Biomet Knee Sales Foreshadow Industry Growth

Biomet, Inc. reported terrific knee sales for the most recent quarter. Reported sales grew by 6.6%, causing Wall Street analysts to predict equally promising results for Biomet’s competitors.

Overall reported sales for the companies 2014 second quarter were up 4.5% to $826 million. Reported hip sales rose 2.3%, extremities and trauma climbed 5.3%, spine and bone healing were up 2.3% and biologics rose 3.1%. Excluding currency, total sales increased by 5.4%.

Other highlights of the quarter included the acquisition of Lanx, Inc. and the launch of the G7 Acetabular System.

Reported net income in the quarter was $4.9 million, compared to a net loss of $66.2 million during the second quarter of the prior year. At November 30, 2013, reported net debt was $5.72 billion, compared to $5.61 billion on May 31, 2013.

Jeff Binder, Biomet’s president and CEO said the company was “very pleased” with a broad and balanced 6% organic sales growth in the quarter, with strong performance across multiple product segments and geographic regions. “We’re also delivering excellent growth in adjusted net income (ex-specials and amortization), with an increase of 27% to approximately $208 million through the first half of our fiscal year.

Wells Fargo analyst Larry Biegelsen said he thinks Biomet’s results are a positive sign for the recon market as Biomet’s knee and hip results have generally correlated well with the overall market. “It is also important to note that Biomet’s [quarter] ends November and we have heard anecdotal reports from several surgeons that procedure volume was very strong in December. This could mean even stronger growth acceleration for the larger recon players.”