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 calendar year ended December 31, 2006.
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 schedules 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 Supplemental Schedules
(a) Financial Statements:
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits at December 31, 2006 and 2005
Statement of Changes in Net Assets Available for Benefits for the year
ended December 31, 2006
Notes to Financial Statements
Schedule of Delinquent Participant Contributions
Schedule of Assets (Held at End of Year)
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: 6/29/07 BY: /s/ Daniel Florin
----------- -----------------------
Daniel Florin
(Member, Biomet, Inc. Benefits Committee)
Biomet, Inc. 401(k) Profit Sharing Plan
Financial Statements and Supplemental Schedules
At December 31, 2006 and 2005, and for the Year Ended December 31, 2006
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
Supplemental Schedules
Schedule of Delinquent Participant Contributions
Schedule of Assets (Held At End of Year)
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, 2006 and
2005, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2006. 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, 2006 and 2005, and the changes in its net assets available for
benefits for the year ended December 31, 2006, 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 December 31, 2006, and
delinquent participant contributions for the year ended December 31, 2006 are
presented for purposes of additional analysis and is not a required part
of the 2006 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 audit
of the 2006 financial statements and, in our opinion, are fairly stated in all
material respects in relation to the 2006 financial statements taken as a whole.
/s/ Ernst & Young LLP
Indianapolis, Indiana
June 29, 2007
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Net Assets Available for Benefits
Years ended December 31, 2006 and 2005
2006 2005
---- ----
Assets
Investments $218,006,924 $198,244,862
Participant Loans 6,222,959 5,968,466
Contributions receivable:
Employer 518,088 475,633
Participant 465,516 500,018
Cash (overdraft) (43,806) (18,609)
Due from brokers 114,721 16,961
Interest receivable 46,572 37,546
----------- -----------
Total assets 225,330,974 205,224,877
Liabilities
Accrued administrative expenses 76,734 60,106
Due to brokers 384,956 614,227
----------- -----------
Total liabilities 461,690 674,333
----------- -----------
Net assets available for benefits at fair value $224,869,284 $204,550,544
----------- -----------
Adjustment from fair value to contract value
for interest in collective trust relating to
fully benefit-responsive investment contracts 21,516 43,086
----------- -----------
Net assets available for benefits $224,890,800 $204,593,630
============ ===========
See accompanying notes.
Biomet, Inc. 401(k) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2006
Additions:
Contributions:
Employer $ 6,619,775
Participant 13,979,027
Transfer-in 3,754,533
Net appreciation in fair value of investments 22,569,749
Investment income 2,777,903
-----------
Total additions 49,700,987
Deductions:
Benefits paid to participants 29,204,191
Administrative expense 199,626
-----------
Total deductions 29,403,817
-----------
Net Increase 20,297,170
Net assets available for benefits, beginning of year 204,593,630
-----------
Net assets available for benefits, end of year $224,890,800
===========
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Biomet, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2006
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 Sponsor) 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, 2006 and 2005, forfeited nonvested accounts
totaled $1,138,509 and $527,646, respectively. During the year ended
December 31, 2006, $0 was used to reduce Employer contributions.
Participant Loans
A participant may borrow from the Plan an amount up to the lesser of
one-half the participant's vested account balance or $50,000 reduced by
the excess of the highest outstanding balance of loans from the Plan during
the one year period ending on the date the loan is made. The Benefits
Committee approves all loan applications and determines the interest rate to
be charged to the participant.
Transfers-In
Effective January 1, 2006, the assets of the Interpore International, Inc.
(a wholly owned subsidiary of Biomet, Inc.) Retirement Savings Plan (the
Retirement Plan) merged into the Plan. The amount transferred into the
Plan was $3,754,533.
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.
New Accounting Pronouncement
In December 2005, the Financial Accounting Standards Board (FASB) issued
FASB Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans (the FSP). The FSP defines the circumstances
in which an investment contract is considered fully benefit responsive and
provides certain reporting and disclosure requirements for fully benefit
responsive investment contracts in defined contribution health and welfare and
pension plans. The financial statement presentation and disclosure provisions
of the FSP are effective for financial statements issued for annual periods
ending after December 15, 2006 and are required to be applied retroactively to
all prior periods presented for comparative purposes. The Plan has adopted the
provisions of the FSP at December 31, 2006.
The plan invests in investment contracts through a collective trust. As
required by the FSP, investments in the accompanying Statements of Net Assets
Available for Benefits include fully benefit responsive investment contracts
recognized at fair value. AICPA Statement of Position 94-4, Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans, as amended, requires fully benefit responsive
investment contracts to be reportedat fair value in the Plan's Statement of
Net Assets Available for Benefits with acorresponding adjustment to reflect
these investments at contract value. The requirements of the FSP have been
applied retroactively to the Statement of Net Assets Available for Benefits
as of December 31, 2005 presented for comparative purposes. Adoption of the
FSP had no effect on the Statement of Changes in Net Assets Available for
Benefits for any period presented.
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. The Plan's interest in the
collective trust is valued based on information reported by the Trustee
regarding the fair value of the underlying assets. 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.
Reclassifications
Certain 2005 amounts have been reclassified to conform to the 2006 presentation.
The reclassifications have no impact on net results previously reported.
3. Investments
The following presents investments that represent 5% or more of the Plan's net
assets at December 31, 2006 and 2005:
2006 2005
---- ----
Biomet, Inc. common shares* $124,150,106 $114,069,510
*Includes nonparticipant-directed amounts of $82,680,306 and $76,458,680 at
December 31, 2006 and 2005, respectively.
During the year ended December 31, 2006, 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 $14,313,414
Other common stock 729,451
Common trust fund 199,229
Mutual funds 7,327,655
---------
$22,569,749
=========
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,
2006 2005
---- ----
Biomet, Inc. common shares $82,680,306 $76,458,680
Money market fund 406,400 66,852
Employer contribution receivable 518,088 475,633
---------- ----------
Net assets $83,604,794 $77,001,165
========== ==========
Year Ended
December 31,
2006
------------
Changes in net assets
Net appreciation in fair value $9,461,218
Employer contributions 6,619,775
Investment income 634,232
Benefit payments (9,916,814)
other (194,782)
---------
$6,603,629
=========
5. Party-in-Interest Transactions
During the year ended December 31, 2006, the Plan acquired 350,019 Biomet,
Inc. common shares at a cost of $12,256,994.
During the year ended December 31, 2006, the Plan sold 276,077 Biomet, Inc.
common shares for $10,153,161. A gain of $4,633,079 was realized.
During the year ended December 31, 2006, 184,849 Biomet, Inc. common shares
with a cost of $3,317,196 were distributed to participants. The fair value
of the shares distributed aggregated $6,336,650.
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 year ended
December 31, 2006.
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. Subsequent to this determination by the Internal Revenue
Service, the Plan was amended. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The plan sponsor has
indicated that it will take the necessary steps, if any, 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 December 31:
2006 2005
---- ----
Net assets available for benefits
per the financial statements $224,890,800 $204,593,630
Amounts allocated to participants withdrawing (1,687,095) (7,787,703)
Adjustment from contract value to fair value
for interest in collective trust relating to
fully benefit responsive investment contracts (21,516) -
----------- -----------
Net assets available for benefits per Form 5500 $223,182,189 $196,805,927
=========== ===========
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 $29,204,191
Add amounts allocated to withdrawing participants at end of year 1,687,095
Less amounts allocated to withdrawing participants at
Beginning of year (7,787,703)
----------
Benefits paid to participants per Form 5500 $23,103,583
==========
The following is a reconciliation of net appreciation from the financial
statements to the Form 5500:
Year Ended
December 31,
2006
------------
Net appreciation in fair value of investments $22,569,749
Adjustments from contract value to fair value (21,516)
------------
Net appreciation per the Form 5500 $22,548,233
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 April 1, 2007, the Biomet Inc. Employee Stock Bonus Plan was merged
into the Biomet, Inc. 401(k) Profit Sharing Plan and the name was changed to
the Biomet 401(k) Savings and Retirement Plan. In conjunction with the merger,
the plan trustee was changed from 1st Source to the Charles Schwab Trust
Company.In addition, the recordkeeping function, which was historically done
in-house, has been assigned to Schwab Retirement Plan Services, Inc.
On June 13, 2007 a tender offer for all of the Company's issued and outstanding
common shares at a price of $46 per common share was initiated by a consortium
of private equity funds sponsored by the Blackstone Group L.P., Goldman Sachs
and Company, Kohlberg Kravis Roberts and Co. L.P. and TPG Capital, L.P.. The
initial expiration date for the tender offer is July 11, 2007.
Biomet, Inc. 401(k) Profit Sharing Plan
Schedule H, Line 4a - Delinquent Participant Contributions
EIN #35-1382845 Plan Number 002
Year Ended December 31, 2006
Participant Contributions Transferred Total that Constitute Nonexempt
Late to the Plan Prohibited Transactions
$ 489,917 $ 489,917
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, 2006
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. 3,008,241 shares $56,444,720 $124,150,106
Mutual funds
Blackrock Funds:
Balanced Capital 283,626 units 6,800,018 7,774,189
Fundamental Growth 325,481 units 4,909,948 6,480,325
Global Allocation 309,327 units 4,546,522 5,632,846
Value Opportunities 368,195 units 8,469,776 9,028,134
Blackrock Aurora 165,613 units 5,354,897 4,531,168
US Government Mtg. 8,863 units 93,011 95,187
*1st Source Monogram Funds:
Diversity Equity 402,805 units 3,279,070 3,210,357
Income Equity 529,646 units 6,534,986 7,642,794
Income 266,455 units 2,633,577 2,581,946
Other Mutual Funds
Calvert Income 94,619 units 1,597,945 1,586,762
Davis NY Venture A 71,463 units 2,151,769 2,752,621
Delaware Group Trend 93,459 units 1,839,307 1,888,800
John Hancock Government Income 179,953 units 1,668,211 1,614,178
MFS Capital Opportunities 38,296 units 451,381 601,244
MFS Massachusetts Investors 96,047 units 1,086,165 1,353,302
Morgan Stanley International Equity 257,014 units 4,975,276 5,243,089
Oppenheimer Global Growth & Income 100,384 units 3,281,738 3,606,811
Alliance RCM Technology 26,090 units 1,053,165 1,063,428
Vanguard 500 Index 23,225 units 2,551,852 3,032,891
Common Trust Fund
*1st Source Bank Guaranteed Income 188,658 units 5,013,702 4,992,186
Money Market Fund
Goldman Sachs Financial Square 6,609,938 shares 6,609,938 6,609,938
U.S. Government Securities
U.S. Treasury Strips 3.5% to 6.5% 27,565 44,154
due 2/15/2010
Corporate preferred stock
Flaherty Preferred 2,731 shares 61,023 58,471
Other
Life Insurance Policies:
State Farm Life Insurance Company Cash Surrender Value 9,874 9,874
Self-directed brokerage funds Various 11,939,624 12,422,123
Participant loans Interest Rate Range from 6,222,959
5.00% tp 9.50%
-----------
Total $224,229,883
===========
*Indicates party-in-interest to the Plan.