Biomet, Inc. (Biomet), an orthopedic devices company, has reported preliminary results for the third quarter ended February 28, 2009. For the third quarter of 2009, Biomet reported net sales of $615 million, up 2%, compared with net sales of $603.1 million for the third quarter of fiscal year 2008. Excluding the impact of foreign currency, net sales increased 7%. Reconstructive product sales grew 1% (7% constant currency) worldwide during the third quarter of 2009, with 10% growth in the US.
Excluding dental sales, reconstructive sales increased 4% (10% constant currency) worldwide and increased 13% in the US.
Sales of Biomet’s hip products improved 5% (10% constant currency) during the third quarter, with a 16% sales increase in the US. The primary drivers of third quarter hip sales growth included the traditional and Microplasty versions of the Taperloc Hip Stem; M2a-Magnum Acetabular Systems; Ringloc and Regenerex Ringloc Modular Acetabular Systems; and E-Poly Antioxidant Infused Technology Acetabular Liners, as well as the Exceed ABT (Advanced Bearing Technologies) Acetabular System, which is available only outside the US.
Global knee sales improved 3% (9% constant currency) and improved 8% in the US during the quarter. Key products during the third quarter were the Vanguard Complete Knee System and the Oxford Partial Knee System, as well as the recently introduced E-Poly Antioxidant Infused Technology Tibial Bearings. The E-Poly technology provides Vitamin E infused highly crosslinked polyethylene, which is designed to offer strength and oxidative stability for improved wear characteristics.
As a result of the weak economy and the elective nature of dental implant treatment, dental reconstructive device sales decreased 16% (-10% constant currency) worldwide during the third quarter and decreased 10% in the US.
Fixation sales were flat (+4% constant currency) worldwide during the third quarter and improved 1% in the US. Strong sales growth of craniomaxillofacial fixation products, along with slightly positive sales growth for internal fixation, was offset by decreased sales of electrical stimulation and external fixation devices during the third quarter.
Spine product sales improved 7% (9% constant currency) worldwide, with 15% growth in the US due to strong sales of spine hardware and spinal stimulation devices. Sales of spine hardware and orthobiologics for the spine improved 17% in the US during the quarter.
Sales of “other” products improved 6% (11% constant currency) worldwide and improved 14% in the US due to continued strong demand for sports medicine products and positive sales growth of softgoods and bracing products.
On a geographic basis, US sales improved 10% to $387.9 million during the third quarter; Europe sales decreased 13% (+2% constant currency) to $167.8 million; and International sales (primarily Canada, South America, Mexico and the Pacific Rim) remained flat (+6% constant currency), at $59.3 million. Excluding dental and the impact of foreign currency, global sales improved 10% with US sales growth of 13%; Europe sales growth of 4%; and an increase of 10% for International sales.
For the nine-month period ended February 28, 2009, net sales improved 7% (8% constant currency) to $1,864.8 million from $1,747.7 million for the combined period from June 1, 2007 to July 11, 2007 (Predecessor) and July 12, 2007 to February 29, 2008 (Successor). Fiscal year to date, US sales grew 10% to $1,135.9 million; Europe sales improved 5%, constant currency, to $532.6 million; and International sales grew 14%, on a constant currency basis, to $196.3 million.
Biomet’s president and chief executive officer Jeffrey R. Binder remarked, “I am pleased to announce very positive sales results for our core orthopedic reconstructive device category during the third quarter of fiscal year 2009, resulting in our seventh consecutive quarter of double-digit orthopedic reconstructive device sales worldwide on a constant currency basis. Global reconstructive device sales, excluding dental, improved 10% at constant currency, with 13% growth in the US. I’m particularly encouraged by the strong momentum in our hip sales, which grew 16% in the US and improved 10% worldwide, excluding the impact of foreign currency. Knee sales improved 8% in the US and 9% worldwide on a constant currency basis, despite being up against steep growth rates from last year’s third quarter of 23% growth in the US and constant currency growth of 21% worldwide.”
Binder continued, “Additionally, we experienced strong US sales in our spine and sports medicine divisions, contributing to our consolidated domestic sales growth of 10% during the third quarter. While we face considerable issues in the dental market, I’m pleased with Biomet’s overall progress during the third quarter and the first nine months of fiscal year 2009.”
Binder will be presenting this sales data at the Goldman Sachs Leveraged Finance Healthcare Conference in New York.
In addition with the Fiscal 2009 Third Quarter full financial release, you are invited to participate in the third quarter conference call on Tuesday, April 14th, 2009 at 10:00 a.m. Eastern.