Biomet Announces Record Second Quarter Results and Share Repurchase Program.

Business & Health/Medical Editors

WARSAW, Ind.--(BW HealthWire)--Dec. 19, 2001

Biomet, Inc. (Nasdaq:BMET) today reported record sales and earnings results for its second quarter ended November 30, 2001. Net sales increased 18% to $289,387,000. Operating income increased 21% to $91,687,000, while net income increased 19% to $61,452,000 and diluted earnings per share increased 21% to $.23.

Biomet, Inc. also announced today that the Board of Directors of the Company has authorized the purchase of up to $124 million of outstanding Common Shares of the Company in the open market or privately negotiated transactions. Under this plan, $24 million has been allocated to the automatic repurchase of shares in the amount of $2 million per month over the next twelve-month period irrespective of market conditions, while the remainder of the $100 million allocated to the plan will be discretionary and the amount expended, if any, will be dependent upon market conditions. Purchases may be made from time to time between December 20, 2001 and December 19, 2002. Dane A. Miller, President and Chief Executive Officer of the Company, said, "We continue to believe that our shares represent an excellent investment for the Company. Our continued high level of earnings have produced cash in excess of our immediate needs, and we view this program as an investment in our future." Shares acquired in this program will be designated as treasury shares and will be available for general corporate purposes including use in the Company's 401(k) and stock option plans. As of November 30, 2001, the Company had 270,030,630 shares outstanding.

Led by strong, balanced growth in its reconstructive, fixation and spinal product lines, net sales increased 19% during the second quarter of fiscal year 2002, excluding the impact of foreign currency which increased second quarter sales by $1.1 million and discontinued products which reduced second quarter sales by $2.5 million. United States and international sales, excluding the effects of foreign currency and discontinued products, increased 20% and 18%, respectively.

Dane A. Miller, Ph.D., Biomet's President and Chief Executive Officer noted "We are pleased with Biomet's second quarter operating results which continue to be propelled by balanced growth throughout the Company's principal strategic business units. Additionally, Biomet continues to make progress with respect to establishing direct sales operations in Japan. We have received approval to distribute numerous Biomet products and have established direct selling operations with approximately eight sales representatives in this important market. As a result of the Company's initiatives in Japan, second quarter revenues were negatively influenced by approximately $600,000 as a result of a reduction in product purchases by Biomet's former dealer organization in Japan. However, we continue to believe that Biomet's long-term prospects in Japan will improve as a result of these initiatives."

Unless otherwise noted, all of the following percentages are quoted on a constant-currency basis and adjusted for discontinued products, as previously discussed. However, the following percentages do not include any adjustment for the reduction in revenues associated with Biomet's Japanese sales.

Worldwide sales of Biomet's reconstructive devices increased 19% during the second quarter of fiscal year 2002 to $174,894,000. Reconstructive devices were led by total knee sales, which increased 20% in the United States and 21% worldwide during the second quarter. Biomet's market-leading knee performance continues to be driven by the Ascent(TM) Total Knee System and the Repicci II(TM) Unicondylar Knee System. Total hip sales increased 20% in the United States and 16% worldwide during the second quarter. The Company's broad line of cementless total hip systems and the M2a(TM) Taper Metal-on-Metal Articulation System continue to experience strong market acceptance in the United States.

Dental reconstructive implants increased 17% during the second quarter of fiscal year 2002. International sales of dental reconstructive implants increased 24%, while domestic sales increased 11% led by the OSSEOTITE(R) dental reconstructive implant system. Bone cement and accessories increased 36% during the second quarter of fiscal year 2002 principally led by the continued market penetration of Palacos(R) bone cement and the Optivac(R) preparation system in the United States.

Fixation sales increased 10% to $53,236,000 during the second quarter of fiscal year 2002. Fixation sales were propelled by sales of internal fixation products which increased 21% worldwide and 26% in the United States during the second quarter. Electrical stimulation sales increased 16% worldwide and 15% in the United States during the second quarter of fiscal year 2002 principally as a result of the continued market penetration and expansion of EBI's Bone Healing System(R) Model 2100 and the OrthoPak(R) System. External fixation sales increased 6% worldwide and 2% in the United States during the second quarter, while craniomaxillofacial sales decreased 12% worldwide and 8% in the United States during the second quarter.

Spinal sales increased 42% to $29,692,000 during the second quarter. Spinal sales in the United States increased 41%, with spinal implant sales increasing 45% and spinal stimulation sales increasing 40%. The Company's spinal implant sales continue to benefit from EBI's recent introduction of the VueLock(TM) Anterior Cervical Plate System and the Omega 21(TM) Spinal Fixation System. Spinal stimulation sales continue to be driven by EBI's SpinalPak(R) Spinal Stimulation System. EBI is currently the fourth largest producer of spinal fusion systems in the United States.

Sales of Biomet's "other products" increased 16% during the second quarter of fiscal year 2002 to $31,565,000. Other product sales in the United States increased 17%, while international sales of other products grew 13%. Arthroscopy sales increased 42% worldwide and 45% in the United States during the recently completed quarter as a result of Arthrotek's procedure-specific products, the LactoSorb(R) line of resorbable arthroscopic products and the introduction of the CurvTek(R) Bone Tunneling System. Softgoods and bracing products rose 8% worldwide and 9% in the United States during the recently completed quarter.

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.

Palacos(R) is a registered trademark of Heraeus Kulzer GmbH.

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

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].

                  BIOMET, INC. - - QUARTERLY RESULTS

                   FOR THE QUARTER ENDED NOVEMBER 30
                 (in thousands, except per share data)

                               Three Months Ended   Six Months Ended
                               ------------------  ------------------
                                 2001      2000      2001      2000
                                 ----      ----      ----      ----
Net Sales                      $289,387  $244,361  $561,409  $475,494
Cost of Sales                    79,034    71,027   156,426   139,194
                               --------  --------  --------  --------
Gross Profit                    210,353   173,334   404,983   336,300

S, G, & A                       106,679    87,180   207,995   170,114
R & D                            11,987    10,295    23,655    20,159
                               --------  --------  --------  --------
Operating Income                 91,687    75,859   173,333   146,027

Other Income, Net                 4,371     4,711     8,935    10,181
                               --------  --------  --------  --------
Income Before Taxes And
 Minority Interest               96,058    80,570   182,268   156,208
Income Taxes                     32,607    27,562    61,876    53,512
                               --------  --------  --------  --------
Income Before Minority Interest  63,451    53,008   120,392   102,696
Minority Interest                 1,999     1,210     2,927     2,471
                               --------  --------  --------  --------
Net Income                       61,452    51,798   117,465   100,225

Earnings per Share:
Basic                               .23       .19       .44       .37
Diluted                             .23       .19       .43       .37

Basic Shares                    269,809   267,729   269,635   267,384
Diluted Shares                  272,822   270,708   272,747   270,129

U.S. sales                     $208,917  $174,680  $408,119  $333,170
Foreign sales                    80,470    69,681   153,290   142,324

Reconstructive sales            174,894  $145,801   336,066  $287,893
Fixation sales                   53,236    48,224   106,882    94,755
Spinal products                  29,692    21,692    57,151    35,801
Other product sales              31,565    28,644    61,310    57,045