By CHELSEY DULANEY
Biomet Inc. said earnings fell about 77% in its August quarter on higher expenses, despite posting sales increases across nearly all divisions.
The manufacturer of artificial knees and hips, among other orthopedic devices, agreed in April to be acquired by rival Zimmer Holdings Inc. ZMH -1.12% for about $13.35 billion in cash and stock, a bid to position the combined company as a leader in making products to repair muscles and bones. That move effectively ended Biomet’s plan for an initial public offering earlier this year.
Last week, European Union regulators opened an in-depth probe into the deal, saying it could result in less innovation and higher prices. The decision raises a potential hurdle to the landmark deal, which has yet to be approved by U.S. regulators.
For the quarter ended Aug. 31, Biomet posted a profit of $7.3 million, down from a profit of $31.1 million a year earlier. Excluding items, adjusted net income rose to $94.6 million from $77.1 million a year earlier. Sales rose 6% to $774.8 million, led by a 20.9% sales increase in its spine and bone healing division. Knee sales increased 4.3%, while hip sales increased 3.8% in the quarter.
Meanwhile, research and development costs rose 14% in the quarter, while selling and administrative expenses rose 15%.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
