Biomet Announces Second Quarter of Fiscal Year 2013 Financial Results

  Biomet Announces Second Quarter of Fiscal Year 2013 Financial Results  Business Wire  WARSAW, Ind. -- January 8, 2013  Biomet, Inc. announced today financial results for its second fiscal quarter ended November 30, 2012.    *Net sales increased 9% (11% constant currency) worldwide to $790 million   *Net sales, excluding the Trauma Acquisition, increased 2% (3% constant     currency) worldwide   *Large Joint Reconstructive sales increased 1% (3% constant currency)     worldwide, with 2% growth in the U.S.   *S.E.T. sales increased 74% (76% constant currency) worldwide to $152     million and increased 65% in the U.S.   *Excluding the Trauma Acquisition, S.E.T. sales increased 14% (15% constant     currency) and increased 15% in the U.S.   *Reported operating income totaled $143 million   *Adjusted EBITDA increased 8% to $288 million                         Second Quarter Financial Results  Net sales during the second quarter of fiscal year 2013 increased 9% to $790.1 million, compared to net sales of $725.1 million during the second quarter of fiscal year 2012. Excluding the effect of foreign currency, net sales increased 11% during the second quarter. U.S. net sales increased 10% to $470.8 million during the second quarter, while Europe net sales decreased 1% (increased 5% constant currency) to $193.9 million and International (primarily Canada, South America, Mexico and the Pacific Rim) net sales increased 21% (22% constant currency) to $125.4 million.  Special items (pre-tax) totaled $96.8 million during the second quarter, including $74.2 million of non-cash amortization expense related to the 2007 Merger and $7.4 million of stock compensation expense. The remaining $15.2 million of special items were primarily associated with the Trauma Acquisition, certain legal charges and the Company’s ongoing operational improvement program.  Reported operating income during the second quarter of fiscal year 2013 was $143.2 million, compared to operating income of $103.8 million during the second quarter of fiscal year 2012. Excluding special items, adjusted operating income totaled $240.0 million during the second quarter of fiscal year 2013, compared to $219.7 million for the second quarter of fiscal year 2012.  Excluding special items, adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $288.2 million, or 36.5% of net sales, during the second quarter of fiscal year 2013, compared to $266.3 million, or 36.7% of net sales, for the second quarter of fiscal year 2012.  Interest expense was $104.9 million during the second quarter of fiscal year 2013, compared to $120.8 million during the second quarter of the prior year, primarily due to lower average interest rates on our term loans and lower bond interest as a result of refinancing activities. Other Expense totaled $124.0 million for the quarter, primarily due to $117.2 million of loss on retirement of debt which was incurred as part of the refinancing activities completed during the quarter.  Reported cash flow from operations was $43.1 million during the second quarter of fiscal year 2013, as compared to reported cash flow from operations of $10.7 million for the second quarter of fiscal year 2012. Free cash flow (operating cash flow of $43.1 million minus capital expenditures of $53.8 million) was a use of cash of $10.7 million, which reflected $155.5 million of cash interest paid in the quarter, compared to negative free cash flow (operating cash flow of $10.7 million minus capital expenditures of $42.0 million) of $31.3 million during the second quarter of fiscal year 2012, which reflected $191.7 million of cash interest paid.  At November 30, 2012, reported gross debt was $6,039.6 million, and cash and cash equivalents, as defined in the Company’s Amended and Restated Credit Agreement dated August 2, 2012, totaled $167.5 million, resulting in net debt of $5,872.1 million, compared to $5,335.4 million at May 31, 2012, reflecting the impact of the Trauma Acquisition, our debt refinancing activities and foreign currency translation on our Euro-denominated debt.  Biomet’s senior secured leverage ratio as of November 30, 2012 was 3.01 times the last twelve months (“LTM”) adjusted EBITDA, as defined by our credit agreement, compared to 4.01 times at May 31, 2008. The total (net debt) leverage ratio was 5.52 times LTM adjusted EBITDA at November 30, 2012, compared to 6.97 times at May 31, 2008.  Biomet’s President and Chief Executive Officer Jeffrey R. Binder remarked, “We had a strong second quarter of fiscal year 2013. We reported top line growth of 9%, which translated to 11% growth on a constant currency basis, and we delivered strong bottom line growth. Adjusted EBITDA improved 8% over the prior year quarter to $288 million or 36.5% of net sales, despite the short-term costs incurred in connection with our trauma acquisition. In addition, we’ve substantially completed the integration of our trauma acquisition, and our Sports, Extremities and Trauma (S.E.T.) revenues are now approaching 20% of our net sales at an annualized run rate of $600 million.”  The following table provides second quarter net sales performance by product category:                        Second Quarter Net Sales Performance                        (in millions, except percentages, unaudited)                                                                                         Worldwide        Worldwide     Worldwide     United                        Reported         Reported      CC            States                        Quarter 2 - FY   Growth %      Growth %      Growth %                        2013                                                                               Large Joint            $     444.2      1         %   3         %   2        % Reconstructive Knees                                   1         %   3         %   1        % Hips                                    1         %   3         %   2        % Bone Cement and                         2         %   4         %   4        % Other Sports, Extremities,         152.2      74        %   76        %   65       % Trauma (S.E.T.) Sports Medicine                         14        %   15        %   3        % Extremities                             22        %   23        %   32       % Trauma                                  268       %   272       %   247      % Spine & Bone Healing         74.3       (1    )   %   (1    )   %   -        % Spine                                   4         %   4         %   7        % Bone Healing                            (15   )   %   (15   )   %   (15   )  % Dental                       67.1       (9    )   %   (7    )   %   4        % Other                       52.3       6        %   7        %   2       % Net Sales              $     790.1      9        %   11       %   10      %                                                                                                                                                             Sports, Extremities, Trauma (S.E.T.)                         14        %   15        %   15       % excluding Trauma Acquisition Trauma excluding                        -         %   1         %   (1    )  % Trauma Acquisition                                                                               Net Sales excluding                     2         %   3         %   3        % Trauma Acquisition                                                                                Large Joint Reconstructive sales increased 1% (3% constant currency) worldwide to $444.2 million and increased 2% in the U.S. during the second quarter of fiscal year 2013, compared to the second quarter of fiscal year 2012. Knee sales increased 1% (3% constant currency) worldwide during the second quarter and increased 1% in the U.S. Hip sales increased 1% (3% constant currency) worldwide during the second quarter and increased 2% in the U.S.  S.E.T. sales increased 74% (76% constant currency) worldwide to $152.2 million during the second quarter, and increased 65% in the U.S. Excluding the Trauma Acquisition, S.E.T. sales increased 14% (15% constant currency) worldwide and increased 15% in the U.S. Sports medicine sales increased 14% (15% constant currency) worldwide during the quarter and increased 3% in the U.S. Extremity sales grew 22% (23% constant currency) worldwide during the quarter, with a growth rate of 32% in the U.S. Trauma sales increased 268% (272% constant currency) worldwide during the quarter and increased 247% in the U.S. Trauma sales, excluding the Trauma Acquisition, were flat worldwide (increased 1% constant currency) and decreased 1% in the U.S. during the second quarter.  Spine and Bone Healing (non-invasive trauma stimulation and bracing) sales decreased 1% (1% constant currency) worldwide to $74.3 million during the second quarter and were flat in the U.S.  Dental sales decreased 9% (7% constant currency) worldwide to $67.1 million and increased 4% in the U.S. during the second quarter.  Sales of Other products increased 6% (7% constant currency) worldwide to $52.3 million during the second quarter and increased 2% in the U.S.  About Biomet  Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet’s product portfolio encompasses large joint reconstructive products, including orthopedic joint replacement devices, and bone cements and accessories; sports medicine, extremities and trauma products, including internal and external orthopedic fixation devices; spine and bone healing products, including spine hardware, spinal stimulation devices, and orthobiologics, as well as electrical bone growth stimulators and softgoods and bracing; dental reconstructive products; and other products, including microfixation products and autologous therapies. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in approximately 90 countries.  Financial Schedule Presentation  The Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended November 30, 2012 and 2011 and other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the United States (except with respect to certain non-GAAP financial measures discussed below), and reflects purchase accounting adjustments related to the Merger referenced below and the Trauma Acquisition.  Forward-Looking Statements  This press release contains “forward-looking statements” within the meaning of Section27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934, as amended. Those statements are often indicated by the use of words such as “will,” “intend,” “anticipate,” “estimate,” “expect,” “plan” and similar expressions. Forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from those contemplated by the forward looking statements due to, among others, the following factors: the success of the Company’s principal product lines; the results of the ongoing investigation by the United States Department of Justice; the ability to successfully implement new technologies; the Company’s ability to sustain sales and earnings growth; the Company’s success in achieving timely approval or clearance of its products with domestic and foreign regulatory entities; the impact to the business as a result of compliance with federal, state and foreign governmental regulations and with the Deferred Prosecution Agreement and Corporate Integrity Agreement; the impact to the business as a result of the economic downturn in both foreign and domestic markets; the impact of federal health care reform; the impact of anticipated changes in the musculoskeletal industry and the ability of the Company to react to and capitalize on those changes; the ability of the Company to successfully implement its desired organizational changes and cost-saving initiatives; the ability of the Company to successfully integrate the Trauma Acquisition; the impact to the business as a result of the Company’s significant international operations, including, among others, with respect to foreign currency fluctuations and the success of the Company’s transition of certain manufacturing operations to China; the impact of the Company’s managerial changes; the ability of the Company’s customers to receive adequate levels of reimbursement from third-party payors; the Company’s ability to maintain its existing intellectual property rights and obtain future intellectual property rights; the impact to the business as a result of cost containment efforts of group purchasing organizations; the Company’s ability to retain existing independent sales agents for its products; the impact of product liability litigation losses; and other factors set forth in the Company’s filings with the SEC, including the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q. 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 as to the accuracy of forward-looking statements contained in this press release. 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 update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements which speak only as of the date on which they were made.  *Non-GAAP Financial Measures:  Management uses non-GAAP financial measures, such as net sales excluding the impact of foreign currency (constant currency), operating income as adjusted, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as adjusted, net income as adjusted, gross profit as adjusted, selling, general and administrative expense as adjusted, research and development expense as adjusted, cash and cash equivalents (as defined by our credit agreement), net debt, senior secured leverage ratio, total leverage ratio, free cash flow, and unlevered free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included elsewhere in the press release.  The term “adjusted” or “as adjusted,” a non-GAAP financial measure, refers to financial performance measures that exclude certain income statement line items, such as interest, taxes, depreciation or amortization, other (income) expense, and/or exclude certain expenses as defined by our credit agreement, such as restructuring charges, non-cash impairment charges, integration and facilities opening costs or other business optimization expenses, new systems design and implementation costs, certain start-up costs and costs related to consolidation of facilities, certain non-cash charges, advisory fees paid to the Company’s private equity owners, certain severance charges, purchase accounting costs, stock-based compensation, litigation costs, and other related charges.  These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP in the United States. Biomet management believes that these non-GAAP financial measures provide useful information to investors; however, this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP.  Non-GAAP Reconciliation  A reconciliation of reported results to adjusted results is included in this press release, which is also posted on Biomet’s website: www.biomet.com  Reclassifications  Certain prior period amounts have been reclassified to conform to the current presentation. The current presentation aligns with how the Company presently reports sales and markets its products.  The Merger  Biomet, Inc. finalized the merger with LVB Acquisition Merger Sub, Inc., a wholly-owned subsidiary of LVB Acquisition, Inc., which we refer to in this press release as the “Merger”, on September25, 2007. LVB Acquisition, Inc. is indirectly owned by investment partnerships directly or indirectly advised or managed by The Blackstone Group, Goldman Sachs& Co., Kohlberg Kravis Roberts& Co. and TPG Global.  Trauma Acquisition  On May24, 2012, DePuy Orthopaedics, Inc. accepted the Company’s binding offer to purchase certain assets representing substantially all of DePuy’s worldwide trauma business (“Trauma Acquisition”), which involves researching, developing, manufacturing, marketing, distributing and selling products to treat certain bone fractures or deformities in the human body, including certain intellectual property assets, and to assume certain liabilities, for approximately $280.0 million in cash. On June15, 2012, the Company announced the initial closing of the transaction. During the first and second quarters of fiscal year 2013 subsequent closings in various foreign countries occurred on a staggered basis, with the final closing occurring on December 7, 2012. The Company acquired the DePuy worldwide trauma business to strengthen its trauma business and to continue to build a stronger presence in the global trauma market.  Biomet, Inc. Product Net Sales Three Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                     Three Months     Three                     Ended            Months        Reported        Currency*                                      Ended                     November 30,     November      Growth %        Growth %                     2012             30, 2011 Large Joint         $  444.2         $   439.5     1           %   3         % Reconstructive Sports, Extremities,           152.2             87.3      74          %   76        % Trauma (S.E.T.) Spine & Bone           74.3              75.4      (1      )   %   (1    )   % Healing Dental                 67.1              73.6      (9      )   %   (7    )   % Other                 52.3            49.3      6          %   7        % Net Sales           $  790.1        $   725.1     9          %   11       %                                                                               Sports, Extremities, Trauma (S.E.T.)        99.5              87.3      14          %   15        % excluding Trauma Acquisition                                                                               Net Sales, excluding              737.4         $   725.1     2           %   3         % Trauma Acquisition                                                                                                   Three Months                   Three                     Ended                          Months                                                    Ended                     November 30,                   November                     2012                           30, 2012                     Net Sales        Currency      Net Sales                     Growth                         Growth in                     As Reported      Impact*       Local                                                    Currencies* Large Joint            1         %       2     %   3           % Reconstructive Knees                  1         %       2     %   3           % Hips                   1         %       2     %   3           % Bone Cement and        2         %       2     %   4           % Other Sports, Extremities,           74        %       2     %   76          % Trauma (S.E.T.) Sports Medicine        14        %       1     %   15          % Extremities            22        %       1     %   23          % Trauma                 268       %       4     %   272         % Spine & Bone           (1     )  %       -     %   (1      )   % Healing Spine                  4         %       -     %   4           % Bone Healing           (15    )  %       -     %   (15     )   % Dental                 (9     )  %       2     %   (7      )   % Other                 6        %      1     %   7          % Net Sales             9        %      2     %   11         %                                                                               Sports, Extremities, Trauma (S.E.T.)        14        %       1     %   15          % excluding Trauma Acquisition Trauma excluding              -         %       1     %   1           % Trauma Acquisition                                                                               Net Sales excluding              2         %       1     %   3           % Trauma Acquisition                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Product Net Sales Six Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                    Six Months      Six                    Ended           Months        Reported          Currency*                                    Ended                    November        November      Growth %         Growth %                    30, 2012        30, 2011 Large Joint        $ 837.2         $ 836.5       -             %   3         % Reconstructive Sports, Extremities,         279.5           169.1       65            %   68        % Trauma (S.E.T.) Spine & Bone         152.2           150.0       1             %   2         % Healing Dental               124.1           132.9       (7          ) %   (3    )   % Other               104.5         101.2       3            %   6        % Net Sales          $ 1,497.5      $ 1,389.7     8            %   10       %                                                                               Sports, Extremities, Trauma (S.E.T.)             188.0           169.1       11            %   13        % excluding Trauma Acquisition                                                                               Net Sales, excluding            1,406.0       $ 1,389.7     1             %   3         % Trauma Acquisition                                                                                                  Six Months                    Six Months                    Ended                         Ended                    November                      November                    30, 2012                      30, 2012                    Net Sales       Currency      Net Sales                    Growth                        Growth in                    As Reported     Impact*       Local                                                         Currencies* Large Joint          -         %     3       %   3             % Reconstructive Knees                -         %     2       %   2             % Hips                 -         %     3       %   3             % Bone Cement          -         %     4       %   4             % and Other Sports, Extremities,         65        %     3       %   68            % Trauma (S.E.T.) Sports               12        %     2       %   14            % Medicine Extremities          18        %     1       %   19            % Trauma               230       %     5       %   235           % Spine & Bone         1         %     1       %   2             % Healing Spine                7         %     1       %   8             % Bone Healing         (12     ) %     -       %   (12         ) % Dental               (7      ) %     4       %   (3          ) % Other               3        %    3       %   6            % Net Sales           8        %    2       %   10           %                                                                               Sports, Extremities, Trauma (S.E.T.)             11        %     2       %   13            % excluding Trauma Acquisition Trauma excluding            (1      ) %     2       %   1             % Trauma Acquisition                                                                               Net Sales excluding            1         %     2       %   3             % Trauma Acquisition                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Geographic Net Sales Three Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                     Three Months     Three                     Ended            Months        Reported        Currency*                                      Ended                     November 30,     November      Growth %        Growth %                     2012             30, 2011 Geographic Sales:    United States    $  470.8         $   426.3     10          %   10        %    Europe              193.9             195.1     (1     )    %   5         %    International      125.4           103.7     21         %   22        %    Net Sales        $  790.1        $   725.1     9          %   11        %                                                                                                                                                                                 Three Months                   Three                     Ended                          Months                                                    Ended                     November 30,                   November                     2012                           30, 2012                     Net Sales        Currency      Net Sales                     Growth                         Growth                     As Reported      Impact*       Local                                                    Currencies*    United States       10        %       -     %   10          %    Europe              (1     )  %       6     %   5           %    International      21       %      1     %   22         %    Total              9        %      2     %   11         %                                                                                 * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Geographic Net Sales excluding Trauma Acquisition Three Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                     Three Months     Three                     Ended            Months        Reported        Currency*                                      Ended                     November 30,     November      Growth %        Growth %                     2012             30, 2011 Geographic Sales excluding Trauma Acquisition:    United States    $  440.9         $   426.3     3           %   3         %    Europe              180.9             195.1     (7     )    %   (2    )   %    International      115.6           103.7     11         %   13       %    Net Sales        $  737.4        $   725.1     2          %   3        %                                                                                                                                                                                 Three Months                   Three                     Ended                          Months                                                    Ended                     November 30,                   November                     2012                           30, 2012                     Net Sales        Currency      Net Sales                     Growth                         Growth                     As Reported      Impact*       Local                                                    Currencies*    United States       3         %       -     %   3           %    Europe              (7     )  %       5     %   (2     )    %    International      11       %      2     %   13         %    Total              2        %      1     %   3          %                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Geographic Net Sales Six Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                     Six Months       Six                     Ended            Months        Reported        Currency*                                      Ended                     November 30,     November      Growth %        Growth %                     2012             30, 2011 Geographic Sales:    United States    $  923.0         $ 841.0       10          %   10        %    Europe              336.8           343.6       (2      )   %   6         %    International      237.7         205.1       16         %   18        %    Net Sales        $  1,497.5      $ 1,389.7     8          %   10        %                                                                                                                                                                                 Six Months                     Six Months                     Ended                          Ended                     November 30,                   November                     2012                           30, 2012                     Net Sales        Currency      Net Sales                     Growth                         Growth                     As Reported      Impact*       Local                                                    Currencies*    United States       10        %     -       %   10          %    Europe              (2      ) %     8       %   6           %    International      16       %    2       %   18         %    Total              8        %    2       %   10         %                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Geographic Net Sales excluding Trauma Acquisition Six Month Period Ended November 30, 2012 and 2011 (in millions, except percentages, unaudited)                                                                                                                                  Constant                     Six Months       Six                     Ended            Months        Reported        Currency*                                      Ended                     November 30,     November      Growth %        Growth %                     2012             30, 2011 Geographic Sales excluding Trauma Acquisition:    United States    $  869.6         $ 841.0       3           %   3         %    Europe              315.0           343.6       (8      )   %   -         %    International      221.4         205.1       8          %   10        %    Net Sales        $  1,406.0      $ 1,389.7     1          %   3         %                                                                                                                                                                                 Six Months                     Six Months                     Ended                          Ended                     November 30,                   November                     2012                           30, 2012                     Net Sales        Currency      Net Sales                     Growth                         Growth                     As Reported      Impact*       Local                                                    Currencies*    United States       3         %     -       %   3           %    Europe              (8      ) %     8       %   -           %    International      8        %    2       %   10         %    Total              1        %    2       %   3          %                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. As Reported Consolidated Statements of Operations (in millions, except percentages, unaudited)                                                                                                                                                               Three Months Ended   Three Months Ended                                        November 30, 2012    November 30, 2011 Net sales                              $    790.1           $    725.1 Cost of sales                              236.0              234.9     Gross profit                                554.1                490.2 Gross profit percentage                     70.1     %           67.6     %                                                              Selling, general and administrative         296.8                270.9 expense Research and development expense            36.4                 31.1 Amortization                               77.7               84.4      Operating income                            143.2                103.8 Percentage of Net Sales                     18.1     %           14.3     % Interest expense                            104.9                120.8 Other (income) expense                     124.0              4.9       Loss before income taxes                    (85.7    )           (21.9    )                                                              Benefit from income taxes                  (19.5    )          (7.9     ) Tax rate                                    22.8     %           36.1     %                                                              Net loss                               $    (66.2    )      $    (14.0    ) Percentage of Net Sales                     -8.4     %           -1.9     %                                                                             Biomet, Inc. As Reported Consolidated Statements of Operations (in millions, except percentages, unaudited)                                                                                                                                                                   Six Months Ended    Six Months Ended                                          November 30, 2012   November 30, 2011 Net sales                                $    1,497.5        $    1,389.7 Cost of sales                                464.1             450.2      Gross profit                                  1,033.4             939.5 Gross profit percentage                       69.0      %         67.6      %                                                               Selling, general and administrative           592.9               532.5 expense Research and development expense              72.2                63.1 Amortization                                 156.1             167.4      Operating income                              212.2               176.5 Percentage of Net Sales                       14.2      %         12.7      % Interest expense                              222.0               246.2 Other (income) expense                       161.5             12.1       Loss before income taxes                      (171.3    )         (81.8     )                                                               Benefit from income taxes                    (73.6     )        (28.6     ) Tax rate                                      43.0      %         35.0      %                                                               Net loss                                 $    (97.7     )    $    (53.2     ) Percentage of Net Sales                       -6.5      %         -3.8      %                                                                               Biomet, Inc. Other Financial Information Reconciliation of Operating Income, as reported to Operating Income, as adjusted* (in millions, unaudited)                                                                                                  Three Months Ended   Three Months Ended                                        November 30, 2012    November 30, 2011 Operating income, as reported          $    143.2           $       103.8 Purchase accounting depreciation            -                       4.5 Purchase accounting amortization            74.2                    80.6 Stock-based compensation expense            7.4                     4.0 Litigation settlements and reserves         4.8                     7.5 and other legal fees Trauma Acquisition costs                    2.3                     - Operational restructuring and consulting expenses related to operational initiatives (severance,         5.4                     16.5 building impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to the            (0.1     )              - Trauma Acquisition Sponsor fee                                2.8                   2.8 Total items (pre-tax) excluded per         96.8                  115.9 our credit agreement Operating income, as adjusted*         $    240.0          $       219.7                                                                       * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Operating Income, as reported to Operating Income, as adjusted* (in millions, unaudited)                                                                                                     Six Months Ended    Six Months Ended                                          November 30, 2012   November 30, 2011 Operating income, as reported            $     212.2         $       176.5 Purchase accounting depreciation               -                     9.1 Purchase accounting amortization               148.9                 161.5 Stock-based compensation expense               26.5                  8.7 Litigation settlements and reserves            9.4                   8.5 and other legal fees Trauma Acquisition costs                       9.2                   - Operational restructuring and consulting expenses related to operational initiatives (severance,            12.2                  32.9 building impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to the               (0.2    )             - Trauma Acquisition Excess and obsolete inventory expense          8.1                   - related to the Trauma Acquisition Sponsor fee                                   5.4                 4.8 Total items (pre-tax) excluded per our        219.5               225.5 credit agreement Operating income, as adjusted*           $     431.7        $       402.0                                                                        * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Operating Income, as reported to EBITDA, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                                       Three Months          Three Months                                           Ended                 Ended                                           November 30, 2012     November 30,                                                                 2011 Operating Income, as reported             $ 143.2               $ 103.8 Depreciation                              43.9                  47.3 Amortization                              77.7                  84.4 Special items adjustments Stock-based compensation expense          7.4                   4.0 Litigation settlements and reserves and   4.8                   7.5 other legal fees Trauma Acquisition costs                  2.3                   - Operational restructuring and consulting expenses related to operational initiatives (severance,       5.4                   16.5 building impairments, abnormal manufacturing variances and other related costs) Inventory step-up related to the Trauma   0.7                   - Acquisition Sponsor fee                               2.8                   2.8 EBITDA, as adjusted*                      $ 288.2               $ 266.3                                                                               Net sales                                 $ 790.1               $ 725.1 EBITDA percentage, as adjusted*           36.5              %   36.7         %                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Operating Income, as reported to EBITDA, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                                        Six Months Ended     Six Months                                                                 Ended                                            November 30,         November 30,                                            2012                 2011 Operating Income, as reported              $ 212.2              $ 176.5 Depreciation                               86.0                 94.1 Amortization                               156.1                167.4 Special items adjustments Stock-based compensation expense           26.5                 8.7 Litigation settlements and reserves and    9.4                  8.5 other legal fees Trauma Acquisition costs                   9.2                  - Operational restructuring and consulting expenses related to operational initiatives (severance, building           12.2                 32.9 impairments, abnormal manufacturing variances and other related costs) Inventory step-up related to the Trauma    0.9                  - Acquisition Excess and obsolete inventory expense      8.1                  - related to the Trauma Acquisition Sponsor fee                                5.4                  4.8 EBITDA, as adjusted*                       $ 526.0              $ 492.9                                                                               Net sales                                  $ 1,497.5            $ 1,389.7 EBITDA percentage, as adjusted*            35.1             %   35.5         %                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Net Loss, as reported to Net Income, as adjusted* (in millions, unaudited)                                                                                                                                                              Three Months Ended   Three Months Ended                                        November 30, 2012    November 30, 2011 Net loss, as reported                  $    (66.2    )      $    (14.0    ) Purchase accounting depreciation            -                    4.5 Purchase accounting amortization            74.2                 80.6 Stock-based compensation expense            7.4                  4.0 Litigation settlements and reserves         4.8                  7.5 and other legal fees Trauma Acquisition costs                    2.3                  - Operational restructuring and consulting expenses related to operational initiatives (severance,         5.4                  16.5 building impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to the            (0.1     )           - Trauma Acquisition Sponsor fee                                 2.8                  2.8 Tax effect on special and purchase         (23.6    )          (38.9    ) accounting items** Net income, as adjusted*               $    7.0            $    63.0                                                                                  * See Non-GAAP Financial Measures Disclosure ** The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred   Biomet, Inc. Other Financial Information Reconciliation of Net Loss, as reported to Net Income, as adjusted* (in millions, unaudited)                                                                                                                                                                  Six Months Ended    Six Months Ended                                          November 30, 2012   November 30, 2011 Net loss, as reported                    $     (97.7   )     $     (53.2   ) Purchase accounting depreciation               -                   9.1 Purchase accounting amortization               148.9               161.5 Stock-based compensation expense               26.5                8.7 Litigation settlements and reserves            9.4                 8.5 and other legal fees Trauma Acquisition costs                       9.2                 - Operational restructuring and consulting expenses related to operational initiatives (severance,            12.2                32.9 building impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to the               (0.2    )           - Trauma Acquisition Excess and obsolete inventory expense          8.1                 - related to the Trauma Acquisition Sponsor fee                                    5.4                 4.8 Tax effect on special and purchase            (87.3   )          (80.7   ) accounting items** Net income, as adjusted*                 $     34.5         $     91.6                                                                    * See Non-GAAP Financial Measures Disclosure ** The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred   Biomet, Inc. Other Financial Information Reconciliation of Gross Profit, as reported to Gross Profit, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                          Three Months Ended     Three Months Ended                                    November 30, 2012      November 30, 2011 Gross profit, as reported          $    554.1             $    490.2 Purchase accounting depreciation        -                      4.5 Stock-based compensation expense        0.2                    0.2 Litigation settlements and              1.5                    (0.1     ) reserves and other legal fees Trauma Acquisition costs                0.2                    - Operational restructuring and consulting expenses related to operational initiatives (severance, building                    3.3                    12.3 impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to       (0.1     )            -         the Trauma Acquisition Gross profit, as adjusted*         $    559.2            $    507.1                                                                                   Net sales                          $    790.1             $    725.1 Gross profit percentage, as             70.1          %        67.6          % reported Gross profit percentage, as             70.8          %        69.9          % adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Gross Profit, as reported to Gross Profit, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                             Six Months Ended      Six Months Ended                                      November 30, 2012     November 30, 2011 Gross profit, as reported            $    1,033.4          $    939.5 Purchase accounting depreciation          -                     9.1 Stock-based compensation expense          1.7                   0.5 Litigation settlements and                4.9                   (0.1      ) reserves and other legal fees Trauma acquisition costs                  1.6                   - Operational restructuring and consulting expenses related to operational initiatives                   6.9                   22.5 (severance, building impairments, abnormal manufacturing variances and other related costs) Inventory and property, plant and equipment step-up related to the          (0.2      )           - Trauma Acquisition Excess and obsolete inventory expense related to the Trauma            8.1                 -          Acquisition Gross profit, as adjusted*           $    1,056.4         $    971.5                                                                                    Net sales                            $    1,497.5          $    1,389.7 Gross profit percentage, as               69.0         %        67.6         % reported Gross profit percentage, as               70.5         %        69.9         % adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Selling, General and Administrative Expense, as reported to Selling, General and Administrative Expense, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                          Three Months Ended     Three Months Ended                                    November 30, 2012      November 30, 2011 Selling, general and administrative expense, as         $    296.8             $    270.9 reported Stock-based compensation expense        (6.0     )             (3.4     ) Litigation settlements and              (3.3     )             (7.6     ) reserves and other legal fees Trauma Acquisition costs                (2.1     )             - Operational restructuring and consulting expenses related to operational initiatives                 (1.9     )             (4.1     ) (severance, building impairments, and other related costs) Sponsor fee                            (2.8     )            (2.8     ) Selling, general and administrative expense, as         $    280.7            $    253.0     adjusted*                                                                               Net sales                          $    790.1             $    725.1 SG&A as a percentage of net             37.6          %        37.4          % sales, as reported SG&A as a percentage of net             35.5          %        34.9          % sales, as adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Selling, General and Administrative Expense, as reported to Selling, General and Administrative Expense, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                             Six Months Ended      Six Months Ended                                      November 30, 2012     November 30, 2011 Selling, general and administrative expense, as           $    592.9            $    532.5 reported Stock-based compensation expense          (20.7     )           (7.3      ) Litigation settlements and                (4.5      )           (8.6      ) reserves and other legal fees Trauma acquisition costs                  (7.6      )           - Operational restructuring and consulting expenses related to operational initiatives                   (5.1      )           (10.2     ) (severance, building impairments, and other related costs) Sponsor fee                              (5.4      )          (4.8      ) Selling, general and administrative expense, as           $    549.6           $    501.6      adjusted*                                                                               Net sales                            $    1,497.5          $    1,389.7 SG&A as a percentage of net sales,        39.6         %        38.3         % as reported SG&A as a percentage of net sales,        36.7         %        36.1         % as adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Research and Development Expense, as reported to Research and Development Expense, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                          Three Months Ended     Three Months Ended                                    November 30, 2012      November 30, 2011 Research and development           $    36.4              $    31.1 expense, as reported Stock-based compensation expense        (1.2     )             (0.4     ) Operational restructuring and consulting expenses related to operational initiatives                (0.2     )            (0.1     ) (severance, and other related costs) Research and development           $    35.0             $    30.6      expense, as adjusted*                                                                               Net sales                          $    790.1             $    725.1 R&D as a percentage of net              4.6           %        4.3           % sales, as reported R&D as a percentage of net              4.4           %        4.2           % sales, as adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Other Financial Information Reconciliation of Research and Development Expense, as reported to Research and Development Expense, as adjusted* (in millions, except percentages, unaudited)                                                                                                                                                                             Six Months Ended      Six Months Ended                                      November 30, 2012     November 30, 2011 Research and development expense,    $    72.2             $    63.1 as reported Stock-based compensation expense          (4.1      )           (0.9      ) Operational restructuring and consulting expenses related to operational initiatives                  (0.2      )          (0.2      ) (severance, and other related costs) Research and development expense,    $    67.9            $    62.0       as adjusted*                                                                               Net sales                            $    1,497.5          $    1,389.7 R&D as a percentage of net sales,         4.8          %        4.5          % as reported R&D as a percentage of net sales,         4.5          %        4.5          % as adjusted*                                                                                * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Condensed Consolidated Balance Sheets (in millions, unaudited)                                                                                                          (Preliminary)                                             November 30, 2012     May 31, 2012 Assets Cash and cash equivalents                   $     167.5           $  492.4 Accounts receivable, net                          556.0              491.6 Short-term investments                            2.6                2.5 Inventories                                       674.1              543.2 Current deferred income taxes                     55.6               52.5 Prepaid expenses and other                        150.6              129.1 Property, plant and equipment, net                693.2              593.6 Intangible assets, net                            3,865.9            3,930.4 Goodwill                                          4,173.4            4,114.4 Other assets                                     126.2             70.7 Total Assets                                $     10,465.1        $  10,420.4                                                                    Liabilities and Shareholder's Equity Current liabilities, excluding debt         $     442.9           $  474.9 Current portion of long-term debt                 34.3               35.6 Long-term debt, net of current portion            6,005.3            5,792.2 Deferred income taxes, long-term                  1,158.3            1,257.8 Other long-term liabilities                       204.2              177.8 Shareholder's equity                             2,620.1           2,682.1 Total Liabilities and Shareholder's         $     10,465.1        $  10,420.4 Equity                                                                    Net Debt (a)*                               $     5,872.1         $  5,335.4                                                                        (a) Net debt is the sum of total debt less cash and cash equivalents, as defined by the credit agreement.  * See Non-GAAP Financial Measures Disclosure   Biomet, Inc. Other Financial Information Reconciliation of Senior Secured Leverage Ratio and Total Leverage Ratio* (in millions, except ratios, unaudited)                                                                                                 November 30, 2012           May 31, 2008 Senior Secured Debt:                                                                         USD Term Loan               $   2,223.3                 $  2,328.3 EUR Term Loan                   1,078.0                    1,355.2 Asset Based Revolver            70.0                       - Cash Flow Revolvers            -                        -        Consolidated Senior             3,371.3         A          3,683.5     E Secured Debt                                                                         Senior Notes                    2,665.4                    2,570.7 European Facilities            2.9                      46.6     Consolidated Total Debt         6,039.6                    6,300.8 Cash and Cash                  (167.5    )     B         (127.6  )   F Equivalents* ** Net Debt*                   $   5,872.1        C       $  6,173.2    G                                                                         LTM Adjusted EBITDA                                                                         Quarter 3 Fiscal 2012           260.5 Adjusted EBITDA Quarter 4 Fiscal 2012           277.7 Adjusted EBITDA Quarter 1 Fiscal 2013           237.8 Adjusted EBITDA Quarter 2 Fiscal 2013           288.2 Adjusted EBITDA "Run Rate" Cost Savings**      -                                                                                  Quarter 2 2013 LTM          $   1,064.2        D Adjusted EBITDA*                                                                         Fiscal 2008 LTM Adjusted                                   829.1 EBITDA "Run Rate" Cost Savings**                                 57.0                                                                             Fiscal 2008 LTM Adjusted                                $  886.1      H EBITDA*                                                                         Senior Secured Leverage         3.01            A+B / D    4.01        E+F / H Ratio* Total Leverage Ratio*           5.52            C / D      6.97        G / H                                                                          * See Non-GAAP Financial Measures Disclosure  ** As defined by the Amended and Restated Credit Agreement dated August 2, 2012   Biomet, Inc. Other Financial Information Reconciliation of Operating Income (Loss) or Net Loss, as reported to EBITDA, as adjusted* (in millions, unaudited)                                                                                                  Three Months Ended   Three Months Ended                                        May 31, 2012         February 29, 2012 Operating Income (Loss), as reported   $   (378.0     )     $       108.1 Depreciation                               44.2                     43.9 Amortization                               77.2                     82.6 Special items adjustments Stock-based compensation expense           3.8                      3.5 Litigation settlements and reserves        (12.7      )             12.8 and other legal fees Trauma Acquisition costs                   4.6                      - Operational restructuring and consulting expenses related to operational initiatives (severance,        6.0                      6.9 building impairments, abnormal manufacturing variances and other related costs) Sponsor fee                                2.8                      2.7 Goodwill and intangible assets            529.8                  - impairment charge EBITDA, as adjusted*                   $   277.7           $       260.5                                                                                                                                                                  Year Ended                                        May 31, 2008 Net loss, as reported                  $   (1,018.8   ) Depreciation                               140.8 Amortization                               329.8 Interest expense                           516.6 Other (income) expense                     9.1 Income tax benefit                         (257.4     ) Additional cost of sales for               160.2 inventory write up to fair value In-process research and development        479.0 Financing fees related to merger           171.6 Share-based payment                        25.8 In-the-money stock option settlement       112.8 Distributor agreements                     41.7 Department of Justice                      26.9 Investment banker fee                      29.6 Consulting expenses related to operational improvement initiatives,       49.6 severance for former executives, sponsor fees and other related costs Additional legal/merger related fees      11.8        EBITDA, as adjusted*                   $   829.1                                                                     * See Non-GAAP Financial Measures Disclosure  Biomet, Inc. Consolidated Statement of Cash Flows (in millions, unaudited)                                                                                                                                                    Fiscal 2013                                             (Preliminary)     (Preliminary)                          Three Months       Three Months      Six Months Ended                          Ended              Ended                          August 31, 2012    November 30,      November 30,                                             2012              2012 CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net loss                 $   (31.5     )    $  (66.2     )    $   (97.7     ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and             120.6             121.5              242.1 amortization Amortization and write off of deferred              7.0               13.0               20.0 financing costs Stock-based                  19.1              7.4                26.5 compensation expense Loss on extinguishment       38.0              117.2              155.2 of debt Provision for doubtful       1.3               (0.4      )        0.9 accounts receivable Deferred income taxes        (68.9     )       (36.6     )        (105.5    ) Other                        (1.3      )       (2.4      )        (3.7      ) Changes in operating assets and liabilities, net of acquired assets: Accounts receivable          5.8               (62.8     )        (57.0     ) Inventories                  (21.2     )       (13.4     )        (34.6     ) Prepaid expenses             (4.2      )       0.6                (3.6      ) Accounts payable             (8.1      )       (5.7      )        (13.8     ) Income taxes                 (4.2      )       (2.9      )        (7.1      ) Accrued interest             51.9              (53.2     )        (1.3      ) Accrued expenses and        (18.8     )      27.0             8.2        other Net cash provided by         85.5              43.1               128.6 operating activities                                                                CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Purchases of                 -                 (6.4      )        (6.4      ) investments Capital expenditures         (53.1     )       (53.8     )        (106.9    ) Acquisitions, net of cash acquired - Trauma       (280.0    )       -                  (280.0    ) Acquisition Other acquisitions,         (5.9      )      (10.1     )       (16.0     ) net of cash acquired Net cash used in             (339.0    )       (70.3     )        (409.3    ) investing activities                                                                CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Debt: Payments under               (0.4      )       (0.3      )        (0.7      ) European facilities Payments under senior secured credit               (8.5      )       (8.2      )        (16.7     ) facilities Proceeds under asset         -                 80.0               80.0 based revolver Payments under asset         -                 (10.0     )        (10.0     ) based revolver Proceeds from Senior         1,000.0           1,666.2            2,666.2 notes Tender/retirement of         (581.7    )       (2,120.5  )        (2,702.2  ) Senior notes due 2017 Payment of fees related to refinancing       (30.1     )       (37.7     )        (67.8     ) activities Equity: Repurchase of LVB Acquisition, Inc.           -               (0.1      )       (0.1      ) shares Net cash provided by         379.3             (430.6    )        (51.3     ) financing activities Effect of exchange          1.0             6.1              7.1        rate changes on cash Increase in cash and         126.8             (451.7    )        (324.9    ) cash equivalents Cash and cash equivalents, beginning      492.4           619.2            492.4      of period Cash and cash equivalents, end of      $   619.2         $  167.5         $   167.5      period Supplemental disclosures of cash flow information: Cash paid during the period for: Interest                 $   62.5         $  155.5         $   218.0      Income taxes             $   22.0         $  13.8          $   35.8                                                                       Biomet, Inc. Consolidated Statement of Cash Flows (in millions, unaudited)                                                                                                                                                                       Fiscal 2012                                                                                                        Three Months   Three Months   Six Months                                     Ended          Ended          Ended                                     August 31,     November 30,   November 30,                                     2011^(1)       2011^(1)       2011^(1) CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net loss                            $  (39.2  )    $  (14.0  )    $  (53.2  ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization          129.8          131.7          261.5 Amortization of deferred               2.8            2.7            5.5 financing costs Stock-based compensation expense       4.7            4.0            8.7 Recovery of doubtful accounts          (2.5   )       -              (2.5   ) receivable Loss on impairment of investments      9.2            7.3            16.5 Property, plant and equipment          -              0.4            0.4 impairment charge Deferred income taxes                  (67.0  )       (20.6  )       (87.6  ) Other                                  (0.6   )       2.4            1.8 Changes in operating assets and liabilities: Accounts receivable                    21.3           (59.2  )       (37.9  ) Inventories                            (2.7   )       7.9            5.2 Prepaid expenses                       2.7            (0.7   )       2.0 Accounts payable                       (1.5   )       7.7            6.2 Income taxes                           22.4           (4.6   )       17.8 Accrued interest                       67.8           (73.2  )       (5.4   ) Accrued expenses and other            (24.1  )      18.9         (5.2   ) Net cash provided by operating         123.1          10.7           133.8 activities                                                                    CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Proceeds from sales/maturities of      33.7           -              33.7 investments Purchases of investments               (0.2   )       -              (0.2   ) Proceeds from sale of property         0.1            13.0           13.1 and equipment Capital expenditures                   (39.2  )       (42.0  )       (81.2  ) Acquisitions, net of cash             (3.9   )      (10.5  )      (14.4  ) acquired Net cash used in investing             (9.5   )       (39.5  )       (49.0  ) activities                                                                    CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Debt: Payments under European                (0.5   )       (0.3   )       (0.8   ) facilities Payments under senior secured          (8.9   )       (9.1   )       (18.0  ) credit facilities Equity: Repurchase of LVB Acquisition,        (0.3   )      (0.8   )      (1.1   ) Inc. shares Net cash used in financing             (9.7   )       (10.2  )       (19.9  ) activities Effect of exchange rate changes       (0.5   )      (8.3   )      (8.8   ) on cash Increase in cash and cash              103.4          (47.3  )       56.1 equivalents Cash and cash equivalents,            327.8        431.2        327.8   beginning of period Cash and cash equivalents, end of   $  431.2      $  383.9      $  383.9   period Supplemental disclosures of cash flow information: Cash paid during the period for: Interest                            $  55.0       $  191.7      $  246.7   Income taxes                        $  20.7       $  16.1       $  36.8                                                                                  (1) Certain amounts have been adjusted to conform to the current presentation.  Biomet, Inc. Other Financial Information GAAP Operating Cash Flow Reconciled to Free Cash Flow* & Unlevered Free Cash Flow* (in millions, unaudited)                                                                                                                                                  Fiscal 2013                                          (Preliminary)        (Preliminary)                        Three Months      Three Months Ended   Six Months Ended                        Ended                        August 31, 2012   November 30, 2012    November 30,                                                               2012 Net loss               $   (31.5   )     $     (66.2    )     $    (97.7    ) Adjustments: Depreciation and           120.6               121.5               242.1 amortization Amortization and write off of               7.0                 13.0                20.0 deferred financing costs Stock-based                19.1                7.4                 26.5 compensation expense Loss on extinguishment of          38.0                117.2               155.2 debt Provision for doubtful accounts          1.3                 (0.4     )          0.9 receivable Deferred income            (68.9   )           (36.6    )          (105.5   ) taxes Other                     (1.3    )          (2.4     )         (3.7     ) TOTAL                      84.3                153.5               237.8 Changes In: Accounts receivable        5.8                 (62.8    )          (57.0    ) Inventories                (21.2   )           (13.4    )          (34.6    ) Prepaid expenses           (4.2    )           0.6                 (3.6     ) Accounts payable           (8.1    )           (5.7     )          (13.8    ) Income taxes               (4.2    )           (2.9     )          (7.1     ) Accrued interest           51.9                (53.2    )          (1.3     ) Accrued expenses and      (18.8   )          27.0              8.2       other Net cash provided by   $   85.5          $     43.1           $    128.6 operating activities Capital expenditures      (53.1   )          (53.8    )         (106.9   ) Free Cash Flow*        $   32.4          $     (10.7    )     $    21.7 Add back: cash paid       62.5              155.5             218.0     for interest Unlevered Free Cash    $   94.9         $     144.8         $    239.7     Flow* (1)                                                                               (1) Defined as Free Cash Flow plus cash paid for interest. Commonly used by companies that are highly leveraged to show how assets perform before interest payments.  * See Non-GAAP Financial Measures Disclosure   Biomet, Inc. Other Financial Information GAAP Operating Cash Flow Reconciled to Free Cash Flow* & Unlevered Free Cash Flow* (in millions, unaudited)                                                                                                                                                              Fiscal 2012                                                                                               Three Months Ended      Three Months   Six Months                                                    Ended          Ended                            August 31, 2011^(2)     November 30,   November 30,                                                    2011^(2)       2011^(2) Net loss                   $      (39.2     )      $  (14.0  )    $  (53.2  ) Adjustments: Depreciation and                  129.8               131.7          261.5 amortization Amortization of deferred financing                2.8                 2.7            5.5 costs Stock-based                       4.7                 4.0            8.7 compensation expense Recovery of doubtful              (2.5      )         -              (2.5   ) accounts receivable Loss on impairment of             9.2                 7.3            16.5 investments Property, plant and equipment impairment              -                   0.4            0.4 charge Deferred income taxes             (67.0     )         (20.6  )       (87.6  ) Other                            (0.6      )        2.4          1.8     TOTAL                             37.2                113.9          151.1 Changes In: Accounts receivable               21.3                (59.2  )       (37.9  ) Inventories                       (2.7      )         7.9            5.2 Prepaid expenses                  2.7                 (0.7   )       2.0 Accounts payable                  (1.5      )         7.7            6.2 Income taxes                      22.4                (4.6   )       17.8 Accrued interest                  67.8                (73.2  )       (5.4   ) Accrued expenses and             (24.1     )        18.9         (5.2   ) other Net cash provided by       $      123.1            $  10.7        $  133.8 operating activities Capital expenditures             (39.2     )        (42.0  )      (81.2  ) Free Cash Flow*            $      83.9             $  (31.3  )    $  52.6 Add back: cash paid for          55.0              191.7        246.7   interest Unlevered Free Cash        $      138.9           $  160.4      $  299.3   Flow* (1)                                                                               (1) Defined as Free Cash Flow plus cash paid for interest. Commonly used by companies that are highly leveraged to show how assets perform before interest payments.  (2) Certain amounts have been adjusted to conform to the current presentation.                                          * See Non-GAAP Financial Measures Disclosure   Contact:  Biomet, Inc. Daniel P. Florin, Senior Vice President and Chief Financial Officer, 574-372-1687 or Barbara Goslee, Director, Investor Relations, 574-372-1514  
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