Biomet Announces Fourth Quarter and Fiscal Year 2013 Final Financial Results

  Biomet Announces Fourth Quarter and Fiscal Year 2013 Final Financial Results

Business Wire

WARSAW, Ind. -- August 29, 2013

Biomet, Inc. announced today final financial results for its fourth quarter
and fiscal year ended May 31, 2013. This release replaces the Company’s
earnings release dated July 11, 2013. The final results for the three and
twelve months ended May 31, 2013 include the finalization of the goodwill
impairment charge related to the Europe reporting unit and the correction of
certain income tax accounts, which did not impact net sales.

                       Fourth Quarter Financial Results

  *Consolidated net sales increased 6.0% (7.6% constant currency) worldwide
    to approximately $784 million
  *S.E.T. sales increased 62.1% (65.3% constant currency) worldwide to
    approximately $160 million
  *Excluding the Trauma Acquisition, S.E.T. sales increased 6.4% (8.1%
    constant currency) worldwide
  *Extremity sales grew 21.5% (22.3% constant currency) worldwide

Consolidated net sales in the quarter grew 6.0% to $783.9 million, compared to
net sales of $739.5 million during the fourth quarter of fiscal year 2012.
Excluding the effect of foreign currency, consolidated net sales increased
7.6% during the fourth quarter. U.S. net sales increased 6.1% during the
fourth quarter to $466.3 million, while Europe net sales increased 3.5% (4.9%
constant currency) to $188.7 million and International (primarily Canada,
South America, Mexico and the Pacific Rim) net sales grew at a rate of 9.6%
(17.2% constant currency) to $128.9 million. We recorded the same number of
selling days on a consolidated company basis during the fourth quarter of
fiscal year 2013 compared to the fourth quarter of fiscal year 2012.

Special items (pre-tax) totaled $375.4 million during the fourth quarter of
fiscal year 2013, compared to $607.2 million during the fourth quarter of
fiscal year 2012.

The Company recently completed its annual impairment testing for goodwill and
intangibles.Upon completion of this analysis, the Company concluded that
certain indicators were present that suggested impairment may exist for its
Europe reporting unit’s goodwill. The Company recorded a $240.0 million
goodwill asset impairment charge related to its Europe reporting unit,
primarily related to the impact of continued austerity measures on procedural
volumes and pricing in certain European countries.

Reported operating loss was $139.3 million during the fourth quarter of fiscal
year 2013, compared to an operating loss of $378.0 million during the fourth
quarter of fiscal year 2012. Excluding special items, adjusted operating
income totaled $223.4 million during the fourth quarter of fiscal year 2013,
compared to $229.2 million during the prior year period.

Reported net loss in the quarter was $221.2 million, compared to a net loss of
$389.1 million during the fourth quarter of the prior year. Excluding special
items, adjusted net income totaled $133.0 million during the fourth quarter of
fiscal year 2013, compared to $105.1 million for the fourth quarter of fiscal
year 2012.

Excluding special items, adjusted earnings before interest, taxes,
depreciation and amortization (“EBITDA”) during the fourth quarter of fiscal
year 2013 totaled $275.9 million, or 35.2% of net sales, compared to $277.7
million, or 37.6% of net sales, for the fourth quarter of fiscal year 2012.

Interest expense decreased to $88.0 million during the fourth quarter of
fiscal year 2013, compared to $116.4 million at the end of the fourth quarter
of 2012, 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 totaled $194.7 million during the fourth
quarter of fiscal year 2013, compared to reported cash flow from operations of
$86.0 million for the fourth quarter of fiscal year 2012. Free cash flow
(operating cash flow minus capital expenditures) was $140.4 million, which
reflected $73.1 million of cash interest paid in the quarter, compared to free
cash flow of $29.4 million, reflecting $183.1 million of cash interest paid
during the fourth quarter of fiscal year 2012.

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

                           Fourth Quarter Net Sales Performance
                            (in millions, except percentages, unaudited)
                            Worldwide        Worldwide   Worldwide    United
                            Reported        Reported   CC          States
                            Quarter 4 - FY   Growth %    Growth %*    Growth %
                            2013
Large Joint                 $   435.2        (1.0   )%   0.7     %    0.7   %
Reconstructive
Knees                                        (1.4   )%   0.1     %    0.1   %
Hips                                         (0.3   )%   1.8     %    2.2   %
Bone Cement and Other                        (1.2   )%   (0.7    )%   (2.9  )%
Sports, Extremities,        159.2            62.1   %    65.3    %    55.8  %
Trauma (S.E.T.)
Sports Medicine                              (0.2   )%   1.3     %    (4.4  )%
Extremities                                  21.5   %    22.3    %    28.2  %
Trauma                                       257.9  %    267.2   %    249.1 %
Spine & Bone Healing**      67.0             (18.2  )%   (17.8   )%   (18.8 )%
Spine                                        (8.6   )%   (8.1    )%   (7.5  )%
Bone Healing**                               (48.1  )%   (48.1   )%   (48.3 )%
Dental                      68.5             (1.0   )%   0.2     %    1.5   %
Other                       54.0            6.7    %    6.8    %    1.7   %
Net Sales                   $   783.9       6.0    %    7.6    %    6.1   %
                                                                      
Net Sales excluding
Trauma Acquisition and                       (0.3   )%   1.1     %    0.9   %
Bracing Divestiture* **
Sports, Extremities,
Trauma (S.E.T.) excluding                    6.4    %    8.1     %    10.1  %
Trauma Acquisition*
Trauma excluding Trauma                      (11.2  )%   (9.3  ) %    (8.5  )%
Acquisition*

*   See Non-GAAP Financial Measures Disclosure
**   The Bracing Divestiture closed on February 28, 2013
     

                         Full Year Financial Results

  *Consolidated net sales grew 7.6% (9.3% constant currency) worldwide to
    approximately $3.053 billion
  *S.E.T. sales increased 66.0% (68.4% constant currency) worldwide
  *Excluding the Trauma Acquisition, S.E.T. sales grew 9.1% (10.5% constant
    currency) worldwide
  *Extremity sales increased 18.9% (19.8% constant currency) worldwide

Consolidated net sales increased 7.6% during the twelve months ended May 31,
2013 to $3,052.9 million, compared to net sales of $2,838.1 million for the
year ended May 31, 2012. Excluding the effect of foreign currency,
consolidated net sales increased 9.3% during the year ended May 31, 2013. U.S.
net sales increased 8.7% to $1,862.2 million, while Europe net sales increased
1.1% (5.3% constant currency) to $710.2 million and International (primarily
Canada, South America, Mexico and the Pacific Rim) net sales increased 13.8%
(18.4% constant currency) to $480.5 million for the year.

Special items (pre-tax) totaled $1,225.3 million during fiscal year 2013,
including a $567.4 million non-cash goodwill and intangible asset impairment
charge related to our dental reconstructive and Europe reporting units,
compared to $940.7 million during fiscal year 2012.

Reported operating loss was $164.5 million during fiscal year 2013, compared
to an operating loss of $93.4 million during fiscal year 2012. Excluding
special items, adjusted operating income totaled $880.1 million during the
fiscal year ended May 31, 2013, compared to $847.3 million for the year ended
May 31, 2012.

Reported net loss during the year ended May 31, 2013 was $623.4 million,
compared to a net loss of $458.8 million during the year ended May 31, 2012.
Excluding special items, adjusted net income totaled $368.0 million during the
fiscal year ended May 31, 2013, compared to $251.8 million for the year ended
May 31, 2012.

Excluding special items, adjusted earnings before interest, taxes,
depreciation and amortization (“EBITDA”) totaled $1,077.3 million, or 35.3% of
net sales, during fiscal year 2013, compared to $1,031.1 million, or 36.3% of
net sales, for fiscal year 2012.

Interest expense decreased to $398.8 million during fiscal year 2013, compared
to $479.8 million during fiscal year 2012, 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 totaled $468.5 million during the year
ended May 31, 2013, compared to reported cash flow from operations of $377.3
million for the year ended May 31, 2012. Free cash flow (operating cash flow
minus capital expenditures) was $264.5 million, which reflected $388.6 million
of cash interest paid during fiscal year 2013, compared to free cash flow of
$198.0 million during fiscal year 2012, which reflected $477.1 million of cash
interest paid.

At May31, 2013, reported gross debt was $5,966.4 million, and cash and cash
equivalents, as defined in the Company’s Amended and Restated Credit Agreement
dated August2, 2012, totaled $355.6 million, resulting in net debt of
$5,610.8 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 May31, 2013 was 2.73 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 5.21 times LTM
adjusted EBITDA at May31, 2013, compared to 6.97 times at May31, 2008.

Biomet's President and CEO Jeffrey R. Binder stated, “Our consolidated net
sales for fiscal 2013 increased 8% on a reported basis and grew 9% at constant
currency, resulting in another record year of net sales.Our combined hip and
knee constant currency growth of 2% for the year was generally in line with
the market - not to our standard of clear above market growth, but we're
working on the product introductions that we believe will return us to that
standard.We believe that our large joint reconstructive business provides us
with a strong and stable base and we disagree strongly with those who believe
that there are few opportunities for innovation and differentiation. We're
working hard to prove the naysayers wrong.

“Fiscal 2013 was a very important year for our SET franchise, which had a
fabulous year. We began the phased closing of our trauma acquisition last June
and the team did a great job with the execution of the integration throughout
the year. Overall, S.E.T. sales reached $600 million for the full fiscal year,
representing 20% of our worldwide consolidated net sales. Even if we exclude
the trauma acquisition from our results, our full fiscal year S.E.T. sales
still grew at a rate of greater than 10% at constant currency, led by
continued strong double digit growth in our extremities product line. In fact,
we believe that Biomet will be the number one shoulder replacement company in
the United States in calendar 2013. We're encouraged by the momentum in our
S.E.T. and Microfixation businesses during fiscal year 2013 and we're excited
by the growth potential we see in our Spine, Dental and Biologics businesses.

“All in all, the team's strong performance enabled Biomet to pass the $3
billion sales mark this year and deliver $1,077 million of adjusted EBITDA
(35.3% of net sales). We're also very pleased with our strong adjusted net
income of $368 million this year, an increase of 46% compared to the prior
fiscal year, largely due to a reduction in interest expense. As we look out
into fiscal 2014 and beyond, we're proud of having reached the $3 billion
sales milestone and we're optimistic about the opportunities that lie ahead.”

Income Tax Account Correction

The foreign currency translation amount for the fiscal year ended May 31, 2013
reflects a correction totaling $43.6 million for the deferred tax impact of
cumulative foreign currency gains associated with the Company's
Euro-denominated term loans that have been designated as a net investment
hedge of the Company's European subsidiaries.The correction of these deferred
income tax liabilities is reflected as an increase in total comprehensive loss
for the year ended May 31, 2013. The Company believes this correction is
immaterial to the consolidated financial statements.

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 twelve months ended May 31, 2013 and 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, Bracing Divestiture and certain Royalties,
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.

Bracing Divestiture

On February 28, 2013, the Company divested certain assets representing
substantially all of the Company's bracing business (“Bracing Divestiture”).

Royalties

The Company is currently receiving royalty income related to a license
agreement for certain Spine products (“Royalties”).

Biomet, Inc.
Product Net Sales
Three Month Period Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)

                            Three Months   Three Months   Reported   Constant
                           Ended         Ended         Growth %  Currency*
                            May 31, 2013   May 31, 2012              Growth %
Large Joint                 $  435.2       $  439.6       (1.0  )%   0.7    %
Reconstructive
Sports, Extremities,        159.2          98.2           62.1  %    65.3   %
Trauma (S.E.T.)
Spine & Bone Healing**      67.0           81.9           (18.2 )%   (17.8  )%
Dental                      68.5           69.2           (1.0  )%   0.2    %
Other                       54.0          50.6          6.7   %    6.8    %
Net Sales                   $  783.9      $  739.5      6.0   %    7.6    %
Sports, Extremities,
Trauma (S.E.T.) excluding   104.5          98.2           6.4   %    8.1    %
Trauma Acquisition*
Net Sales, excluding
Trauma Acquisition and      729.1          731.5          (0.3  )%   1.1    %
Bracing Divestiture* **
                                                                            

                             Three Months                  Three Months Ended
                             Ended              Currency   May 31, 2013
                            May 31, 2013      Impact*   Net Sales Growth in
                             Net Sales Growth              Local Currencies*
                             As Reported
Large Joint Reconstructive   (1.0      )%       1.7   %    0.7         %
Knees                        (1.4      )%       1.5   %    0.1         %
Hips                         (0.3      )%       2.1   %    1.8         %
Bone Cement and Other        (1.2      )%       0.5   %    (0.7        )%
Sports, Extremities,         62.1      %        3.2   %    65.3        %
Trauma (S.E.T.)
Sports Medicine              (0.2      )%       1.5   %    1.3         %
Extremities                  21.5      %        0.8   %    22.3        %
Trauma                       257.9     %        9.3   %    267.2       %
Spine & Bone Healing**       (18.2     )%       0.4   %    (17.8       )%
Spine                        (8.6      )%       0.5   %    (8.1        )%
Bone Healing**               (48.1     )%       —     %    (48.1       )%
Dental                       (1.0      )%       1.2   %    0.2         %
Other                        6.7       %        0.1   %    6.8         %
Net Sales                    6.0       %        1.6   %    7.6         %
Sports, Extremities,
Trauma (S.E.T.) excluding    6.4       %        1.7   %    8.1         %
Trauma Acquisition*
Trauma excluding Trauma      (11.2     )%       1.9   %    (9.3        )%
Acquisition*
Net Sales, excluding
Trauma Acquisition and       (0.3      )%       1.4   %    1.1         %
Bracing Divestiture* **
                                                                       

                            Three Months   Three Months   Reported   Constant
                           Ended         Ended         Growth %  Currency*
                            May 31, 2013   May 31, 2012              Growth %
Spine & Bone Healing
excluding Royalties and     $   65.7       $   70.1       (6.3  )%   (5.8  )%
Bracing Divestiture* **
                                                                           

                           Three Months Ended              Three Months Ended
                          May 31, 2013        Currency  May 31, 2013
                           Net Sales Growth     Impact*    Net Sales Growth in
                           As Reported                     Local Currencies*
Spine & Bone Healing
excluding Royalties and    (6.3       )%        0.5   %    (5.8        )%
Bracing Divestiture* **
Bone Healing excluding     (14.6      )%        —     %    (14.6       )%
Bracing Divestiture* **
Spine excluding            (4.5       )%        0.5   %    (4.0        )%
Royalties*

*   See Non-GAAP Financial Measures Disclosure
**   The Bracing Divestiture closed on February 28, 2013
     

Biomet, Inc.
Product Net Sales
Year Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)

                        Year Ended May   Year Ended May   Reported   Constant
                       31, 2013        31, 2012        Growth %  Currency*
                                                                     Growth %
Large Joint             $  1,696.3       $  1,698.8       (0.1  )%   1.7   %
Reconstructive
Sports, Extremities,    600.1            361.6            66.0  %    68.4  %
Trauma (S.E.T.)
Spine & Bone            291.3            306.8            (5.1  )%   (4.6  )%
Healing**
Dental                  257.0            267.7            (4.0  )%   (1.9  )%
Other                   208.2           203.2           2.5   %    3.7   %
Net Sales               $  3,052.9      $  2,838.1      7.6   %    9.3   %
Sports, Extremities,
Trauma (S.E.T.)         394.5            361.6            9.1   %    10.5  %
excluding Trauma
Acquisition*
Net Sales, excluding
Trauma Acquisition      2,825.3          2,803.8          0.8   %    2.4   %
and Bracing
Divestiture* **
                                                                           

                             Year Ended                    Year Ended
                            May 31, 2013      Currency  May 31, 2013
                             Net Sales Growth   Impact*    Net Sales Growth in
                             As Reported                   Local Currencies*
Large Joint Reconstructive   (0.1      )%       1.8   %    1.7         %
Knees                        (0.2      )%       1.6   %    1.4         %
Hips                         —         %        2.1   %    2.1         %
Hip and Knee                 (0.1      )%       1.8   %    1.7         %
Bone Cement and Other        (0.3      )%       1.8   %    1.5         %
Sports, Extremities,         66.0      %        2.4   %    68.4        %
Trauma (S.E.T.)
Sports Medicine              6.0       %        1.6   %    7.6         %
Extremities                  18.9      %        0.9   %    19.8        %
Trauma                       252.3     %        6.3   %    258.6       %
Spine & Bone Healing**       (5.1      )%       0.5   %    (4.6        )%
Spine                        0.7       %        0.7   %    1.4         %
Bone Healing**               (21.2     )%       0.1   %    (21.1       )%
Dental                       (4.0      )%       2.1   %    (1.9        )%
Other                        2.5       %        1.2   %    3.7         %
Net Sales                    7.6       %        1.7   %    9.3         %
Sports, Extremities,
Trauma (S.E.T.) excluding    9.1       %        1.4   %    10.5        %
Trauma Acquisition*
Trauma excluding Trauma      (3.7      )%       1.6   %    (2.1        )%
Acquisition*
Net Sales, excluding
Trauma Acquisition and       0.8       %        1.6   %    2.4         %
Bracing Divestiture* **
                                                                       

                            Year Ended     Year Ended     Reported   Constant
                           May 31, 2013  May 31, 2012  Growth %  Currency*
                                                                     Growth %
Spine & Bone Healing
excluding Royalties and     $    260.0     $    265.7     (2.1  )%   (1.6  )%
Bracing Divestiture* **
                                                                           

                             Year Ended                    Year Ended
                            May 31, 2013      Currency  May 31, 2013
                             Net Sales Growth   Impact*    Net Sales Growth in
                             As Reported                   Local Currencies*
Spine & Bone Healing
excluding Royalties and      (2.1      )%       0.5   %    (1.6        )%
Bracing Divestiture* **
Bone Healing excluding       (10.5     )%       —     %    (10.5       )%
Bracing Divestiture* **
Spine excluding Royalties*   (0.4      )%       0.7   %    0.3         %
                                                                       

*   See Non-GAAP Financial Measures Disclosure
**   The Bracing Divestiture closed on February 28, 2013
     

Biomet, Inc.
Geographic Net Sales
Three Month Period Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)

                    Three Months        Three Months      Reported   Constant
                   Ended              Ended            Growth %  Currency*
                    May 31, 2013        May 31, 2012                 Growth %
Geographic Sales:
United States       $    466.3          $   439.5         6.1   %    6.1    %
Europe              188.7               182.4             3.5   %    4.9    %
International       128.9              117.6            9.6   %    17.2   %
Net Sales           $    783.9         $   739.5        6.0   %    7.6    %
                                                                            

                Three Months Ended              Three Months Ended
               May 31, 2013        Currency  May 31, 2013
                Net Sales Growth     Impact*    Net Sales Growth
                As Reported                     Local Currencies*
United States   6.1        %         —     %    6.1        %
Europe          3.5        %         1.4   %    4.9        %
International   9.6        %         7.6   %    17.2       %
Total           6.0        %         1.6   %    7.6        %

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Geographic Net Sales excluding Trauma Acquisition and Bracing Divestiture*
Three Month Period Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)

                         Three Months      Three Months   Reported   Constant
                        Ended            Ended         Growth %  Currency*
                         May 31, 2013      May 31, 2012              Growth %
Geographic Sales
excluding Trauma
Acquisition and
Bracing Divestiture*:
United States            $   435.4         $  431.8       0.8   %    0.8   %
Europe                   175.1             182.0          (3.8  )%   (2.6  )%
International            118.5            117.6         0.8   %    7.4   %
Net Sales                $   729.0        $  731.4      (0.3  )%   1.1   %
                                                                           

                Three Months Ended              Three Months Ended
               May 31, 2013        Currency  May 31, 2013
                Net Sales Growth     Impact*    Net Sales Growth
                As Reported                     Local Currencies*
United States   0.8        %         —     %    0.8        %
Europe          (3.8       )%        1.2   %    (2.6       )%
International   0.8        %         6.6   %    7.4        %
Total           (0.3       )%        1.4   %    1.1        %

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Geographic Net Sales
Year Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited
                                                                
                    Year Ended May      Year Ended May    Reported   Constant
                    31, 2013            31, 2012          Growth %   Currency*
                                                                     Growth %
Geographic Sales:
United States       $   1,862.2         $  1,713.3        8.7   %    8.7    %
Europe              710.2               702.7             1.1   %    5.3    %
International       480.5              422.1            13.8  %    18.4   %
Net Sales           $   3,052.9        $  2,838.1       7.6   %    9.3    %
                                                                            

                Year Ended                    Year Ended
               May 31, 2013      Currency  May 31, 2013
                Net Sales Growth   Impact*    Net Sales Growth
                As Reported                   Local Currencies*
United States   8.7       %        —     %    8.7        %
Europe          1.1       %        4.2   %    5.3        %
International   13.8      %        4.6   %    18.4       %
Total           7.6       %        1.7   %    9.3        %

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Geographic Net Sales excluding Trauma Acquisition and Bracing Divestiture*
Year Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)
                                                                
                        Year Ended May   Year Ended May   Reported   Constant
                        31, 2013         31, 2012         Growth %   Currency*
                                                                     Growth %
Geographic Sales
excluding Trauma
Acquisition and
Bracing Divestiture*:
United States           $  1,723.9       $  1,680.2       2.6   %    2.6   %
Europe                  659.4            701.4            (6.0  )%   (2.1  )%
International           441.9           422.1           4.7   %    8.8   %
Net Sales               $  2,825.2      $  2,803.7      0.8   %    2.4   %
                                                                           

                Year Ended                    Year Ended
               May 31, 2013      Currency  May 31, 2013
                Net Sales Growth   Impact*    Net Sales Growth
                As Reported                   Local Currencies*
United States   2.6       %        —     %    2.6       %
Europe          (6.0      )%       3.9   %    (2.1      )%
International   4.7       %        4.1   %    8.8       %
Total           0.8       %        1.6   %    2.4       %

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Reconciliation of Reported Consolidated Statements of Operations to Consolidated Statements
of Operations, as adjusted*
Three Months and Years Ended May 31, 2013 and 2012
(in millions, except percentages, unaudited)

                Three Months Ended May 31, 2013         Three Months Ended May 31, 2012
                 Reported      Special      As          Reported     Special    As
                                Items*        Adjusted*                 Items*      Adjusted*
Net sales        $ 783.9        $ —           $ 783.9     $ 739.5       $ —         $ 739.5
Cost of sales    260.5        (28.5   )    232.0      224.5        (5.8    )   218.7   
Gross profit     523.4          28.5          551.9       515.0         5.8         520.8
Gross profit     66.8       %                 70.4    %   69.6     %                70.4    %
percentage
Selling,
general and      302.7          (18.8   )    283.9       252.4         1.9         254.3
administrative
expense
Research and
development      43.1           (1.9    )    41.2        33.6          (0.6    )   33.0
expense
Amortization     83.6           (80.2   )    3.4         77.2          (72.9   )   4.3
Goodwill and
intangible
assets           233.3        (233.3  )    —          529.8        (529.8  )   —       
impairment
charge
Operating        (139.3   )     362.7         223.4       (378.0   )    607.2       229.2
income (loss)
Percentage of    (17.8    ) %                 28.5    %   (51.1    )%               31.0    %
Net Sales
Interest         88.0           —             88.0        116.4         —           116.4
expense
Other (income)   5.4          (12.7   )    (7.3    )   8.3          —          8.3     
expense
Income (loss)
before income    (232.7   )     375.4         142.7       (502.7   )    607.2       104.5
taxes
Provision
(benefit) for    (11.5    )    21.2        9.7        (113.6   )    113.0      (0.6    )
income taxes
Net income       $ (221.2 )    $ 354.2     $ 133.0    $ (389.1 )    $ 494.2    $ 105.1 
(loss)
Percentage of    (28.2    ) %                 17.0    %   (52.6    )%               14.2    %
Net Sales

                Year Ended May 31, 2013                   Year Ended May 31, 2012
                Reported        Special    As            Reported      Special    As
                                  Items*      Adjusted*                    Items*      Adjusted*
Net sales        $ 3,052.9        $ —         $ 3,052.9     $ 2,838.1      $ —         $ 2,838.1
Cost of sales    996.5          (94.0   )   902.5        894.4         (48.0   )   846.4     
Gross profit     2,056.4          94.0        2,150.4       1,943.7        48.0        1,991.7
Gross profit     67.4        %                70.4      %   68.5      %                70.2      %
percentage
Selling,
general and      1,189.4          (76.5   )   1,112.9       1,053.3        (45.8   )   1,007.5
administrative
expense
Research and
development      150.3            (7.1    )   143.2         126.8          (2.2    )   124.6
expense
Amortization     313.8            (299.6  )   14.2          327.2          (314.9  )   12.3
Goodwill and
intangible
assets           567.4          (567.4  )   —            529.8         (529.8  )   —         
impairment
charge
Operating        (164.5    )      1,044.6     880.1         (93.4     )    940.7       847.3
income (loss)
Percentage of    (5.4      ) %                28.8      %   (3.3      )%               29.9      %
Net Sales
Interest         398.8            —           398.8         479.8          —           479.8
expense
Other (income)   177.8          (180.7  )   (2.9      )   17.6          —          17.6      
expense
Income (loss)
before income    (741.1      )    1,225.3     484.2         (590.8    )    940.7       349.9
taxes
Provision
(benefit) for    (117.7     )    233.9      116.2        (132.0    )    230.1      98.1      
income taxes
Tax rate         15.9        %                24.0      %   22.3      %                28.0      %
Net income       $ (623.4   )    $ 991.4    $ 368.0      $ (458.8  )    $ 710.6    $ 251.8   
(loss)
Percentage of    (20.4       )%               12.1      %   (16.2     )%               8.9       %
Net Sales

*  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    Year Ended     Year Ended
                  Ended            Ended           May 31, 2013   May 31, 2012
                  May 31, 2013     May 31, 2012
Operating
income (loss),    $  (139.3)       $  (378.0  )    $  (164.5)     $  (93.4   )
as reported
Special items
from              362.7            607.2           1,044.6        940.7
operations*
Depreciation
and               52.5            48.5           197.2         183.8      
amortization
from operations
EBITDA, as        $  275.9        $  277.7       $  1,077.3    $  1,031.1 
adjusted*
                                                                  
Net Sales         $  783.9         $  739.5        $  3,052.9     $  2,838.1
EBITDA, as
adjusted, as      35.2        %    37.6       %    35.3       %   36.3       %
percentage of
Net Sales*

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Other Financial Information
Special Items detail*
(in millions, unaudited)
                                                                
                        Three Months   Three Months                  Year
                        Ended          Ended          Year Ended     Ended
                        May 31, 2013   May 31, 2012   May 31, 2013   May 31,
                                                                     2012
Purchase accounting
amortization and        $  81.1        $  72.9        $  302.7       $  325.6
depreciation
Stock-based             7.3            3.8            39.6           16.0
compensation expense
Litigation
settlements and         25.5           (12.7     )    57.9           8.6
reserves and other
legal fees
Trauma Acquisition      1.9            4.6            12.2           4.6
costs
Operational
restructuring and
consulting expenses
related to
operational
initiatives             23.5           6.0            40.3           45.8
(severance, building
impairments, abnormal
manufacturing
variances and other
related costs) and
other
Product
rationalization         —              —              23.1           —
charges
Sponsor fee             2.8            2.8            11.0           10.3
Loss on
extinguishment of       —              —              171.1          —
debt
Goodwill and
intangible assets       233.3         529.8         567.4         529.8
impairment charge
Special items,          $  375.4      $  607.2      $  1,225.3    $  940.7
pre-tax*
Tax effect              21.2          113.0         233.9         230.1
Special items, after    $  354.2      $  494.2      $  991.4      $  710.6
tax*

*  See Non-GAAP Financial Measures Disclosure
    

Biomet, Inc.
Condensed Consolidated Balance Sheets
(in millions, unaudited)
                                            May 31, 2013  May 31, 2012
Assets
Cash and cash equivalents                    $ 355.6        $  492.4
Accounts receivable, net                     531.8          491.6
Short-term investments                       —              2.5
Inventories                                  624.0          543.2
Current deferred income taxes                119.9          52.5
Prepaid expenses and other                   141.3          129.1
Property, plant and equipment, net           665.2          593.6
Intangible assets, net                       3,630.2        3,930.4
Goodwill                                     3,600.9        4,114.4
Other assets                                 125.8         70.7
Total Assets                                 $ 9,794.7     $  10,420.4
Liabilities and Shareholder’s Equity
Current liabilities, excluding debt          $ 523.8        $  474.9
Current portion of long-term debt            40.3           35.6
Long-term debt, net of current portion       5,926.1        5,792.2
Deferred income taxes, long-term             1,129.8        1,257.8
Other long-term liabilities                  206.1          177.8
Shareholder’s equity                         1,968.6       2,682.1
Total Liabilities and Shareholder’s Equity   $ 9,794.7     $  10,420.4
Net Debt (a)*                                $ 5,610.8      $  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)

                              May 31, 2013           May 31, 2008 
Senior Secured Debt:
USD Term Loan                  $  2,221.1               $  2,328.3
EUR Term Loan                  1,074.3                  1,355.2
Asset Based Revolver           —                        —
Cash Flow Revolvers            —                       —          
Consolidated Senior Secured    3,295.4        A         3,683.5        E
Debt
Senior Notes                   2,662.7                  2,570.7
China Facility                 6.0                      —
European Facilities            2.3                     46.6       
Consolidated Total Debt        5,966.4                  6,300.8
Cash and Cash Equivalents*     (355.6     )   B         (127.6     )   F
**
Net Debt*                      $  5,610.8    C         $  6,173.2    G
LTM 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
Quarter 4 Fiscal 2013          275.9
Adjusted EBITDA
“Run Rate” Cost Savings**      —          
Quarter 4 2013 LTM Adjusted    $  1,077.3    D
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        2.73           A+B / D   4.01           E+F / H
Ratio*
Total Leverage Ratio*          5.21           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.
Consolidated Statement of Cash Flows and GAAP Operating Cash Flow Reconciled
to Free Cash Flow*
& Unlevered Free Cash Flow*
(in millions, unaudited)
                                            Fiscal 2013
                                             Three Months Ended  Year Ended
                                             May 31, 2013         May 31, 2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net income (loss)                            $    (221.2)         $  (623.4 )
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization                130.6                495.4
Amortization and write off of deferred       3.7                  31.0
financing costs
Stock-based compensation expense             6.0                  38.3
Loss on extinguishment of debt               —                    155.2
Provision for doubtful accounts receivable   (4.5           )     (4.9       )
Realized gain on investments                 —                    (0.2       )
Goodwill and intangible assets impairment    233.3                567.4
charge
Deferred income taxes                        (50.1          )     (215.5     )
Other                                        11.8                 17.7
Changes in operating assets and
liabilities, net of acquired assets:
Accounts receivable                          12.7                 (40.4      )
Inventories                                  (2.4           )     (36.0      )
Prepaid expenses                             38.4                 30.5
Accounts payable                             24.6                 (3.4       )
Income taxes                                 (43.9          )     (38.4      )
Accrued interest                             12.3                 (0.3       )
Accrued expenses and other                   43.4                95.5       
Net cash provided by operating activities    194.7                468.5
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Proceeds from sales/maturities of            —                    5.5
investments
Purchases of investments                     —                    (6.4       )
Proceeds from sale of assets                 —                    14.0
Capital expenditures                         (54.3          )     (204.0     )
Acquisitions, net of cash acquired -         —                    (280.0     )
Trauma Acquisition
Other acquisitions, net of cash acquired     (0.5           )     (17.7      )
Net cash used in investing activities        (54.8          )     (488.6     )
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Debt:
Payments under European facilities           (0.3           )     (1.3       )
Payments under senior secured credit         (8.3           )     (33.5      )
facilities
Proceeds under revolvers/facility            6.6                  86.6
Payments under revolvers/facility            (0.6           )     (80.6      )
Proceeds from senior and senior              —                    3,396.2
subordinated notes due 2020 and term loans
Tender/retirement of Senior notes due 2017   —                    (3,423.0   )
and term loans
Payment of fees related to refinancing       (1.2           )     (79.0      )
activities
Equity:
Repurchase of LVB Acquisition, Inc. shares   —                   (0.1       )
Net cash used in financing activities        (3.8           )     (134.7     )
Effect of exchange rate changes on cash      2.1                 18.0       
Increase (decrease) in cash and cash         138.2                (136.8     )
equivalents
Cash and cash equivalents, beginning of      217.4               492.4      
period
Cash and cash equivalents, end of period     $    355.6          $  355.6   
                                                                  
Free Cash Flow*(1)                           $    140.4           $  264.5
Add back: cash paid for interest             73.1                388.6      
Unlevered Free Cash Flow* (2)                $    213.5          $  653.1   
                                                                  
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest                                     $    73.1           $  388.6   
Income taxes                                 $    32.5           $  81.5    

 (1)  Defined as cash flow from operations less capital expenditures
        Defined as Free Cash Flow plus cash paid for interest. Commonly used
  (2)   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  Year Ended
                                         May 31, 2012^(1)     May 31, 2012^(1)
CASH FLOWS PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
Net loss                                 $    (388.1    )     $   (457.8   )
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization            121.4                509.4
Amortization and write off of deferred   2.8                  11.1
financing costs
Goodwill and intangible assets           529.8                529.8
impairment charge
Stock-based compensation expense         3.8                  16.0
Recovery of doubtful accounts            (2.7           )     (5.3         )
receivable
Realized gain on investments             (0.1           )     (2.0         )
Loss on impairment of investments        0.8                  20.1
Property, plant and equipment            —                    0.4
impairment charge
Deferred income taxes                    (84.6          )     (205.3       )
Other                                    (2.5           )     (4.5         )
Changes in operating assets and
liabilities, net of acquired assets:
Accounts receivable                      1.8                  (36.6        )
Inventories                              3.8                  13.4
Prepaid expenses                         (11.1          )     (12.3        )
Accounts payable                         33.1                 28.9
Income taxes                             (48.1          )     (29.0        )
Accrued interest                         (69.3          )     (7.6         )
Accrued expenses and other               (4.8           )     8.6          
Net cash provided by operating           86.0                 377.3
activities
CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITIES:
Proceeds from sales/maturities of        0.1                  42.1
investments
Purchases of investments                 (0.1           )     (0.4         )
Proceeds from sale of property and       1.0                  14.7
equipment
Capital expenditures                     (56.6          )     (179.3       )
Acquisitions, net of cash acquired       (6.7           )     (21.1        )
Net cash used in investing activities    (62.3          )     (144.0       )
CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES:
Debt:
Payments under European facilities       (0.3           )     (1.4         )
Payments under senior secured credit     (8.8           )     (35.4        )
facilities
Equity:
Repurchase of LVB Acquisition, Inc.      (0.1           )     (1.3         )
shares
Net cash used in financing activities    (9.2           )     (38.1        )
Effect of exchange rate changes on       (18.1          )     (30.6        )
cash
Increase in cash and cash equivalents    (3.6           )     164.6
Cash and cash equivalents, beginning     496.0               327.8        
of period
Cash and cash equivalents, end of        $    492.4          $   492.4    
period
                                                              
Free Cash Flow*(2)                       $    29.4            $   198.0
Add back: cash paid for interest         183.1               477.1        
Unlevered Free Cash Flow* (3)            $    212.5          $   675.1    
                                                              
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest                                 $    183.1          $   477.1    
Income taxes                             $    18.1           $   95.0     

 (1)  Certain amounts have been adjusted to conform to the current
        presentation.
  (2)   Defined as cash flow from operations less capital expenditures
        Defined as Free Cash Flow plus cash paid for interest. Commonly used
  (3)   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, Senior Vice President and Chief Financial Officer,
574-372-1687
or
Barbara Goslee, Director, Investor Relations, 574-372-1514