UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal period ended December 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 schedules 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
Statement of Changes in Net Assets Available for Benefits
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: 06/23/2006 BY: /s/ Gregory D. Hartman
----------- -----------------------
Gregory D. Hartman
(Member, Biomet, Inc. Benefits Committee)
Biomet, Inc. 401(k) Profit Sharing Plan
Financial Statements and Supplemental Schedules
December 31, 2005 and May 31, 2005, and for the Period June 1, 2005
through December 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 December 31,
2005 and May 31, 2005, and the related statement of changes in net assets
available for benefits for the period June 1, 2005 through December 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 December 31, 2005 and May 31, 2005, and the changes in its net assets
available for benefits for the period June 1, 2005 through December 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 assets held at end of year as of December 31, 2005, and
reportable transactions for the period June 1, 2005 through December 31,
2005, 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.
May 23, 2006
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Net Assets Available for Benefits
December 31, May 31,
2005 2005
---- ----
Assets
Investments $204,256,414 $200,656,750
Contributions receivable:
Employer 475,633 153,782
Participant 500,018 362,513
Cash (overdraft) (18,609) (17,133)
Due from brokers 16,961 47,266
Interest receivable 37,546 23,646
----------- -----------
Total assets 205,267,963 201,226,824
Liabilities
Accrued administrative expenses 60,106 61,380
Due to brokers 614,227 393,698
----------- -----------
Total liabilities 674,333 455,078
----------- -----------
Net assets available for benefits $204,593,630 $200,771,746
=========== ===========
See accompanying notes.
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Period June 1, 2005 through December 31, 2005
Additions
Contributions:
Employer $ 3,128,621
Participant 7,796,199
Net appreciation in fair value of investments 1,757,653
Investment income 1,887,990
-----------
Total additions 14,570,463
Deductions:
Benefits paid to participants 10,635,859
Administrative expense 112,720
-----------
Total deductions 10,748,579
-----------
Net Increase 3,821,884
Net assets available for benefits, beginning of period 200,771,746
-----------
Net assets available for benefits, end of period $204,593,630
===========
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Biomet, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
December 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 or Plan Sponser) 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 December 31, 2005 and May 31, 2005, forfeited nonvested
accounts totaled $527,646 and $530,873, respectively. During the period
ended December 31, 2005, $700,000 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
All investment information disclosed in the accompanying financial statements
and schedules, including investments held at December 31, 2005 and May 31,
2005, and net appreciation in fair value of investments, and investment income
for the period from June 1, 2005 through December 31, 2005, were obtained or
derived from information supplied to the plan administrator and certified as
complete and accurate by 1st Source Bank, the Trustee.
The following presents investments that represent 5% or more of the Plan's net
assets at December 31, 2005 and May 31, 2005:
December 31, May 31,
2005 2005
---- ----
Biomet, Inc. common shares $114,069,510* $118,866,835*
*Includes nonparticipant-directed amounts of $76,458,680 and $79,742,851 at
December 31, 2005 and May 31, 2005, respectively.
During the period ended December 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 $(3,951,950)
Other common stock 1,806,974
Common trust fund 100,297
Mutual funds 3,802,332
---------
$ 1,757,653
=========
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:
December 31 May 31,
2005 2005
---- ----
Biomet, Inc. common shares $76,458,680 $79,742,851
Money market fund 66,852 24,855
---------- ----------
Net assets $76,525,532 $79,767,706
========== ==========
Period Ended
December 31, 2005
-----------------
Changes in net assets
Net depreciation in fair value $(2,120,391)
Employer contributions 2,808,259
Investment income 530,079
Benefit payments (4,430,312)
Transfers-out (29,809)
---------
$(3,242,174)
=========
5. Party-in-Interest Transactions
During the period June 1, 2005 through December 31, 2005, the Plan acquired
140,951 Biomet, Inc. common shares at a cost of $5,128,690.
During the period June 1, 2005 through December 31, 2005, the Plan sold
64,172 Biomet, Inc. common shares for $2,316,621. A gain of $1,105,705 was
realized.
During the period June 1, 2005 through December 31, 2005, 112,209 Biomet, Inc.
common shares with a cost of $1,961,520 were distributed to participants. The
fair value of the shares distributed aggregated $4,158,634.
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 the period
June 1, 2005 through December 31, 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 sponsor believes the Plan
is being operated in compliance with the Code and, therefore, believes that the
Plan, as amended, is qualified and the related trust is tax exempt.
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 December 31,and May 31:
December 31 May 31
2005 2005
---- ----
Net assets available for benefits
per the financial statements $204,593,630 $200,771,746
Amounts allocated to participants withdrawing (7,787,703) (3,471,497)
----------- -----------
Net assets available for benefits per Form 5500 $196,805,927 $197,300,249
=========== ===========
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 $10,635,859
Add amounts allocated to withdrawing participants at end of year 7,787,703
Less amounts allocated to withdrawing participants at
Beginning of year (3,471,497)
----------
Benefits paid to participants per Form 5500 $14,952,065
==========
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.
8. Subsequent Event
Effective January 1, 2006 the assets of the Interpore International, Inc.
(a wholly-owned subsidiary of Biomet, Inc.) Retirement Savings Plan
("Retirement Plan") merged into the Plan. The amount transferred into the
plan was approximately $3,698,272.
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
December 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. 3,119,210 shares $53,025,004 $114,069,510
Mutual funds
Merrill Lynch Funds:
Balanced Capital 285,247 units 6,658,037 7,310,876
Foundational Growth 332,816 units 4,720,516 6,373,430
Global Allocation 282,409 units 3,823,015 4,784,001
Small Cap Value 301,200 units 6,588,097 7,786,032
US Government Mtg. 12,557 units 122,646 126,450
*1st Source Monogram Funds:
Diversity Equity 429,384 units 3,537,555 3,246,143
Income Equity 482,923 units 5,710,261 6,306,979
Income 155,350 units 1,566,480 1,514,666
Other Mutual Funds
Calvert Income 78,484 units 1,336,061 1,315,397
Davis NY Venture A 68,423 units 1,883,962 2,305,135
Delaware Group Trend 80,518 units 1,520,267 1,792,334
Janus Adv. Agressive Growth 49 units 3,284 1,383
John Hancock Government Income 164,134 units 1,548,515 1,485,412
MFS Capital Opportunities 40,864 units 452,046 559,025
MFS Massachusetts Investors 99,240 units 1,074,057 1,296,075
Morgan Stanley International Equity 214,362 units 4,003,286 4,330,142
Oppenheimer Global Growth & Income 71,707 units 1,952,662 2,648,862
Alliance RCM Innovation 17,301 units 714,937 674,236
Blackrock Aurora 109,724 units 3,746,976 3,751,460
Vanguard 500 Index 23,622 units 2,457,677 2,714,630
Common Trust Fund
*1st Source Bank Guaranteed Income 225,066 units 5,343,285 5,779,894
Money Market Fund
Goldman Sachs Financial Square 6,549,501 units 6,549,501 6,549,501
Bonds and Notes
Federal Agencies & Other Bonds:
Heller Financial, Inc. 25,000 units 26,599 25,085
U.S. Government Securities:
U.S. Treasury Strips 51,000 units 27,566 42,715
Federal Home Loan Bank 50,000 units 50,000 49,977
Corporate Preferred Stock
Flaherty Preferred 1,050 units 25,010 20,265
Other
Life Insurance Policies:
State Farm Life Insurance Company Cash Surrender Value 9,873 9,873
Self-directed brokerage funds Various 11,977,942 11,418,460
Participant loans Interest Rate Range 5,968,465 5,968,466
from 5.00% tp 10.00%
-----------
Total $204,256,414
===========
*Indicates party-in-interest to the Plan.
Biomet, Inc. 401(k) Profit Sharing Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
EIN #35-1382845 Plan Number 002
Period June 1, 2005 through December 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 Asset Price Price Asset Date Gain
-------- ----------- -------- ------- ------- ----------- ----
Category (iii) - Series of transactions in excess of 5% of plan assets
Biomet Inc. Biomet, Inc. common stock:
Purchases $ 5,128,690 -- $ 5,128,690 $5,128,690 --
Sales -- $2,316,621 $ 1,210,916 $2,316,621 $1,105,705
Note: Columns (e) and (f) and categories (i), (ii) and (iv) are not applicable.