UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2002.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________.
Commission file Number 0-12515.
BIOMET, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1418342
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
56 East Bell Drive, Warsaw, Indiana 46582
(Address of principal executive offices)
(574) 267-6639
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
As of August 31, 2002, the registrant had 259,783,889 common shares
outstanding.
BIOMET, INC.
CONTENTS
Part I. Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets 1-2
Consolidated Statements of Income 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
Item 3. Quantitative and Qualitative Disclosure about
Market Risks 11
Item 4. Controls and Procedures 11
Part II. Other Information 12-13
Signatures 14
Certifications of Principal Executive Officer and Principal
Financial Officer regarding facts and circumstances relating
to quarterly reports 15-16
Index to Exhibits 17
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOMET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
at August 31, 2002 and May 31, 2002
(in thousands)
ASSETS
August 31, May 31,
2002 2002
---------- -------
(Unaudited)
Current assets:
Cash and cash equivalents $ 124,789 $ 154,297
Investments 40,240 30,973
Accounts and notes receivable, net 368,589 365,148
Inventories 361,073 335,348
Deferred income taxes 50,131 49,523
Prepaid expenses and other 20,208 17,655
--------- ---------
Total current assets 965,030 952,944
--------- ---------
Property, plant and equipment, at cost 411,017 389,454
Less, Accumulated depreciation 185,938 170,393
--------- ---------
Property, plant and equipment, net 225,079 219,061
--------- ---------
Investments 158,616 201,247
Intangible assets, net 13,653 8,532
Excess acquisition costs over fair value
of acquired net assets, net 122,440 125,157
Other assets 14,816 14,782
--------- ---------
Total assets $1,499,634 $1,521,723
========= =========
The accompanying notes are a part of the consolidated financial statements.
BIOMET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
at August 31, 2002 and May 31, 2002
(in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
August 31, May 31,
2002 2002
---------- -------
(Unaudited)
Current liabilities:
Short-term borrowings $ 101,483 $ 90,467
Accounts payable 41,249 36,318
Accrued income taxes 31,085 17,483
Accrued wages and commissions 30,337 35,106
Accrued litigation 5,864 5,864
Other accrued expenses 52,073 52,461
--------- ---------
Total current liabilities 262,091 237,699
Long-term liabilities:
Deferred income taxes 2,967 3,332
Other liabilities 380 406
--------- ---------
Total liabilities 265,438 241,437
--------- ---------
Minority interest 105,088 103,807
--------- ---------
Contingencies (Note 7)
Shareholders' equity:
Common shares 124,702 124,417
Additional paid-in capital 48,192 48,868
Retained earnings 990,360 1,054,020
Accumulated other comprehensive loss (34,146) (50,826)
--------- ---------
Total shareholders' equity 1,129,108 1,176,479
--------- ---------
Total liabilities and shareholders' equity $1,499,634 $1,521,723
========= =========
The accompanying notes are a part of the consolidated financial statements.
BIOMET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
for the three months ended August 31, 2002 and 2001
(Unaudited, in thousands, except per share data)
Three Months Ended
------------------
2002 2001
---- ----
Net sales $317,600 $272,022
Cost of sales 90,137 77,392
------- -------
Gross profit 227,463 194,630
Selling, general and administrative expenses 115,888 101,316
Research and development expense 12,638 11,668
------- -------
Operating income 98,937 81,646
Other income, net 3,944 4,564
------- -------
Income before income taxes and minority interest 102,881 86,210
Provision for income taxes 35,594 29,269
------- -------
Income before minority interest 67,287 56,941
Minority interest 1,281 928
------- -------
Net income $ 66,006 $ 56,013
======= =======
Earnings per share:
Basic $.25 $.21
==== ====
Diluted $.25 $.21
==== ====
Shares used in the computation
of earnings per share:
Basic 262,378 269,459
======= =======
Diluted 264,405 272,668
======= =======
Cash dividends per common share $.10 $.09
==== ====
The accompanying notes are a part of the consolidated financial statements.
BIOMET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three months ended August 31, 2002 and 2001
(Unaudited, in thousands)
2002 2001
---- ----
Cash flows from (used in) operating activities:
Net income $ 66,006 $ 56,013
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 10,316 7,922
Amortization 1,025 2,897
Gain on sale of investments, net (69) (4)
Minority interest 1,281 928
Deferred income taxes (699) (1,155)
Changes in current assets and liabilities,
excluding effects of acquisitions:
Accounts and notes receivable, net 1,484 5,293
Inventories (13,715) (14,710)
Prepaid expenses and other 1,157 2,450
Accounts payable 6,168 903
Accrued income taxes 13,148 5,033
Accrued wages and commissions (4,769) (4,635)
Other accrued expenses (5,176) (7,115)
------- ------
Net cash from operating activities 76,157 53,820
------- ------
Cash flows from (used in) investing activities:
Proceeds from sales and maturities of investments 46,211 38,980
Purchases of investments (13,544) (39,566)
Capital expenditures (10,024) (11,960)
Other (2,533) (1,011)
------- ------
Net cash from (used in) investing activities 20,110 (13,557)
------- ------
Cash flows from (used in) financing activities:
Increase (decrease) in short-term borrowings, net 2,313 (2,098)
Issuance of common shares 2,249 4,856
Cash dividends (26,400) (24,268)
Purchase of common shares (106,000) -
------- ------
Net cash used in financing activities (127,838) (21,510)
------- ------
Effect of exchange rate changes on cash 2,063 940
------- ------
Increase (decrease) in cash and cash equivalents (29,508) 19,693
Cash and cash equivalents, beginning of year 154,297 235,091
------- -------
Cash and cash equivalents, end of period $124,789 $254,784
======= =======
The accompanying notes are a part of the consolidated financial statements.
BIOMET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION.
The accompanying consolidated financial statements include the accounts of
Biomet, Inc. and its subsidiaries (individually and collectively referred to as
the "Company"). The unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three-month period
ended August 31, 2002 are not necessarily indicative of the results that may
be expected for the fiscal year ending May 31, 2003. For further information,
refer to the consolidated financial statements and notes thereto included in
the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2002.
The accompanying consolidated balance sheet at May 31, 2002, has been derived
from the audited Consolidated Financial Statements at that date, but does not
include all disclosures required by generally accepted accounting principles.
The Company operates in one business segment, musculoskeletal products, which
includes the designing, manufacturing and marketing of reconstructive products,
fixation devices, spinal products and other products. Other products consist
primarily of Arthrotek's arthroscopy products, EBI's softgoods and bracing
products, general instruments and operating room supplies. The Company manages
its business segment primarily on a geographic basis. These geographic markets
are comprised of the United States, Europe and other. The other geographic
market includes Canada, South America, Mexico, Japan and the Pacific Rim.
Net sales of musculoskeletal products by product category are as follows for the
three months ended August 31:
2002 2001
---- ----
(in thousands)
Reconstructive $192,025 $161,172
Fixation 59,381 53,646
Spinal products 33,266 27,459
Other 32,928 29,745
------- -------
$317,600 $272,022
======= =======
NOTE 2: COMPREHENSIVE INCOME.
Other comprehensive income includes foreign currency translation adjustments
and unrealized appreciation of available-for-sale securities, net of taxes.
Other comprehensive income for the three months ended August 31, 2002 and
2001 was $16,680,000 and $399,000, respectively. Total comprehensive income
combines reported net income and other comprehensive income. Total
comprehensive income for the three months ended August 31, 2002 and 2001 was
$82,686,000 and $56,412,000, respectively.
NOTE 3: INVENTORIES.
Inventories at August 31, 2002 and May 31, 2002 are as follows:
August 31, May 31,
2002 2002
------------ -------
(in thousands)
Raw materials $ 36,275 $ 35,036
Work-in-process 46,052 45,476
Finished goods 152,135 135,842
Consigned 126,611 118,994
------- -------
$361,073 $335,348
======= =======
NOTE 4: COMMON SHARES.
During the three months ended August 31, 2002, the Company issued 292,599
Common Shares upon the exercise of outstanding stock options for proceeds
aggregating $2,249,000.
NOTE 5: EARNINGS PER SHARE.
Earnings per common share amounts ("basic EPS") are computed by dividing net
income by the weighted average number of common shares outstanding and excludes
any potential dilution. Earnings per common share amounts assuming dilution
("diluted EPS") are computed by reflecting potential dilution from the
exercise of stock options.
NOTE 6: INCOME TAXES.
The difference between the reported provision for income taxes and a provision
computed by applying the federal statutory rate to pre-tax accounting income is
primarily attributable to state income taxes, tax benefits relating to
operations in Puerto Rico, tax-exempt income and tax credits.
NOTE 7: CONTINGENCIES.
In January 1996, a jury returned a verdict in a patent infringement matter
against the Company and in favor of Raymond G. Tronzo ("Tronzo"), which in
August 1998 was subsequently reversed and vacated by the United States Court
of Appeals for the Federal Circuit (the "Federal Circuit"). The Federal
Circuit then remanded the case to the District Court for the Southern District
of Florida (the "District Court") for further consideration on state law
claims only. On August 27, 1999, the District Court entered a final judgment
of $53,530 against the Company. Tronzo then appealed the District Court's
final judgment with the Federal Circuit and in January 2001 the Federal
Circuit reinstated a $20 million punitive damages award against the Company
while affirming the compensatory damage award of $520. The Federal Circuit's
decision was based principally on procedural grounds, and in March 2001 it
denied the Company's combined petition for panel rehearing petition and
petition for rehearing en banc. On November 13, 2001 the United States
Supreme Court ("Supreme Court") denied the Company's petition to review
the $20 million punitive damage award against the Company given to Tronzo.
The Company had previously recorded a one-time special charge during the
third quarter of fiscal 2001 of $26.1 million, which represents the total
damage award plus the maximum amount of interest that, as calculated by the
Company, may be due under the award and related expenses. While the Company
was disappointed in the Supreme Court's decision not to review the case, the
Company has paid $20,236,000 out of escrow. The amount of interest owed by
the Company, if any, on this award continues to be in dispute; however, if
a decision on the interest award is adverse to the Company, it should not
exceed the amount of the remaining funds in escrow. The Supreme Court's
decision does not affect the ongoing sales of any of Biomet's product lines.
There are various other claims, lawsuits, disputes with third parties,
investigations and pending actions involving various allegations against
the Company incident to the operation of its business, principally product
liability and intellectual property cases. Each of these matters is subject
to various uncertainties, and it is possible that some of these matters may
be resolved unfavorably to the Company. The Company establishes accruals
for losses that are deemed to be probable and subject to reasonable
estimate. Based on the advice of counsel to the Company in these matters,
management believes that the ultimate outcome of these matters and any
liabilities in excess of amounts provided will not have a material adverse
impact on the Company's consolidated financial position or on its future
business operations.
NOTE 8: RECENT ACCOUNTING PRONOUNCEMENTS:
In June 2001, the Financial Accounting Standards Board (FASB) approved the
issuance of Statement 142, "Goodwill and Other Intangible Assets". FASB
Statement 142, among other things, requires that goodwill not be amortized
but should be tested for impairment at least annually. The Company
adopted this statement during the current quarter by discontinuing the
amortization of goodwill ($1.8 million). In addition, the Company is
required to review its goodwill during the next six months for possible
impairment. Based on the Company's initial review, the Company does not
anticipate any impairment charge from this review. The following tables
show the reported net income and earnings per share for the three-month
period ended August 31, 2001, reconciles them to the adjusted net income
and earnings per share had the nonamortization provisions of Statement
142 been applied in that period and compares them to the three-month
period ended August 31, 2002:
2002 2001
---- ----
Reported net income $66,006 $56,013
Effect of goodwill amortization -- 1,600
------ ------
As adjusted $66,006 $57,613
====== ======
Reported basic earnings per share $ .25 $ .21
Effect of goodwill amortization - -
---- ----
As adjusted $ .25 $ .21
==== ====
Reported diluted earnings per share $ .25 $ .21
Effect of goodwill amortization - -
---- ----
As adjusted $ .25 $ .21
==== ====
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION AS OF AUGUST 31, 2002
The Company's cash and investments decreased $62,872,000 to $323,645,000 at
August 31, 2002. This decrease resulted from the $26,400,000 dividend paid
during the quarter and the $106,000,000 used to purchase shares during the
quarter pursuant to the share repurchase programs, offset by positive cash
flow from operations.
Cash flows provided by operating activities were $76,157,000 for the first
three months of fiscal 2003 compared to $53,820,000 in 2002. The primary
sources of fiscal year 2003 cash flows from operating activities were net
income, a decrease in accounts receivable and an increase in accrued income
taxes. Accrued income taxes increased in the first quarter because there
is no federal tax estimate due in the first quarter. The primary use was
an increase in inventory. Inventories increased from line extensions and
new product introductions (specifically in Europe) and a buildup of
inventory associated with the Company's establishment of its direct
operations in Japan. Accounts and notes receivable and inventory balances
were increased during the quarter by $5 million and $12 million,
respectively,
Cash flows from investing activities were $20,110,000 for the first three
months of fiscal 2003 compared to a use of $13,557,000 in 2002. The primary
source of cash flows from investing activities were sales and maturities of
investments offset by purchases of investments and capital equipment.
Cash flows used in financing activities were $127,838,000 for the first
three months of fiscal 2003 compared to a use of $21,510,000 in 2002. The
primary use of cash flows from financing activities were the purchase of the
Company's Common Shares as part of the Common Share repurchase programs and
the cash dividend paid in the first quarter. In July 2002, the Company's
Board of Directors declared a cash dividend of ten cents ($.10) per share
payable to shareholders of record at the close of business on July 8, 2002.
In September 2002, the Company announced that it's Board of Directors had
authorized the purchase of up to an additional $100 million of the
outstanding Common Shares of the Company. This brings the total
authorization for repurchases to $424 million, of which the Company had
purchased $316 million as of August 31, 2002.
Currently available funds, together with anticipated cash flows generated
from future operations, are believed to be adequate to cover the Company's
anticipated cash requirements, including capital expenditures, Common Stock
repurchases, research and development costs, and litigation settlements, if any.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2002
AS COMPARED TO THE THREE MONTHS ENDED AUGUST 31, 2001
Net sales increased 17% to $317,600,000 for the three-month period ended August
31, 2002, from $272,022,000 for the same period last year. Excluding the impact
of foreign currency which increased sales for the quarter by $6.2 million, net
sales increased 15% during the first quarter of fiscal year 2003. The Company's
U.S.-based revenue increased 13% to $224,580,000 during the first three months
of fiscal 2003, while foreign sales increased 28% to $93,020,000. Excluding the
positive foreign exchange adjustment, foreign sales in local currencies
increased 19%. Biomet's worldwide sales of reconstructive products during the
first three months of fiscal 2003 were $192,025,000, representing a 19% increase
compared to the first three months of last year. This increase was primarily a
result of Biomet's continued penetration of the reconstructive device market led
by the Company's broad line of cementless total hip systems, the Company's
comprehensive line of total knee systems and bone cements and accessories. The
Company's line of dental reconstructive implants experienced modest growth
during the quarter due to increased seasonal slowdown in elective procedures in
this market. Sales of fixation products were $59,381,000 for the first three
months of fiscal 2003, representing an 11% increase as compared to the same
period in 2002. Sales of spinal products were $33,266,000 for the first three
months of fiscal 2003, representing a 21% increase as compared to the same
period in 2002. The increase is a result of continued market acceptance of
EBI's non-invasive SpinalPak Spinal Stimulation System and the VueLokTM Anterior
Cervical Plate System. The Company's sales of other products totaled
$32,928,000, representing an 11% increase over the first three months of fiscal
year 2002, primarily as a result of increased sales of arthroscopy products and
softgoods and bracing products. The sale of many of the Company's
musculoskeletal products are elective surgery-related and accordingly are
influenced by seasonal factors, as the number of elective orthopedic procedures
decline during the summer months and the holiday season.
Cost of sales decreased as a percentage of net sales to 28.4% for the first
three months of fiscal 2003 from 28.5% last year primarily as a result of
increased sales of higher margin products and increased in-house manufacturing
efficiencies. Selling, general and administrative expenses as a percentage of
net sales decreased to 36.5% compared to 37.2% for the first quarter last year.
This decrease in the percentage is a result of the Company adopting FASB 142
and the discontinuance of amortization of goodwill during the quarter of $1.8
million. Research and development expenditures increased during the first
three months to $12,638,000 reflecting the Company's continued emphasis on
new product introductions. Operating income rose 21% from $81,646,000 for
the first three months of fiscal 2002, to $98,937,000 for the first three
months of fiscal 2003. Other income decreased 14%. Over the last three
quarters, the Company has used $316,000,000 to purchase its common stock which
has reduced investable cash. The effective income tax rate increased to 34.6%
for the first quarter of fiscal year 2003 from 34.0% last year primarily as a
result of states increasing their tax rates.
These factors resulted in an 18% increase in net income to $66,006,000 for
the first three months of fiscal 2003 as compared to $56,013,000 for the same
period in fiscal 2002. Basic and diluted earnings per share increased 19%,
from $.21 to $.25 for the periods presented.
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
There have been no material changes from the information provided in the
Company's Annual Report on Form 10-K for the year ended May 31, 2002.
Item 4. Controls and Procedures.
As of August 31, 2002, an evaluation was performed under the supervision and
with the participation of the Company's management, including the CEO and CFO,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on that evaluation, the Company's management,
including the CEO and CFO, concluded that the Company's disclosure controls
and procedures were effective as of August 31, 2002. There have been no
significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls subsequent to August 31, 2002.
PART II. OTHER INFORMATION
Item 1: Legal Proceedings.
In January 1996, a jury returned a verdict in a patent infringement matter
against the Company and in favor of Raymond G. Tronzo ("Tronzo"), which in
August 1998 was subsequently reversed and vacated by the United States Court
of Appeals for the Federal Circuit (the "Federal Circuit"). The Federal
Circuit then remanded the case to the District Court for the Southern District
of Florida (the "District Court") for further consideration on state law claims
only. On August 27, 1999, the District Court entered a final judgment of
$53,530 against the Company. Tronzo then appealed the District Court's final
judgment with the Federal Circuit and in January 2001 the Federal Circuit
reinstated a $20 million punitive damages award against the Company while
affirming the compensatory damage award of $520. The Federal Circuit's
decision was based principally on procedural grounds, and in March 2001 it
denied the Company's combined petition for panel rehearing petition and
petition for rehearing en banc. On November 13, 2001 the United States
Supreme Court ("Supreme Court") denied the Company's petition to review the
$20 million punitive damage award against the Company given to Tronzo. The
Company had previously recorded a one-time special charge during the third
quarter of fiscal 2001 of $26.1 million, which represents the total damage
award plus the maximum amount of interest that, as calculated by the Company,
may be due under the award and related expenses. While the Company was
disappointed in the Supreme Court's decision not to review the case, the
Company has paid $20,236,000 out of escrow. The amount of interest owed by the
Company, if any, on this award continues to be in dispute; however, if a
decision on the interest award is adverse to the Company, it should not exceed
the amount of the remaining funds in escrow. The Supreme Court's decision does
not affect the ongoing sales of any of Biomet's product lines.
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Shareholders of the Company was held on September 21,
2002. At the Annual Meeting:
1. The following persons were elected as Directors of the Company for a
three-year term expiring in 2005.
Name Votes For Votes Withheld
- ---- --------- --------------
C. Scott Harrison, M.D. 217,620,028 4,723,193
Niles L. Noblitt 217,596,066 4,747,155
Kenneth V. Miller 219,881,601 2,461,619
L. Gene Tanner 219,624,053 2,719,168
Marilyn Tucker Quayle 217,619,504 4,723,717
The following directors will continue in office until their term expires at the
2003 Annual Meeting of shareholders: Dane A. Miller, Ph. D.; Jerry L. Ferguson;
Thomas F. Kearns, Jr.; and Daniel P. Hann.
The following directors will continue in office until their term expires at the
2004 Annual meeting of shareholders: M. Ray Harroff; Jerry L. Miller; Charles
E. Niemier; and Prof. Dr. Bernhard Scheuble.
2. The selection of Ernst & Young LLP as certified public accountants for the
Company for the fiscal year ending May 31, 2003 was ratified by the
shareholders, as follows: Votes For - 218,199,693; Votes Against -
3,019,245; and Abstentions and Broker Non-Votes - 1,124,283.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Index to Exhibits.
(b) Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BIOMET, INC.
------------
DATE: 10/14/2002 BY: /s/ Gregory D. Hartman
---------- -----------------------
Gregory D. Hartman
Senior Vice President - Finance
(Principal Financial Officer)
(Signing on behalf of the registrant
and as principal financial officer)
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER REGARDING FACTS AND CIRCUMSTANCES RELATING TO QUARTERLY REPORTS
I, Dane A. Miller, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Biomet, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date") ; and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: 10/14/2002 /s/ Dane A. Miller
---------- ------------------
Dane A. Miller, Ph.D.
President and Chief Executive Officer
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER REGARDING FACTS AND CIRCUMSTANCES RELATING TO QUARTERLY REPORTS
I, Gregory D. Hartman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Biomet, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date") ; and
(c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: 10/14/2002 /s/ Gregory D. Hartman
---------- -----------------------
Gregory D. Hartman
Senior Vice President - Finance
and Chief Financial Officer
BIOMET, INC.
FORM 10-Q
INDEX TO EXHIBITS
Sequential
Number Assigned Numbering System
in Regulation S-K Page Number
Item 601 Description of Exhibit of Exhibit
- ----------------- -------------------------------- ----------------
(2) No exhibit
(4) 4.1 Specimen certificate for Common
Shares. (Incorporated by reference to
Exhibit 4.1 to the registrant's Report
on Form 10-K for the fiscal year ended
May 31, 1985.)
4.2 Rights Agreement between Biomet,
Inc. and Lake City Bank, as Rights Agent,
dated as of December 16, 1999. (Incorporated
by reference to Exhibit 4.01 to Biomet, Inc.
Form 8-K Current Report dated December 16,
1999, Commission File No. 0-12515), as
amended September 1, 2002 to change rights
agent to American Stock Transfer & Trust
Company.
(10) No exhibit.
(11) No exhibit.
(15) No exhibit.
(18) No exhibit.
(19) No exhibit.
(22) No exhibit.
(23) No exhibit.
(24) No exhibit.
(99) 99.1 Written Statement of Chief Executive
Officer and Chief Financial Officer Pursuant
to Sections 906 of the Sarbanes-Oxley Act of
2002.