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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
Section 27A of the Securities Act of 1933 and Section 21E 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 September 25, 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 May 24, 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 June 15, 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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