("Biomet 3Q Loss Widens On Charges; Sales Grow 5%," at 7:03 a.m. EDT, misstated the hip sales increase in the sixth paragraph. The correct version follows:)
Biomet Inc.'s fiscal third-quarter loss widened on merger-related costs as strong sales for sports medicine, extremities and trauma helped drive the orthopedic medical-device maker's top-line growth.
Though privately held, Biomet's results are closely watched because the company reports earlier than larger competitors--such as Zimmer Holdings Inc. (>> Zimmer Holdings, Inc.), Stryker Corp. (SYK) and Johnson & Johnson (>> Johnson & Johnson)--and could foreshadow industry trends.
Biomet has seen its losses widen 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 have also been weak as patients, worried about out-of-pocket costs or long absences from work to recover, opt to defer hip and knee-replacement procedures. Biomet has said it is unclear when demand will come back.
For the quarter ended Feb. 29, Biomet reported a loss of $16.5 million, compared with a loss of $11.6 million a year earlier. Excluding merger and other special items, adjusted earnings fell to $55.1 million from $63.8 million. Sales jumped 4.5% to $708.9 million.
Gross margin slipped to 69% from 69.3%.
The company, which distributes products in about 90 countries, said worldwide hip sales increased 6%, while worldwide knee sales grew 4%. Sales for sports medicine, extremities and trauma were up 16%, while the spine and bone healing segment saw a 5% drop.
U.S. sales grew 5% while Europe sales rose 2.1%. International sales, which include Canada, South America, Mexico and the Asia-Pacific region, jumped 7.2%.
Last week, Biomet made a binding offer to acquire the global trauma business of Johnson & Johnson's DePuy Orthopaedics Inc. for about $280 million in cash, a deal the company said would greatly expand its sports, extremities and trauma business. Biomet also recently agreed to pay $23 million in penalties to settle U.S. allegations that it bribed doctors in Brazil, China and other countries over a period of years.
--By Anne Pallivathuckal and Melodie Warner, Dow Jones Newswires; 212-416-2283; [email protected]