Biomet Announces Record First Quarter Results.

Business & Health/Medical Editors

WARSAW, Ind.--(BUSINESS WIRE)--Sept. 17, 2002

Biomet, Inc. today reported record sales and earnings results for its first quarter ended August 31, 2002. Net sales increased 17% to $317,600,000. Operating income increased 21% to $98,937,000, while net income increased 18% to $66,006,000 and diluted earnings per share increased 19% to $.25.

Propelled by strong, balanced growth in its reconstructive, fixation and spinal product lines, net sales increased 15% during the first quarter of fiscal year 2003, excluding the impact of foreign currency which increased first quarter sales by approximately $6.2 million. United States and international sales, excluding the effects of foreign currency, increased 13% and 19%, respectively.

Dane A. Miller, Ph.D., Biomet's President and Chief Executive Officer noted, "We are pleased with Biomet's first quarter operating results which were led by balanced growth throughout the Company's multiple strategic business units. The Company's market-leading product development efforts, which have resulted in 260 new product introductions during the past three years, continue to position the Company's dynamic salesforces with unique products addressing musculoskeletal surgeons' needs. Biomet finished the quarter with strong momentum which gives us comfort that we should meet the range of analysts' sales and earnings estimates of $320 million to $331 million and $.25 to $.27 per share, respectively for the second quarter of fiscal year 2003."

Unless otherwise noted, all of the following percentages are quoted on a constant-currency basis.

Worldwide sales of Biomet's reconstructive devices increased 16% during the first quarter of fiscal year 2003 to $192,025,000. Reconstructive devices were led by total hip sales, which increased 20% worldwide and 12% in the United States during the first quarter. Biomet's broad line of cementless total hip systems and the M2a Taper Metal-on-Metal Articulation System continue to experience strong sales in the United States. Total knee sales increased 17% worldwide and 14.5% in the United States during the first quarter. Knee sales continue to be driven by Biomet's leadership position in the minimally-invasive, unicondylar knee market segment. With over 20,000 units sold during fiscal year 2002, Biomet's leadership position in the minimally-invasive, unicondylar knee market with the Repicci II Minimally Invasive Unicondylar Knee System and the Oxford Unicondylar Knee System provides an excellent platform for the Company's anticipated expansion into the minimally invasive total hip market. Extremity products increased 15% worldwide and 18% in the United States during the first quarter of fiscal year 2003. The Discovery Elbow System and the Copeland Shoulder have experienced excellent initial market acceptance.

Dental reconstructive implants increased 6% in the United States and 3% worldwide during the first quarter of fiscal year 2003. The OSSEOTITE NT dental reconstructive implant system was launched near the end of the first quarter. The OSSEOTITE NT implant incorporates a naturally-tapered design indicated for immediate placement in extraction sockets, narrow ridges and converging root situations. Bone cement and accessories increased 30% in the United States and 23% worldwide during the first quarter of fiscal year 2003 principally led by the continued penetration of the Company's broad portfolio of bone cements and the Optivac(R) preparation system in the domestic market.

Fixation sales increased 10% to $59,381,000 during the first quarter of fiscal year 2003. Fixation sales were led by sales of electrical stimulation systems which increased 12% during the first quarter. EBI's OrthoPak(R) System and the Bone Healing System Model 2100 continue to gain market share in the domestic market for electrical stimulation systems. Internal fixation sales increased 9% in the United States and 8% worldwide during the first quarter, while craniomaxillofacial fixation sales, through the Company's Lorenz Surgical subsidiary, increased 8% in the United States and 12% worldwide. External fixation sales increased 5% worldwide and 4% in the United States during the first quarter of fiscal year 2003.

Spinal sales increased 20% to $33,266,000 during the first quarter. Spinal sales in the United States increased 20% during the first quarter, principally as a result of the continued strong performance of EBI's non-invasive SpinalPak Spinal Stimulation System and the VueLock(TM) Anterior Cervical Plate System. Worldwide sales of spinal stimulation devices increased 22%, while worldwide sales of spinal implants increased 13% during the first quarter.

Sales of Biomet's "other products" increased 9% during the first quarter of fiscal year 2003 to $32,928,000. Other product sales in the United States increased 11%, while international sales of other products grew 2%. Arthroscopy sales increased 13% in the United States and 12% worldwide during the recently completed quarter as a result of Arthrotek's procedure-specific products, the LactoSorb(R) line of resorbable arthroscopic products and the recent introduction of the Cuff Patch reinforcement material for rotator cuff repair. Softgoods and bracing products increased 11% in the United States and 8% worldwide during the recently completed quarter. Domestic sales of softgoods and bracing products continue to benefit from EBI's Support-on-Site (S.O.S.(TM)) stock and bill program.

Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic support devices, operating room supplies, general surgical instruments, arthroscopy products, spinal implants, bone cements, bone substitutes, craniomaxillofacial implants and dental reconstructive implants and associated instrumentation. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in more than 100 countries.

For further information contact Greg W. Sasso, Vice President, Corporate Development and Communications at [phone] or Barbara Goslee, Manager, Corporate Communications at [phone].

This press release contains certain statements that are "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. 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. 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.

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 [e-mail].

All trademarks are owned by Biomet, Inc., or one of its subsidiaries.

                  BIOMET, INC. - - QUARTERLY RESULTS

                   FOR THE QUARTERS ENDED AUGUST 31
                 (in thousands, except per share data)

                               2002                             2001

Net Sales                  $317,600                         $272,022
Cost of Sales                90,137                           77,392
                         ----------                       ----------
Gross Profit                227,463                          194,630

S, G, & A                   115,888                          101,316
R & D                        12,638                           11,668
                         ----------                       ----------
Operating Income             98,937                           81,646

Other Income, Net             3,944                            4,564
                        -----------                      -----------
Income Before Taxes
   And Minority Interest    102,881                           86,210
Income Taxes                 35,594                           29,269
                        -----------                       ----------
Income Before
   Minority Interest         67,287                           56,941
Minority Interest             1,281                              928
                       ------------                      -----------
Net Income                   66,006                           56,013

Earnings per Share
Basic                           .25                              .21
Diluted                         .25                              .21

Basic Shares Outstanding    262,378                          269,459
Diluted Shares Outstanding  264,405                          272,668

U.S. sales                 $224,580                         $199,202
Foreign sales                93,020                           72,820

Reconstructive sales       $192,025                         $161,172
Fixation sales               59,381                           53,646
Spinal products              33,266                           27,459
Other product sales          32,928                           29,745