07.01.06
$1.9 Billion ($41.3B Total)
Key Executives:
Daniel P. Hann, Interim President and CEO
Niles L. Noblitt, Chairman
Jerry L. Ferguson, Vice Chairman
Garry L. England, Chief Operating Officer, Domestic
Charles E. Niemier, Chief Operating Officer, International
Gregory D. Hartman, Sr. VP, Finance, Treasurer and CFO
Joel P. Pratt, Senior VP
No. of Employees: 6,300
World Headquarters: Warsaw, IN
Biomet, an orthopedic reconstruction product manufacturer with operations in 50 locations and distributions in more than 100 countries, has seen some major changes in the past six months. Former CEO and founder Dane Miller, 60, abruptly resigned from his post in March, announcing his early retirement after serving as president, CEO and a director of the company since its formation in 1977. He will continue to serve as a director and consultant.
The board of directors named Daniel Hann as the interim president and CEO.
Mostly known as a “premier franchise,” Biomet has not been without struggle in competing against larger players Zimmer and Stryker. After all the recent reshuffling, Biomet confirmed in April that it hired investment banker Morgan Stanley to help explore future strategies, including a possible move to sell the company. Analysts have cited Medtronic and Smith & Nephew as potential buyers.
The asking price for Biomet, should it decide to sell, could be more than $10 billion, as the company’s third quarter 2006 and final numbers for fiscal year 2005 (ended May 31, 2005) have continued to post healthy gains—this year, the company moves up Medical Product Outsourcing’s list several notches as a reflection of Biomet’s continued growth.
In its 27th consecutive year of record revenues, Biomet was aided by a 16% increase in sales ($1.88 billion vs $1.62 billion in 2004), which is keeping in line with prior years. In addition, net income was up 8%, from $326 million to $352 million. In the past six fiscal years, Biomet has introduced more than 500 new products to the market. Continuing this product launch streak, 2006 will see many new additional introductions to the market. Biomet is hoping to make a splash with its C2a-Taper Acetabular ceramic-on-ceramic hip system and its Porous Plasma Spray technology, both approved by the FDA last December. In May, the FDA gave Biomet another nod, this time for the Regenerex porous titanium artificial hip product; the expected launch date is December 2006 or early 2007. The company plans to use the Regenerex brand to introduce a series of products made from porous metal.
Other offerings on the horizon include the ExploR Modular Radial Head as well as the Cobalt Bone Cement, which offers high optical contrast in Biomet’s Microplasty Minimally Invasive Programs.
In FY 2005, overall domestic sales grew 15%, while international numbers climbed 20%—many of these sales were positively impacted by currency translation; European sales, for example, were up 17%.
In the reconstructive device market, sales were up 19%, exceeding $1.25 billion total.
Spinal product sales increased 34%. Spinal hardware and orthobiological products used in spinal procedures grew a whopping 118%; however, spinal stimulation products decreased 9%. Biomet’s first top-loading spinal product, the Array Degenerative System, launched in 2005 and has since become the company’s best-selling spinal hardware system. Other spinal products introduced in 2005 include the ESL Spine Spacer System and the Interpore Nexus Curved Spacer System. In 2006, the company plans to roll out Interpore’s Altius M-INI Spinal Fixation System, the Synergy Polaris, Ibex Spine System and SpF MINI Implantable Spinal Fusion Stimulator.
Biomet’s EBI subsidiary faced some changes in 2005, as its sales force was divided into separate spine and fixation groups, all while the Interpore sales force was integrated with EBI’s spine sales force. In addition, Bart Doedens, MD, former president of Biomet’s 3i subsidiary, was promoted to president of EBI. Amid all these changes, fixation sales were flat.
The knee market saw healthy growth, with sales increasing 29% domestically and 25% worldwide. These percentages were partially achieved by Biomet’s Vanguard Complete Knee System, as well as by the domestic introduction of the Oxford Unicompartmental Knee System, the only free-floating meniscal unicompartmental knee system available in the United States. The Vanguard line will see even more introductions in 2006 for open knee procedures.
The hip market also aided sales, as the company launched the M2a-Magnum Large Metal Articulation, the bone-conserving ReCap Femoral and Total Resurfacing Systems, and the second-generation ArComXL, a highly cross-linked polyethelene that was cleared by the FDA in 2005.
Other products (eg, arthroscopy, softgoods and bracing equipment, as well as operating room supplies) saw a combined increase of 7%. The dental reconstruction segment also strengthened the bottom line with the introduction of the Encode Restorative System (a series of custom abutments) and CAM StructSURE Precision Milled Bars (for overdentures).
Looking ahead, the company increased its R&D expenditure by 25% in 2005, as the company continues to focus its attention on new product development and enhancements to existing products. Biomet is currently also evaluating facility expansion plans, possibly in either Indiana or New Jersey.
Third-quarter 2006 results, ending February 28, show the company is continuing its successful strides in the orthopedic market. Net sales were up 5% for the quarter and net income increased 10%. Biomet executives attributed much of this success to its national branding campaign. Reconstructive device, hip, dental implants and extremities sales were all up by 10% or more, with knee sales not too far behind, at about 8%-9% in the United States and abroad.
Tempering all the good news reported earlier this year, former CEO Miller did caution before his retirement that the company estimates it will see a negative impact from the continued strength of the US dollar on fourth-quarter sales (by as much as $11 million). As a result, the company expects fourth-quarter earnings to be in the range of $530 million to $540 million.
Key Executives:
Daniel P. Hann, Interim President and CEO
Niles L. Noblitt, Chairman
Jerry L. Ferguson, Vice Chairman
Garry L. England, Chief Operating Officer, Domestic
Charles E. Niemier, Chief Operating Officer, International
Gregory D. Hartman, Sr. VP, Finance, Treasurer and CFO
Joel P. Pratt, Senior VP
No. of Employees: 6,300
World Headquarters: Warsaw, IN
Biomet, an orthopedic reconstruction product manufacturer with operations in 50 locations and distributions in more than 100 countries, has seen some major changes in the past six months. Former CEO and founder Dane Miller, 60, abruptly resigned from his post in March, announcing his early retirement after serving as president, CEO and a director of the company since its formation in 1977. He will continue to serve as a director and consultant.
The board of directors named Daniel Hann as the interim president and CEO.
Mostly known as a “premier franchise,” Biomet has not been without struggle in competing against larger players Zimmer and Stryker. After all the recent reshuffling, Biomet confirmed in April that it hired investment banker Morgan Stanley to help explore future strategies, including a possible move to sell the company. Analysts have cited Medtronic and Smith & Nephew as potential buyers.
The asking price for Biomet, should it decide to sell, could be more than $10 billion, as the company’s third quarter 2006 and final numbers for fiscal year 2005 (ended May 31, 2005) have continued to post healthy gains—this year, the company moves up Medical Product Outsourcing’s list several notches as a reflection of Biomet’s continued growth.
In its 27th consecutive year of record revenues, Biomet was aided by a 16% increase in sales ($1.88 billion vs $1.62 billion in 2004), which is keeping in line with prior years. In addition, net income was up 8%, from $326 million to $352 million. In the past six fiscal years, Biomet has introduced more than 500 new products to the market. Continuing this product launch streak, 2006 will see many new additional introductions to the market. Biomet is hoping to make a splash with its C2a-Taper Acetabular ceramic-on-ceramic hip system and its Porous Plasma Spray technology, both approved by the FDA last December. In May, the FDA gave Biomet another nod, this time for the Regenerex porous titanium artificial hip product; the expected launch date is December 2006 or early 2007. The company plans to use the Regenerex brand to introduce a series of products made from porous metal.
Other offerings on the horizon include the ExploR Modular Radial Head as well as the Cobalt Bone Cement, which offers high optical contrast in Biomet’s Microplasty Minimally Invasive Programs.
In FY 2005, overall domestic sales grew 15%, while international numbers climbed 20%—many of these sales were positively impacted by currency translation; European sales, for example, were up 17%.
In the reconstructive device market, sales were up 19%, exceeding $1.25 billion total.
Spinal product sales increased 34%. Spinal hardware and orthobiological products used in spinal procedures grew a whopping 118%; however, spinal stimulation products decreased 9%. Biomet’s first top-loading spinal product, the Array Degenerative System, launched in 2005 and has since become the company’s best-selling spinal hardware system. Other spinal products introduced in 2005 include the ESL Spine Spacer System and the Interpore Nexus Curved Spacer System. In 2006, the company plans to roll out Interpore’s Altius M-INI Spinal Fixation System, the Synergy Polaris, Ibex Spine System and SpF MINI Implantable Spinal Fusion Stimulator.
Biomet’s EBI subsidiary faced some changes in 2005, as its sales force was divided into separate spine and fixation groups, all while the Interpore sales force was integrated with EBI’s spine sales force. In addition, Bart Doedens, MD, former president of Biomet’s 3i subsidiary, was promoted to president of EBI. Amid all these changes, fixation sales were flat.
The knee market saw healthy growth, with sales increasing 29% domestically and 25% worldwide. These percentages were partially achieved by Biomet’s Vanguard Complete Knee System, as well as by the domestic introduction of the Oxford Unicompartmental Knee System, the only free-floating meniscal unicompartmental knee system available in the United States. The Vanguard line will see even more introductions in 2006 for open knee procedures.
The hip market also aided sales, as the company launched the M2a-Magnum Large Metal Articulation, the bone-conserving ReCap Femoral and Total Resurfacing Systems, and the second-generation ArComXL, a highly cross-linked polyethelene that was cleared by the FDA in 2005.
Other products (eg, arthroscopy, softgoods and bracing equipment, as well as operating room supplies) saw a combined increase of 7%. The dental reconstruction segment also strengthened the bottom line with the introduction of the Encode Restorative System (a series of custom abutments) and CAM StructSURE Precision Milled Bars (for overdentures).
Looking ahead, the company increased its R&D expenditure by 25% in 2005, as the company continues to focus its attention on new product development and enhancements to existing products. Biomet is currently also evaluating facility expansion plans, possibly in either Indiana or New Jersey.
Third-quarter 2006 results, ending February 28, show the company is continuing its successful strides in the orthopedic market. Net sales were up 5% for the quarter and net income increased 10%. Biomet executives attributed much of this success to its national branding campaign. Reconstructive device, hip, dental implants and extremities sales were all up by 10% or more, with knee sales not too far behind, at about 8%-9% in the United States and abroad.
Tempering all the good news reported earlier this year, former CEO Miller did caution before his retirement that the company estimates it will see a negative impact from the continued strength of the US dollar on fourth-quarter sales (by as much as $11 million). As a result, the company expects fourth-quarter earnings to be in the range of $530 million to $540 million.