Biomet Profit Drops

Warsaw-based Biomet is reporting fiscal first quarter net income of $7.3 million, compared to $31.1 million in the same period last year. The company is currently seeking approval from U.S. and European regulators for a proposed merger with Zimmer Holdings Inc. (NYSE: ZMH) valued at $13 billion. October 9, 2014

News Release

WARSAW, Ind. – Biomet, Inc. (“the Company”) announced today financial results for its first quarter ended August 31, 2014.

First Quarter Financial Results

Consolidated net sales increased 6.0% (5.6% constant currency) worldwide to approximately $775 million

Knee sales grew 4.3% (3.8% constant currency) worldwide to $234.7 million

Hip sales increased 3.8% (3.6% constant currency) worldwide to $155.3 million

S.E.T. sales increased 3.4% (3.0% constant currency) worldwide to $154.5 million

Consolidated net sales increased 6.0% to $774.8 million worldwide during the first quarter of fiscal year 2015, compared to net sales of $730.7 million during the first quarter of fiscal year 2014. Excluding the effect of foreign currency, consolidated net sales increased 5.6% during the first quarter. U.S. net sales increased 5.4% during the first quarter to $495.1 million, while Europe net sales increased 6.5% (3.2% constant currency) to $161.3 million and International (primarily Canada, Latin America and the Asia Pacific region) net sales increased 8.3% (10.0% constant currency) to $118.4 million. On a consolidated basis, the Company had the same number of selling days in the quarter compared to the prior year quarter.

Special items, after tax, totaled $87.3 million during the first quarter of fiscal year 2015, compared to $46.0 million during the first quarter of fiscal year 2014.

Reported operating income was $82.5 million during the first quarter of fiscal year 2015, compared to an operating income of $96.4 million during the first quarter of fiscal year 2014. Excluding special items, adjusted operating income totaled $197.1 million during the first quarter of fiscal year 2015, compared to $188.6 million during the prior year period.

Reported net income in the quarter was $7.3 million, compared to a net income of $31.1 million during the first quarter of the prior year. Excluding special items, adjusted net income totaled $94.6 million during the first quarter of fiscal year 2015, compared to $77.1 million for the first quarter of fiscal year 2014.

Excluding special items, adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) during the first quarter of fiscal year 2015 totaled $253.2 million, compared to $234.5 million for the first quarter of fiscal year 2014.

Reported cash flow from operations totaled $2.4 million during the first quarter of fiscal year 2015, compared to reported cash flow from operations of $50.8 million for the first quarter of fiscal year 2014. Free cash flow (operating cash flow minus capital expenditures) was negative $58.4 million, which included $93.8 million of cash interest paid in the quarter, compared to a free cash flow of $4.3 million during the first quarter of fiscal year 2014, including $101.3 million of cash interest paid.

At August 31, 2014, reported gross debt was $5,736.3 million, and cash and cash equivalents totaled $192.0 million, resulting in net debt of $5,544.3 million, compared to $5,472.8 million at May 31, 2014.

About Biomet

Biomet, Inc. and its subsidiaries design, manufacture and market surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. Biomet's product portfolio includes hip and knee reconstructive products; sports medicine, extremities and trauma products; spine, bone healing and microfixation products; dental reconstructive products; and cement, biologics and other products. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in approximately 90 countries.

Source: Biomet Inc.