Biomet, Inc. announced today financial results for its second fiscal quarter ended November 30, 2008.
- Net sales increased 6% (9% constant currency) to approximately $643 million
- Reconstructive product sales increased 10% worldwide on a constant currency basis
- Hip sales increased 10% (14% constant currency) worldwide, with 12% growth in the U.S.
Knee sales increased 7% (10% constant currency) worldwide, with U.S. growth at 11% Net sales increased 6% during the second quarter of fiscal year 2009 to $642.8 million from $607.2 million for the second quarter of fiscal year 2008. Excluding the impact of foreign currency, net sales increased 9%. U.S. sales increased 9% to $379.5 million during the quarter, while Europe sales of $195.4 million increased 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 increased 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, compared to 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 compared to $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 increased 17% to $247.1 million, or 38.4% of sales, compared to 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. A reconciliation of reported results to adjusted results can be viewed in the Investors Section of Biomet’s website, www.biomet.com, under the section entitled, Quarterly Financial Results, or by clicking on the following link: www.biomet.com/fileLibrary/corporate/investors/financials/fiscal2009Q2OtherFinancialInformation.pdf
The Company’s net interest expense for the second quarter of fiscal year 2009 was $139.2 million compared to $148.7 million for the second quarter of last year. Net debt at November 30, 2008, was $5,967.6 million, a decrease of approximately $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.”
Second Quarter Sales Performance Worldwide Reported Worldwide Reported Worldwide CC United States Quarter 2 – 2009 Growth% Growth% Growth% Reconstructive $483.3 6% 10% 11% Hips 10% 14% 12% Knees 7% 10% 11% Dental -2% 2% 1% Other 9% 14% 17% Fixation 58.0 2% 4% 2% Spine 55.3 8% 9% 10% Other 46.2 2% 6% 6% Total Sales $642.8 6% 9% 9% Products primarily driving the strong growth for Biomet’s global hip sales included the M2a-Magnum™ Acetabular System, the traditional and Microplasty™ versions of the Taperloc® Hip Stem, E-Poly™ Acetabular Liners, and the Regenerex® Ringloc®+ Modular Acetabular System, in addition to European sales of the Bi-Metric® and Aura™ Hip Stems and the Exceed ABT™ (Advanced Bearing Technologies) Acetabular System. Biomet’s knee sales increased 10% on a constant currency basis during the second quarter as a result of continued demand for the Oxford® Partial Knee System and the Vanguard™ Complete Knee System.
The free-floating mobile-bearing Oxford® System is the most widely used and clinically proven partial knee in the world with 10, 15 and 20-year published results. The Vanguard™ System offers surgeons and their patients more implant combinations than any other total knee system on the market. Dental reconstructive device sales increased 2% worldwide during the second quarter on a constant currency basis, due to a combination of factors including a difficult economic environment, the elective nature of dental implant procedures, and the availability of alternative treatment options that are more commonly reimbursed through insurance. During the second quarter, the positive sales growth for internal fixation and craniomaxillofacial fixation products was partially offset by decreased sales of electrical stimulation and external fixation devices. Spine product sales increased 10% in the United States and increased 9% worldwide, on a constant currency basis with solid growth coming from both spine hardware and spinal stimulation devices. Sales of “other” products were impacted by decreased sales of softgoods and bracing products, while Biomet’s sports medicine division reported solid sales growth during the second quarter of fiscal year 2009. All trademarks herein are the property of Biomet, Inc. or its subsidiaries unless otherwise indicated.