RTI Biologics Announces 2013 First Quarter Results

  RTI Biologics Announces 2013 First Quarter Results

            – Company Will Hold Conference Call at 8:30 a.m. ET –

Business Wire

ALACHUA, Fla. -- April 25, 2013

RTI Biologics Inc. (RTI) (Nasdaq: RTIX), a leading provider of orthopedic and
other biologic implants, reported operating results for the first quarter of
2013 as follows:

Quarterly Highlights:

  *Achieved quarterly revenues of $40.4 million.
  *Achieved net income of $1.5 million, or $0.03 per fully diluted share.
  *Launched direct surgical specialties business with new line of biologic
    implants for hernia repair.
  *Received 510(k) clearance for porcine dermis implant.
  *Announced positive clinical results for BioCleanse®-processed BTB
    allografts.

Worldwide revenues of $40.4 million for the first quarter of 2013 decreased 8
percent compared to the first quarter of 2012. Domestic revenues of $36.1
million for the first quarter of 2013 decreased by 5 percent compared to the
first quarter of 2012, primarily due to weakness of the sports medicine, bone
graft substitutes and general orthopedic, and dental businesses and offset by
strength in the spine business. In addition, domestic other revenue was
positively impacted by the acceleration of deferred revenues resulting from
our hernia distributor relinquishing exclusive distribution rights in the
hernia market. International revenues of $4.3 million for the first quarter of
2013 decreased 27 percent as compared to the first quarter of 2012. On a
constant currency basis, international revenues for the first quarter of 2013
also decreased 27 percent as compared to the first quarter of 2012.

For the first quarter of 2013, the company reported net income of $1.5 million
and net income per fully diluted share of $0.03, based on 56.3 million fully
diluted shares outstanding, compared to net income of $2.0 million or $0.04
per fully diluted share for the first quarter of 2012, based on 55.9 million
fully diluted shares outstanding. First quarter 2013 net income per fully
diluted share was favorably impacted by approximately $0.01 due to recognition
of the full 2012 research and experimentation tax credit in the quarter.

“Our first quarter results were in line with our expectations,” said Brian K.
Hutchison, president and chief executive officer of RTI. “In a very
challenging environment, our distribution team has worked hard to respond to
customer reaction to the FDA warning letter that was received in October 2012.
International revenues continued to be negatively impacted by inaccuracies in
European media coverage about the company and the tissue industry. We will
continue to diligently work through these issues until we bring them to
resolution.”

Fiscal 2013 and Second Quarter Outlook

Based on results from the first quarter, the company is raising the low end of
its full year revenue guidance for 2013 from $178 million to $179 million. The
company now expects full year revenues for 2013 to be between $179 million and
$182 million. Full year net income per fully diluted share is expected to be
in the range of $0.17 to $0.19, based on 56.7 million fully diluted shares
outstanding. In 2013, the company will continue to make investments in
distribution, marketing and development activities to support the launch of
its direct surgical specialties business and expand its presence in general
orthopedics.

For the second quarter of 2013, the company expects revenues to be between $42
million and $43 million, and net income per fully diluted share to be
approximately $0.03.

“As mentioned in our 2012 fourth quarter and year-end earnings release, we
expect weakness in the first half of the year due to customer reaction to the
FDA warning letter and inaccuracies in media coverage,” said Hutchison.
“However, we anticipate that following closure of the warning letter and the
introduction of new implants, the second half of the year will be strong.”

Conference Call

RTI will host a conference call and simultaneous audio webcast to discuss the
first quarter results at 8:30 a.m. ET today. The conference call can be
accessed by dialing (877) 383-7419. The webcast can be accessed through the
investor section of RTI’s website at www.rtix.com. A replay of the conference
call will be available on the RTI website following the call.

About RTI Biologics Inc.

RTI Biologics Inc. is a leading provider of sterile biologic implants for
surgeries around the world with a commitment to advancing science, safety and
innovation. RTI prepares human donated tissue and animal tissue for
transplantation through extensive testing and screening and using proprietary
processes. These allograft and xenograft implants are used in orthopedic,
dental and other specialty surgeries.

RTI’s innovations continuously raise the bar of science and safety for
biologics – from being the first company to offer precision-tooled bone
implants and assembled technology to maximize each gift of donation, to
inventing validated sterilization processes that include viral inactivation
steps. The BioCleanse® Tissue Sterilization Process, the Tutoplast® Tissue
Sterilization Process and the Cancelle™ SP Demineralization Process  have a
combined record of more than four million implants distributed with zero
incidence of implant-associated infection. These processes have been validated
by tissue type to inactivate or remove viruses, bacteria, fungi and spores
from the tissue while maintaining biocompatibility and functionality.

RTI’s worldwide corporate headquarters are located in Alachua, Fla., with
international locations in Germany and France. The company is accredited by
the American Association of Tissue Banks in the United States and is a member
of AdvaMed.

Forward Looking Statement

This communication contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on management’s current expectations, estimates and
projections about our industry, our management's beliefs and certain
assumptions made by our management. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such forward-looking
statements. In addition, except for historical information, any statements
made in this communication about anticipated financial results, growth rates,
new product introductions, future operational improvements and results or
regulatory actions or approvals or changes to agreements with distributors
also are forward-looking statements. These statements are not guarantees of
future performance and are subject to risks and uncertainties, including the
risks described in public filings with the U.S. Securities and Exchange
Commission (SEC). Our actual results may differ materially from the
anticipated results reflected in these forward-looking statements. Copies of
the company's SEC filings may be obtained by contacting the company or the SEC
or by visiting RTI's website at www.rtix.com or the SEC's website at
www.sec.gov.

RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
                                                            
                                                Three Months Ended
                                                March 31,
                                                 2013          2012       
Revenues:
Tissue distribution                             $ 37,088       $ 42,121
Other revenues                                   3,334         1,622      
Total revenues                                    40,422         43,743
Costs of processing and distribution             21,226        23,637     
Gross profit                                     19,196        20,106     
Expenses:
Marketing, general and administrative             15,023         14,374
Research and development                          3,111          2,827
Asset abandonments                               -             16         
Total operating expenses                         18,134        17,217     
Operating income                                 1,062         2,889      
Total other income (expense) - net               -             55         
Income before income tax benefit (provision)      1,062          2,944
Income tax benefit (provision)                   400           (942       )
Net income                                      $ 1,462        $ 2,002      
                                                               
Net income per common share - basic             $ 0.03         $ 0.04       
Net income per common share - diluted           $ 0.03         $ 0.04       
Weighted average shares outstanding - basic      56,022,389    55,712,485 
Weighted average shares outstanding - diluted    56,290,110    55,923,946 

RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(In thousands)
(Unaudited)
                                                        
                                                Three Months Ended
                                                March 31,
                                                2013       2012
                                                           
Revenues from tissue distribution:
Sports medicine                                 $ 10,511   $ 13,425
Spine                                           10,099     8,560
Surgical specialties                            6,954      7,797
Bone graft substitutes and general orthopedic   5,351      7,015
Dental                                          4,173      5,324
Other revenues                                  3,334      1,622
Total revenues                                  $ 40,422   $ 43,743
Domestic revenues                               36,114     37,873
International revenues                          4,308      5,870
Total revenues                                  $ 40,422   $ 43,743

RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

                                                 March 31,     December 31,
                                                    2013         2012     
Assets
Cash and cash equivalents                          $ 38,802       $ 49,696
Accounts receivable - net                            21,498         21,694
Inventories - net                                    78,344         76,509
Prepaid and other current assets                    19,595       18,673   
Total current assets                                 158,239        166,572
                                                                  
Property, plant and equipment - net                  50,618         49,644
Other assets - net                                  25,368       25,193   
Total assets                                       $ 234,225     $ 241,409  
                                                                  
Liabilities and Stockholders' Equity
Accounts payable                                   $ 10,734       $ 11,949
Accrued expenses and other current liabilities       17,704         25,397
Current portion of long-term obligations            38           116      
Total current liabilities                            28,476         37,462
                                                                  
Deferred revenue                                     19,058         18,780
Long-term liabilities                               1,311        1,175    
Total liabilities                                    48,845         57,417
Stockholders' equity:
Common stock and additional paid-in capital          415,041        414,504
Accumulated other comprehensive loss                 (2,387   )     (1,776   )
Accumulated deficit                                 (227,274 )    (228,736 )
Total stockholders' equity                          185,380      183,992  
Total liabilities and stockholders' equity         $ 234,225     $ 241,409  

RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                                   
                                                           Three Months Ended
                                                           March 31,
                                                           2013       2012
Cash flows from operating activities:
Net income                                                 $ 1,462    $ 2,002
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization expense                      2,028      1,909
Stock-based compensation                                   485        525
Amortization of deferred revenue                           (2,915)    (1,164)
Other items to reconcile to net cash
(used in) provided by operating activities                 (9,123)    1,093
Net cash (used in) provided by operating activities        (8,063)    4,365
Cash flows from investing activities:
Purchases of property, plant and equipment                 (2,708)    (2,803)
Acquired intangible asset costs                            (98)       (65)
Net cash used in investing activities                      (2,806)    (2,868)
Cash flows from financing activities:
Proceeds from exercise of common stock options             85         100
Payments on long-term obligations                          (82)       (199)
Other financing activities                                 (23)       (20)
Net cash used in financing activities                      (20)       (119)
Effect of exchange rate changes on cash and cash           (5)        32
equivalents
Net (decrease) increase in cash and cash equivalents       (10,894)   1,410
Cash and cash equivalents, beginning of period             49,696     46,178
Cash and cash equivalents, end of period                   $ 38,802   $ 47,588

Contact:

RTI Biologics
Robert Jordheim, Chief Financial Officer
rjordheim@rtix.com
or
Jenny Highlander, APR
Corporate Communications
jhighlander@rtix.com
386-418-8888
 
Press spacebar to pause and continue. Press esc to stop.