Biomet reports $6 billion net debt at end of fiscal 2013 third quarter

By Lisa Kerner

Charlotte, N.C., April 9 - Biomet Inc. ended the third quarter of fiscal 2013 on Feb. 28 with cash and cash equivalents of about $217 million and net debt of about $6 billion.

According to Biomet, the net debt figure compares to net debt of $5.3 billion at May 31, 2012, reflecting the impact of the Trauma Acquisition, its debt refinancing activities and foreign currency translation on the company's euro-denominated debt.

At Feb. 28, Biomet's senior secured leverage ratio was 2.87 times, compared with 4.01 times at May 31, 2008, the first fiscal year-end following the company's merger.

The total (net debt) leverage ratio was 5.34 times LTM adjusted EBITDA compared to 6.97 times for the same periods.

Lower-than-average interest rates on Biomet's term loans and lower bond interest as a result of refinancing activities resulted in lower third-quarter interest expense of $88.8 million, compared with $117.2 million during the third quarter of fiscal 2012.

During the fiscal third quarter, Biomet generated about $102 million of free cash flow, compared with $116 million during the prior-year period.

Sales up worldwide

Net sales for the quarter were up 9% worldwide from the year-ago quarter at about $772 million, according to Biomet's earnings news release.

U.S. net sales were also up 9% for the quarter, while net sales in Europe rose 5% and international (primarily Canada, South America, Mexico and the Pacific Rim) net sales increased 15%.

Biomet reported an operating loss for the third quarter of fiscal year 2013 of $237.4 million, compared to operating income of $108.1 million during the third quarter of fiscal year 2012.

Excluding special items, EBITDA for the period was $275.4 million, or 35.7% of net sales, during the quarter, versus $260.5 million, or 36.7% of net sales, for the prior-year period.

Biomet is a Warsaw, Ind.-based designer, manufacturer and marketer of products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy.

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