Biomet Announces Record Third Quarter and Nine Month Results.Business Editors & Health/Medical Writers WARSAW, Ind.--(BW HealthWire)--March 22, 2002 Biomet, Inc. (Nasdaq:BMET BMET Biomedical Engineering Technology BMet Bachelor of Metallurgy BMET Bio-Medical Equipment Repair Technician ) today reported record sales and earnings results for its third quarter ended February 28, 2002. 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 14% to $304,609,000. Excluding non-recurring charges during the third quarter of fiscal year 2001, 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 13% to $94,330,000, while net income increased 11% to $61,674,000 and 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 15% to $.23. As previously announced, Biomet recorded a one-time pre-tax charge of $26.1 million in the third quarter of fiscal year 2001 associated with the U.S. Court of Appeals for the Federal Circuit's reversal concerning the Tronzo 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. . Last year's charge to earnings did not affect the on-going sales of any of Biomet's product lines. As a result of this charge, reported net income for the third quarter of fiscal year 2001 amounted to $38,205,000, while reported diluted earnings per share represented $.14. Led by strong growth in its reconstructive, spinal and other product lines, net sales increased 15.4% during the third quarter of fiscal year 2002, excluding the impact of foreign currency which decreased third quarter sales by approximately $900,000 and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: products which reduced third quarter sales by approximately $2.5 million. 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 and discontinued products, increased 16% and 14%, respectively. Dane A. Miller, Ph.D., Biomet's President and Chief Executive Officer noted, "We are pleased with Biomet's third quarter sales performance which continues to be propelled by balanced growth throughout the Company's principal strategic business units. However, Biomet experienced higher than anticipated S G & A expenses during the third quarter principally as a result of the continued expansion of certain of the Company's direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. organizations. We continue to build our direct sales operations in Japan, we have expanded Biomet's European sales force by approximately 34 individuals as a result of the recent acquisition of the Synthes-Stratec reconstructive products division, in addition to expanding EBI's direct sales force by approximately 18 sales representatives during the third quarter. We anticipate that the Company's S G & A expenses, as a percent of sales, will decrease as we approach fiscal year 2003. Additionally, Biomet's "other income" declined by $1.5 million compared to the second quarter of fiscal year 2002 and approximately $1.1 million compared to the third quarter of fiscal year 2001 principally as a result of lower interest rates associated with the Company's cash and investments." Unless otherwise noted, all of the following percentages are quoted on a constant-currency basis and adjusted for discontinued products, as previously discussed. Worldwide sales of Biomet's reconstructive devices increased 17% during the third quarter of fiscal year 2002 to $184,765,000. Reconstructive devices were led by total knee sales, which increased 19% in the United States and 18% worldwide during the third quarter. Biomet's knee performance continues to be driven by the Repicci II(TM) Unicondylar Knee System and the Ascent(TM) Total Knee System. Total hip sales increased 13% in the United States and 15% worldwide during the third quarter. The Company's M2a(TM) Taper taper verb To gradually ↓ a dose, usually of a therapeutic agent–eg, corticosteroids, with potentially significant adverse effects, which cannot be abruptly halted, often due to rebound effects Metal-on-Metal Articulation articulation In phonetics, the shaping of the vocal tract (larynx, pharynx, and oral and nasal cavities) by positioning mobile organs (such as the tongue) relative to other parts that may be rigid (such as the hard palate) and thus modifying the airstream to produce speech System and Biomet's broad line of cementless total hip systems continue to experience strong market acceptance in the United States. Dental reconstructive implants increased 17% during the third quarter of fiscal year 2002. International sales of dental reconstructive implants increased 18%, while domestic sales increased 16% led by the OSSEOTITE(R) 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. system. Bone cement and accessories increased 25% during the third quarter of fiscal year 2002 propelled by the Optivac(R) preparation system and bone cements. Fixation fixation: see psychoanalysis. sales increased 2% to $53,548,000 during the third quarter of fiscal year 2002. Fixation sales were led by sales of electrical stimulation products which increased 7% worldwide during the third quarter of fiscal year 2002 led by EBI's OrthoPak(R) System. 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 4% worldwide and 1% in the United States during the third 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 decreased 1% worldwide and increased 5% in the United States during the third quarter, while craniomaxillofacial sales decreased 13% worldwide and increased 3% in the United States during the third quarter. Spinal sales increased 30% to $32,458,000 during the third quarter. Spinal sales in the United States increased 26%, with spinal implant sales increasing 29% and spinal stimulation sales increasing 25%. The Company's spinal implant sales continue to benefit from EBI's VueLock(TM) Anterior anterior /an·te·ri·or/ (an-ter´e-or) situated at or directed toward the front; opposite of posterior. an·te·ri·or adj. 1. Placed before or in front. 2. Cervical Plate System and the Omega 21(TM) Spinal Fixation System. Spinal stimulation sales continue to be driven by EBI's non-invasive SpinalPak(R) Spinal Stimulation System. We believe that EBI See electron beam imaging. is currently the fourth largest producer of spinal fusion spinal fusion n. A surgical procedure in which vertebrae are joined. Also called spondylosyndesis. Spinal fusion systems in the United States. Sales of Biomet's "other products" increased 19% during the third quarter of fiscal year 2002 to $33,838,000. Other product sales in the United States increased 26%, while international sales of other products were flat. 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 36% worldwide and 35% 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 CurvTek(R) Bone Tunneling tunneling, quantum-mechanical effect by which a particle can penetrate a barrier into a region of space that would be forbidden by ordinary classical mechanics. System. Softgoods and bracing bracing, n a resistance to the horizontal components of masticatory force. products rose 13% worldwide and 17% in the United States during the recently completed quarter principally as a result of the continued expansion of EBI's Support-On-Site (SOS SOS, code letters of the international distress signal. The signal is expressed in International Morse code as … — — — … (three dots, three dashes, three dots). ) stock and bill program. 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, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. support devices, operating room operating room n. Abbr. OR A room equipped for performing surgical operations. supplies, general surgical instruments A surgical instrument is a specially designed tool or device for performing specific actions of carrying out desired effects during a surgery or operation, such as modifying biological tissue, or to provide access or viewing it. , arthroscopy products, spinal implants, bone cements, bone substitutes, craniomaxillofacial implants and dental reconstructive implants and associated instrumentation. 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. 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 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 investor.relations@biometmail.com.
BIOMET, INC. - - QUARTERLY RESULTS
FOR THE PERIODS ENDED FEBRUARY 28
(in thousands, except per share data)
THREE MONTHS ENDED
Feb. 28, 2002 Feb. 28, 2001
------------- ----------------------------------
Non-Recurring As
Charges Reported
Net Sales $304,609 $267,163 $267,163
Cost of Sales 85,238 75,042 75,042
-------- -------- --------
Gross Profit 219,371 192,121 192,121
S, G, & A 112,851 96,975 26,100 123,075
R & D 12,190 11,374 11,374
-------- -------- ------ --------
Operating Income 94,330 83,772 26,100 57,672
Other Income, Net 2,872 3,926 3,926
-------- -------- --------
Income Before Taxes
And Minority
Interest 97,202 87,698 26,100 61,598
Income Taxes 32,924 30,012 8,900 21,112
-------- -------- ------ --------
Income Before
Minority Interest 64,278 57,686 17,200 40,486
Minority Interest 2,604 2,281 2,281
-------- -------- ------ --------
Net Income 61,674 55,405 17,200 38,205
Earnings per Share:
Basic .23 .21 .14
Diluted .23 .20 .14
Basic Shares 269,388 268,245 268,245
Diluted Shares 272,265 271,530 271,530
U.S. sales $217,583 $187,686
Foreign sales 87,026 79,477
Reconstructive
sales $184,765 $158,655
Fixation sales 53,548 52,549
Spinal products 32,458 26,429
Other product sales 33,838 29,530
FOR THE PERIODS ENDED FEBRUARY 28
(in thousands, except per share data)
NINE MONTHS ENDED
Feb. 28, 2002 Feb. 28, 2001
------------- ----------------------------------
Non-Recurring As
Charges Reported
Net Sales $866,018 $742,657 $742,657
Cost of Sales 241,664 214,236 214,236
--------- -------- --------
Gross Profit 624,354 528,421 528,421
S, G, & A 320,846 267,089 26,100 293,189
R & D 35,845 31,533 31,533
--------- -------- ------ --------
Operating Income 267,663 229,799 26,100 203,699
Other Income, Net 11,807 14,107 14,107
--------- -------- --------
Income Before Taxes
And Minority
Interest 279,470 243,906 26,100 217,806
Income Taxes 94,800 83,524 8,900 74,624
--------- -------- ------ --------
Income Before
Minority Interest 184,670 160,382 17,200 143,182
Minority Interest 5,531 4,752 4,752
--------- -------- ------ --------
Net Income 179,139 155,630 17,200 138,430
Earnings per Share:
Basic .66 .58 .52
Diluted .66 .58 .51
Basic Shares 269,554 267,633 267,633
Diluted Shares 272,543 270,561 270,561
U.S. sales $625,702 $520,856
Foreign sales 240,316 221,801
Reconstructive
sales $520,831 $446,548
Fixation sales 160,430 147,304
Spinal products 89,609 62,230
Other product sales 95,148 86,575
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