Biomet Showing Record Results

Staff Report

Biomet Inc. reported record sales and earnings results today for its third quarter ended Feb. 28.

Net sales increased 5 percent to $506,254,000. Operating income increased 9 percent to $156,993,000 from $144,270,000 and increased 4 percent, on an adjusted basis, from $151,672,000.

Net income increased 10 percent to $106,065,000 from $96,784,000 and increased 4 percent, as adjusted, from $101,615,000. Diluted earnings per share increased 13 percent to $0.43 from $0.38 and increased 8 percent, on an adjusted basis, from $0.40.

President and Chief Executive Officer Dane A. Miller said, “Biomet’s record results during the third quarter of fiscal year 2006 are attributable to continued solid sales growth for orthopedic reconstructive devices, dental reconstructive implants and internal fixation devices.

“Cost of goods sold was increased by approximately $1.5 million during the quarter due to the previously announced price increase from the supplier of Biomet’s antibiotic delivery system in Europe. Additionally, Biomet’s national branding campaign increased selling, general and administrative expenses by approximately 60 basis points during the third quarter. We have chosen to invest in Biomet’s future growth through this awareness program and we expect the expenses associated with the national branding campaign to decrease in future quarters.”

Excluding the impact of foreign currency, net sales increased 8 percent worldwide. International revenues for the third quarter increased 11 percent, while domestic revenues increased 6 percent.

Miller said, “Biomet continues to experience market-leading growth in its reconstructive device products segment despite extremely strong previous year growth comparisons in the important knee product category. We are pleased with the momentum of certain EBI product categories, particularly internal fixation. In addition, electrical stimulation device sales exhibited positive growth after several quarters of declining sales, while spinal hardware and orthobiologic products for the spine experienced an acceleration in growth. However, due to the continued strength of the U.S. dollar, we estimate that foreign currency will negatively affect fourth quarter sales by approximately $11 million. Consequently, we remain comfortable with analysts’ sales and earnings estimates of $530 million to $540 million and $0.45 to $0.46 per share for the fourth quarter of fiscal year 2006.”