Biomet loss narrows, biggest segments grow sales

Biomet Inc.’s fiscal fourth-quarter loss narrowed as the orthopedic medical-device maker lowered costs and improved revenue, seeing year-over-year growth in its three largest segments.
Though privately held, Biomet’s results are closely watched because the company reports earlier than larger competitors–such as Zimmer Holdings Inc.,Stryker Corp.and Johnson & Johnson JNJ — and could foreshadow industry trends. Biomet has seen its results in recent quarters weighed down by charges related to its $11.4 billion buyout in 2007 by a private-equity consortium including affiliates from The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.Sales growth has been weak in past quarters as patients, concerned about out-of-pocket expenses or long absences from work needed to recover, have opted to put off hip and knee-replacement surgeries.For the period ended May 31, Biomet posted a loss of $388.1 million, compared with a loss of $812.8 million the year before. The most recent quarter included a goodwill and intangible asset impairment charge of $529.8 million, mostly related to Biomet’s spine and bone healing segment and its dental division, among other items, and the year-ago period included merger-related depreciation and amortization and other expenses. Excluding the special items, adjusted earnings rose to $105.6 million from $24.6 million.Net sales edged up 3.4% to $739.5 million as gross margin widened to 69.6% from 68%.
U.S. sales rose 6.8% while sales in Europe fell 8.2%, or fell 2% on a constant currency basis. International sales, which include Canada, South America, Mexico and the Pacific Rim, increased 12%, or 14% at constant currency.The company said worldwide hip sales increased 3%, while worldwide knee sales grew 4%. Sales for sports medicine, extremities and trauma were up 14%, and the spine and bone healing segment saw a 4.6% increase.
Source:Victoria Stilwell.http://www.marketwatch.com