UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 2005.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________.
Commission file Number 0-12515.
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Biomet, Inc. 401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office.
BIOMET, INC.
56 East Bell Drive
Warsaw, Indiana 46582
REQUIRED INFORMATION
Item 4. The Biomet Inc. 401(k) Profit Sharing Plan (the "Plan") is subject to
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Plan's financial statements and schedule have been
prepared in accordance with the financial reporting requirements of
ERISA. Such financial statements and schedule are included in this
Report in lieu of the information required by items 1-3 of Form 11-K.
Financial Statements and Exhibits
(a) Financial Statements:
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits at May 31, 2005 and 2004
Statement of Changes in Net Assets Available for Benefits for the year
ended May 31, 2005
Notes to Financial Statements
Schedule of Assets (Held at End of Year)
Schedule of Reportable Transactions
Other supplemental schedules required by Section 2520.103-10 of the Department
of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because they are not applicable.
(b) Exhibits.
23.1 Consent of Ernst & Young LLP
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. 401(k) Profit Sharing Plan
---------------------------------------
DATE: 11/23/2005 BY: /s/ Gregory D. Hartman
----------- -----------------------
Gregory D. Hartman
(Member, Biomet, Inc. Benefits Committee)
Biomet, Inc. 401(k) Profit Sharing Plan
Financial Statements and Schedules
At May 31, 2005 and 2004, and for the Year Ended May 31, 2005
Contents
Report of Independent Registered Public Accounting Firm
Audited Financial Statements
Statements of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Schedules
Schedule of Assets (Held At End of Year)
Schedule of Reportable Transactions
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Biomet, Inc. 401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for
benefits of Biomet, Inc. 401(k) Profit Sharing Plan as of May 31, 2005 and
2004, and the related statement of changes in net assets available for
benefits for the year ended May 31, 2005. These financial statements are
the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
We were not engaged to perform an audit of the Plan's internal control
over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Plan's internal control
over financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
at May 31, 2005 and 2004, and the changes in its net assets available for
benefits for the year ended May 31, 2005, in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of the assets held at end of year as of May 31, 2005, and
reportable transactions for the year then ended, are presented for purposes
of additional analysis and are not a required part of the financial statements
but are supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects
in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Indianapolis, Indiana
October 26, 2005
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Net Assets Available for Benefits
Years ended May 31, 2005 and 2004
2005 2004
---- ----
Assets
Investments $200,656,750 $193,680,661
Contributions receivable:
Employer 153,782 161,059
Employee 362,513 263,234
Cash (overdraft) (17,133) (35,512)
Due from brokers 47,266 60,423
Interest receivable 23,646 10,221
----------- -----------
Total assets 201,226,824 194,140,086
Liabilities
Accrued administrative expenses 61,380 76,500
Due to brokers 393,698 345,746
----------- -----------
Total liabilities 455,078 422,246
----------- -----------
Net assets available for benefits $200,771,746 $193,717,840
=========== ===========
See accompanying notes.
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year ended May 31, 2005
Additions
Contributions:
Employer $ 6,119,960
Employee 14,268,359
Investment income 1,797,019
-----------
Total additions 22,185,338
Deductions:
Benefits paid to participants 11,130,514
Net depreciation in fair value of investments 3,819,909
Administrative expense 181,009
-----------
Total deductions 15,131,432
-----------
Net Increase 7,053,906
Net assets available for benefits, beginning of year 193,717,840
-----------
Net assets available for benefits, end of year $200,771,746
===========
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Biomet, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
May 31, 2005
1. Description of the Plan
The following brief description of Biomet, Inc. 401(k) Profit Sharing Plan
(the "Plan") is provided for general information purposes only. Participants
should refer to the Summary Plan Description for a more complete description
of the Plan's provisions.
General
The Plan is a defined-contribution plan which became effective on June 1, 1985.
The Plan covers substantially all full-time employees of Biomet, Inc. and
certain United States subsidiaries (individually and collectively, the Employer
or Company) who have reached age 18 and completed the earlier of 1,000 hours of
service or 90 days of continuous employment. The Plan is subject to the
provisions of The Employee Retirement Income Security Act of 1974 (ERISA).
Contributions and Vesting
Participating employees may contribute up to 60% of their compensation, as
defined. Participants may direct the investment of their contributions into
various investment options offered by the Plan. The Employer matching
contribution is 75% of the participant's contribution up to 5% of the
participant's compensation. The Employer may also make an additional
contribution at the discretion of the Board of Directors. Such contributions,
if any, are allocated to participants based on compensation. All Employer
contributions are invested in Biomet, Inc. common shares. Participants are
vested in Employer contributions 20% after two years and an additional 20%
per year thereafter to 100% at the end of six years. Participant
contributions are fully vested at all times.
Participant Accounts
Each participant's account is credited with the participant's contribution and
an allocation of the Employer contributions and Plan earnings. Plan earnings
are allocated to participants based on the participant's account balance per
fund compared to the total participant accounts per fund.
Withdrawals
Withdrawals are not permitted before age 59 1/2 except in the event of death,
disability, termination of employment, loan, or reasons of proven financial
hardship.
Distributions
Vested benefits are distributed in cash or common shares of the Company in
accordance with the Plan's provisions.
Forfeitures
Nonvested portions of Employer contributions are held pending a break in
service, at which time such amounts are used to reduce future Employer
contributions. At May 31, 2005 and 2004, forfeited nonvested accounts totaled
$874,595 and $393,979, respectively. During the year ended May 31, 2005,
$593,979 was used to reduce Employer contributions.
Participant Loans
A participant may borrow from the Plan an amount up to the lesser of one-half
his vested account balances or $50,000. The Benefits Committee approves all
loan applications and determines the interest rate to be charged to the
participant.
Termination of Plan
Although the Company has not expressed any intent to do so, it has the right
under the Plan to discontinue its matching contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become fully vested.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
Investments in securities (commercial notes and common stocks) traded on
a national securities exchange, including Biomet Inc. shares, are valued
at fair value determined by the quoted market prices on the last business
day of the Plan year. Securities traded in the over-the-counter market
and listed securities for which no sale was reported on that date are valued
at the mean between the last reported bid and asked prices. Investments in
common trust funds are stated at fair value based upon quoted redemption
values on the last business day of the Plan year. Investments in mutual funds
are valued based on quoted market prices, which represent the net asset values
of shares held by the Plan on the last business day of the Plan year.
Participant loans are valued at cost which approximates fair value.
Purchases and sales are recorded on a trade-date basis. Gain or loss on sales
of securities is based on the specific identification method or average cost
method, depending on the type of investment.
Dividend income is recorded on the ex-dividend date. Investment income is
recorded on the accrual basis.
Use of Estimates
The preparation of financial statements, in conformity with U.S. generally
accepted accounting principles, requires management to make estimates that
affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Risks and Uncertainties
The Plan invests in Biomet, Inc. common shares, other common stock, mutual
funds, and other investments, which are exposed to various risks, such as
market and credit. Due to level of risk associated with such investment
securities and the level of uncertainty related to changes in the value of
such investments, it is at least reasonably possible that changes in risk in
the near term could materially affect participants' account balances and the
amounts reported in the statements of net assets available for benefits and
the statement of changes in net assets available for benefits.
3. Investments
The following presents investments that represent 5% or more of the Plan's net
assets at May 31, 2005 and 2004:
2005 2004
---- ----
Biomet, Inc. common shares $118,866,835* $122,374,225*
*Includes nonparticipant-directed amounts of $79,742,851 and $82,725,177 at
May 31, 2005 and 2004, respectively.
During the year ended May 31, 2005, the Plan's investments (including
investments bought, sold, as well as held during the year) appreciated
(depreciated) in value as follows:
Investments at fair value as determined by quoted market prices:
Biomet, Inc. common shares $(7,997,917)
Other common stock 306,086
Common trust fund 155,071
Mutual funds 3,716,851
---------
$(3,819,909)
=========
4. Nonparticipant-Directed Investments
Information about the assets and the significant components of the changes in
assets relating to the nonparticipant-directed investments is as follows:
May 31,
2005 2004
---- ----
Biomet, Inc. common shares $79,742,851 $82,725,177
Money market fund 24,855 21,469
---------- ----------
Net assets $79,767,706 $82,746,646
========== ==========
Year Ended
May 31, 2005
------------
Changes in net assets
Net depreciation in fair value $(5,326,747)
Employer contributions 6,120,080
Investment income 416,372
Benefit payments (4,082,363)
Transfers-out (106,282)
---------
$(2,978,940)
=========
5. Party-in-Interest Transactions
During the year ended May 31, 2005, the Plan acquired 283,971 Biomet, Inc.
common shares at a cost of $12,198,866.
During the year ended May 31, 2005, the Plan sold 135,584 Biomet, Inc.
common shares for $5,804,160. A gain of $3,318,431 was realized.
During the year ended May 31, 2005, 43,952 Biomet, Inc. common shares with
a cost of $660,672 were distributed to participants. The fair value of the
shares distributed aggregated $1,904,176.
The above transactions are statutorily exempt from the prohibitions against
party-in-interest transactions under ERISA.
The Company provides certain accounting, record-keeping, and administrative
services to the Plan for which it receives no compensation. The Company also
paid certain other administrative expenses of the Plan during 2005.
6. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated June 19, 2003, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The plan administrator has
indicated that, if ever necessary, it will take the necessary steps to bring
the Plan's operations into compliance with the Code.
7. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 as of May 31:
2005 2004
---- ----
Net assets available for benefits
per the financial statements $200,771,746 $193,717,840
Amounts allocated to participants withdrawing (3,471,497) (2,771,188)
----------- -----------
Net assets available for benefits per Form 5500 $197,300,249 $190,946,652
=========== ===========
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
Benefits paid to participants per the financial statements $11,130,514
Add amounts allocated to withdrawing participants at end of year 3,471,497
Less amounts allocated to withdrawing participants at
Beginning of year (2,771,188)
----------
Benefits paid to participants per Form 5500 $11,830,823
==========
In accordance with accounting principles generally accepted in the United
States, the financial statements herein do not include accruals for lump-sum
distributions due participants which have been approved and processed as of
year-end; however, the Department of Labor (DOL) requires these amounts to be
reported as a liability on the Form 5500.
Biomet, Inc. 401(k) Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets (Held At End of Year)
EIN #35-1382845 Plan Number 002
May 31, 2005
Description of Investment,
Identy of issue, Including Maturity Date,
Borrower, Lessor, or Rate of Interest, Par, or Current
Similar Party Maturity Value Cost Value
-------------------- -------------------------- ---- -------
Common stocks
*Biomet, Inc. 3,154,640 shares $50,963,539 $118,866,835
Mutual funds
Merrill Lynch Funds:
Balanced Capital 267,818 units ** 7,110,568
Foundational Growth 330,558 units ** 5,781,466
Global Allocation 251,425 units ** 4,151,026
Small Cap Value 252,105 units ** 6,615,237
US Government Mtg. 13,062 units ** 134,540
*1st Source Monogram Funds:
Diversity Equity 418,878 units ** 3,024,297
Income Equity 410,161 units ** 5,528,964
Income 153,336 units ** 1,530,294
Other Mutual Funds
Calvert Income 70,611 units ** 1,204,631
Davis NY Venture A 60,315 units ** 1,856,405
Delaware Group Trend 76,991 units ** 1,505,176
Janus Adv. Agressive Growth 49 units ** 1,211
John Hancock Government Income 151,309 units ** 1,401,126
MFS Capital Opportunities 36,793 units ** 484,192
MFS Massachusetts Investors 91,809 units ** 1,128,337
Morgan Stanley International Equity 188,348 units ** 3,842,316
Oppenheimer Global Growth & Income 58,207 units ** 1,859,120
Alliance RCM Innovation 15,473 units ** 529,475
Blackrock Aurora 84,023 units ** 3,272,696
Vanguard 500 Index 21,752 units ** 2,395,108
Common Trust Fund
*1st Source Bank Guaranteed Income ** 5,708,120
Money Market Fund
Goldman Sachs Financial Square 6,272,275 units 6,272,275 6,272,275
Bonds and Notes
Federal Agencies & Other Bonds:
Heller Financial, Inc. $25,000, 6.37%, ** 25,496
due 3/15/2006
U.S. Government Securities:
U.S. Treasury Strips $51,000, ** 42,958
due 2/15/2010
Other
Life Insurance Policies:
State Farm Life Insurance Company Cash Surrender Value ** 9,873
Self-directed brokerage funds Various ** 10,665,495
Participant loans Interest Rate Range from ** 5,709,513
5.00% tp 10.00%
-----------
Total $200,656,750
===========
*Indicates party-in-interest to the Plan.
**Note: Cost information is not required for participant-directed investments.
Biomet, Inc. 401(k) Profit Sharing Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
EIN #35-1382845 Plan Number 002
May 31, 2005
(a) (b) (c) (d) (g) (h) (i)
Current
Value of
Identity Asset on
of Party Description Purchase Selling Cost of Transaction Net
Involved of Assets Price Price Assets Date Gain
-------- ----------- -------- ------- ------- ----------- ----
(in thousands)
Category (iii) - Series of transactions in excess of 5% of plan assets
Biomet Inc. Biomet, Inc. common stock:
Purchases $12,198,866 -- $12,198,866 -- --
Sales -- $5,804,160 $ 2,485,729 $5,804,160 $3,318,431
Note: Columns (e) and (f) and categories (i), (ii) and (iv) are not applicable.