Biomet Plans to Restate Annual Report

Biomet Inc. plans to amend its 2006 annual report and fiscal first-quarter report because of preliminary findings from a continuing options-backdating probe. The company warned that previous financial statements couldn’t be relied upon.

The Warsaw, Ind., medical products company also named J. Pat Richardson interim chief financial officer, replacing Gregory D. Hartman, who is retiring. Biomet said it is looking for a permanent financial chief. In addition, Biomet said Daniel P. Hann, executive vice president of administration and a director, is retiring.

Both Messrs. Hartman and Hann will serve as consultants to the company “to ensure a smooth transition of business operations and financial matters,” Biomet said.

Providing an update to the options probe, Biomet said that, so far, the investigation has found that most of the options issued between 1996 and 2006 were priced wrongly with some misdated and mispriced to take advantage of lower prices, and that Mr. Hartman was aware of it.

Biomet said the difference between the correct and manipulated exercise prices adds up to $50 million over 11 years.

The company also described its internal controls as inadequate.

SOURCE: The Wall Street Journal