Losses for Biomet Inc., a bellwether for the U.S. orthopedic market, soared during the fourth quarter and fiscal 2011, largely due to a nearly $1 billion writedown related to its re-assessment of the European market.
The Warsaw, Ind.-based medical device maker said sales slipped 3 percent in the U.S., shaking Wall Street’s confidence in the orthopedics market. Shares of Stryker Corp (NYSE:SYK), Smith & Nephew plc (NYSE:SNN) and Zimmer Holdings (NYSE:ZMH) were all down as of mid-morning today.
The $941.1 million writedown was mostly due to "the company’s Europe business due to the continued market slowdown in Europe relative to our original purchase accounting assumptions" when a private equity consortium took Biomet private in 2007, according to a press release.
"During our fiscal fourth quarter, our sales results continued to be challenged by industry volume and price pressures that affected our sales throughout fiscal 2011," president & CEO Jeffrey Binder said in prepared remarks. "In addition, we have not been executing to our standard of above-market growth in most of our businesses. We are working hard to return to that standard as quickly as possible."
Biomet posted net losses of $806.5 million on sales of $715.2 million for the three months ended May 31. That’s a net loss increase of about 5,462 percent, despite a top-line increase of 1.8 percent, compared with the same period last year.
For the full year, Biomet logged net losses of $843.5 million (up more than 1,672 percent) on sales of $2.73 billion (up 1.3 percent).
The dip in fourth-quarter U.S. sales was somewhat offset by a 1 percent increase in global sales. Reconstructive device sales were a bright spot in the U.S., rising 22 percent, and overseas, where they were up 17 percent.
MassDevice keeps a close eye on public medical device companies, tracking their quarterly sales and earnings reports. For the most recent filings, check out our Earnings Roundup, where we collect each quarter’s reports.
Here’s a quick rundown of a few releases over the past couple days:
Biolase’s preliminary second quarter revenues anticipate 104% jump in sales
Biolase Technology Inc. (NSDQ:BLTI) said its preliminary second-quarter sales figure rose 103.4 pecent compared with Q2 2010, rising to $12.0 million from $5.9 million during the three months ended June 30.
The Irvine, Calif.-based dental laser maker also said it expects another $2 million in sales from a prepaid order by Henry Schein (NSDQ:HSIC) that it couldn’t get out the door in time for the end of the quarter.
"We view this as a timing issue and our overall expectations for the Company in 2011 remain unchanged," chairman & CEO Federico Pignatelli said in prepared remarks. "The change in the purchase order was within Schein’s contractual rights, but it came a month into the quarter and created a considerable amount of stress on our supply chain and unfortunately a certain number of critical components did not arrive in time to allow the shipment of product by the end of the quarter. We expect to ship the final portion by the end of July, well before the contractual due date of August 25, 2011."
The Albany, N.Y.-based medical device maker reported a net loss of $752,000, or 3 cents per diluted share, on sales of $56.4 million. That compares with profits of $3.7 million, or 15 cents per diluted share, on sales of $60.3 million during the same period last year.
AngioDynamics posted net earnings of $8.2 million, or 33 cents per diluted share, on sales of $216.0 million for the full year, compared with earnings of $12.3 million, or 50 cents per diluted share, on sales of $216.0 million for fiscal 2010.