Mail Stop 6010
February 13, 2006
VIA U.S. MAIL AND FACSIMILE (574) 372-1790
Gregory D. Hartman
Chief Financial Officer
Biomet, Inc.
56 East Bell Drive
Warsaw, Indiana 46582
Re: Biomet, Inc.
Form 10-K for the fiscal year ended May 31, 2005
Filed August 10, 2005
Form 8-K dated June 20, 2005
File No. 001-15601
Dear Mr. Hartman:
We have reviewed your filing and have the following
comments.
We have limited our review of your filing to those issues we have
addressed in our comments. Where indicated, we think you should
revise your future filings in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the fiscal year ended May 31, 2005
Consolidated Financial Statements
Note C: Business Combinations, page 40
1. We see that a significant portion of the purchase price for the
Interpore acquisition was allocated to in-process technology.
Please
tell us and expand future filings to disclose the nature of the
acquired technology and disclose the method and significant
assumptions used to determine the fair value. Please also provide
the following disclosures in future filings:
* The stage of completion and the extent of effort necessary to
complete these project(s), including estimated costs.
* Nature and timing of remaining efforts for completion, including
expected completion date and the impact from any delays;
* The period in which material net cash inflows from these
projects
are expected to commence;
* Whether the technology was brought to fruition, and if not,
disclose why not.
* How periods subsequent to the acquisition have been affected by
completion of the project and introduction of the technology.
2. Additionally, we see that the aggregate amount assigned to
goodwill and other intangible assets resulting from your
acquisitions
is significant in relation to the aggregate cost of the acquiring
Interpore. Please revise future filings to include all of the
disclosures required by paragraph 52 of SFAS 141. Refer to
paragraph
53(d) of the Standard for additional guidance. Please also
disclose
the factors that contributed to a purchase price that resulted in
a
significant amount of goodwill.
Schedule II - Valuation and Qualifying Accounts, page 50
3. We note from your schedule of valuation and qualifying accounts
that you decreased your excess and obsolete inventory reserve
during
fiscal year 2004 by $16 million. Please tell us and revise future
filings to clarify how the 2004 acquisitions resulted in a
decrease
in your excess and obsolete inventory reserve.
Form 8-K dated June 20, 2005
4. We note that you present the non-GAAP measure "adjusted
earnings
per share" in discussing your expected results for the fourth
quarter
ended May 31, 2005. Please note that Instruction 2 to Item 2.02
of
Form 8-K requires that when furnishing information under this item
you must provide all the disclosures required by paragraph
(e)(1)(i)
of Item 10 of Regulation S-K. You should also include the
disclosures discussed in Question 8 of the FAQ Regarding the Use
of
Non-GAAP Financial Measures dated June 13, 2003, including the
manner
in which management uses the non-GAAP measure, the economic
substance
behind management`s decision to use the measure, the material
limitations associated with the use of the non-GAAP measure as
compared to the directly comparable GAAP measure, the manner in
which
management compensates for the limitations of using the non-GAAP
measure and the substantive reasons why management believes that
the
non-GAAP financial measure provides useful information to
investors.
You should provide more specific rationale about why the non-GAAP
measures are useful to investors.
Please confirm that you will expand future Forms 8-K to provide
all
of the disclosures required by Item 10(e)(1)(i) of Regulation S-K
and
question 8 of the FAQ Regarding the Use of Non-GAAP Financial
Measures.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your response that keys your
responses to our comments and provides any requested information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision. Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Kristin Lochhead at (202) 551-3664 or me at
(202) 551-3676 if you have questions. In this regard, please do
not
hesitate to contact Martin James, Senior Assistant Chief
Accountant,
at (202) 551-3671 with any other questions.
Sincerely,
Brian Cascio
Accounting Branch Chief
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Mr. Hartman
Biomet, Inc.
February 13, 2006
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