Biomet, Inc., often seen as the canary in the orthopedic coalmine, was first to report revenue for the last quarter. The privately-held company’s results are closely watched by analysts to see where the broader orthopedic market is heading.
Reported sales of $707 million for the company’s first quarter of 2013, excluding the acquisition of DePuy’s trauma business, was up 1% from the previous year’s first quarter. Including the acquisition increased reported sales by 6%.
Hips and knees both declined 1% on a reported basis. Spine and extremities were bright spots, increasing 10% and 13%, respectively.
|
Biomet 1Q 2013 |
Sales ($ in millions) |
% Change |
|
Total Reported Sales |
$707.4 |
1%* |
|
Large Joints |
$393 |
down 1% |
|
Knees |
|
down 1% |
|
Hips |
|
down 1% |
|
Sports, Extremities, Trauma |
$127.3 |
8%* |
|
Spine & Bone Healing |
$77.9 |
4% |
|
Dental |
$57 |
down 4% |
|
Other |
$52.2 |
1% |
* excluding DePuy Trauma Acquisition
Source: Biomet, Inc.
“After three consecutive quarters of robust growth, taking market share, it is not terribly surprising that Biomet’s growth rate has slowed, as the company’s growth reverts to the mean, ” wrote BMO Capital Markets analyst Joanne Wuensch.
Wuensch also said that the company’s results have become, “less correlated with other orthopedic companies. This is particularly true given the company’s odd quarter-end and lumpiness from periodic sales initiatives. This said, [first quarter] large joint results [down 1%] give us pause.”
Bob Hopkins of Merrill Lynch said Biomet’s results are as often misleading as they are predictive when it comes to read-throughs for the other hip and knee players. “We do not believe hip and knee market trends changed materially from last quarter.”
Jeff Binder, Biomet’s president and CEO, was “generally pleased” with the results. “The completion of the trauma acquisition bolsters our S.E.T. (Sports, Extremities, Trauma) product category to annualized sales in excess of $500 million in an attractive segment of the orthopaedic market. The team has executed well on the integration and our investment in building a great S.E.T. business is paying off. We did experience some deceleration in growth for our hip and knee business, but until others report their results we won’t know whether market growth has slowed or our growth has come back to market.”
The company reported a loss of $31.5 million, compared with a loss of $39.2 million a year earlier.
The Wall Street Journal‘s MarketWatch.com reported that, “Biomet has been in the red for over four years, weighed down by charges related to its 2007 buyout by a private-equity consortium. A weak economy has also caused some patients to put off hip and knee-replacement procedures. But strong sales in the sports-medicine and extremities segments have helped to drive Biomet’s top-line growth in recent quarters.”
