarter of fiscal year 2008: 1) $112.8 million of additional compensation expense to settle in-the-money stock options of employees, as required by the Merger agreement; 2) $38.4 million of distributor fee expense associated with renegotiation of distribution agreements; 3) $29.6 million of investment banker fees associated with the Merger; 4) $26.9 million settlement with the Department of Justice; and 5) $16.4 million of additional legal and merger-related fees. These expenses incurred during the first quarter of fiscal year 2008 were current period expenses and are not indicative of future results. The Company's management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the Company's operations, period over period. Management uses these measures internally for evaluation of the performance of the business, including the allocation of resources and the evaluation of results relative to team member performance compensation targets. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

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