Biomet Announces Fourth Quarter and Fiscal 2009 Financial Results

WARSAW, Ind.--(Business Wire)--
Biomet, Inc. announced today financial results for its fourth quarter and fiscal
year ended May 31, 2009. The Company announced preliminary net sales results for
the fiscal fourth quarter and twelve month period in its press release issued
June 26, 2009, which is posted on Biomet`s website at www.biomet.com in the
Investors Section. There have been no changes to the net sales results following
the release of the preliminary net sales results.

Fourth Quarter Financial Results

During the fourth quarter of fiscal year 2009, net sales increased 1% to $639.3
million, compared to net sales during the fourth quarter of fiscal year 2008 of
$635.6 million. On a constant currency basis, net sales increased 7% during the
fourth quarter. Domestic sales increased 9% to $392.0 million, while sales
outside the United States decreased 11% (+5% constant currency) to $247.3
million during the fourth quarter. Net sales of the Company`s Reconstructive
segment, excluding dental implants, increased 3% (11% constant currency)
worldwide during the quarter.

The Company recorded $311.8 million of special items (pre-tax) during the fourth
quarter of fiscal year 2009, which consisted of the following items:

* $103.6 million of amortization and depreciation expense related to the Merger;

* $102.6 million charge resulting from finalizing the non-cash goodwill and
intangible asset impairment related to the dental reconstructive business;
* $64.4 million of settlements and reserves associated with the previously
disclosed King litigation and other legal fees;
* $20.5 million of inventory charges related to a product rationalization
program in the Company`s Spine and Trauma business; and
* $20.7 million of other special items, including operational improvement and
restructuring costs and non-cash stock compensation expense.

On a reported basis, operating loss for the fourth quarter was $107.2 million,
compared to operating income of $44.8 million for the fourth quarter of the
prior fiscal year. Excluding special charges in both periods, adjusted operating
income increased 12% to $204.6 million for the fourth quarter, compared to
adjusted operating income of $182.2 million in the same period of the prior
fiscal year.

The Company recorded a net loss of $170.9 million for the fourth quarter of
fiscal year 2009, on a reported basis, in comparison to a net loss of $91.5
million for the same period in the prior fiscal year. Excluding special charges,
adjusted net income was $66.3 million during the quarter, compared to $18.8
million for the fourth quarter in the prior fiscal year.

Net interest expense for the fourth quarter was $134.5 million compared to
$144.6 million during the fourth quarter of fiscal year 2008.

Excluding special charges and stock compensation expense in both periods,
adjusted earnings before interest, taxes, depreciation and amortization
("EBITDA") for the fourth quarter increased 10.0% to $242.5 million, or 37.9% of
net sales, compared to adjusted EBITDA of $220.5 million, or 34.7% of net sales,
for the fourth quarter of fiscal year 2008.

Free cash flow (operating cash flow minus capital expenditures) was $58.8
million for fiscal year ended May 31, 2009. Unlevered free cash flow (cash flow
before debt service) totaled $592.1 million for the twelve-month period ended
May 31, 2009, and $197.3 million for the fourth quarter of fiscal year 2009.

The Company`s reported net debt balance as of May 31, 2009 was $5.997 billion,
including cash on hand of $215.6 million, for a net debt reduction of $147.9
million since the Merger date of September 25, 2007. Reflected in this net debt
reduction is $31.9 million of unfavorable foreign currency translation on the
Company`s Euro denominated Term Loan.

At May 31, 2009, the Company`s senior secured leverage ratio was at 3.7 times
adjusted EBITDA (including run rate cost savings as defined in the Credit
Agreement dated September 25, 2007), compared to 4.7 times at the Merger date.
The Company`s net debt leverage ratio was 6.2 times adjusted EBITDA (including
run rate cost savings as defined in the Credit Agreement dated September 25,
2007) at fiscal year end, in comparison to 7.7 times at the time of the Merger.

A reconciliation of reported results to adjusted results is included in this
press release, which is also posted on our website at www.biomet.com in the
Investors Section.

Full Year Financial Results (Combined1)

For the twelve months ended May 31, 2009, net sales increased 5% to $2.504
billion from $2.383 billion in the prior fiscal year. On a constant currency
basis, net sales increased 8% worldwide. Sales in the United States increased
10% during fiscal year 2009, while sales outside of the United States decreased
1% (+6% constant currency). Net sales of the Company`s Reconstructive segment,
excluding dental implants, increased 8% (12% constant currency) worldwide during
fiscal year 2009. On a worldwide and constant currency basis, knee and hip sales
increased 12% and 11%, respectively.

During the twelve-month period ended May 31, 2009, the Company incurred special
charges (pre-tax) of $1,129.8 million, consisting of the following:

* $392.8 million of amortization and depreciation expense related to the Merger;

* $551.1 million non-cash goodwill and intangible asset impairment charge
related to the dental reconstructive business;
* $87.8 million of settlements and reserves associated with the previously
disclosed King litigation and other legal fees;
* $20.5 million of inventory charges related to a product rationalization
program in the Company`s Spine and Trauma business; and
* $77.6 million of other special items, including $34.8 million of operational
improvement and restructuring costs, as well as $33.9 million of non-cash stock
compensation expense.

On a reported basis, operating loss for fiscal year 2009 was $348.3 million,
compared to $750.5 million for fiscal year 2008. Excluding special charges,
adjusted operating income for fiscal year 2009 increased 11% to $781.5 million,
or 31.2% of net sales, compared to $702.4 million, or 29.5% of net sales, in the
prior fiscal year.

Net interest expense for fiscal year 2009 was $547.1 million, compared to $516.6
million in fiscal year 2008.

The Company recorded a net loss for fiscal year 2009 of $749.2 million, compared
to $1,018.8 million for fiscal year 2008. Excluding special charges in both
years, adjusted net income for fiscal year 2009 was $158.1 million, compared to
$107.4 million for the same period in the prior year.

Excluding special charges and stock compensation expense in both periods,
adjusted EBITDA for fiscal year 2009 increased 12% to $926.4 million, or 37.0%
of sales compared to adjusted EBITDA of $829.1 million or 34.8% of sales for
fiscal year 2008.

Biomet`s President and Chief Executive Officer Jeffrey R. Binder commented, "I`m
extremely pleased with the Biomet team`s overall performance during both the
fourth quarter and our full fiscal year 2009. We continued to take additional
market share in our orthopedic reconstructive business during fiscal 2009, with
double-digit sales growth in hips, knees and extremities. Our sports medicine,
craniomaxillofacial fixation and biologics divisions each recorded double-digit
sales growth during fiscal 2009, as well, while our spine business continued to
gain momentum each quarter throughout the year, reaching double-digit sales
growth during the fourth quarter."

Mr. Binder continued, "In addition to our strong sales driven by new products
and good sales execution, we made significant progress with our value creation
program and maintained good discipline in operational expense management,
providing additional opportunities to increase the bottom line. During fiscal
year 2009, we were able to further improve our leverage ratios with adjusted
EBITDA growth of 10% for the fourth quarter and 12% for the full year. We are
working hard toward delivering another strong year in fiscal 2010."

1In this press release and related website schedules, the June 1 to July 11,
2007 and July 12 to May 31, 2008 periods have been combined and are referred to
as "Combined". The combined presentation does not comply with U.S. GAAP, but is
presented because we believe it provides the most meaningful comparison of our
results. The results of the Successor are not comparable to the results of the
Predecessor due to the difference in basis of presentation of purchase
accounting as compared to historical cost.

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 reconstructive
products, including orthopedic joint replacement devices, bone cements and
accessories, autologous therapies and dental reconstructive implants; fixation
products, including electrical bone growth stimulators, internal and external
orthopedic fixation devices, craniomaxillofacial implants and bone substitute
materials; spinal products, including spinal stimulation devices, spinal
hardware and orthobiologics; and other products, such as arthroscopy products
and softgoods and bracing products. Headquartered in Warsaw, Indiana, Biomet and
its subsidiaries currently distribute products in approximately 90 countries.

The Transaction

Biomet Inc. finalized the merger with LVB Acquisition Merger Sub, Inc., a
wholly-owned subsidiary of LVB Acquisition, Inc., on September 25, 2007. LVB
Acquisition, Inc. is indirectly owned by investment partnerships directly or
indirectly advised or managed by The Blackstone Group L.P., Goldman Sachs & Co.,
Kohlberg Kravis Roberts & Co. L.P. and TPG Capital.

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 ongoing
investigations by the United States Department of Justice and the United States
Securities and Exchange Commission; 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 Corporate Integrity Agreement; the impact to the business as a result of the
economic downturn in both foreign and domestic markets; the possible enactment
of federal or state 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 (as amended) 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,
net income as adjusted, Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and Adjusted EBITDA (as defined by our bank agreement, the
method to calculate this is likely to be different from methods used by other
companies). In addition, information for the period from June 1 to July 11, 2007
("Predecessor" and the date which the merger of Biomet with a company owned by a
consortium of private equity funds occurred, with Biomet as the surviving
entity) and from July 12, 2007 to May 31, 2008 ("Successor") periods have been
combined and are referred to as "Combined" in the press release and attached
statements. The combined presentation does not comply with U.S. GAAP, but is
presented because we believe it provides the most meaningful comparison of our
results. The results of the Successor are not comparable to the results of the
Predecessor due to the difference in basis of presentation of purchase
accounting as compared to historical cost.

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 and/or exclude certain expenses as
defined by our bank 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 private equity owners, certain
severance charges, purchase accounting costs, costs associated with stock option
accounting issues, payments to distributors that are not in the ordinary course
of business, litigation costs, and other related charges.

The Company`s management believes that the presentation of these measures
provides useful information to investors. These measures may assist investors in
evaluating the Company`s operations, period over period. Management uses these
measures internally for evaluation of the performance of the business, including
the allocation of resources and the evaluation of results relative to team
member performance compensation targets, including equity incentives. Investors
should consider these non-GAAP measures only supplement to, not as a substitute
for or as superior to, measures of financial performance prepared in accordance
with GAAP in the United States.

Biomet, Inc.
Product Net Sales*
Three Month Period Ended May 31, 2009 and May 31, 2008
(In millions, unaudited)

Constant
Reported Currency
Q4 2009 Q4 2008 Growth % Growth %
Reconstructive $ 468.2 $ 473.4 (1.1 ) % 6.6 %
Fixation 58.5 58.3 0.3 % 5.0 %
Spine 61.5 53.1 15.9 % 18.0 %
Other 51.1 50.8 0.6 % 6.8 %
Total Sales $ 639.3 $ 635.6 0.6 % 7.4 %

Q4 2009 Net
Q4 2009 Net Q4 2009 Net Sales Growth in
Sales Growth FX Sales Growth in Local Currencies
As Reported Impact Local Currencies Impact of Dental Excluding Dental
Reconstructive (1.1 ) % 7.7 % 6.6 % 4.2 % 10.8 %
Hips 1.3 % 8.0 % 9.3 %
Knees 3.5 % 7.4 % 10.9 %
Extremities 8.6 % 8.9 % 17.5 %
Dental (19.1 ) % 6.4 % (12.7 ) %
Other 4.6 % 9.6 % 14.2 %
Fixation 0.3 % 4.7 % 5.0 %
Spine 15.9 % 2.1 % 18.0 %
Other 0.6 % 6.2 % 6.8 %
Total Sales 0.6 % 6.8 % 7.4 % 3.1 % 10.5 %

* See Non-GAAP Financial Measures Disclosure Below

Biomet, Inc.
Product Net Sales*
Year Ended May 31, 2009 and May 31, 2008
(In millions, unaudited)

Constant
(Combined)* Reported Currency
Fiscal 2009 Fiscal 2008 Growth % Growth %
Reconstructive $ 1,851.0 $ 1,756.7 5.4 % 9.0 %
Fixation 234.1 230.3 1.6 % 3.8 %
Spine 222.1 208.0 6.8 % 7.4 %
Other 196.9 188.3 4.6 % 7.3 %
Total Sales $ 2,504.1 $ 2,383.3 5.1 % 8.2 %

FY 2009 Net
FY 2009 Net FY 2009 Net Sales Growth in
Sales Growth FX Sales Growth in Local Currencies
As Reported Impact Local Currencies Impact of Dental Excluding Dental
Reconstructive 5.4 % 3.6 % 9.0 % 3.0 % 12.0 %
Hips 8.0 % 3.4 % 11.4 %
Knees 7.9 % 3.7 % 11.6 %
Extremities 10.1 % 4.5 % 14.6 %
Dental (8.9 ) % 3.1 % (5.8 ) %
Other 10.2 % 4.4 % 14.6 %
Fixation 1.6 % 2.2 % 3.8 %
Spine 6.8 % 0.6 % 7.4 %
Other 4.6 % 2.7 % 7.3 %
Total Sales 5.1 % 3.1 % 8.2 % 2.0 % 10.2 %

FY 2009 Net
FY 2009 Net Sales Growth
Sales Growth As Reported
As Reported Impact of Dental Excluding Dental
Reconstructive 5.4 % 2.9 % 8.3 %

* See Non-GAAP Financial Measures Disclosure Below

Biomet, Inc.
Geographic Segment Net Sales Percentage Summary*
Three Month Period Ended May 31, 2009 and May 31, 2008
(In millions, unaudited)

Constant
Reported Currency
Q4 2009 Q4 2008 Growth % Growth %
Geographic Segments:
United States $ 392.0 $ 358.0 9.5 % 9.5 %
Europe 179.0 206.9 (13.5 ) % 4.2 %
International 68.3 70.7 (3.3 ) % 6.1 %
Total $ 639.3 $ 635.6 0.6 % 7.4 %

Q4 2009 Net
Q4 2009 Net Q4 2009 Net Sales Growth in
Sales Growth FX Sales Growth in Impact Local Currencies
As Reported Impact Local Currencies of Dental Excluding Dental
United States 9.5 % - % 9.5 % 2.4 % 11.9 %
Europe (13.5 ) % 17.7 % 4.2 % 5.3 % 9.5 %
International (3.3 ) % 9.4 % 6.1 % (0.3 ) % 5.8 %
Total sales 0.6 % 6.8 % 7.4 % 3.1 % 10.5 %

* See Non-GAAP Financial Measures Disclosure Above

Biomet, Inc.
Geographic Segment Net Sales Percentage Summary*
Year Ended May 31, 2009 and May 31, 2008
(In millions, unaudited)

Constant
(Combined)* Reported Currency
Fiscal 2009 Fiscal 2008 Growth % Growth %
Geographic Segments:
United States $ 1,527.9 $ 1,394.0 9.6 % 9.6 %
Europe 711.7 734.5 (3.1 ) % 5.6 %
International 264.5 254.8 3.8 % 8.0 %
Total $ 2,504.1 $ 2,383.3 5.1 % 8.2 %

FY 2009 Net
FY 2009 Net FY 2009 Net Sales Growth in
Sales Growth FX Sales Growth in Impact Local Currencies
United States As Reported Impact Local Currencies of Dental Excluding Dental
Europe (3.1 ) % (8.7 ) % 5.6 % 3.5 % 9.1 %
International 3.8 % (4.2 ) % 8.0 % (0.6 ) % 7.4 %
Total sales 5.1 % (3.1 ) % 8.2 % 2.0 % 10.2 %

* See Non-GAAP Financial Measures Disclosure Above

Biomet, Inc.
As Reported Consolidated Statements of Operations
(In millions, unaudited)

Three Months Ended Three Months Ended
May 31, 2009 May 31, 2008

Net sales $ 639.3 $ 635.6
Cost of sales 265.9 201.2
Gross profit 373.4 434.4
Gross profit percentage 58.4 % 68.3 %

Selling, general and administrative 251.4 263.8
Research and development 26.6 23.1
Amortization 100.0 102.7
Goodwill and intangible assets impairment charge 102.6 -
Operating income (loss) (107.2 ) 44.8
Percentage of Sales -16.8 % 7.0 %

Other expense (income), net (5.3 ) 8.6
Interest expense, net 134.5 144.6
Income (loss) before income taxes (236.4 ) (108.4 )

Income taxes (65.5 ) (16.9 )
Tax rate 27.7 % 15.6 %

Net income (loss) $ (170.9 ) $ (91.5 )
Percentage of Sales -26.7 % -14.4 %

Biomet, Inc.
As Reported Consolidated Statements of Operations
(In millions, unaudited)

(Successor) (Predecessor)
(Successor) Period from Period from
Year Ended July 12, 2007 to June 1, 2007 to
May 31, 2009 May 31, 2008 July 11, 2007

Net sales $ 2,504.1 $ 2,134.5 $ 248.8
Cost of sales 828.4 814.7 102.3
Gross profit 1,675.7 1,319.8 146.5
Gross profit percentage 66.9 % 61.8 % 58.9 %

Selling, general and administrative 1,003.6 1,097.6 194.2
Research and development 93.5 82.2 34.0
In-process research and development - 479.0 -
Amortization 375.8 329.3 0.5
Goodwill and intangible assets impairment charge 551.1 - -
Operating income (loss) (348.3 ) (668.3 ) (82.2 )
Percentage of Sales -13.9 % -31.3 % -33.0 %

Other expense (income), net 25.0 9.7 (0.6 )
Interest expense, net 547.1 516.3 0.3
Income (loss) before income taxes (920.4 ) (1,194.3 ) (81.9 )

Income taxes (171.2 ) (230.1 ) (27.3 )
Tax rate 18.6 % 19.3 % 33.3 %

Net income (loss) $ (749.2 ) $ (964.2 ) $ (54.6 )
Percentage of Sales -29.9 % -45.2 % -21.9 %

BIOMET, INC.
Other Financial Information
Operating Income, as reported to Operating Income, as adjusted
(in millions, unaudited)

Three Months Ended Three Months Ended
May 31, 2009 May 31, 2008

Operating income, as reported $ (107.2 ) $ 44.8
Purchase accounting depreciation 4.5 4.5
Purchase accounting amortization 99.1 102.7
Goodwill and intangible assets impairment charge 102.6 -
Share-based payment 7.6 14.3
Misdated option payroll tax (1.0 ) -
Litigation settlements and reserves and other legal fees 64.4 -
Operational restructuring 5.9 -
Consulting expenses related to operational improvement initiatives, and other related costs
5.4 13.5
Spine and trauma product rationalization 20.5 -
Sponsor fee 2.5 2.4
Other 0.3 -
Operating income, as adjusted* $ 204.6 $ 182.2

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
Operating Income, as reported to Operating Income, as adjusted
(in millions, unaudited)

(Combined)*
Year Ended Year Ended
May 31, 2009 May 31, 2008

Operating income, as reported $ (348.3 ) $ (750.5 )
Purchase accounting depreciation 17.9 14.6
Purchase accounting amortization 374.9 329.3
Goodwill and intangible assets impairment charge 551.1 -
Additional cost of sales for inventory write up to fair value - 160.2
In-process research and development - 479.0
Share-based payment 33.9 25.8
Misdated option payroll tax (5.7 ) -
In-the-money stock option settlement - 112.8
Distributor agreements 2.0 41.7
Litigation settlements and reserves and other legal fees 87.8 26.9
Operational restructuring 15.8 -
Consulting expenses related to operational improvement initiatives, and other related costs
19.0 41.2
Spine and trauma product rationalization 20.5 -
Sponsor fee 9.2 8.4
Financing fees related to merger - 171.6
Investment banker fee - 29.6
Additional legal/merger related fees - 11.8
Other 3.4 -
Operating income, as adjusted* $ 781.5 $ 702.4

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
EBITDA and adjusted EBITDA
(in millions, unaudited)

Three Months Ended Three Months Ended
May 31, 2009 May 31, 2008

Operating income, as reported $ (107.2 ) $ 44.8
Depreciation 41.5 42.8
Amortization 100.0 102.7
EBITDA, as reported* $ 34.3 $ 190.3

Special items and purchase accounting adjustments:
Goodwill and intangible assets impairment charge 102.6 -
Share-based payment 7.6 14.3
Misdated option payroll tax (1.0 ) -
Litigation settlements and reserves and other legal fees 64.4 -
Operational restructuring 5.9 -
Consulting expenses related to operational improvement initiatives, and other related costs
5.4 13.5
Spine and trauma product rationalization 20.5 -
Sponsor fee 2.5 2.4
Other 0.3 -
EBITDA, as adjusted* $ 242.5 $ 220.5

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
EBITDA and adjusted EBITDA
(in millions, unaudited)

(Combined)*
Year Ended Year Ended
May 31, 2009 May 31, 2008

Operating income, as reported $ (348.3 ) $ (750.5 )
Depreciation 161.9 140.8
Amortization 375.8 329.8
EBITDA, as reported* $ 189.4 $ (279.9 )

Special items and purchase accounting adjustments:
Additional cost of sales for inventory write up to fair value - 160.2
In-process research and development - 479.0
Goodwill and intangible assets impairment charge 551.1 -
Share-based payment 33.9 25.8
In-the-money stock option settlement - 112.8
Misdated option payroll tax (5.7 ) -
Distributor agreements 2.0 41.7
Litigation settlements and reserves and other legal fees 87.8 26.9
Operational restructuring 15.8 -
Consulting expenses related to operational improvement initiatives, and other related costs
19.0 41.2
Spine and trauma product rationalization 20.5 -
Sponsor fee 9.2 8.4
Financing fees related to merger - 171.6
Investment banker fee - 29.6
Additional legal/merger related fees - 11.8
Other 3.4 -
EBITDA, as adjusted* $ 926.4 $ 829.1

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
Net Income (Loss) to EBITDA, as reported
(in millions, unaudited)

Three Months Ended Three Months Ended
May 31, 2009 May 31, 2008

Net income (loss), as reported $ (170.9 ) $ (91.5 )
Depreciation 41.5 42.8
Amortization 100.0 102.7
Interest expense, net 134.5 144.6
Other (income) expense, net (5.3 ) 8.6
Income taxes (65.5 ) (16.9 )
EBITDA, as reported* $ 34.3 $ 190.3

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
Net Income (Loss) to EBITDA, as reported
(in millions, unaudited)

(Combined)*
Year Ended Year Ended
May 31, 2009 May 31, 2008

Net income (loss), as reported $ (749.2 ) $ (1,018.8 )
Depreciation 161.9 140.8
Amortization 375.8 329.8
Interest expense, net 547.1 516.6
Other (income) expense, net 25.0 9.1
Income taxes (171.2 ) (257.4 )
EBITDA, as reported* $ 189.4 $ (279.9 )

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Reconciliation of GAAP Consolidated Net Income (Loss) to
Non-GAAP Adjusted Consolidated Net Income
(In millions, unaudited)

Three Months Ended Three Months Ended
May 31, 2009 May 31, 2008
Net income (loss), as reported $ (170.9 ) $ (91.5 )
Purchase accounting depreciation 4.5 4.5
Purchase accounting amortization 99.1 102.7
Goodwill and intangible assets impairment charge 102.6 -
Share-based payment 7.6 14.3
Misdated option payroll tax (1.0 ) -
Litigation settlements and reserves and other legal fees 64.4 -
Operational restructuring 5.9 -
Consulting expenses related to operational improvement initiatives, and other related costs
5.4 13.5
Spine and trauma product rationalization 20.5 -
Sponsor fee 2.5 2.4
Other 0.3 -
Tax effect on special and purchase accounting items (74.6 ) (27.1 )
Net income, as adjusted* $ 66.3 $ 18.8

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Reconciliation of GAAP Consolidated Net Income (Loss) to
Non-GAAP Adjusted Consolidated Net Income
(In millions, unaudited)

(Combined)*
Year Ended Year Ended
May 31, 2009 May 31, 2008
Net income (loss), as reported $ (749.2 ) $ (1,018.8 )
Purchase accounting depreciation 17.9 14.6
Purchase accounting amortization 374.9 329.3
Goodwill and intangible assets impairment charge 551.1 -
Additional cost of sales for inventory write up to fair value - 160.2
In-process research and development - 479.0
Share-based payment 33.9 25.8
In-the-money stock option settlement 112.8
Misdated option payroll tax (5.7 ) -
Distributor agreements 2.0 41.7
Litigation settlements and reserves and other legal fees 87.8 26.9
Operational restructuring 15.8 -
Consulting expenses related to operational improvement initiatives, and other related costs
19.0 41.2
Spine and trauma product rationalization 20.5 -
Sponsor fee 9.2 8.4
Financing fees related to merger - 171.6
Investing banking fee - 29.6
Additional legal/merger related fees - 11.8
Other 3.4 -
Tax effect on special and purchase accounting items (222.5 ) (326.7 )
Net income, as adjusted* $ 158.1 $ 107.4

* See Non-GAAP Financial Measures Disclosure Above

BIOMET, INC.
Other Financial Information
Net Debt Leverage Ratio
(in millions, unaudited)

Year Ended
May 31, 2009

Operating income, as reported $ (348.3 )
Depreciation 161.9
Amortization 375.8
EBITDA, as reported* $ 189.4

Special items and purchase accounting adjustments:
Goodwill and intangible assets impairment charge 551.1
Share-based payment 33.9
Misdated option payroll tax (5.7 )
Distributor agreements 2.0
Litigation settlements and reserves and other legal fees 87.8
Operational restructuring 15.8
Consulting expenses related to operational improvement initiatives, and other related costs
19.0
Spine and trauma product rationalization 20.5
Sponsor fee 9.2
Other 3.4
EBITDA, as adjusted* $ 926.4

Run rate cost savings** $ 39.5

EBITDA, as adjusted including run rate cost savings* $ 965.9 B

Gross debt $ 6,212.7
Cash (215.6 )
Net debt* $ 5,997.1 A

Net Debt Leverage Ratio* 6.2 A / B

* See Non-GAAP Financial Measures Disclosure Above

** As defined by the Credit Agreement dated September 25, 2007

BIOMET, INC.
Other Financial Information
Senior Secured Leverage Ratio
(in millions, unaudited)

Year Ended
May 31, 2009

Operating income, as reported $ (348.3 )
Depreciation 161.9
Amortization 375.8
EBITDA, as reported* $ 189.4

Special items and purchase accounting adjustments:
Goodwill and intangible assets impairment charge 551.1
Share-based payment 33.9
Misdated option payroll tax (5.7 )
Distributor agreements 2.0
Litigation settlements and reserves and other legal fees 87.8
Operational restructuring 15.8
Consulting expenses related to operational improvement initiatives, and other related costs 19.0
Spine and trauma product rationalization 20.5
Sponsor fee 9.2
Other 3.4
EBITDA, as adjusted* $ 926.4

Run rate cost savings** $ 39.5

EBITDA, as adjusted including run rate cost savings* $ 965.9 B

Term Loans (USD and Euro) $ 3,524.7
Asset based revolver 65.2
Senior Secured Debt $ 3,589.9 A

Senior Secured Leverage Ratio* 3.7 A / B

* See Non-GAAP Financial Measures Disclosure Above

** As defined by the Credit Agreement dated September 25, 2007

Biomet, Inc.
Balance Sheets
(In millions, unaudited)

(Preliminary)
May 31, 2009 May 31, 2008

Assets
Cash and cash equivalents $ 215.6 $ 127.6
Accounts receivable, net 511.1 486.2
Income tax receivable 20.0 48.8
Inventories 523.9 539.7
Current deferred income taxes 78.4 100.7
Prepaids and other current assets 39.1 46.7
Property, plant and equipment, net 636.1 640.9
Intangible assets, net 5,680.0 6,208.2
Goodwill 4,780.5 5,368.2
Other assets 116.2 160.2
Total Assets $ 12,600.9 $ 13,727.2

Liabilities and Stockholders' Equity
Current liabilities $ 477.0 $ 408.2
Accrued interest 73.1 80.9
Short-term borrowings 81.2 75.4
Long-term debt 6,131.5 6,217.2
Deferred income taxes, long-term 1,816.3 2,044.1
Other long-term liabilities 181.5 51.3
Stockholders' equity 3,840.3 4,850.1
Total Liabilities and Stockholders' Equity $ 12,600.9 $ 13,727.2

Net Debt (a)* $ 5,997.1 $ 6,165.0

(a) Net debt is the sum of total debt less cash and cash equivalents and
short-term investments.

* See Non-GAAP Financial Measures Disclosure Above

Biomet, Inc.
Consolidated Statements of Cash Flows
(In millions, unaudited)

(Preliminary) (Successor) (Predecessor)
(Successor) Period from Period from
Year Ended July 12, 2007 to June 1, 2007 to
May 31, 2009 May 31, 2008 July 11, 2007
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net loss $ (749.2 ) $ (964.2 ) $ (54.6 )
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization 537.7 461.0 9.3
Amortization of deferred financing costs 11.3 7.7 -
In-process research and development charge - 479.0 -
Stock based compensation expense 33.9 25.8 -
Inventory step-up related to merger - 160.3 -
Provision for doubtful accounts receivable (10.5 ) - -
Loss (gain) and impairment on investments, net 14.6 - (7.0 )
Goodwill and intangible assets impairment charge 551.1 - -
Provision for inventory obsolescence 9.9 7.7 -
Deferred income taxes (194.3 ) (27.5 ) 76.7
Excess tax benefit from exercise of stock options - - (3.9 )
Other (26.4 ) (0.4 ) -
Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable (38.8 ) (14.9 ) 5.8
Inventories (27.9 ) 5.7 (12.0 )
Prepaid expenses 3.1 25.2 -
Accounts payable 19.6 13.4 (1.6 )
Accrued (refundable) income taxes 39.4 (17.8 ) -
Accrued interest (7.8 ) 80.9 -
Share-based compensation accrual related to Merger - - 112.8
Other 78.1 (53.0 ) (66.1 )
Net cash provided by operating activities 243.8 188.9 59.4

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Net proceeds (purchases) from sale and purchase of investments 3.1 84.7 42.8
Capital expenditures (185.0 ) (167.9 ) (22.0 )
Acquisitions, net of cash acquired (13.0 ) (0.4 ) (9.8 )
Acquisition of Biomet, Inc. - (11,638.2 ) -
Net cash provided by (used in) investing activities (194.9 ) (11,721.8 ) 11.0

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Debt:
Increase (decrease) in short-term borrowings - (51.0 ) 0.2
Proceeds under revolving credit agreements 213.6 - -
Payments under revolving credit agreements (138.2 ) (134.6 )
Payments under senior secured credit facility (35.7 ) (18.3 ) -
Proceeds from long-term debt - merger - 6,250.7 -
Payment of deferred financing costs - (87.1 ) -
Equity:
Capital contributions 3.7 5,521.9 -
Repurchase of common shares (0.9 ) - (2.8 )
Excess tax benefit from exercise of stock options - - 3.9
Net cash provided by financing activities 42.5 11,481.6 1.1
Effect of exchange rate changes on cash (3.4 ) 2.0 0.1
Increase (decrease) in cash and cash equivalents 88.0 (49.3 ) 71.6
Cash and cash equivalents, beginning of period 127.6 176.9 105.1
Cash and cash equivalents, end of period $ 215.6 $ 127.6 $ 176.7

BIOMET, INC.
Other Financial Information
GAAP Operating Cash Flow Reconciled to Free Cash Flow & Unlevered Free Cash Flow
(in millions, unaudited)

Three Months Ended Year Ended
May 31, 2009 May 31, 2009
Net Income (loss) $ (170.9 ) $ (749.2 )
Adjustments:
Depreciation and amortization 141.5 537.7
Goodwill and intangible assets impairment charge 102.6 551.1
Amortization of deferred financing costs 2.8 11.3
Non-cash stock compensation expense 7.6 33.9
Loss on investments 1.0 14.6
Provision for accounts receivable (3.1 ) (10.5 )
Provision for inventory obsolescence 9.0 9.9
Deferred income taxes (48.3 ) (194.3 )
Other (30.3 ) (26.4 )
TOTAL 11.9 178.1

Changes In:
Accounts and notes receivables, net 5.8 (38.8 )
Inventories (5.2 ) (27.9 )
Prepaid expenses 2.0 3.1
Accounts payable 26.5 19.6
Accrued (refundable) income taxes (13.0 ) 39.4
Accrued Interest (67.1 ) (7.8 )
Other 86.5 78.1
Cash From Operations $ 47.4 $ 243.8

Capital expenditures (57.6 ) (185.0 )

Free Cash Flow $ (10.2 ) $ 58.8

Acquisitions, net of cash acquired (3.5 ) (13.0 )
Proceeds from sale and maturities of investments 3.1 3.1
Capital contributions - 3.7
Repurchase of common shares (0.2 ) (0.9 )
Add back: cash paid for interest 200.1 543.8
Effect of exchange rates on cash 8.0 (3.4 )
Unlevered Free Cash Flow $ 197.3 $ 592.1

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

Copyright Business Wire 2009