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Biomet Reports Q2 Fiscal 2009 Results

Biomet, Inc. (Biomet) has reported net sales of $642.8 million for the second quarter of fiscal 2009, up 6%, compared with the net sales of $607.2 million in the year-ago quarter. It has also reported a net loss of $39.7 million for the second quarter of fiscal 2009, compared with the net loss of $302 million in the year-ago quarter.

Excluding the impact of foreign currency, net sales increased 9%. US sales Up 9% to $379.5 million during the quarter, while Europe sales of $195.4 million Up 8% on a constant currency basis and International (primarily Canada, South America, Mexico and the Pacific Rim) sales of $67.9 million increased 13% on a constant currency basis. For the six-month period ended November 30, 2008, net sales of $1,249.8 million Up 9% on a reported and constant currency basis.

Operating income for the second quarter of fiscal year 2009 was $80.0 million on a reported basis, against an operating loss of $251.0 million for the second quarter of fiscal year 2008. Excluding special charges in both periods, adjusted operating income increased 17% to $211.4 million for the second quarter against $180.0 million for the same period last year. Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the second quarter of fiscal year 2009 up 17% to $247.1 million, or 38.4% of sales, against adjusted EBITDA of $210.8 million, or 34.7% of sales, in the prior year period.

During the second quarter of fiscal year 2009, Biomet reported $131.4 million of special items (pre-tax), including purchase accounting charges of $94.3 million. The purchase accounting charges primarily relate to amortization expense for established intangible assets, along with depreciation expense as a result of the step-up of property to fair value.

The company’s net interest expense for the second quarter of fiscal year 2009 was $139.2 million against $148.7 million for the second quarter of last year. Net debt at November 30, 2008, was $5,967.6 million, a decrease of about $200 million from fiscal year ended May 31, 2008, primarily due to foreign currency fluctuations in connection with our Euro-denominated term loan.

Biomet’s president and chief executive officer Jeffrey R. Binder stated, “I am pleased with our consolidated sales results for the second quarter of fiscal year 2009, as we experienced our sixth consecutive quarter of double-digit global reconstructive device sales growth on a constant currency basis. I’m particularly pleased with the 14% sales growth for our hip products, attributable to demand for several product lines including our recently introduced E-Poly™ Acetabular Liners and the Regenerex® Ringloc®+ Modular Acetabular System. I’m satisfied with the turnaround in our spine franchise, which resulted in 9% sales growth due to new product introductions and improved sales force effectiveness. In addition, the team delivered another quarter of leveraged growth with adjusted EBITDA increasing 17% compared to the same period in the prior year.”