Exhibit 99.1
BIOMET ANNOUNCES THIRD QUARTER OF FISCAL YEAR 2012 FINANCIAL RESULTS
WARSAW, Ind., April 11, 2012 – Biomet, Inc. announced today financial results for its third fiscal quarter ended February 29, 2012.
| • | Net sales increased 5% (5% constant currency) worldwide to $709 million |
| • | Large joint reconstructive sales increased 5% (5% constant currency) worldwide and increased 6% in the U.S. |
| • | Sports medicine sales increased 22% (22% constant currency) worldwide, with 18% U.S. growth |
| • | Extremity sales grew 18% (18% constant currency) worldwide, with a 21% increase in the U.S. |
| • | Operating cash flow of $158 million |
| • | Binding offer to acquire DePuy trauma business for $280 million |
Third Quarter Financial Results
Net sales increased 5% during the third quarter of fiscal year 2012 to $708.9 million, compared to net sales of $678.0 million during the third quarter of fiscal year 2011. Compared to the prior year period, changes in foreign currency exchange rates had a negligible effect on consolidated sales growth rates. U.S. net sales increased 5% to $432.8 million during the third quarter, while Europe net sales increased 2% (4% constant currency) to $176.7 million and International (primarily Canada, South America, Mexico and the Pacific Rim) net sales increased 7% (6% constant currency) to $99.4 million.
Special items (pre-tax) for the third quarter totaled $108.0 million, including $82.1 million of non-cash amortization and depreciation expense related to the Merger and $25.9 million of non-Merger related special items.
Reported operating income during the third quarter of fiscal year 2012 was $108.1 million, compared to operating income of $94.9 million during the third quarter of fiscal year 2011. Adjusted operating income totaled $216.1 million during the third fiscal quarter, compared to adjusted operating income of $212.8 million in the same period of the prior fiscal year.
Reported net loss during the third quarter of fiscal year 2012 was $16.5 million, compared to a net loss of $11.6 million during the third quarter of fiscal year 2011. Adjusted net income was $55.1 million during the third fiscal quarter, compared to $63.8 million during the third quarter of fiscal year 2011.
Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $260.5 million, or 36.7% of net sales during the third quarter of fiscal year 2012, compared to adjusted EBITDA of $258.4 million during the third quarter of the prior fiscal year.
Interest expense during the third quarter totaled $117.2 million, compared to $124.0 million during the third quarter of fiscal year 2011, principally due to lower average interest rates on our term loans.
Reported cash flow from operations during the third quarter totaled $157.5 million, compared to $151.8 million for the third quarter of fiscal year 2011. Free cash flow (operating cash flow of $157.5 million minus capital expenditures of $41.5 million) was $116.0 million, which reflected $47.3 million of cash interest paid in the quarter. Free cash flow during the same quarter of fiscal year 2011 was $106.7 million.
Reported gross debt was $5.920 billion, and cash and cash equivalents, as defined in the Company’s credit agreement dated September 25, 2007, totaled $496.0 million, resulting in net debt of $5.424 billion as of February 29, 2012. From May 31, 2008, the first fiscal year-end after the Merger, to February 29, 2012, net debt decreased by $749.1 million due to an increase in cash and cash equivalents, as defined by our credit agreement, of $368.4 million and a $380.7 million reduction of gross debt. The reduction of gross debt includes a $179.4 million decrease due to favorable foreign currency translation on the Company’s euro-denominated debt.
The Company’s senior secured leverage ratio as of February 29, 2012 was 2.83 times the last twelve months (“LTM”) adjusted EBITDA, as defined by our credit agreement, compared to 4.01 times at May 31, 2008. The total leverage ratio was 5.35 times LTM adjusted EBITDA at February 29, 2012, compared to 6.97 times as of May 31, 2008.
Biomet’s President and Chief Executive Officer Jeffrey R. Binder commented, “We reported strong and improving sales results across many of our product categories this quarter, with particularly good momentum in our Large Joint Reconstructive and S.E.T. product categories. I was particularly happy with the consistency of our performance across all geographies. In addition, we are very excited about our future opportunities in the trauma market given our pending acquisition of DePuy’s worldwide trauma business.”
The following table provides third quarter net sales performance by product category:
| Third Quarter Net Sales Performance | ||||||||||||||||
| Worldwide | Worldwide | Worldwide | United | |||||||||||||
| Reported | Reported | CC | States | |||||||||||||
| Quarter 3 - FY 2012 | Growth % | Growth % | Growth % | |||||||||||||
| Large Joint Reconstructive |
$ | 422.7 | 5 | % | 5 | % | 6 | % | ||||||||
| Knees |
4 | % | 4 | % | 4 | % | ||||||||||
| Hips |
6 | % | 6 | % | 7 | % | ||||||||||
| Bone Cement and Other |
6 | % | 7 | % | 8 | % | ||||||||||
| Sports, Extremities, Trauma (S.E.T.) |
92.7 | 16 | % | 16 | % | 15 | % | |||||||||
| Sports Medicine |
22 | % | 22 | % | 18 | % | ||||||||||
| Extremities |
18 | % | 18 | % | 21 | % | ||||||||||
| Trauma |
1 | % | 1 | % | (6 | )% | ||||||||||
| Spine & Bone Healing |
76.5 | (5 | )% | (5 | )% | (5 | )% | |||||||||
| Spine |
(3 | )% | (3 | )% | (3 | )% | ||||||||||
| Bone Healing |
(10 | )% | (10 | )% | (10 | )% | ||||||||||
| Dental |
65.6 | (2 | )% | (2 | )% | 12 | % | |||||||||
| Other |
51.4 | 8 | % | 9 | % | — | % | |||||||||
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| Net Sales |
$ | 708.9 | 5 | % | 5 | % | 5 | % | ||||||||
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Large Joint Reconstructive sales grew 5% (5% constant currency) worldwide to $422.7 million and increased 6% in the U.S. during the third quarter of fiscal year 2012 compared to the third quarter of fiscal year 2011. Knee sales increased 4% (4% constant currency) worldwide and in the U.S. during the third quarter. Hip sales increased 6% (6% at constant currency) worldwide during the third quarter and grew 7% in the U.S.
Sports, Extremities and Trauma (S.E.T.) sales increased 16% (16% constant currency) worldwide to $92.7 million during the third quarter and increased 15% in the U.S. Sports medicine sales grew 22% worldwide and on a constant currency basis and increased 18% in the U.S. Extremity sales increased 18% (18% constant currency) worldwide during the quarter, with U.S. growth of 21%. Trauma sales increased 1% (1% constant currency) worldwide during the quarter and decreased 6% in the U.S.
During the third quarter, Spine and Bone Healing (non-invasive trauma stimulation and bracing) sales decreased 5% (5% constant currency) worldwide to $76.5 million, and decreased 5% in the U.S.
Worldwide Dental sales decreased 2% (2% constant currency) to $65.6 million and increased 12% in the U.S. during the third quarter.
Sales of Other products increased 8% (9% constant currency) worldwide to $51.4 million, and were flat in the U.S. during the quarter.
About Biomet
Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet’s product portfolio encompasses large joint reconstructive products, including orthopedic joint replacement devices, and bone cements and accessories; sports medicine, extremities and trauma products, including internal and external orthopedic fixation devices; spine and bone healing products, including spine hardware, spinal stimulation devices, and orthobiologics, as well as electrical bone growth stimulators and softgoods and bracing; dental reconstructive products; and other products, including microfixation products and autologous therapies. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in approximately 90 countries.
Contacts
For further information contact Daniel P. Florin, Senior Vice President and Chief Financial Officer, at (574) 372-1687 or Barbara Goslee, Director, Corporate Communications at (574) 372-1514.
Financial Schedule Presentation
The Company’s unaudited condensed consolidated financial statements as of and for the three months and nine months ended February 29, 2012 and February 28, 2011 and other financial data included in this press release have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles (“GAAP”) 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.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements are often indicated by the use of words such as “will,” “intend,” “anticipate,” “estimate,” “expect,” “plan” and similar expressions. Forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from those contemplated by the forward looking statements due to, among others, the following factors: the success of the Company’s principal product lines; the results of the ongoing investigation by the United States Department of Justice; the ability to successfully implement new technologies; the Company’s ability to sustain sales and earnings growth; the Company’s success in achieving timely approval or clearance of its products with domestic and foreign regulatory entities; the impact to the business as a result of compliance with federal, state and foreign governmental regulations and with the Deferred Prosecution Agreement and Corporate Integrity Agreement; the impact to the business as a result of the economic downturn in both foreign and domestic markets; the impact of federal health care reform; the impact of anticipated changes in the musculoskeletal industry and the ability of the Company to react to and capitalize on those changes; the ability of the Company to successfully implement its desired organizational changes and cost-saving initiatives; the 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; and other factors set forth in the Company’s filings with the SEC, including the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Although the Company believes that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate given the inherent uncertainties as to the occurrence or non-occurrence of future events. There can be no assurance as to the accuracy of forward-looking statements contained in this press release. The inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company’s objectives will be achieved. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements which speak only as of the date on which they were made.
*Non-GAAP Financial Measures:
Management uses non-GAAP financial measures, such as net sales excluding the impact of foreign currency (constant currency), operating income as adjusted, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as adjusted, net income as adjusted, gross profit as adjusted, selling, general and administrative expense as adjusted, research and development expense as adjusted, cash and cash equivalents (as defined by our credit agreement), net debt, senior secured leverage ratio, total leverage ratio (net debt), 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 “as adjusted,” a non-GAAP financial measure, refers to financial performance measures that exclude certain income statement line items, such as interest, taxes, depreciation or amortization, other (income) expense, and/or exclude certain expenses as defined by our credit agreement, such as restructuring charges, non-cash impairment charges, integration and facilities opening costs or other business optimization expenses, new systems design and implementation costs, certain start-up costs and costs related to consolidation of facilities, certain non-cash charges, advisory fees paid to the Company’s private equity owners, certain severance charges, purchase accounting costs, stock-based compensation, litigation costs, and other related charges.
These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP in the United States. Biomet management believes that these non-GAAP financial measures provide useful information to investors; however, this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP.
Non-GAAP Reconciliation
A reconciliation of reported results to adjusted results is included in this press release, which is also posted on Biomet’s website: www.biomet.com
Reclassifications
Certain prior period amounts have been reclassified to conform to the current presentation. Such reclassifications were limited to net sales information by product and geographic categories. The current presentation aligns with how the Company presently reports sales and markets its products.
The Merger
Biomet, Inc. finalized the merger with LVB Acquisition Merger Sub, Inc., a wholly-owned subsidiary of LVB Acquisition, Inc., which we refer to in this press release as the “Merger”, on September 25, 2007. LVB Acquisition, Inc. is indirectly owned by investment partnerships directly or indirectly advised or managed by The Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG Capital.
Biomet, Inc.
Product Net Sales
Three Month Period Ended February 29, 2012 and February 28, 2011
(in millions, except percentages, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
Reported Growth % |
Constant Currency* Growth % |
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| Large Joint Reconstructive |
$ | 422.7 | $ | 402.6 | 5 | % | 5 | % | ||||||||
| Sports, Extremities, Trauma (S.E.T.) |
92.7 | 80.2 | 16 | % | 16 | % | ||||||||||
| Spine & Bone Healing |
76.5 | 80.6 | (5 | )% | (5 | )% | ||||||||||
| Dental |
65.6 | 67.2 | (2 | )% | (2 | )% | ||||||||||
| Other |
51.4 | 47.4 | 8 | % | 9 | % | ||||||||||
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| Net Sales |
$ | 708.9 | $ | 678.0 | 5 | % | 5 | % | ||||||||
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| Three Months Ended February 29, 2012 Net Sales Growth As Reported |
Currency Impact* |
Three Months Ended February 29, 2012 Net Sales Growth in Local Currencies* |
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| Large Joint Reconstructive |
5 | % | — | % | 5 | % | ||||||
| Knees |
4 | % | — | % | 4 | % | ||||||
| Hips |
6 | % | — | % | 6 | % | ||||||
| Bone Cement and Other |
6 | % | 1 | % | 7 | % | ||||||
| Sports, Extremities, Trauma (S.E.T.) |
16 | % | — | % | 16 | % | ||||||
| Sports Medicine |
22 | % | — | % | 22 | % | ||||||
| Extremities |
18 | % | — | % | 18 | % | ||||||
| Trauma |
1 | % | — | % | 1 | % | ||||||
| Spine & Bone Healing |
(5 | )% | — | % | (5 | )% | ||||||
| Spine |
(3 | )% | — | % | (3 | )% | ||||||
| Bone Healing |
(10 | )% | — | % | (10 | )% | ||||||
| Dental |
(2 | )% | — | % | (2 | )% | ||||||
| Other |
8 | % | 1 | % | 9 | % | ||||||
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| Net Sales |
5 | % | — | % | 5 | % | ||||||
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| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Product Net Sales
Nine Month Period Ended February 29, 2012 and February 28, 2011
(in millions, except percentages, unaudited)
| Nine Months Ended February 29, 2012 |
Nine Months Ended February 28, 2011 |
Reported Growth % |
Constant Currency* Growth % |
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| Large Joint Reconstructive |
$ | 1,259.2 | $ | 1,205.1 | 4 | % | 3 | % | ||||||||
| Sports, Extremities, Trauma (S.E.T.) |
258.2 | 228.0 | 13 | % | 12 | % | ||||||||||
| Spine & Bone Healing |
230.1 | 247.2 | (7 | )% | (7 | )% | ||||||||||
| Dental |
198.5 | 195.5 | 2 | % | — | % | ||||||||||
| Other |
152.6 | 141.2 | 8 | % | 7 | % | ||||||||||
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| Net Sales |
$ | 2,098.6 | $ | 2,017.0 | 4 | % | 3 | % | ||||||||
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| Nine Months Ended February 29, 2012 Net Sales Growth As Reported |
Currency Impact* |
Nine Months Ended February 29, 2012 Net Sales Growth in Local Currencies* |
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| Large Joint Reconstructive |
4 | % | (1 | ) % | 3 | % | ||||||
| Knees |
3 | % | (2 | )% | 1 | % | ||||||
| Hips |
7 | % | (2 | )% | 5 | % | ||||||
| Bone Cement and Other |
6 | % | (2 | )% | 4 | % | ||||||
| Sports, Extremities, Trauma (S.E.T.) |
13 | % | (1 | )% | 12 | % | ||||||
| Sports Medicine |
18 | % | (1 | )% | 17 | % | ||||||
| Extremities |
17 | % | (1 | )% | 16 | % | ||||||
| Trauma |
(1 | )% | (1 | )% | (2 | )% | ||||||
| Spine & Bone Healing |
(7 | )% | — | % | (7 | )% | ||||||
| Spine |
(6 | )% | (1 | )% | (7 | )% | ||||||
| Bone Healing |
(8 | )% | — | % | (8 | )% | ||||||
| Dental |
2 | % | (2 | )% | — | % | ||||||
| Other |
8 | % | (1 | )% | 7 | % | ||||||
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| Net Sales |
4 | % | (1 | )% | 3 | % | ||||||
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| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Geographic Net Sales
Three Month Period Ended February 29, 2012 and February 28, 2011
(in millions, except percentages, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
Reported Growth % |
Constant Currency* Growth % |
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| Geographic Sales: |
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| United States |
$ | 432.8 | $ | 412.3 | 5 | % | 5 | % | ||||||||
| Europe |
176.7 | 173.0 | 2 | % | 4 | % | ||||||||||
| International |
99.4 | 92.7 | 7 | % | 6 | % | ||||||||||
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| Net Sales |
$ | 708.9 | $ | 678.0 | 5 | % | 5 | % | ||||||||
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| Three Months Ended | Three Months Ended | |||||||||||
| February 29, 2012 | February 29, 2012 | |||||||||||
| Net Sales Growth | Currency | Net Sales Growth | ||||||||||
| As Reported | Impact* | Local Currencies* | ||||||||||
| United States |
5 | % | — | % | 5 | % | ||||||
| Europe |
2 | % | 2 | % | 4 | % | ||||||
| International |
7 | % | (1 | )% | 6 | % | ||||||
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| Total |
5 | % | — | % | 5 | % | ||||||
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| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Geographic Net Sales
Nine Month Period Ended February 29, 2012 and February 28, 2011
(in millions, except percentages, unaudited)
| Nine Months Ended February 29, 2012 |
Nine Months Ended February 28, 2011 |
Reported Growth % |
Constant Currency* Growth % |
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| Geographic Sales: |
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| United States |
$ | 1,273.8 | $ | 1,247.6 | 2 | % | 2 | % | ||||||||
| Europe |
520.3 | 499.0 | 4 | % | 1 | % | ||||||||||
| International |
304.5 | 270.4 | 13 | % | 7 | % | ||||||||||
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| Net Sales |
$ | 2,098.6 | $ | 2,017.0 | 4 | % | 3 | % | ||||||||
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| Nine Months Ended February 29, 2012 Net Sales Growth As Reported |
Currency Impact* |
Nine Months Ended February 29, 2012 Net Sales Growth Local Currencies* |
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| United States |
2 | % | — | % | 2 | % | ||||||
| Europe |
4 | % | (3 | )% | 1 | % | ||||||
| International |
13 | % | (6 | )% | 7 | % | ||||||
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| Total |
4 | % | (1 | )% | 3 | % | ||||||
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| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
As Reported Consolidated Statements of Operations
(in millions, except percentages, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
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| Net sales |
$ | 708.9 | $ | 678.0 | ||||
| Cost of sales |
219.7 | 208.1 | ||||||
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| Gross profit |
489.2 | 469.9 | ||||||
| Gross profit percentage |
69.0 | % | 69.3 | % | ||||
| Selling, general and administrative expense |
268.4 | 252.9 | ||||||
| Research and development expense |
30.1 | 28.8 | ||||||
| Amortization |
82.6 | 93.3 | ||||||
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| Operating income |
108.1 | 94.9 | ||||||
| Percentage of Net Sales |
15.2 | % | 14.0 | % | ||||
| Interest expense |
117.2 | 124.0 | ||||||
| Other (income) expense |
(2.8 | ) | (3.0 | ) | ||||
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| Loss before income taxes |
(6.3 | ) | (26.1 | ) | ||||
| Provision (benefit) from income taxes |
10.2 | (14.5 | ) | |||||
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| Tax rate |
-161.9 | % | 55.6 | % | ||||
| Net loss |
$ | (16.5 | ) | $ | (11.6 | ) | ||
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| Percentage of Net Sales |
-2.3 | % | -1.7 | % | ||||
Biomet, Inc.
As Reported Consolidated Statements of Operations
(in millions, except percentages, unaudited)
| Nine Months Ended February 29, 2012 |
Nine Months Ended February 28, 2011 |
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| Net sales |
$ | 2,098.6 | $ | 2,017.0 | ||||
| Cost of sales |
669.9 | 609.6 | ||||||
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| Gross profit |
1,428.7 | 1,407.4 | ||||||
| Gross profit percentage |
68.1 | % | 69.8 | % | ||||
| Selling, general and administrative expense |
800.9 | 765.4 | ||||||
| Research and development expense |
93.2 | 88.3 | ||||||
| Amortization |
250.0 | 283.3 | ||||||
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| Operating income |
284.6 | 270.4 | ||||||
| Percentage of Net Sales |
13.6 | % | 13.4 | % | ||||
| Interest expense |
363.4 | 373.7 | ||||||
| Other (income) expense |
9.3 | (8.7 | ) | |||||
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| Loss before income taxes |
(88.1 | ) | (94.6 | ) | ||||
| Benefit from income taxes |
(18.4 | ) | (57.6 | ) | ||||
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| Tax rate |
20.9 | % | 60.9 | % | ||||
| Net loss |
$ | (69.7 | ) | $ | (37.0 | ) | ||
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| Percentage of Net Sales |
-3.3 | % | -1.8 | % | ||||
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income, as reported to Operating Income, as adjusted*
(in millions, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
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| Operating income, as reported |
$ | 108.1 | $ | 94.9 | ||||
| Purchase accounting depreciation |
1.6 | 4.5 | ||||||
| Purchase accounting amortization |
80.5 | 91.2 | ||||||
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| Total merger related depreciation and amortization |
82.1 | 95.7 | ||||||
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| Stock-based compensation expense |
3.5 | 5.2 | ||||||
| Litigation settlements and reserves and other legal fees |
12.8 | 2.3 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
6.9 | 12.0 | ||||||
| Sponsor fee |
2.7 | 2.7 | ||||||
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| Total non-merger related items |
25.9 | 22.2 | ||||||
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| Total items (pre-tax) excluded per our credit agreement |
108.0 | 117.9 | ||||||
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| Operating income, as adjusted* |
$ | 216.1 | $ | 212.8 | ||||
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| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Other Financial Information
Reconciliation of Operating Income, as reported to Operating Income, as adjusted*
(in millions, unaudited)
| Nine Months Ended February 29, 2012 |
Nine Months Ended February 28, 2011 |
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| Operating income, as reported |
$ | 284.6 | $ | 270.4 | ||||
| Purchase accounting depreciation |
10.7 | 13.3 | ||||||
| Purchase accounting amortization |
242.0 | 276.1 | ||||||
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| Total merger related depreciation and amortization |
252.7 | 289.4 | ||||||
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| Stock-based compensation expense |
12.2 | 14.6 | ||||||
| Litigation settlements and reserves and other legal fees |
21.3 | 9.7 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
39.8 | 29.7 | ||||||
| Sponsor fee |
7.5 | 7.6 | ||||||
|
|
|
|
|
|||||
| Total non-merger related items |
80.8 | 61.6 | ||||||
|
|
|
|
|
|||||
| Total items (pre-tax) excluded per our credit agreement |
333.5 | 351.0 | ||||||
|
|
|
|
|
|||||
| Operating income, as adjusted* |
$ | 618.1 | $ | 621.4 | ||||
|
|
|
|
|
|||||
| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Other Financial Information
Reconciliation of Net Loss, as reported to EBITDA, as adjusted*
(in millions, except percentages, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
|||||||
| Net loss, as reported |
$ | (16.5 | ) | $ | (11.6 | ) | ||
| Depreciation |
43.9 | 48.0 | ||||||
| Amortization |
82.6 | 93.3 | ||||||
| Interest expense |
117.2 | 124.0 | ||||||
| Other (income) expense |
(2.8 | ) | (3.0 | ) | ||||
| Income tax provision (benefit) |
10.2 | (14.5 | ) | |||||
| Stock-based compensation expense |
3.5 | 5.2 | ||||||
| Litigation settlements and reserves and other legal fees |
12.8 | 2.3 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
6.9 | 12.0 | ||||||
| Sponsor fee |
2.7 | 2.7 | ||||||
|
|
|
|
|
|||||
| EBITDA, as adjusted* |
$ | 260.5 | $ | 258.4 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 708.9 | $ | 678.0 | ||||
| EBITDA percentage, as adjusted* |
36.7 | % | 38.1 | % | ||||
| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Other Financial Information
Reconciliation of Net Loss, as reported to EBITDA, as adjusted*
(in millions, except percentages, unaudited)
| Nine Months Ended February 29, 2012 |
Nine Months Ended February 28, 2011 |
|||||||
| Net loss, as reported |
$ | (69.7 | ) | $ | (37.0 | ) | ||
| Depreciation |
138.0 | 134.2 | ||||||
| Amortization |
250.0 | 283.3 | ||||||
| Interest expense |
363.4 | 373.7 | ||||||
| Other (income) expense |
9.3 | (8.7 | ) | |||||
| Income tax benefit |
(18.4 | ) | (57.6 | ) | ||||
| Stock-based compensation expense |
12.2 | 14.6 | ||||||
| Litigation settlements and reserves and other legal fees |
21.3 | 9.7 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
39.8 | 29.7 | ||||||
| Sponsor fee |
7.5 | 7.6 | ||||||
|
|
|
|
|
|||||
| EBITDA, as adjusted* |
$ | 753.4 | $ | 749.5 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 2,098.6 | $ | 2,017.0 | ||||
| EBITDA percentage, as adjusted* |
35.9 | % | 37.2 | % | ||||
| * | 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 February 29, 2012 |
Three Months Ended February 28, 2011 |
|||||||
| Net loss, as reported |
$ | (16.5 | ) | $ | (11.6 | ) | ||
| Purchase accounting depreciation |
1.6 | 4.5 | ||||||
| Purchase accounting amortization |
80.5 | 91.2 | ||||||
| Stock-based compensation expense |
3.5 | 5.2 | ||||||
| Litigation settlements and reserves and other legal fees |
12.8 | 2.3 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
6.9 | 12.0 | ||||||
| Sponsor fee |
2.7 | 2.7 | ||||||
| Tax effect on special and purchase accounting items** |
(36.4 | ) | (42.5 | ) | ||||
|
|
|
|
|
|||||
| Net income, as adjusted* |
$ | 55.1 | $ | 63.8 | ||||
|
|
|
|
|
|||||
| * | 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 February 29, 2012 |
Nine Months Ended February 28, 2011 |
|||||||
| Net loss, as reported |
$ | (69.7 | ) | $ | (37.0 | ) | ||
| Purchase accounting depreciation |
10.7 | 13.3 | ||||||
| Purchase accounting amortization |
242.0 | 276.1 | ||||||
| Stock-based compensation expense |
12.2 | 14.6 | ||||||
| Litigation settlements and reserves and other legal fees |
21.3 | 9.7 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
39.8 | 29.7 | ||||||
| Sponsor fee |
7.5 | 7.6 | ||||||
| Tax effect on special and purchase accounting items** |
(117.1 | ) | (133.4 | ) | ||||
|
|
|
|
|
|||||
| Net income, as adjusted* |
$ | 146.7 | $ | 180.6 | ||||
|
|
|
|
|
|||||
| * | See Non-GAAP Financial Measures Disclosure |
| ** | The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred |
Biomet, Inc.
Other Financial Information
Reconciliation of Gross Profit, as reported to Gross Profit, as adjusted*
(in millions, except percentages, unaudited)
| Three Months Ended February 29, 2012 |
Three Months Ended February 28, 2011 |
|||||||
| Gross profit, as reported |
$ | 489.2 | $ | 469.9 | ||||
| Purchase accounting depreciation |
1.6 | 4.5 | ||||||
| Litigation settlements and reserves and other legal fees |
2.1 | 0.2 | ||||||
| Stock-based compensation expense |
0.2 | 0.3 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
6.3 | 7.1 | ||||||
|
|
|
|
|
|||||
| Gross profit, as adjusted* |
$ | 499.4 | $ | 482.0 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 708.9 | $ | 678.0 | ||||
| Gross profit percentage, as reported |
69.0 | % | 69.3 | % | ||||
| Gross profit percentage, as adjusted* |
70.4 | % | 71.1 | % | ||||
| * | 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 February 29, 2012 |
Nine Months Ended February 28, 2011 |
|||||||
| Gross profit, as reported |
$ | 1,428.7 | $ | 1,407.4 | ||||
| Purchase accounting depreciation |
10.7 | 13.3 | ||||||
| Litigation settlements and reserves and other legal fees |
2.0 | 0.2 | ||||||
| Stock-based compensation expense |
0.7 | 0.9 | ||||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
28.8 | 19.6 | ||||||
|
|
|
|
|
|||||
| Gross profit, as adjusted* |
$ | 1,470.9 | $ | 1,441.4 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 2,098.6 | $ | 2,017.0 | ||||
| Gross profit percentage, as reported |
68.1 | % | 69.8 | % | ||||
| Gross profit percentage, as adjusted* |
70.1 | % | 71.5 | % | ||||
| * | 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 February 29, 2012 |
Three Months Ended February 28, 2011 |
|||||||
| Selling, general and administrative expense, as reported |
$ | 268.4 | $ | 252.9 | ||||
| Stock-based compensation expense |
(2.8 | ) | (4.4 | ) | ||||
| Litigation settlements and reserves and other legal fees |
(10.7 | ) | (2.1 | ) | ||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, and other related costs) |
(0.6 | ) | (4.4 | ) | ||||
| Sponsor fee |
(2.7 | ) | (2.7 | ) | ||||
|
|
|
|
|
|||||
| Selling, general and administrative expense, as adjusted* |
$ | 251.6 | $ | 239.3 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 708.9 | $ | 678.0 | ||||
| SG&A as a percentage of net sales, as reported |
37.9 | % | 37.3 | % | ||||
| SG&A as a percentage of net sales, as adjusted* |
35.5 | % | 35.3 | % | ||||
| * | 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 February 29, 2012 |
Nine Months Ended February 28, 2011 |
|||||||
| Selling, general and administrative expense, as reported |
$ | 800.9 | $ | 765.4 | ||||
| Stock-based compensation expense |
(10.1 | ) | (12.2 | ) | ||||
| Litigation settlements and reserves and other legal fees |
(19.3 | ) | (9.5 | ) | ||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, and other related costs) |
(10.8 | ) | (8.7 | ) | ||||
| Sponsor fee |
(7.5 | ) | (7.6 | ) | ||||
|
|
|
|
|
|||||
| Selling, general and administrative expense, as adjusted* |
$ | 753.2 | $ | 727.4 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 2,098.6 | $ | 2,017.0 | ||||
| SG&A as a percentage of net sales, as reported |
38.2 | % | 37.9 | % | ||||
| SG&A as a percentage of net sales, as adjusted* |
35.9 | % | 36.1 | % | ||||
| * | 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 February 29, 2012 |
Three Months Ended February 28, 2011 |
|||||||
| Research and development expense, as reported |
$ | 30.1 | $ | 28.8 | ||||
| Stock-based compensation expense |
(0.5 | ) | (0.5 | ) | ||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, and other related costs) |
— | (0.5 | ) | |||||
|
|
|
|
|
|||||
| Research and development expense, as adjusted* |
$ | 29.6 | $ | 27.8 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 708.9 | $ | 678.0 | ||||
| R&D as a percentage of net sales, as reported |
4.2 | % | 4.2 | % | ||||
| R&D as a percentage of net sales, as adjusted* |
4.2 | % | 4.1 | % | ||||
| * | 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 February 29, 2012 |
Nine Months Ended February 28, 2011 |
|||||||
| Research and development expense, as reported |
$ | 93.2 | $ | 88.3 | ||||
| Stock-based compensation expense |
(1.4 | ) | (1.5 | ) | ||||
| Operational restructuring and consulting expenses related to operational initiatives (severance, and other related costs) |
(0.2 | ) | (1.4 | ) | ||||
|
|
|
|
|
|||||
| Research and development expense, as adjusted* |
$ | 91.6 | $ | 85.4 | ||||
|
|
|
|
|
|||||
| Net sales |
$ | 2,098.6 | $ | 2,017.0 | ||||
| R&D as a percentage of net sales, as reported |
4.4 | % | 4.4 | % | ||||
| R&D as a percentage of net sales, as adjusted* |
4.4 | % | 4.2 | % | ||||
| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Condensed Consolidated Balance Sheets
(in millions, unaudited)
| (Preliminary) February 29, 2012 |
May 31, 2011 | |||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 496.0 | $ | 327.8 | ||||
| Accounts receivable, net |
507.4 | 480.1 | ||||||
| Income tax receivable |
3.1 | 5.4 | ||||||
| Short-term investments |
3.8 | 41.4 | ||||||
| Inventories |
555.8 | 582.5 | ||||||
| Current deferred income taxes |
72.3 | 71.5 | ||||||
| Prepaid expenses and other |
111.4 | 109.7 | ||||||
| Property, plant and equipment, net |
598.9 | 638.4 | ||||||
| Intangible assets, net |
4,275.0 | 4,534.4 | ||||||
| Goodwill |
4,445.4 | 4,470.1 | ||||||
| Other assets |
69.5 | 95.7 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 11,138.6 | $ | 11,357.0 | ||||
|
|
|
|
|
|||||
| Liabilities and Shareholder's Equity |
||||||||
| Current liabilities, excluding debt |
$ | 530.2 | $ | 502.0 | ||||
| Current portion of long-term debt |
36.6 | 37.4 | ||||||
| Long-term debt, net of current portion |
5,883.5 | 5,982.9 | ||||||
| Deferred income taxes, long-term |
1,370.4 | 1,487.6 | ||||||
| Other long-term liabilities |
206.8 | 172.0 | ||||||
| Shareholder's equity |
3,111.1 | 3,175.1 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Shareholder's Equity |
$ | 11,138.6 | $ | 11,357.0 | ||||
|
|
|
|
|
|||||
| Net Debt (a)* |
$ | 5,424.1 | $ | 5,659.4 | ||||
| (a) | Net debt is the sum of total debt less cash and cash equivalents, as defined by the credit agreement. Cash and cash equivalents at May 31, 2011 includes $33.1 million of time deposits with maturities of less than 2 years. |
| * | 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 29, 2012 | May 31, 2008 | |||||||||||
| Senior Secured Debt: |
||||||||||||
| USD Term Loan B |
$ | 2,240.6 | $ | 2,328.3 | ||||||||
| EUR Term Loan B |
1,125.4 | 1,355.2 | ||||||||||
| Asset Based Revolver |
— | — | ||||||||||
| Cash Flow Revolvers |
— | — | ||||||||||
|
|
|
|
|
|||||||||
| Consolidated Senior Secured Debt |
3,366.0 | A | 3,683.5 | E | ||||||||
| Senior Notes |
2,550.0 | 2,570.7 | ||||||||||
| European Operations |
4.1 | 46.6 | ||||||||||
|
|
|
|
|
|||||||||
| Consolidated Total Debt |
5,920.1 | 6,300.8 | ||||||||||
| Cash and Cash Equivalents* ** |
(496.0 | ) | B | (127.6 | ) | F | ||||||
|
|
|
|
|
|||||||||
| Net Debt* |
$ | 5,424.1 | C | $ | 6,173.2 | G | ||||||
|
|
|
|
|
|||||||||
| LTM Adjusted EBITDA |
||||||||||||
| Quarter 4 Fiscal 2011 Adjusted EBITDA |
260.9 | |||||||||||
| Quarter 1 Fiscal 2012 Adjusted EBITDA |
226.6 | |||||||||||
| Quarter 2 Fiscal 2012 Adjusted EBITDA |
266.3 | |||||||||||
| Quarter 3 Fiscal 2012 Adjusted EBITDA |
260.5 | |||||||||||
| “Run Rate” Cost Savings** |
— | |||||||||||
|
|
|
|||||||||||
| Quarter 3 2012 LTM Adjusted EBITDA* |
$ | 1,014.3 | D | |||||||||
|
|
|
|||||||||||
| Fiscal 2008 LTM Adjusted EBITDA |
829.1 | |||||||||||
| “Run Rate” Cost Savings** |
57.0 | |||||||||||
|
|
|
|||||||||||
| Fiscal 2008 LTM Adjusted EBITDA* |
$ | 886.1 | H | |||||||||
|
|
|
|||||||||||
| Senior Secured Leverage Ratio* |
2.83 | A+B / D | 4.01 | E+F / H | ||||||||
| Total Leverage Ratio* |
5.35 | C / D | 6.97 | G / H | ||||||||
| * | See Non-GAAP Financial Measures Disclosure |
| ** | As defined by the Credit Agreement dated September 25, 2007 |
Biomet, Inc.
Other Financial Information
Reconciliation of Net Loss, as reported to EBITDA, as adjusted*
(in millions, unaudited)
| Three Months Ended May 31, 2011 |
||||
| Net loss, as reported |
$ | (812.8 | ) | |
| Depreciation |
46.9 | |||
| Amortization |
84.6 | |||
| Interest expense |
125.2 | |||
| Other (income) expense |
(2.5 | ) | ||
| Income tax benefit |
(157.2 | ) | ||
| Stock-based compensation expense |
(1.9 | ) | ||
| Litigation settlements and reserves and other legal fees |
2.8 | |||
| Operational restructuring and consulting expenses related to operational initiatives (severance, building impairments, abnormal manufacturing variances and other related costs) |
31.9 | |||
| Sponsor fee |
2.5 | |||
| Goodwill and intangible assets impairment charge |
941.4 | |||
|
|
|
|||
| EBITDA, as adjusted* |
$ | 260.9 | ||
|
|
|
|||
| 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 other related costs |
49.6 | |||
| Additional legal/merger related fees |
11.8 | |||
|
|
|
|||
| EBITDA, as adjusted* |
$ | 829.1 | ||
|
|
|
|||
| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Consolidated Statement of Cash Flows
(in millions, unaudited)
| Fiscal 2012 | ||||||||||||||||
| Three Months Ended August 31, 2011 |
Three Months Ended November 30, 2011 |
(Preliminary) Three Months Ended February 29, 2012 |
(Preliminary) Nine Months Ended February 29, 2012 |
|||||||||||||
| CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: |
||||||||||||||||
| Net loss |
$ | (39.2 | ) | $ | (14.0 | ) | $ | (16.5 | ) | $ | (69.7 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization |
129.8 | 131.7 | 126.5 | 388.0 | ||||||||||||
| Amortization of deferred financing costs |
2.8 | 2.7 | 2.8 | 8.3 | ||||||||||||
| Stock-based compensation expense |
4.7 | 4.0 | 3.5 | 12.2 | ||||||||||||
| Recovery of doubtful accounts receivable |
(2.5 | ) | — | (0.1 | ) | (2.6 | ) | |||||||||
| Realized gain on investmetns |
— | — | (1.9 | ) | (1.9 | ) | ||||||||||
| Loss on impairment of investments |
9.2 | 7.3 | 2.8 | 19.3 | ||||||||||||
| Property, plant and equipment impairment charge |
— | 0.4 | — | 0.4 | ||||||||||||
| Provision for inventory obsolescence |
(0.5 | ) | 4.3 | 5.7 | 9.5 | |||||||||||
| Deferred income taxes |
(67.0 | ) | (20.6 | ) | (33.1 | ) | (120.7 | ) | ||||||||
| Other |
(0.6 | ) | 2.4 | (3.8 | ) | (2.0 | ) | |||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Accounts receivable |
21.3 | (59.2 | ) | (0.5 | ) | (38.4 | ) | |||||||||
| Inventories |
(2.2 | ) | 3.6 | (1.3 | ) | 0.1 | ||||||||||
| Prepaid expenses |
2.7 | (0.7 | ) | (3.2 | ) | (1.2 | ) | |||||||||
| Accounts payable |
(1.5 | ) | 7.7 | (10.4 | ) | (4.2 | ) | |||||||||
| Income taxes |
22.4 | (4.6 | ) | 1.3 | 19.1 | |||||||||||
| Accrued interest |
67.8 | (73.2 | ) | 67.1 | 61.7 | |||||||||||
| Accrued expenses and other |
(24.1 | ) | 18.9 | 18.6 | 13.4 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
123.1 | 10.7 | 157.5 | 291.3 | ||||||||||||
| CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: |
||||||||||||||||
| Proceeds from sales/maturities of investments |
33.7 | — | 8.3 | 42.0 | ||||||||||||
| Purchases of investments |
(0.2 | ) | — | (0.1 | ) | (0.3 | ) | |||||||||
| Proceeds from sale of property and equipment |
0.1 | 13.0 | 0.6 | 13.7 | ||||||||||||
| Capital expenditures |
(39.2 | ) | (42.0 | ) | (41.5 | ) | (122.7 | ) | ||||||||
| Acquisitions, net of cash acquired |
(3.9 | ) | (10.5 | ) | — | (14.4 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash used in investing activities |
(9.5 | ) | (39.5 | ) | (32.7 | ) | (81.7 | ) | ||||||||
| CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: |
||||||||||||||||
| Debt: |
||||||||||||||||
| Payments under European facilties |
(0.5 | ) | (0.3 | ) | (0.3 | ) | (1.1 | ) | ||||||||
| Payments under senior secured credit facilities |
(8.9 | ) | (9.1 | ) | (8.6 | ) | (26.6 | ) | ||||||||
| Equity: |
||||||||||||||||
| Repurchase of LVB Acquisition, Inc. shares |
(0.3 | ) | (0.8 | ) | (0.1 | ) | (1.2 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash used in financing activities |
(9.7 | ) | (10.2 | ) | (9.0 | ) | (28.9 | ) | ||||||||
| Effect of exchange rate changes on cash |
(0.5 | ) | (8.3 | ) | (3.7 | ) | (12.5 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Increase (decrease) in cash and cash equivalents |
103.4 | (47.3 | ) | 112.1 | 168.2 | |||||||||||
| Cash and cash equivalents, beginning of period |
327.8 | 431.2 | 383.9 | 327.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash and cash equivalents, end of period |
$ | 431.2 | $ | 383.9 | $ | 496.0 | $ | 496.0 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Supplemental disclosures of cash flow information: |
||||||||||||||||
| Cash paid during the period for: |
||||||||||||||||
| Interest |
$ | 55.0 | $ | 191.7 | $ | 47.3 | $ | 294.0 | ||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Income taxes |
$ | 20.7 | $ | 16.1 | $ | 40.1 | $ | 76.9 | ||||||||
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|
|||||||||
Biomet, Inc.
Consolidated Statement of Cash Flows
(in millions, unaudited)
| Fiscal 2011 | ||||||||||||||||
| Three Months Ended August 31, 2010 |
Three Months Ended November 30, 2010 |
Three Months Ended February 28, 2011 |
NIne Months Ended February 28, 2011 |
|||||||||||||
| CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: |
||||||||||||||||
| Net loss |
$ | (17.8 | ) | $ | (7.6 | ) | $ | (11.6 | ) | $ | (37.0 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization |
136.7 | 139.5 | 141.3 | 417.5 | ||||||||||||
| Amortization of deferred financing costs |
2.8 | 2.9 | 2.7 | 8.4 | ||||||||||||
| Stock-based compensation expense |
5.1 | 4.3 | 5.2 | 14.6 | ||||||||||||
| Recovery of doubtful accounts receivable |
(1.3 | ) | (0.3 | ) | (2.3 | ) | (3.9 | ) | ||||||||
| Gain on sale of investments |
— | (2.6 | ) | (2.3 | ) | (4.9 | ) | |||||||||
| Provision for inventory obsolescence |
1.7 | 5.3 | 4.8 | 11.8 | ||||||||||||
| Deferred income taxes |
(43.8 | ) | (10.6 | ) | (44.0 | ) | (98.4 | ) | ||||||||
| Other |
0.5 | (18.2 | ) | 7.4 | (10.3 | ) | ||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Accounts receivable |
27.1 | (28.6 | ) | 13.2 | 11.7 | |||||||||||
| Inventories |
(18.3 | ) | (33.2 | ) | (13.5 | ) | (65.0 | ) | ||||||||
| Prepaid expenses |
(12.2 | ) | 10.5 | (6.7 | ) | (8.4 | ) | |||||||||
| Accounts payable |
(0.6 | ) | 3.0 | (9.6 | ) | (7.2 | ) | |||||||||
| Income taxes |
4.3 | 2.9 | 6.8 | 14.0 | ||||||||||||
| Accrued interest |
67.7 | (74.3 | ) | 67.7 | 61.1 | |||||||||||
| Accrued expenses and other |
(20.6 | ) | 27.1 | (7.3 | ) | (0.8 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
131.3 | 20.1 | 151.8 | 303.2 | ||||||||||||
| CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: |
||||||||||||||||
| Proceeds from sales/maturities of investments |
3.8 | 7.9 | 2.9 | 14.6 | ||||||||||||
| Purchases of investments |
— | — | (44.3 | ) | (44.3 | ) | ||||||||||
| Proceeds from sale of property and equipment |
— | 4.8 | 1.3 | 6.1 | ||||||||||||
| Capital expenditures |
(36.5 | ) | (52.3 | ) | (45.1 | ) | (133.9 | ) | ||||||||
| Acquisitions, net of cash acquired |
(9.6 | ) | (6.8 | ) | (1.9 | ) | (18.3 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash used in investing activities |
(42.3 | ) | (46.4 | ) | (87.1 | ) | (175.8 | ) | ||||||||
| CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: |
||||||||||||||||
| Debt: |
||||||||||||||||
| Proceeds under European facilities |
0.1 | — | 0.1 | 0.2 | ||||||||||||
| Payments under European facilities |
(0.6 | ) | (0.5 | ) | (0.4 | ) | (1.5 | ) | ||||||||
| Payments under senior secured credit facilities |
(8.5 | ) | (8.7 | ) | (8.7 | ) | (25.9 | ) | ||||||||
| Repurchases of senior notes |
— | (11.2 | ) | — | (11.2 | ) | ||||||||||
| Equity: |
||||||||||||||||
| Repurchase of LVB Acquisition, Inc. shares |
(0.2 | ) | (0.8 | ) | (0.2 | ) | (1.2 | ) | ||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Net cash used in financing activities |
(9.2 | ) | (21.2 | ) | (9.2 | ) | (39.6 | ) | ||||||||
| Effect of exchange rate changes on cash |
5.1 | 2.1 | 3.6 | 10.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Increase (decrease) in cash and cash equivalents |
84.9 | (45.4 | ) | 59.1 | 98.6 | |||||||||||
| Cash and cash equivalents, beginning of period |
189.1 | 274.0 | 228.6 | 189.1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash and cash equivalents, end of period |
$ | 274.0 | $ | 228.6 | $ | 287.7 | $ | 287.7 | ||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Supplemental disclosures of cash flow information: |
||||||||||||||||
| Cash paid during the period for: |
||||||||||||||||
| Interest |
$ | 56.3 | $ | 194.5 | $ | 53.6 | $ | 304.4 | ||||||||
|
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|
|
|
|
|
|
|||||||||
| Income taxes |
$ | 6.5 | $ | 11.2 | $ | 10.5 | $ | 28.2 | ||||||||
|
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|
|||||||||
Biomet, Inc.
Other Financial Information
GAAP Operating Cash Flow Reconciled to Free Cash Flow* & Unlevered Free Cash Flow*
(in millions, unaudited)
| Fiscal 2012 | ||||||||||||||||
| Three Months Ended August 31, 2011 |
Three Months Ended November 30, 2011 |
(Preliminary) Three Months Ended February 29, 2012 |
(Preliminary) Nine Months Ended February 29, 2012 |
|||||||||||||
| Net loss |
$ | (39.2 | ) | $ | (14.0 | ) | $ | (16.5 | ) | $ | (69.7 | ) | ||||
| Adjustments: |
||||||||||||||||
| Depreciation and amortization |
129.8 | 131.7 | 126.5 | 388.0 | ||||||||||||
| Amortization of deferred financing costs |
2.8 | 2.7 | 2.8 | 8.3 | ||||||||||||
| Stock-based compensation expense |
4.7 | 4.0 | 3.5 | 12.2 | ||||||||||||
| Recovery of doubtful accounts receivable |
(2.5 | ) | — | (0.1 | ) | (2.6 | ) | |||||||||
| Realized gain on investmetns |
— | — | (1.9 | ) | (1.9 | ) | ||||||||||
| Loss on impairment of investments |
9.2 | 7.3 | 2.8 | 19.3 | ||||||||||||
| Property, plant and equipment impairment charge |
— | 0.4 | 0.4 | |||||||||||||
| Provision for inventory obsolescence |
(0.5 | ) | 4.3 | 5.7 | 9.5 | |||||||||||
| Deferred income taxes |
(67.0 | ) | (20.6 | ) | (33.1 | ) | (120.7 | ) | ||||||||
| Other |
(0.6 | ) | 2.4 | (3.8 | ) | (2.0 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
36.7 | 118.2 | 85.9 | 240.8 | ||||||||||||
| Changes In: |
||||||||||||||||
| Accounts receivable |
21.3 | (59.2 | ) | (0.5 | ) | (38.4 | ) | |||||||||
| Inventories |
(2.2 | ) | 3.6 | (1.3 | ) | 0.1 | ||||||||||
| Prepaid expenses |
2.7 | (0.7 | ) | (3.2 | ) | (1.2 | ) | |||||||||
| Accounts payable |
(1.5 | ) | 7.7 | (10.4 | ) | (4.2 | ) | |||||||||
| Income taxes |
22.4 | (4.6 | ) | 1.3 | 19.1 | |||||||||||
| Accrued interest |
67.8 | (73.2 | ) | 67.1 | 61.7 | |||||||||||
| Accrued expenses and other |
(24.1 | ) | 18.9 | 18.6 | 13.4 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
$ | 123.1 | $ | 10.7 | $ | 157.5 | $ | 291.3 | ||||||||
| Capital expenditures |
(39.2 | ) | (42.0 | ) | (41.5 | ) | (122.7 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free Cash Flow* |
$ | 83.9 | $ | (31.3 | ) | $ | 116.0 | $ | 168.6 | |||||||
| Acquisitions, net of cash acquired |
(3.9 | ) | (10.5 | ) | — | (14.4 | ) | |||||||||
| Proceeds from sales/maturities of investments |
33.7 | — | 8.3 | 42.0 | ||||||||||||
| Purchases of investments |
(0.2 | ) | — | (0.1 | ) | (0.3 | ) | |||||||||
| Proceeds from sale of property and equipment |
0.1 | 13.0 | 0.6 | 13.7 | ||||||||||||
| Repurchase of LVB Acquisition, Inc. shares |
(0.3 | ) | (0.8 | ) | (0.1 | ) | (1.2 | ) | ||||||||
| Add back: cash paid for interest |
55.0 | 191.7 | 47.3 | 294.0 | ||||||||||||
| Effect of exchange rates on cash |
(0.5 | ) | (8.3 | ) | (3.7 | ) | (12.5 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Unlevered Free Cash Flow* (1) |
$ | 167.8 | $ | 153.8 | $ | 168.3 | $ | 489.9 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Cash flow that does not take into account the interest payments required on outstanding debt, among other financing and investing activities. Commonly used by companies that are highly leveraged to show how assets perform before debt service (principal and interest). |
| * | See Non-GAAP Financial Measures Disclosure |
Biomet, Inc.
Other Financial Information
GAAP Operating Cash Flow Reconciled to Free Cash Flow* & Unlevered Free Cash Flow*
(in millions, unaudited)
| Fiscal 2011 | ||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||
| August 31, 2010 | November 30, 2010 | February 28, 2011 | February 28, 2011 | |||||||||||||
| Net loss |
$ | (17.8 | ) | $ | (7.6 | ) | $ | (11.6 | ) | $ | (37.0 | ) | ||||
| Adjustments: |
||||||||||||||||
| Depreciation and amortization |
136.7 | 139.5 | 141.3 | 417.5 | ||||||||||||
| Amortization of deferred financing costs |
2.8 | 2.9 | 2.7 | 8.4 | ||||||||||||
| Stock-based compensation expense |
5.1 | 4.3 | 5.2 | 14.6 | ||||||||||||
| Recovery of doubtful accounts receivable |
(1.3 | ) | (0.3 | ) | (2.3 | ) | (3.9 | ) | ||||||||
| Gain on sale of investments |
— | (2.6 | ) | (2.3 | ) | (4.9 | ) | |||||||||
| Provision for inventory obsolescence |
1.7 | 5.3 | 4.8 | 11.8 | ||||||||||||
| Deferred income taxes |
(43.8 | ) | (10.6 | ) | (44.0 | ) | (98.4 | ) | ||||||||
| Other |
0.5 | (18.2 | ) | 7.4 | (10.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
83.9 | 112.7 | 101.2 | 297.8 | ||||||||||||
| Changes In: |
||||||||||||||||
| Accounts receivable |
27.1 | (28.6 | ) | 13.2 | 11.7 | |||||||||||
| Inventories |
(18.3 | ) | (33.2 | ) | (13.5 | ) | (65.0 | ) | ||||||||
| Prepaid expenses |
(12.2 | ) | 10.5 | (6.7 | ) | (8.4 | ) | |||||||||
| Accounts payable |
(0.6 | ) | 3.0 | (9.6 | ) | (7.2 | ) | |||||||||
| Income taxes |
4.3 | 2.9 | 6.8 | 14.0 | ||||||||||||
| Accrued interest |
67.7 | (74.3 | ) | 67.7 | 61.1 | |||||||||||
| Accrued expenses and other |
(20.6 | ) | 27.1 | (7.3 | ) | |
(0.8 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
$ | 131.3 | $ | 20.1 | $ | 151.8 | $ | 303.2 | ||||||||
| Capital expenditures |
(36.5 | ) | (52.3 | ) | (45.1 | ) | (133.9 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free Cash Flow* |
$ | 94.8 | $ | (32.2 | ) | $ | 106.7 | $ | 169.3 | |||||||
| Acquisitions, net of cash acquired |
(9.6 | ) | (6.8 | ) | (1.9 | ) | (18.3 | ) | ||||||||
| Proceeds from sales/maturities of investments |
3.8 | 7.9 | 2.9 | 14.6 | ||||||||||||
| Purchases of investments |
— | — | (44.3 | ) | (44.3 | ) | ||||||||||
| Proceeds from sale of property and equipment |
— | 4.8 | 1.3 | 6.1 | ||||||||||||
| Loss on bond repurchase |
— | (1.2 | ) | — | (1.2 | ) | ||||||||||
| Repurchase of LVB Acquisition, Inc. shares |
(0.2 | ) | (0.8 | ) | (0.2 | ) | (1.2 | ) | ||||||||
| Add back: cash paid for interest |
56.3 | 194.5 | 53.6 | 304.4 | ||||||||||||
| Effect of exchange rates on cash |
5.1 | 2.1 | 3.6 | 10.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Unlevered Free Cash Flow* (1) |
$ | 150.2 | $ | 168.3 | $ | 121.7 | $ | 440.2 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Cash flow that does not take into account the interest payments required on outstanding debt, among other financing and investing activities. Commonly used by companies that are highly leveraged to show how assets perform before debt service (principal and interest). |
| * | See Non-GAAP Financial Measures Disclosure |