Biomet Announces Record First Quarter Results.WARSAW Warsaw (wôr`sô), Pol. Warszawa, city (1993 est. pop. 1,655,700), capital of Poland and of Mazowieckie prov., central Poland, on both banks of the Vistula River. , Ind. -- Biomet, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BMET BMET Biomedical Engineering Technology BMet Bachelor of Metallurgy BMET Bio-Medical Equipment Repair Technician ) today reported record sales and earnings results for its first quarter ended August 31, 2006. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 5% to $508,161,000. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 2% to $155,043,000 from $151,410,000, and on an adjusted basis increased 7% to $159,269,000. Net income increased 2% to $102,830,000 from $100,299,000. and increased 6% on an adjusted basis to $106,815,000. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 5% to $0.42 from $0.40, and increased 10% on an adjusted basis to $0.44. Reported earnings per share for the first quarter of fiscal year 2007 includes a $.02 per share impact related to SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123(R) Share-Based Payment. Effective June 1, 2006, the Company adopted this new accounting standard using the modified-prospective method. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with this adoption method, the Company is not adjusting its historical financial statements to reflect the impact of share-based payment. Interim President and Chief Executive Officer Daniel P. Hann stated, "The Company's record first quarter results are attributable to continued strong sales of orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. reconstructive re·con·struc·tive adj. 1. Relating to or characterized by reconstruction. 2. Serving to rebuild, restore, or correct the appearance and function of defective, damaged, or misshaped body structures or parts: devices and dental reconstructive implants. However, sales of Biomet Trauma and Biomet Spine (formerly EBI See electron beam imaging. ) were approximately $12 million below management's expectations for the first quarter of fiscal year 2007. The Company has made numerous changes at its Biomet Trauma and Biomet Spine subsidiary, including the appointment of Chuck Niemier, former COO (Cell Of Origin) See mobile positioning. International Operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , as president, and the appointments of a new vice president of finance and vice president of sales. We are also making significant progress with the implementation of a new computer system, sales support systems, the in-sourcing of the manufacture of spinal spinal /spi·nal/ (spi´n'l) 1. pertaining to a spine or to the vertebral column. 2. pertaining to the spinal cord's functioning independently from the brain. spi·nal adj. hardware products, and expanding the research and development team. Additionally, since May 31, 2005, the Company has eliminated over 330 positions at the former EBI operations. We believe that the new management team and infrastructure changes at Biomet Trauma and Biomet Spine will allow the Company to provide greater focus on the spine and trauma markets and to our customers." Excluding the impact of foreign currency, which increased sales by $3 million, net sales increased 4%. First quarter sales in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. increased 3%, while international sales increased 7%, on a constant currency basis. During the first quarter of fiscal year 2007, worldwide reconstructive device sales increased 9% to $351,737,000. Excluding the effects of foreign currency, reconstructive device sales increased 8% worldwide during the quarter. Knee sales increased 11% worldwide and in the United States during the first quarter. On a constant currency basis, knee sales increased 10% worldwide. Revenue growth for knees during the first quarter continued to be driven by strong demand for Biomet's recent product introductions for total and unicompartmental knee replacement procedures. Hip sales increased 8% worldwide and 3% in the United States during the first quarter. Worldwide hip sales increased 7%, constant currency. The Company's metal-on-metal acetabular acetabular /ac·e·tab·u·lar/ (as?e-tab´u-lar) pertaining to the acetabulum. acetabular pertaining to the acetabulum. acetabular dysplasia see hip dysplasia. systems, porous porous /por·ous/ (por´us) penetrated by pores and open spaces. po·rous adj. 1. Full of or having pores. 2. Admitting the passage of gas or liquid through pores. coated hip stems and second generation highly crosslinked polyethylene polyethylene (pŏl'ēĕth`əlēn), widely used plastic. It is a polymer of ethylene, CH2=CH2, having the formula (-CH2-CH2-)n components experienced increased market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" during the first quarter. Extremity extremity /ex·trem·i·ty/ (eks-trem´i-te) 1. the distal or terminal portion of elongated or pointed structures. 2. limb. ex·trem·i·ty n. 1. sales increased 13% worldwide and 8% in the United States during the first quarter. Excluding the impact of foreign currency, worldwide extremity sales increased 12% during the quarter. Dental reconstructive implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. sales increased 11% worldwide and in the United States during the first quarter. On a constant currency basis, worldwide dental reconstructive implants sales increased 10%. Sales of bone cements and accessories decreased 11% worldwide and increased 9% in the United States during the first quarter. Sales of bone cements and accessories decreased 12% worldwide, constant currency. Worldwide fixation fixation: see psychoanalysis. sales decreased 5% to $60,873,000 during the first quarter of fiscal year 2007 and decreased 9% in the United States during the first quarter. Internal fixation internal fixation n. The stabilization of fractured bony parts by direct fixation to one another with surgical wires, screws, pins, or plates. sales increased 1% worldwide and decreased 10% in the United States during the first quarter. Excluding the effects of foreign currency, internal fixation sales increased 1% worldwide. Lorenz Surgical's craniomaxillofacial fixation sales decreased 4% worldwide and decreased 5% in the United States during the first quarter. Electrical stimulation device sales decreased 8% worldwide and in the United States during the first quarter. Worldwide external fixation external fixation n. The fixation of a fractured bone by a splint or plastic dressing. external fixation Orthopedics Open reduction, stabilization and use of external fixators to manage fracture bone fragments sales decreased 11% and decreased 16% in the United States during the quarter. On a constant currency basis, worldwide external fixation sales decreased 11%. During the first quarter of fiscal year 2007, spinal product sales decreased 6% worldwide to $51,933,000, and decreased 7% in the United States. Spinal product sales decreased 7% worldwide, on a constant currency basis. Sales of spinal implants and orthobiologics for the spine decreased 4% worldwide and decreased 5% in the United States during the first quarter. On a constant currency basis, spinal implants and orthobiologics for the spine decreased 5% worldwide during the first quarter. Spinal stimulation sales decreased 9% worldwide and in the United States during the first quarter. Worldwide sales of Biomet's "other products" increased 5% to $43,618,000 during the first quarter of fiscal year 2007 and increased 2% in the United States. Excluding the effects of foreign currency, sales of "other products" increased 4% worldwide. Softgoods and bracing bracing, n a resistance to the horizontal components of masticatory force. sales increased 10% worldwide and increased 11% in the United States during the first quarter. Softgoods and bracing sales increased 10% worldwide, constant currency. Arthroscopy Arthroscopy Definition Arthroscopy is the examination of a joint, specifically, the inside structures. The procedure is performed by inserting a specifically designed illuminated device into the joint through a small incision. sales increased 13% worldwide and increased 6% in the United States during the first quarter. On a constant currency basis, arthroscopy sales increased 12% worldwide. Mr. Hann concluded, "We are pleased with Biomet's reconstructive and dental reconstructive sales performance during the first quarter of fiscal year 2007. As previously mentioned, the Company is disappointed with the sales performance of its trauma and spinal products in the United States. However, the Company is taking aggressive, appropriate action to address the issues affecting its trauma and spinal businesses and we expect to experience improved sales performance and profitability at these businesses as we progress through fiscal year 2007. We are comfortable with sales and earnings estimates of $519 million to $540 million and $0.44 to $0.46 per share for the second quarter of fiscal year 2007. This guidance does not incorporate the effect of SFAS 123(R), Share-Based Payment, which the Company estimates to be $0.01 to $0.02 per share for the second quarter of fiscal year 2007." Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal musculoskeletal /mus·cu·lo·skel·e·tal/ (-skel´e-t'l) pertaining to or comprising the skeleton and muscles. mus·cu·lo·skel·e·tal adj. Relating to or involving the muscles and the skeleton. 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 Warsaw is a city in, and the county seat of, Kosciusko County, Indiana, United StatesGR6. The population was 12,415, as of the 2000 census. Cradled between Winona Lake, Pike Lake and Center Lake, Warsaw is nicknamed "Lake City , Biomet and its subsidiaries currently distribute products in more than 100 countries. For further information contact Greg W. Sasso, Senior Vice President, Corporate Development and Communications at (574) 372-1528 or Barbara Goslee, Manager, Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. at (574) 372-1514. This press release contains certain statements that are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . 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 that the forward-looking statements contained in this press release will prove to be accurate. Some of the factors that could cause actual results to differ from those contained in forward-looking statements made in this press release include the success of the Company's principal product lines and reorganization efforts with respect to its EBI operations, the Company's ability to develop and market new products and technologies in a timely manner, government regulation, currency exchange rate fluctuations, reimbursements from third party payors, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , revenue and earnings estimates, and other risk factors as set forth from time to time in the Company's filings with the SEC. 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 publicly update forward-looking statements, whether as a result of new information, future events or otherwise. All of Biomet's financial information may be obtained on our website at www.biomet.com or you may contact us by e-mail at investor.relations@biometmail.com. All trademarks are owned by Biomet, Inc., or one of its subsidiaries.
Biomet, Inc.
Results for the quarter ended August 31
(in thousands, except per share data)
Three Months Ended
---------------------------------
2006 2005
------------------ --------------
Net Sales $508,161 $484,903
Cost of Sales 138,747 134,495
------------------ --------------
Gross Profit 369,414 350,408
S, G, & A 190,010 178,182
R & D 24,361 20,816
------------------ --------------
Operating Income 155,043 151,410
Other Income (Expense), Net 1,113 558
------------------ --------------
Income Before Taxes 156,156 151,968
Income Taxes 53,326 51,669
------------------ --------------
Net Income $102,830 $100,299
================== ==============
Earnings per Share
Basic .42 .40
Diluted .42 .40
Basic Shares Outstanding 244,881 249,582
Diluted Shares Outstanding 244,881 250,656
U.S. sales $325,947 $317,326
Foreign sales 182,214 167,577
Reconstructive sales $351,737 $323,815
Fixation sales 60,873 64,179
Spinal product sales 51,933 55,326
Other product sales 43,618 41,583
Consolidated Balance Sheets August 31, 2006 May 31, 2006
Assets
Cash and Investments $257,576 $225,471
Accounts and notes receivable, net 493,639 507,883
Inventories 560,410 534,515
Other current assets 106,955 105,687
Fixed Assets, net 363,550 357,632
Goodwill 442,118 441,397
Other Assets 93,592 91,337
------------------ --------------
Total Assets $2,317,840 $2,263,922
================== ==============
Liabilities and Stockholders' Equity
Current Liabilities $540,253 $520,432
Other Liabilities 28,971 26,991
Stockholders' Equity 1,748,616 1,716,499
------------------ --------------
Total Liabilities and
Stockholders' Equity $2,317,840 $2,263,922
================== ==============
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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earning per share Noun 1. earning per share - the portion of a company's profit allocated to each outstanding share of common stock net income, net profit, profit, profits, earnings, lucre, net - the excess of revenues over outlays in a given period of time (including depreciation as adjusted. The term "as adjusted", a non-GAAP financial measure, refers to financial performance measures that exclude the effect of share-based payments. 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 allocation of resources Apportionment of productive assets among different uses. The issue of resource allocation arises as societies seek to balance limited resources (capital, labour, land) against the various and often unlimited wants of their members. 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). .
BIOMET, INC.
Reconciliation of non-GAAP financial information to GAAP
financial information
For the Three Months Ended August 31, 2006
(in millions, unaudited)
Operating income as reported $155,043
Share-based payment 4,226
-----------
Operating income, as adjusted, excluding the effects of
share-based payments 159,269
===========
Net income, as reported $102,830
Share-based payment, net of tax 3,985
-----------
Net income, as adjusted, excluding the effects of share-
based payments $106,815
===========
Diluted EPS $0.42
Share-based payment, net of tax 0.02
-----------
Diluted EPS, as adjusted, excluding the effects of share-
based payments $0.44
===========
Current year sales growth as reported and in local currencies is as
follows:
Sales Growth FX Sales Growth in
As Reported Impact Local Currencies
Three Months
-----------------
U.S. sales 3% 0% 3%
Foreign sales 9 2 7
Total sales 5 1 4
Reconstructive sales 9% 1% 8%
Fixation sales (5) 0 (5)
Spinal product sales (6) 1 (7)
Other product sales 5 1 4
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