Biomet Announces Record Second 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 IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . -- Biomet Biomet, Inc. NASDAQ: BMET is a medical device manufacturer located in Warsaw, Indiana. The company specializes in reconstructive products for hips, knees and shoulders, fixation devices, orthopedic support devices, dental implants and operating room supplies. , 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 second quarter ended November 30, 2004. 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 18% to $456,674,000, while 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 11% to $139,648,000 and increased 16%, as adjusted, to $147,050,000. Net income increased 10% to $91,199,000 and increased 16%, as adjusted, to $96,030,000, while 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 13% to $0.36 and increased 19%, as adjusted, to $0.38. The Company's reported results reflect the acquisition of Merck KGaA's interest in the Biomet Merck joint venture on March 19, 2004, as well as the acquisition of Interpore International, Inc. on June 18, 2004. Adjusted results, which are non-GAAP measures, exclude acquisition costs, including inventory step-up step-up A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. and write off of in-process research and development. A reconciliation to comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures is included in this press release. At its meeting on December 10, 2004, the Board of Directors of Biomet increased the size of its board by one and immediately filled that opening with the appointment of Sandra sandra (sänˑ·dr  ),adj A. Lamb to the Company's Board of Directors. Ms. Lamb is currently serving as President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Lamb Advisors LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , which provides strategic management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects services to nonprofit organizations Nonprofit Organization An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well. Notes: Examples of non-profit organizations are charities, hospitals and schools. , and has over 35 years of Wall Street, corporate, and nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. experience addressing financially complex and critical strategic issues. From 1983 through 2002, Ms. Lamb was managing director at the investment banking firm of Lazard Freres & Co. LLC where she held executive responsibility working with corporate clients on all aspects of buying and selling businesses and other financial advisory assignments. Prior to 1983, she was a portfolio manager at The MONY MONY Mutual of New York (Insurance - Syracuse, NY) Group. Dane A. Miller, Ph.D., Biomet's President and Chief Executive Officer noted, "We are confident that Ms. Lamb's strong background in finance will be an asset to Biomet's Board of Directors and are pleased that she has accepted this appointment." Dr. Miller also stated, "We are pleased with Biomet's second quarter operating results which were led by strong growth in the Company's 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: , 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 and orthobiologic product lines. Continued market acceptance of recently introduced products and minimally-invasive knee instruments propelled the growth of the Company's reconstructive product lines during the second quarter. In the important domestic market for reconstructive devices, Biomet's reconstructive products increased 22% during the second quarter. Worldwide total hip, knee, 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. and dental reconstructive sales grew 9%, 25%, 18% and 17%, respectively, during the recently completed quarter. Additionally, sales of the Company's spinal hardware and orthobiologic spinal products increased 124% worldwide during the second quarter as Biomet continues to broaden its line of spinal products and technologies through the recent acquisition of Interpore International, Inc." Excluding the impact of foreign currency, which increased second quarter sales by $9.6 million, net sales increased 15% during the second quarter of fiscal year 2005. 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. and international sales, excluding the effects of foreign currency, increased 17% and 12%, respectively, during the second quarter. Additionally, excluding the impact of the acquisition of Interpore International, Inc., United States and international sales increased 13% and 9%, respectively. Reconstructive device sales increased 20% worldwide to $301,385,000 during the second quarter of fiscal year 2005. On a constant currency basis, worldwide reconstructive device sales increased 16%. Knee sales increased 25% worldwide during the second quarter and 30% in the United States. Knee sales increased 22% worldwide, constant currency. Biomet's industry-leading knee sales growth continues to be driven by new product introductions, in addition to the Company's broad line of total knee systems and minimally-invasive, unicondylar knee systems. Additionally, Biomet's Microplasty minimally-invasive and quad-sparing total knee instruments continue to receive excellent market acceptance. During the second quarter, hip sales increased 9% worldwide and 6% in the United States. Excluding the impact of foreign currency, hip sales increased 6% worldwide. Biomet's M2a 38 metal-on-metal system and the Company's broad line of 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 stems continue to lead hip sales growth. Extremity sales increased 18% worldwide during the second quarter of fiscal year 2005 and 21% in the United States. On a constant currency basis, extremity sales increased 15% worldwide. Sales of dental reconstructive implants increased 17% worldwide and 16% in the United States during the second quarter. Worldwide 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 14%, constant currency. Sales of bone cements and accessories increased 36% worldwide during the second quarter and 82% in the United States. Excluding the effect of foreign currency, sales of bone cements and accessories increased 30% worldwide. Fixation fixation: see psychoanalysis. sales were flat at $60,328,000 during the second quarter of fiscal year 2005 and decreased 1% worldwide, constant currency. Lorenz Surgical's craniomaxillofacial fixation sales increased 5% worldwide and 1% in the United States during the second quarter. Worldwide craniomaxillofacial fixation sales increased 3%, constant currency. Sales of electrical stimulation products decreased 4% worldwide and in the United States during the second quarter. 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 increased 3% worldwide during the second quarter and decreased 5% in the United States. Excluding the impact of foreign currency, external fixation sales increased 2% worldwide. 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 decreased 2% worldwide and decreased 11% in the United States during the second quarter. On a constant currency basis, worldwide internal fixation sales decreased 5% during the second quarter. Spinal product sales increased 37% to $53,232,000 and increased 30% in the United States during the second quarter of fiscal year 2005. Spinal sales increased 36% worldwide, constant currency. Domestic sales of spinal implants and orthobiological products for the spine increased 124%, while domestic spinal stimulation sales decreased 8% during the second quarter. Sales of Biomet's "other products" increased 15% to $41,729,000 and increased 10% in the United States during the second quarter of fiscal year 2005. On a constant currency basis, "other product" sales increased 13% worldwide. 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 19% worldwide during the second quarter and increased 16% in the United States. On a constant currency basis, arthroscopy sales increased 18% during the second quarter of fiscal year 2005. Softgoods and bracing bracing, n a resistance to the horizontal components of masticatory force. sales decreased 2% worldwide, in the United States and on a constant currency basis during the second quarter. Dr. Miller concluded, "Biomet finished the quarter with strong momentum in the key reconstructive product categories. Consequently, we remain comfortable with the range of analysts' sales and earnings estimates of $468 million to $487 million and $0.39 to $0.40 per share for the third quarter of fiscal year 2005." 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 orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. 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, 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, 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. , 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. - - QUARTERLY RESULTS
FOR THE QUARTERS ENDED NOVEMBER 30
(in thousands, except per share data)
Three Months Ended
--------------------------------------------------
2004 Adjustments(1) As Adjusted(1) 2003
--------- -------------- -------------- ---------
Net Sales $456,674 $ 456,674 $387,561
Cost of Sales 131,115 ( 7,402)(a) 123,713 108,790
---------- -------------- -------------- ---------
Gross Profit 325,559 7,402 332,961 278,771
S, G, & A 166,305 166,305 136,664
R & D 19,606 - 19,606 15,810
---------- -------------- -------------- ---------
Operating Income 139,648 7,402 147,050 126,297
Other Income
(Expense), Net 244 - 244 3,669
---------- -------------- -------------- ---------
Income Before Taxes
And Minority
Interest 139,892 7,402 147,294 129,966
Income Taxes 48,693 2,571 (c) 51,264 45,250
---------- -------------- -------------- ---------
Income Before
Minority Interest 91,199 4,831 96,030 84,716
Minority Interest - - - 2,024
---------- -------------- -------------- --------
Net Income 91,199 4,831 96,030 82,692
Earnings per Share
Basic .36 .38 .32
Diluted .36 .38 .32
Basic Shares
Outstanding 252,944 252,944 255,797
Diluted Shares
Outstanding 255,225 255,225 257,599
U.S. sales $309,006 $264,702
Foreign sales 147,668 122,859
Reconstructive
sales $301,385 $252,083
Fixation sales 60,328 60,295
Spinal product
sales 53,232 38,979
Other product sales 41,729 36,204
Six Months Ended
--------------------------------------------------
2004 Adjustments(1) As Adjusted(1) 2003
---------- -------------- -------------- ---------
Net Sales $894,834 $ 894,834 $757,880
Cost of Sales 257,087 ( 14,404)(a) 242,683 214,408
---------- -------------- -------------- ---------
Gross Profit 637,747 14,404 652,151 543,472
S, G, & A 326,765 326,765 269,061
R & D 64,102 ( 26,020)(b) 38,082 30,558
---------- -------------- -------------- ---------
Operating Income 246,880 40,424 287,304 243,853
Other Income
(Expense), Net ( 484) - ( 484) 6,690
---------- -------------- -------------- ---------
Income Before Taxes
And Minority
Interest 246,396 40,424 286,820 250,543
Income Taxes 94,764 5,003 (c) 99,767 87,229
---------- -------------- -------------- ---------
Income Before
Minority Interest 151,632 35,421 187,053 163,314
Minority Interest - - - 4,144
---------- -------------- -------------- ---------
Net Income 151,632 35,421 187,053 159,170
Earnings per Share
Basic .60 .74 .62
Diluted .59 .73 .62
Basic Shares
Outstanding 253,403 253,403 256,325
Diluted Shares
Outstanding 255,586 255,586 257,904
U.S. sales $605,310 $516,797
Foreign sales 289,524 241,083
Reconstructive
sales $583,867 $485,522
Fixation sales 123,041 122,428
Spinal product
sales 106,141 76,946
Other product sales 81,785 72,984
(a) Current period impact of inventory step-up related to the
acquisition of the interest of Merck KGaA in the Biomet Merck
joint venture and Interpore International, Inc.
(b) In-process research and development written off as of the closing
date related to the acquisition of Interpore International, Inc.
(c) Tax effect of item (a) above.
(1) Adjusted results, which are non-GAAP financial measures, exclude
acquisition costs, including inventory step-up and write off of
in-process research and development. We have included these
adjusted measures to provide management and investors with a
better understanding of our results, because expenses related to
these acquisitions in the current quarter and the remainder of
fiscal year 2005 are not indicative of our future operating
results.
Consolidated Balance Sheets November 30, 2004 May 31, 2004
Assets
Cash and Investments $ 174,305 $ 235,612
Accounts and notes receivable, net 476,574 465,949
Inventories 446,711 389,391
Other current assets 115,421 91,256
Fixed Assets, net 298,797 268,826
Goodwill 439,335 266,860
Other Assets 106,598 69,803
----------------- ----------------
Total Assets $ 2,057,741 $ 1,787,697
================= ================
Liabilities and Stockholders'
Equity
Current Liabilities $ 545,502 $ 313,402
Other Liabilities 34,982 26,085
Stockholders' Equity 1,477,257 1,448,210
----------------- ----------------
Total Liabilities and
Stockholders' Equity $ 2,057,741 $ 1,787,697
================= ================
The above balance sheet includes the preliminary purchase price allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as in connection with the Interpore acquisition. The Company believes that changes, if any, when the purchase price allocation is finalized See finalization. , will not be material. |
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