Biomet (NASDAQ:BMET)
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Biomet, Inc. (NASDAQ:BMET) announced today that its
Board of Directors declared a cash dividend of $0.25 per share,
payable July 22, 2005, to shareholders of record at the close of
business on July 15, 2005. The Board also authorized the repurchase of
2.5 million shares of Biomet's outstanding Common Shares to be
automatically purchased daily in equal increments over the next twelve
months, irrespective of market conditions. This is in addition to the
March 2005 authorization to repurchase up to an additional $100
million of the Company's outstanding Common Shares in open market or
privately negotiated transactions, of which approximately $84 million
is currently available. Since December 2001, the Company has
repurchased approximately 26.4 million of its Common Shares, for an
aggregate amount of $841.6 million.
President and Chief Executive Officer Dane A. Miller, Ph.D.,
stated, "The declaration of this dividend is in response to the
Company's record financial performance during fiscal year 2005, and
our anticipated results during fiscal year 2006. The expansion of our
stock repurchase program is a reflection of the ongoing poor
investment return environment and the Company's continued positive net
cash flow from operations which amounted to $411 million during fiscal
year 2005. During the fourth quarter of fiscal year 2005, Biomet's
reconstructive devices continued to expand at market-leading growth
rates. However, EBI's fixation, spinal stimulation and softgoods and
bracing products continued to underperform management's expectations.
As previously announced, Bart Doedens, M.D., former President of
Biomet's 3i subsidiary, has been promoted to President of EBI. We are
confident that Dr. Doedens will provide the leadership capabilities
necessary to position EBI as a leader in the spinal and fixation
market places."
During the fourth quarter of fiscal year 2005, net sales increased
13% to $503,093,000, while operating income increased 33% to
$155,734,000 and increased 8%, on an adjusted basis, to $158,178,000.
Net income increased 29% to $103,200,000 and 10%, as adjusted, to
$104,794,000, while diluted earnings per share increased 32% to $0.41
and 14%, as adjusted, to $0.42 per share. 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 for
2005 and 2004, which are non-GAAP measures, exclude acquisition costs,
including the amortization of inventory step-up and write-off of
in-process research and development related to these acquisitions. A
reconciliation to comparable GAAP measures is included in this press
release. Adjusted results for 2004 also exclude the $25 million charge
to selling, general and administrative expense reported in the fourth
quarter of last year to revise the Company's estimates of future
collections of EBI's insurance receivables.
Excluding the impact of foreign currency, which increased fourth
quarter sales by $8.8 million, net sales increased 11%. United States
and international sales, excluding the effects of foreign currency,
increased 10% and 12%, respectively, during the fourth quarter.
Reconstructive device sales increased 16% worldwide during the
fourth quarter of fiscal year 2005 to $344,147,000. Worldwide
reconstructive device sales increased 13% during the quarter, on a
constant currency basis. During the fourth quarter, knee sales
increased 20% worldwide and 22% in the United States. Knee sales
increased 18% worldwide, excluding the effects of foreign currency.
During the fourth quarter, knee sales growth was driven by the
continued rollout of new products.
Hip sales increased 10% worldwide during the fourth quarter and 7%
in the United States. Worldwide hip sales increased 7%, constant
currency. Biomet's Metal-on-Metal Systems continue to gain increased
market acceptance while the Company's porous-coated hip stems
continued to experience excellent growth during the fourth quarter.
Extremity sales increased 11% worldwide and in the United States
during the fourth quarter. Excluding the impact of foreign currency,
extremity sales increased 9% worldwide during the quarter. Dental
reconstructive implant sales increased 15% worldwide during the fourth
quarter and 10% in the United States. Worldwide dental reconstructive
implant sales increased 13%, constant currency. Sales of bone cements
and accessories increased 36% in the United States during the fourth
quarter and 21% worldwide. On a constant currency basis, worldwide
sales of bone cements and accessories increased 17%.
During the fourth quarter of fiscal year 2005, worldwide fixation
sales decreased 4% to $61,599,000 and decreased 5% worldwide,
excluding the effects of foreign currency. Lorenz Surgical's
craniomaxillofacial fixation sales increased 1% worldwide during the
fourth quarter and decreased 7% in the United States. Worldwide
craniomaxillofacial fixation sales were flat worldwide, on a constant
currency basis. Electrical stimulation product sales decreased 7%
worldwide and in the United States during the fourth quarter. Internal
fixation sales increased 2% worldwide during the quarter and decreased
12% in the United States. Excluding foreign currency effects,
worldwide internal fixation sales were flat. External fixation sales
decreased 12% worldwide during the fourth quarter and decreased 16% in
the United States. Worldwide external fixation sales decreased 12%,
constant currency.
Spinal product sales increased 27% to $55,283,000 during the
fourth quarter of fiscal year 2005 and increased 21% in the United
States. Excluding the impact of foreign currency, spinal product sales
increased 26% worldwide. Domestic sales of spinal implants and
orthobiologics for the spine increased 102% during the fourth quarter,
while domestic spinal stimulation sales decreased 15%.
Sales of Biomet's "other products" decreased 1% worldwide to
$42,064,000 and decreased 2% in the United States during the fourth
quarter of fiscal year 2005. Worldwide sales of "other products"
decreased 2%, on a constant currency basis. During the fourth quarter,
arthroscopy sales increased 15% in the United States and increased 13%
worldwide. Arthroscopy sales increased 12% worldwide, constant
currency. Softgoods and bracing sales decreased 8% worldwide during
the fourth quarter and decreased 9% in the United States. Excluding
foreign currency effects, softgoods and bracing sales decreased 8%
worldwide.
Dr. Miller concluded, "We are optimistic about our new product
introductions scheduled throughout fiscal year 2006. Consequently, we
remain comfortable with the range of analysts' sales and earnings
estimates of $482 million to $492 million and $0.39 to $0.41 per share
for the first quarter of fiscal year 2006; and $2,047 million to
$2,109 million and $1.74 to $1.84 per share for fiscal year 2006."
Biomet, Inc. and its subsidiaries design, manufacture and market
products used primarily by musculoskeletal medical specialists in both
surgical and non-surgical therapy. The Company's product portfolio
encompasses reconstructive products, including orthopedic 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,
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 at (574) 372-1514.
This press release contains certain statements that are
"forward-looking statements" 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. 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 and reorganization efforts with respect to its EBI operations,
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, revenue and earnings estimates, 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.
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*T
BIOMET, INC.
RESULTS FOR THE QUARTERS AND YEARS ENDED MAY 31, 2005
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net Sales $503,093 $447,188 $1,879,950 $1,615,253
Cost of Sales 135,497 128,652 508,846 459,052
Cost of Sales, current
period impact of
inventory step-up 2,444 2,450 24,250 2,450
----------- ----------- ----------- -----------
Gross Profit 365,152 316,086 1,346,854 1,153,751
S, G, & A 188,265 180,461 694,254 595,234
R & D 21,153 17,186 79,696 63,636
In-process research
and development -- 1,250 26,020 1,250
----------- ----------- ----------- -----------
Operating Income 155,734 117,189 546,884 493,631
Other Income (Expense),
Net 659 4,905 2,816 15,165
----------- ----------- ----------- -----------
Income Before Taxes
And Minority Interest 156,393 122,094 549,700 508,796
Income Taxes 54,043 42,292 206,508 176,951
Income Taxes related to
inventory step-up (850) (853) (8,424) (853)
----------- ----------- ----------- -----------
Income Before
Minority Interest 103,200 80,655 351,616 332,698
Minority Interest -- 798 -- 7,071
----------- ----------- ----------- -----------
Net Income $103,200 $79,857 $351,616 $325,627
=========== =========== =========== ===========
Earnings per Share
Basic .41 .31 1.39 1.27
Diluted .41 .31 1.38 1.27
Basic Shares
Outstanding 250,566 254,308 252,387 255,512
Diluted Shares
Outstanding 251,825 256,185 254,148 257,204
U.S. sales $320,213 $291,215 $1,238,727 $1,079,532
Foreign sales 182,880 155,973 641,223 535,721
Reconstructive sales $344,147 $297,139 $1,254,234 $1,052,865
Fixation sales 61,599 63,932 246,730 248,821
Spinal product sales 55,283 43,660 214,039 159,927
Other product sales 42,064 42,457 164,947 153,640
Consolidated Balance Sheets May 31, 2005 May 31, 2004
Assets
Cash and Investments $177,075 $235,612
Accounts and notes receivable, net 479,745 465,949
Inventories 469,791 389,391
Other current assets 111,177 91,256
Fixed Assets, net 322,887 268,826
Goodwill 435,621 262,068
Other Assets 102,746 69,803
------------ ------------
Total Assets $2,099,042 $1,782,905
============ ============
Liabilities and Stockholders' Equity
Current Liabilities 503,793 $308,610
Other Liabilities 31,255 26,085
Stockholders' Equity 1,563,994 1,448,210
------------ ------------
Total Liabilities and Stockholders'
Equity $2,099,042 $1,782,905
============ ============
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Management uses non-GAAP financial measures, such as net sales,
excluding the impact of foreign currency, operating income as
adjusted, net income as adjusted, and diluted earning per share as
adjusted. The term "as adjusted", a non-GAAP financial measure, refers
to financial performance measures that exclude the following charges:
(a) the 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 the interest of Merck KGaA in the Biomet Merck joint
venture and Interpore International, Inc.; and tax effect of item (a)
above. Inventory stepped-up to its current fair market value in an
acquisition and subsequently sold, results in a higher cost of goods
sold during the periods in which the stepped-up inventory is sold,
thus overstating cost of goods sold and understating gross margins
versus historical and future periods in which the inventory sold
represents the actual cost of products manufactured. In-process
research and development written off as of the closing date of an
acquisition is a one time event that is not indicative of future
results. The Company's management believes that the presentation of
these measures provides useful information to investors. These
measures may assist investors in evaluating the Company's operations,
period over period. Management uses these measures internally for
evaluation of the performance of the business, including the
allocation of resources and the evaluation of results relative to team
member performance compensation targets. Investors should consider
these non-GAAP measures only as a supplement to, not as a substitute
for or as superior to, measures of financial performance prepared in
accordance with GAAP.
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*T
BIOMET, INC.
Reconciliation of non-GAAP financial information
to GAAP financial information
RESULTS FOR THE QUARTER AND YEAR ENDED MAY 31, 2005
(in thousands, except per share data)
Three Months Twelve Months
------------------- -------------------
Percent Percent
Amount of Sales Amount of Sales
--------- --------- --------- ---------
Operating income, as reported $155,734 30.9% $546,884 29.1%
Inventory step-up 2,444 0.5 24,250 1.3
In-process research and
development -- -- 26,020 1.4
--------- --------- --------- ---------
Operating income, as adjusted $158,178 31.4% $597,154 31.8%
========= ========= ========= =========
Net income, as reported $103,200 20.5% $351,616 18.7%
Inventory step-up 2,444 0.5 24,250 1.3
In-process research and
development -- -- 26,020 1.4
Tax effect of inventory
step-up (850) ( 0.2) (8,424) ( 0.5)
--------- --------- --------- ---------
Net income, as adjusted $104,794 20.8% $393,462 20.9%
========= ========= ========= =========
Three Months Twelve Months
------------------- -------------------
Basic Diluted Basic Diluted
--------- --------- --------- ---------
Earnings per share, as
reported $0.41 $0.41 $1.39 $1.38
Inventory step-up 0.01 .01 .10 .10
In-process research
and development -- -- .10 .10
Tax effect of
inventory step-up -- -- (0.03) (0.03)
--------- --------- --------- ---------
Earnings per share, as
adjusted $0.42 $0.42 $1.56 $1.55
Sales Sales Sales Sales
Growth Growth in Growth Growth in
As FX Local As FX Local
Reported Impact Currencies Reported Impact Currencies
Three Months Twelve Months
---------------------------- ----------------------------
U.S. sales 10% --% 10% 15% --% 15%
Foreign sales 17 5 12 20 7 13
Total sales 13 2 11 16 2 14
Reconstructive
sales 16% 3% 13% 19% 3% 16%
Fixation sales (4) 1 (5) (1) 1 (2)
Spinal product
sales 27 1 26 34 1 33
Other product
sales (1) 1 (2) 7 1 6
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