Biomet Announces Third Quarter of Fiscal Year 2013 Financial Results

  Biomet Announces Third Quarter of Fiscal Year 2013 Financial Results

Business Wire

WARSAW, Ind. -- April 09, 2013

Biomet, Inc. announced today financial results for its third fiscal quarter
ended February28, 2013.

  *Net sales increased 9% (9% constant currency) worldwide to approximately
    $772 million
  *Net sales, excluding the Trauma Acquisition, were flat (increased 1%
    constant currency) worldwide
  *S.E.T. sales increased 71% (73% constant currency) worldwide to $161
    million and increased 62% in the U.S.
  *Excluding the Trauma Acquisition, S.E.T. sales increased 8% (9% constant
    currency) worldwide and grew 11% in the U.S.
  *Extremity sales grew 18% (19% constant currency) worldwide, with 26% U.S.
    growth

                       Third Quarter Financial Results

Net sales during the third quarter of fiscal year 2013 increased 9% to $771.5
million, compared to net sales of $708.9 million during the third quarter of
fiscal year 2012. Excluding the effect of foreign currency, net sales
increased 9% during the third quarter. U.S. net sales increased 9% to $472.9
million during the third quarter, while Europe net sales increased 5% (4%
constant currency) to $184.7 million and International (primarily Canada,
South America, Mexico and the Pacific Rim) net sales increased 15% (20%
constant currency) to $113.9 million. There were two fewer selling days during
the quarter compared to the prior year quarter.

Special items (pre-tax) totaled $462.7 million during the third quarter,
including a $334.1 million non-cash goodwill and intangible asset impairment
charge related to our dental reconstructive reporting unit due to evidence of
continued declining industry market growth rates in certain European and Asia
Pacific markets and corresponding unfavorable margin trends, $70.5 million of
non-cash amortization expense related to the 2007 Merger, $23.0 million of
legal expenses and $5.8 million of stock compensation expense. The remaining
$29.3 million of special items were primarily associated with the Trauma
Acquisition and the Company’s ongoing operational improvement program.

Reported operating loss during the third quarter of fiscal year 2013 was
$237.4 million, compared to operating income of $108.1 million during the
third quarter of fiscal year 2012. Excluding special items, adjusted operating
income totaled $225.0 million during the third quarter of fiscal year 2013,
compared to $216.1 million for the third quarter of fiscal year 2012.

Reported net loss during the third quarter of fiscal year 2013 was $304.5
million, compared to a net loss of $16.5 million during the third quarter of
fiscal year 2012. Excluding special items, adjusted net income totaled $80.4
million during the third quarter of fiscal year 2013, compared to $55.1
million for the third quarter of fiscal year 2012.

Excluding special items, adjusted earnings before interest, taxes,
depreciation and amortization (“EBITDA”) was $275.4 million, or 35.7% of net
sales, during the third quarter of fiscal year 2013, compared to $260.5
million, or 36.7% of net sales, for the third quarter of fiscal year 2012.

Interest expense decreased to $88.8 million during the third quarter of fiscal
year 2013, compared to $117.2 million during the third 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.

Reported cash flow from operations was $145.2 million during the third quarter
of fiscal year 2013, compared to reported cash flow from operations of $157.5
million for the third quarter of fiscal year 2012. Free cash flow (operating
cash flow minus capital expenditures) was $102.4 million, which reflected
$97.5 million of cash interest paid in the quarter, compared to free cash flow
of $116.0 million during the third quarter of fiscal year 2012, which
reflected $47.3 million of cash interest paid.

At February 28, 2013, reported gross debt was $5,978.4 million, and cash and
cash equivalents, as defined in the Company’s Amended and Restated Credit
Agreement dated August2, 2012, totaled $217.4 million, resulting in net debt
of $5,761.0 million, compared to $5,335.4 million at May31, 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 February 28, 2013 was 2.87 times
the last twelve months (“LTM”) adjusted EBITDA, as defined by our credit
agreement, compared to 4.01 times at May31, 2008, the first fiscal year-end
following the Merger. The total (net debt) leverage ratio was 5.34 times LTM
adjusted EBITDA at February 28, 2013, compared to 6.97 times at May31, 2008.

Biomet's President and Chief Executive Officer Jeffrey R. Binder commented,
“We performed very well during our fiscal third quarter, with 9% net sales
growth on both a reported and a constant currency basis, and 6% Adjusted
EBITDA growth. Despite two fewer selling days in our fiscal third quarter
compared to our prior year quarter, our Large Joint Reconstructive sales
increased 1% on a constant currency basis, while our Sports, Extremities and
Trauma (S.E.T.) sales, excluding our trauma acquisition, grew at a constant
currency rate of 9%.”

The following table provides third quarter net sales performance by product
category:

                           
                             Third Quarter Net Sales Performance
                             (in millions, except percentages, unaudited)
                             Worldwide        Worldwide   Worldwide   United

                             Reported        Reported   CC         States

                             Quarter 3 - FY   Growth %    Growth %*   Growth %
                             2013
Large Joint Reconstructive   $   423.9        —     %     1     %     1    %
Knees                                         —     %     1     %     1    %
Hips                                          —     %     1     %     1    %
Bone Cement and Other                         —     %     (1    )%    2    %
Sports, Extremities,         161.4            71    %     73    %     62   %
Trauma (S.E.T.)
Sports Medicine                               3     %     3     %     (5   )%
Extremities                                   18    %     19    %     26   %
Trauma                                        291   %     296   %     291  %
Spine & Bone Healing         72.1             (4    )%    (4    )%    (6   )%
Spine                                         (1    )%    (1    )%    (3   )%
Bone Healing                                  (13   )%    (13   )%    (13  )%
Dental                       64.4             (2    )%    (1    )%    7    %
Other                        49.7            (3    )%    (4    )%    (1   )%
Net Sales                    $   771.5       9     %     9     %     9    %
Sports, Extremities,
Trauma (S.E.T.) excluding                     8     %     9     %     11   %
Trauma Acquisition*
Trauma excluding Trauma                       (1    )%    —     %     8    %
Acquisition*
Net Sales excluding Trauma                    —     %     1     %     2    %
Acquisition*
                                                                           

* See Non-GAAP Financial Measures Disclosure

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;
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.

Contacts

For further information contact Daniel P. Florin, Senior Vice President and
Chief Financial Officer, at (574)372-1687 or Barbara Goslee, Director,
Investor Relations at (574)372-1514.

Financial Schedule Presentation

The Company’s unaudited condensed consolidated financial statements as of and
for the three and nine months ended February 28, 2013 and February 29, 2012
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; 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 the Trauma Acquisition, 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, loss on extinguishment of debt, 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 December7, 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 February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                            Three Months   Three Months              Constant
                            Ended          Ended          Reported   Currency*
                            February 28,   February 29,   Growth %   Growth %
                            2013           2012
Large Joint                 $  423.9       $  422.7       —    %     1    %
Reconstructive
Sports, Extremities,        161.4          94.3           71   %     73   %
Trauma (S.E.T.)
Spine & Bone Healing        72.1           74.9           (4   )%    (4   )%
Dental                      64.4           65.6           (2   )%    (1   )%
Other                       49.7          51.4          (3   )%    (4   )%
Net Sales                   $  771.5      $  708.9      9    %     9    %
Sports, Extremities,
Trauma (S.E.T.) excluding   102.0          94.3           8    %     9    %
Trauma Acquisition*
Net Sales, excluding        712.1          708.9          —    %     1    %
Trauma Acquisition*
                                                                          

                                                       
                            Three Months                   Three Months Ended
                            Ended
                                                Currency   February 28, 2013
                            February 28, 2013
                                                Impact*    Net Sales Growth in
                            Net Sales Growth
                                                           Local Currencies*
                            As Reported
Large Joint                 —         %         1    %     1          %
Reconstructive
Knees                       —         %         1    %     1          %
Hips                        —         %         1    %     1          %
Bone Cement and Other       —         %         (1   )%    (1         )%
Sports, Extremities,        71        %         2    %     73         %
Trauma (S.E.T.)
Sports Medicine             3         %         —    %     3          %
Extremities                 18        %         1    %     19         %
Trauma                      291       %         5    %     296        %
Spine & Bone Healing        (4        )%        —    %     (4         )%
Spine                       (1        )%        —    %     (1         )%
Bone Healing                (13       )%        —    %     (13        )%
Dental                      (2        )%        1    %     (1         )%
Other                       (3        )%        (1   )%    (4         )%
Net Sales                   9         %         —    %     9          %
Sports, Extremities,
Trauma (S.E.T.) excluding   8         %         1    %     9          %
Trauma Acquisition*
Trauma excluding Trauma     (1        )%        1    %     —          %
Acquisition*
Net Sales excluding         —         %         1    %     1          %
Trauma Acquisition*
                                                                      

* See Non-GAAP Financial Measures Disclosure

                                                                
Biomet, Inc.
Product Net Sales
Nine Month Period Ended February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                        Nine Months      Nine Months      Reported   Currency*
                        Ended            Ended
                        February 28,     February 29,     Growth %   Growth %
                        2013             2012
Large Joint             $  1,261.1       $  1,259.2       —    %     2    %
Reconstructive
Sports, Extremities,    440.9            263.4            67   %     70   %
Trauma (S.E.T.)
Spine & Bone Healing    224.3            224.9            —    %     —    %
Dental                  188.5            198.5            (5   )%    (3   )%
Other                   154.2           152.6           1    %     3    %
Net Sales               $  2,269.0      $  2,098.6      8    %     10   %
Sports, Extremities,
Trauma (S.E.T.)         290.0            263.4            10   %     11   %
excluding Trauma
Acquisition*
Net Sales, excluding    2,118.1          2,098.6          1    %     3    %
Trauma Acquisition*
                                                                          

                                                       
                            Nine Months Ended              Nine Months Ended

                            February 28, 2013   Currency   February 28, 2013

                            Net Sales Growth    Impact*    Net Sales Growth in

                            As Reported                    Local Currencies*
Large Joint                 —         %         2    %     2          %
Reconstructive
Knees                       —         %         2    %     2          %
Hips                        —         %         2    %     2          %
Bone Cement and Other       —         %         2    %     2          %
Sports, Extremities,        67        %         3    %     70         %
Trauma (S.E.T.)
Sports Medicine             8         %         2    %     10         %
Extremities                 18        %         1    %     19         %
Trauma                      250       %         6    %     256        %
Spine & Bone Healing        —         %         —    %     —          %
Spine                       4         %         1    %     5          %
Bone Healing                (12       )%        —    %     (12        )%
Dental                      (5        )%        2    %     (3         )%
Other                       1         %         2    %     3          %
Net Sales                   8         %         2    %     10         %
Sports, Extremities,
Trauma (S.E.T.) excluding   10        %         1    %     11         %
Trauma Acquisition*
Trauma excluding Trauma     (1        )%        1    %     —          %
Acquisition*
Net Sales excluding         1         %         2    %     3          %
Trauma Acquisition*
                                                                      

* See Non-GAAP Financial Measures Disclosure

                                                                
Biomet, Inc.
Geographic Net Sales
Three Month Period Ended February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                                        Three Months                 Constant
                    Three Months        Ended             Reported
                    Ended               February 29,                 Currency*
                    February 28, 2013   2012              Growth %
                                                                     Growth %
Geographic Sales:
United States       $    472.9          $   432.8         9    %     9     %
Europe              184.7               176.7             5    %     4     %
International       113.9              99.4             15   %     20    %
Net Sales           $    771.5         $   708.9        9    %     9     %
                                                                           

                                            
                Three Months Ended              Three Months Ended

                February 28, 2013    Currency   February 28, 2013

                Net Sales Growth     Impact*    Net Sales Growth

                As Reported                     Local Currencies*
United States   9         %          —    %     9         %
Europe          5         %          (1   )%    4         %
International   15        %          5    %     20        %
Total           9         %          —    %     9         %
                                                          

* See Non-GAAP Financial Measures Disclosure

                                                                
Biomet, Inc.
Geographic Net Sales excluding Trauma Acquisition*
Three Month Period Ended February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                            Three Months   Three Months              Constant
                            Ended          Ended          Reported
                            February 28,   February 29,              Currency*
                            2013           2012           Growth %
                                                                     Growth %
Geographic Sales
excluding Trauma
Acquisition*:
United States               $  439.9       $  432.8       2    %     2    %
Europe                      170.2          176.7          (4   )%    (5   )%
International               102.0         99.4          3    %     7    %
Net Sales                   $  712.1      $  708.9      —    %     1    %
                                                                          

                                            
                Three Months Ended              Three Months Ended

                February 28, 2013    Currency   February 28, 2013

                Net Sales Growth     Impact*    Net Sales Growth

                As Reported                     Local Currencies*
United States   2         %          —    %     2         %
Europe          (4        )%         (1   )%    (5        )%
International   3         %          4    %     7         %
Total           —         %          1    %     1         %
                                                          

* See Non-GAAP Financial Measures Disclosure

                                                                
Biomet, Inc.
Geographic Net Sales
Nine Month Period Ended February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                                        Nine Months                  Constant
                    Nine Months Ended   Ended             Reported
                    February 28, 2013   February 29,                 Currency*
                                        2012              Growth %
                                                                     Growth %
Geographic Sales:
United States       $   1,395.9         $  1,273.8        10   %     10    %
Europe              521.5               520.3             —    %     5     %
International       351.6              304.5            15   %     19    %
Net Sales           $   2,269.0        $  2,098.6       8    %     10    %
                                                                           

                                           
                Nine Months Ended              Nine Months Ended

                February 28, 2013   Currency   February 28, 2013

                Net Sales Growth    Impact*    Net Sales Growth

                As Reported                    Local Currencies*
United States   10        %         —    %     10        %
Europe          —         %         5    %     5         %
International   15        %         4    %     19        %
Total           8         %         2    %     10        %
                                                         

* See Non-GAAP Financial Measures Disclosure

                                                                
Biomet, Inc.
Geographic Net Sales excluding Trauma Acquisition*
Nine Month Period Ended February 28, 2013 and February 29, 2012
(in millions, except percentages, unaudited)
                                                                     
                                         Nine Months                 Constant
                     Nine Months Ended   Ended            Reported
                     February 28, 2013   February 29,                Currency*
                                         2012             Growth %
                                                                     Growth %
Geographic Sales
excluding Trauma
Acquisition*:
United States        $   1,309.5         $  1,273.8       3    %     3    %
Europe               485.2               520.3            (7   )%    (2   )%
International        323.4              304.5           6    %     9    %
Net Sales            $   2,118.1        $  2,098.6      1    %     3    %
                                                                          

                                           
                Nine Months Ended              Nine Months Ended

                February 28, 2013   Currency   February 28, 2013

                Net Sales Growth    Impact*    Net Sales Growth

                As Reported                    Local Currencies*
United States   3        %          —    %     3        %
Europe          (7       )%         5    %     (2       )%
International   6        %          3    %     9        %
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
                                       February 28, 2013    February 29, 2012
Net sales                              $    771.5           $    708.9
Cost of sales                          271.9               219.7         
Gross profit                           499.6                489.2
Gross profit percentage                64.8          %      69.0          %
Selling, general and administrative    293.8                268.4
expense
Research and development expense       35.0                 30.1
Amortization                           74.1                 82.6
Goodwill and intangible assets         334.1               —             
impairment charge
Operating income (loss)                (237.4        )      108.1
Percentage of Net Sales                (30.8         )%     15.2          %
Interest expense                       88.8                 117.2
Other (income) expense                 10.9                (2.8          )
Loss before income taxes               (337.1        )      (6.3          )
Provision (benefit) for income taxes   (32.6         )      10.2          
Tax rate                               9.7           %      (161.9        )%
Net loss                               $    (304.5   )      $    (16.5    )
Percentage of Net Sales                (39.5         )%     (2.3          )%
                                                                          

                                                          
Biomet, Inc.
As Reported Consolidated Statements of Operations
(in millions, except percentages, unaudited)
                                                             
                                        Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Net sales                                $   2,269.0         $   2,098.6
Cost of sales                            736.0              669.9         
Gross profit                             1,533.0             1,428.7
Gross profit percentage                  67.6          %     68.1          %
Selling, general and administrative      886.7               800.9
expense
Research and development expense         107.2               93.2
Amortization                             230.2               250.0
Goodwill and intangible assets           334.1              —             
impairment charge
Operating income (loss)                  (25.2         )     284.6
Percentage of Net Sales                  (1.1          )%    13.6          %
Interest expense                         310.8               363.4
Other (income) expense                   172.4              9.3           
Loss before income taxes                 (508.4        )     (88.1         )
Benefit from income taxes                (106.2        )     (18.4         )
Tax rate                                 20.9          %     20.9          %
Net loss                                 $   (402.2    )     $   (69.7     )
Percentage of Net Sales                  (17.7         )%    (3.3          )%
                                                                           

                                                         
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income (Loss), as reported to Operating Income, as
adjusted*
(in millions, unaudited)
                                                            
                                       Three Months Ended   Three Months Ended
                                       February 28, 2013    February 29, 2012
Operating income (loss), as reported   $    (237.4    )     $       108.1
Purchase accounting depreciation and   70.5                 82.1
amortization
Inventory step-up related to the       2.4                  —
Trauma Acquisition
Stock-based compensation expense       5.8                  3.5
Litigation settlements and reserves    23.0                 12.8
and other legal fees
Trauma Acquisition costs               1.1                  —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,    6.3                  6.9
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges        16.4                 —
Sponsor fee                            2.8                  2.7
Goodwill and intangible assets         334.1               —
impairment charge
Total items (pre-tax) excluded per     462.4               108.0
our credit agreement
Operating income, as adjusted*         $    225.0          $       216.1
                                                                    

* See Non-GAAP Financial Measures Disclosure

                                                          
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income (Loss), as reported to Operating Income, as
adjusted*
(in millions, unaudited)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Operating income (loss), as reported     $    (25.2    )     $      284.6
Purchase accounting depreciation and     218.3               252.7
amortization
Inventory step-up related to the         3.3                 —
Trauma Acquisition
Stock-based compensation expense         32.3                12.2
Litigation settlements and reserves      32.4                21.3
and other legal fees
Trauma Acquisition costs                 10.3                —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,      18.5                39.8
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges          24.5                —
Sponsor fee                              8.2                 7.5
Goodwill and intangible assets           334.1              —
impairment charge
Total items (pre-tax) excluded per our   681.9              333.5
credit agreement
Operating income, as adjusted*           $    656.7         $      618.1
                                                                    

* See Non-GAAP Financial Measures Disclosure

                                                         
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income (Loss), as reported to EBITDA, as adjusted*
(in millions, except percentages, unaudited)
                                                            
                                       Three Months Ended   Three Months Ended
                                       February 28, 2013    February 29, 2012
Operating income (loss), as reported   $    (237.4    )     $    108.1
Depreciation and amortization          122.7                126.5
Inventory step-up related to the       2.4                  —
Trauma Acquisition
Stock-based compensation expense       5.8                  3.5
Litigation settlements and reserves    23.0                 12.8
and other legal fees
Trauma Acquisition costs               1.1                  —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,    6.3                  6.9
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges        14.6                 —
Sponsor fee                            2.8                  2.7
Goodwill and intangible assets         334.1               —             
impairment charge
EBITDA, as adjusted*                   $    275.4          $    260.5    
Net sales                              $    771.5           $    708.9
EBITDA percentage, as adjusted*        35.7           %     36.7          %
                                                                          

* See Non-GAAP Financial Measures Disclosure

                                                          
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income (Loss), as reported to EBITDA, as adjusted*
(in millions, except percentages, unaudited)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Operating income (loss), as reported     $   (25.2     )     $   284.6
Depreciation and amortization            364.8               388.0
Inventory step-up related to the         3.3                 —
Trauma Acquisition
Stock-based compensation expense         32.3                12.2
Litigation settlements and reserves      32.4                21.3
and other legal fees
Trauma Acquisition costs                 10.3                —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,      18.5                39.8
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges          22.7                —
Sponsor fee                              8.2                 7.5
Goodwill and intangible assets           334.1              —             
impairment charge
EBITDA, as adjusted*                     $   801.4          $   753.4     
Net sales                                $   2,269.0         $   2,098.6
EBITDA percentage, as adjusted*          35.3          %     35.9          %
                                                                           

* 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
                                       February 28, 2013    February 29, 2012
Net loss, as reported                  $    (304.5    )     $    (16.5    )
Purchase accounting depreciation and   70.5                 82.1
amortization
Inventory step-up related to the       2.4                  —
Trauma Acquisition
Stock-based compensation expense       5.8                  3.5
Litigation settlements and reserves    23.0                 12.8
and other legal fees
Trauma Acquisition costs               1.1                  —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,    3.2                  6.9
building impairments, abnormal
manufacturing variances and other
related costs)
Loss on extinguishment of debt         3.4                  —
Product rationalization charges        16.4                 —
Sponsor fee                            2.8                  2.7
Goodwill and intangible assets         334.1                —
impairment charge
Tax effect on special and purchase     (77.8          )     (36.4         )
accounting items**
Net income, as adjusted*               $    80.4           $    55.1     
                                                                          

* 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)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Net loss, as reported                    $    (402.2   )     $    (69.7    )
Purchase accounting depreciation and     218.3               252.7
amortization
Inventory step-up related to the         3.3                 —
Trauma Acquisition
Stock-based compensation expense         32.3                12.2
Litigation settlements and reserves      32.4                21.3
and other legal fees
Trauma Acquisition costs                 10.3                —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,      15.4                39.8
building impairments, abnormal
manufacturing variances and other
related costs)
Loss on extinguishment of debt           171.1               —
Product rationalization charges          24.5                —
Sponsor fee                              8.2                 7.5
Goodwill and intangible assets           334.1               —
impairment charge
Tax effect on special and purchase       (212.7        )     (117.1        )
accounting items**
Net income, as adjusted*                 $    235.0         $    146.7    
                                                                           

* 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
                                       February 28, 2013    February 29, 2012
Gross profit, as reported              $    499.6           $    489.2
Purchase accounting depreciation       —                    1.6
Inventory step-up related to the       2.4                  —
Trauma Acquisition
Stock-based compensation expense       0.3                  0.2
Litigation settlements and reserves    18.2                 2.1
and other legal fees
Trauma Acquisition costs               0.2                  —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,    5.0                  6.3
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges        16.4                —             
Gross profit, as adjusted*             $    542.1          $    499.4    
Net sales                              $    771.5           $    708.9
Gross profit percentage, as reported   64.8          %      69.0          %
Gross profit percentage, as            70.3          %      70.4          %
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)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Gross profit, as reported                $   1,533.0         $   1,428.7
Purchase accounting depreciation         (1.1          )     10.7
Inventory step-up related to the         3.3                 —
Trauma Acquisition
Stock-based compensation expense         2.0                 0.7
Litigation settlements and reserves      23.1                2.0
and other legal fees
Trauma acquisition costs                 1.8                 —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,      11.9                28.8
building impairments, abnormal
manufacturing variances and other
related costs)
Product rationalization charges          24.5               —             
Gross profit, as adjusted*               $   1,598.5        $   1,470.9   
Net sales                                $   2,269.0         $   2,098.6
Gross profit percentage, as reported     67.6          %     68.1          %
Gross profit percentage, as adjusted*    70.4          %     70.1          %
                                                                           

* 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
                                       February 28, 2013    February 29, 2012
Selling, general and administrative    $    293.8           $    268.4
expense, as reported
Stock-based compensation expense       (4.6          )      (2.8          )
Litigation settlements and reserves    (4.8          )      (10.7         )
and other legal fees
Trauma Acquisition costs               (0.9          )      —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,    (1.3          )      (0.6          )
building impairments, and other
related costs)
Sponsor fee                            (2.8          )      (2.7          )
Selling, general and administrative    $    279.4          $    251.6    
expense, as adjusted*
Net sales                              $    771.5           $    708.9
SG&A as a percentage of net sales,     38.1          %      37.9          %
as reported
SG&A as a percentage of net sales,     36.2          %      35.5          %
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)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Selling, general and administrative      $   886.7           $   800.9
expense, as reported
Stock-based compensation expense         (25.3         )     (10.1         )
Litigation settlements and reserves      (9.3          )     (19.3         )
and other legal fees
Trauma acquisition costs                 (8.5          )     —
Operational restructuring and
consulting expenses related to
operational initiatives (severance,      (6.4          )     (10.8         )
building impairments, and other
related costs)
Sponsor fee                              (8.2          )     (7.5          )
Selling, general and administrative      $   829.0          $   753.2     
expense, as adjusted*
Net sales                                $   2,269.0         $   2,098.6
SG&A as a percentage of net sales, as    39.1          %     38.2          %
reported
SG&A as a percentage of net sales, as    36.5          %     35.9          %
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
                                February 28, 2013         February 29, 2012
Research and development        $     35.0                $     30.1
expense, as reported
Stock-based compensation        (0.9            )        (0.5            )
expense
Research and development        $     34.1               $     29.6      
expense, as adjusted*
Net sales                       $     771.5               $     708.9
R&D as a percentage of net      4.5             %         4.2             %
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)
                                                             
                                         Nine Months Ended   Nine Months Ended
                                         February 28, 2013   February 29, 2012
Research and development expense, as     $   107.2           $   93.2
reported
Stock-based compensation expense         (5.0          )     (1.4          )
Operational restructuring and
consulting expenses related to           (0.2          )     (0.2          )
operational initiatives (severance,
and other related costs)
Research and development expense, as     $   102.0          $   91.6      
adjusted*
Net sales                                $   2,269.0         $   2,098.6
R&D as a percentage of net sales, as     4.7           %     4.4           %
reported
R&D as a percentage of net sales, as     4.5           %     4.4           %
adjusted*
                                                                           

* See Non-GAAP Financial Measures Disclosure

                                                              
Biomet, Inc.
Condensed Consolidated Balance Sheets
(in millions, unaudited)
                                                                 
                                             (Preliminary)
                                                                 May 31, 2012
                                             February 28, 2013
Assets
Cash and cash equivalents                    $   217.4           $  492.4
Accounts receivable, net                     545.9               491.6
Short-term investments                       —                   2.5
Inventories                                  643.3               543.2
Current deferred income taxes                62.1                52.5
Prepaid expenses and other                   134.3               129.1
Property, plant and equipment, net           679.4               593.6
Intangible assets, net                       3,662.4             3,930.4
Goodwill                                     3,927.5             4,114.4
Other assets                                 129.4              70.7
Total Assets                                 $   10,001.7       $  10,420.4
Liabilities and Shareholder’s Equity
Current liabilities, excluding debt          $   450.5           $  474.9
Current portion of long-term debt            34.5                35.6
Long-term debt, net of current portion       5,943.9             5,792.2
Deferred income taxes, long-term             1,100.9             1,257.8
Other long-term liabilities                  205.9               177.8
Shareholder’s equity                         2,266.0            2,682.1
Total Liabilities and Shareholder’s Equity   $   10,001.7       $  10,420.4
Net Debt (a)*                                $   5,761.0         $  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)
                                                                       
                          February 28, 2013             May 31, 2008
Senior Secured Debt:
USD Term Loan             $   2,226.7                   $  2,328.3
EUR Term Loan             1,085.0                       1,355.2
Asset Based Revolver      —                             —
Cash Flow Revolvers       —                            —          
Consolidated Senior       3,311.7             A         3,683.5        E
Secured Debt
Senior Notes              2,664.1                       2,570.7
European Facilities       2.6                          46.6       
Consolidated Total Debt   5,978.4                       6,300.8
Cash and Cash             (217.4        )     B         (127.6     )   F
Equivalents* **
Net Debt*                 $   5,761.0        C         $  6,173.2    G
LTM 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
Quarter 3 Fiscal 2013     275.4
Adjusted EBITDA
“Run Rate” Cost           —             
Savings**
Quarter 3 2013 LTM        $   1,079.1        D
Adjusted EBITDA*
Fiscal 2008 LTM                                         829.1
Adjusted EBITDA
“Run Rate” Cost                                         57.0       
Savings**
Fiscal 2008 LTM                                         $  886.1      H
Adjusted EBITDA*
Senior Secured Leverage   2.87                A+B / D   4.01           E+F / H
Ratio*
Total Leverage Ratio*     5.34                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

                                                            May 31, 2012
Operating Income (Loss), as reported                        $    (378.0    )
Depreciation                                                44.2
Amortization                                                77.2
Stock-based compensation expense                            3.8
Litigation settlements and reserves and other legal fees    (12.7          )
Trauma Acquisition costs                                    4.6
Operational restructuring and consulting expenses related
to operational initiatives (severance, building             6.0
impairments, abnormal manufacturing variances and other
related costs)
Sponsor fee                                                 2.8
Goodwill and intangible assets impairment charge            529.8          
EBITDA, as adjusted*                                        $    277.7     
                                                                           

                                                                
                                                                  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 inventory write up to fair value     160.2
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, severance for former executives, sponsor fees and    49.6
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 and GAAP Operating Cash Flow Reconciled
to Free Cash Flow* & Unlevered Free Cash  Flow*
(in millions, unaudited)
                                        
                                        Fiscal 2013
                                        (Preliminary)        (Preliminary)

                                        Three Months Ended  Nine Months Ended

                                        February 28, 2013    February 28, 2013
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net loss                                $    (304.5    )     $    (402.2   )
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization           122.7                364.8
Amortization and write off of           7.3                  27.3
deferred financing costs
Stock-based compensation expense        5.8                  32.3
Loss on extinguishment of debt          —                    155.2
Provision for doubtful accounts         (1.3           )     (0.4          )
receivable
Realized gain on investments            (0.2           )     (0.2          )
Goodwill and intangible assets          334.1                334.1
impairment charge
Deferred income taxes                   (59.9          )     (165.4        )
Other                                   9.6                  5.9
Changes in operating assets and
liabilities, net of acquired assets:
Accounts receivable                     3.9                  (53.1         )
Inventories                             1.0                  (33.6         )
Prepaid expenses                        (4.3           )     (7.9          )
Accounts payable                        (14.2          )     (28.0         )
Income taxes                            12.6                 5.5
Accrued interest                        (11.3          )     (12.6         )
Accrued expenses and other              43.9                52.1          
Net cash provided by operating          145.2                273.8
activities
CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
Proceeds from sales/maturities of       5.5                  5.5
investments
Purchases of investments                —                    (6.4          )
Proceeds from sale of assets            14.0                 14.0
Capital expenditures                    (42.8          )     (149.7        )
Acquisitions, net of cash acquired -    —                    (280.0        )
Trauma Acquisition
Other acquisitions, net of cash         (1.2           )     (17.2         )
acquired
Net cash used in investing              (24.5          )     (433.8        )
activities
CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES:
Debt:
Payments under European facilities      (0.3           )     (1.0          )
Payments under senior secured credit    (8.5           )     (25.2         )
facilities
Proceeds under asset based revolver     —                    80.0
Payments under asset based revolver     (70.0          )     (80.0         )
Proceeds from senior and senior
subordinated notes due 2020 and term    730.0                3,396.2
loans
Tender/retirement of Senior notes       (720.8         )     (3,423.0      )
due 2017 and term loans
Payment of fees related to              (10.0          )     (77.8         )
refinancing activities
Equity:
Repurchase of LVB Acquisition, Inc.     —                   (0.1          )
shares
Net cash used in financing              (79.6          )     (130.9        )
activities
Effect of exchange rate changes on      8.8                 15.9          
cash
Increase (decrease) in cash and cash    49.9                 (275.0        )
equivalents
Cash and cash equivalents, beginning    167.5               492.4         
of period
Cash and cash equivalents, end of       $    217.4          $    217.4    
period
                                                             
Free Cash Flow*(1)                      $    102.4           $    124.1
Add back: cash paid for interest        97.5                315.5         
Unlevered Free Cash Flow* (2)           $    199.9          $    439.6    
                                                             
Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest                                $    97.5           $    315.5    
Income taxes                            $    13.2           $    49.0     
                                                                           

(1) Defined as cash flow from operations less capital expenditures

(2) 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.
Consolidated Statement of Cash Flows and GAAP Operating Cash Flow Reconciled
to Free Cash Flow* & Unlevered Free Cash Flow*
(in millions, unaudited)
                               
                               Fiscal 2012
                                 Three Months Ended      Nine Months Ended
                                                      
                                 February 29, 2012^(1)   February 29, 2012^(1)
CASH FLOWS PROVIDED BY (USED
IN) OPERATING ACTIVITIES:
Net loss                         $     (16.5     )       $     (69.7     )
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization    126.5                   388.0
Amortization and write off of    2.8                     8.3
deferred financing costs
Stock-based compensation         3.5                     12.2
expense
Recovery of doubtful accounts    (0.1            )       (2.6            )
receivable
Realized gain on investments     (1.9            )       (1.9            )
Loss on impairment of            2.8                     19.3
investments
Property, plant and equipment    —                       0.4
impairment charge
Deferred income taxes            (33.1           )       (120.7          )
Other                            (3.8            )       (2.0            )
Changes in operating assets
and liabilities, net of
acquired assets:
Accounts receivable              (0.5            )       (38.4           )
Inventories                      4.4                     9.6
Prepaid expenses                 (3.2            )       (1.2            )
Accounts payable                 (10.4           )       (4.2            )
Income taxes                     1.3                     19.1
Accrued interest                 67.1                    61.7
Accrued expenses and other       18.6                   13.4            
Net cash provided by operating   157.5                   291.3
activities
CASH FLOWS PROVIDED BY (USED
IN) INVESTING ACTIVITIES:
Proceeds from sales/maturities   8.3                     42.0
of investments
Purchases of investments         (0.1            )       (0.3            )
Proceeds from sale of property   0.6                     13.7
and equipment
Capital expenditures             (41.5           )       (122.7          )
Acquisitions, net of cash        —                      (14.4           )
acquired
Net cash used in investing       (32.7           )       (81.7           )
activities
CASH FLOWS PROVIDED BY (USED
IN) FINANCING ACTIVITIES:
Debt:
Payments under European          (0.3            )       (1.1            )
facilities
Payments under senior secured    (8.6            )       (26.6           )
credit facilities
Equity:
Repurchase of LVB Acquisition,   (0.1            )       (1.2            )
Inc. shares
Net cash used in financing       (9.0            )       (28.9           )
activities
Effect of exchange rate          (3.7            )       (12.5           )
changes on cash
Increase in cash and cash        112.1                   168.2
equivalents
Cash and cash equivalents,       383.9                  327.8           
beginning of period
Cash and cash equivalents, end   $     496.0            $     496.0     
of period
                                                         
Free Cash Flow*(2)               $     116.0             $     168.6
Add back: cash paid for          47.3                   294.0           
interest
Unlevered Free Cash Flow* (3)    $     163.3            $     462.6     
                                                         
Supplemental disclosures of
cash flow information:
Cash paid during the period
for:
Interest                         $     47.3             $     294.0     
Income taxes                     $     40.1             $     76.9      
                                                                         

(1)Certain amounts have been adjusted to conform to the current presentation.

(2) Defined as cash flow from operations less capital expenditures

(3) 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

Contact:

Biomet, Inc.
Daniel P. Florin, 574-372-1687
Senior Vice President and Chief Financial Officer
or
Barbara Goslee, 574-372-1514
Director, Investor Relations
 
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