ALACHUA, Fla., Oct. 24 /PRNewswire-FirstCall/ -- Regeneration Technologies, Inc. (RTI) , the Florida-based processor of orthopedic, cardiovascular and other biologic implants, announced today that the company’s net revenue was $22.5 million for the third quarter of 2005 and $55.1 million for the nine months ended September 30, 2005, compared to $22.8 million for the third quarter 2004 and $69.5 million for the nine months ended September 30, 2004.
For the third quarter ended September 30, 2005, the company reported net loss of $1.6 million and net loss per diluted share of $0.06, compared to net income of $1.7 million and net income per diluted share of $0.06 for the third quarter of 2004. For the nine months ended September 30, 2005 RTI reported net loss of $3.8 million and net loss per diluted share of $0.14, compared to net income of $4.5 million and net income per diluted share of $0.17 for the nine months ended September 30, 2004.
On October 14, 2005, RTI issued a press release announcing a voluntary recall of certain tissues from the marketplace. Reflected in the numbers above, the company has recorded a charge to operating income in the third quarter of approximately $3.5 million, or $0.08 per diluted share, to recognize expenses related to the recall.
On August 29, 2005, RTI sold 2.8 million shares of common stock to accredited investors for an aggregate purchase price of approximately $23.9 million, with net proceeds to the company of $22.4 million. The proceeds from the financing were used to pay off $3 million outstanding under the company’s line of credit and the remainder will be used for general working capital purposes.
“Third quarter revenues of $22.5 million show recovery, as expected, from first quarter revenues of $15.0 million and second quarter revenues of $17.6 million. In addition, we made significant progress during the quarter on improving our liquidity position and establishing our direct distribution force,” said Brian K. Hutchison, chairman, president and CEO of RTI. “Had it not been for the October product recall, we would have returned to profitability in the third quarter as expected.”
Conference Call
RTI will hold a live conference call and simultaneous audio web cast on Monday, October 24, 2005 at 9:00 a.m. ET to discuss third quarter results. The conference call can be accessed by dialing 888-390-0675, passcode RTIX Q3. The web cast can be accessed through the investor section of RTI’s web site at www.rtix.com. A telephone replay of the call will be available through November 20, 2005 and can be accessed by calling 866-403-8767; the replay will also be available at www.rtix.com.
About Regeneration Technologies, Inc.
RTI processes allograft and xenograft tissue into shaped implants for use in orthopedic, cardiovascular and other surgeries with a commitment to science, safety and innovation.
RTI also holds the patents on BioCleanse(R), the only proven tissue sterilization process validated to eliminate viruses, bacteria, fungi and spores from tissue without impacting the structural or biomechanical integrity of the tissue. The company has distributed more than 600,000 allograft implants sterilized with the BioCleanse process with zero incidence of infection. RTI is accredited by the American Association of Tissue Banks and was named a 2004 Technology Pioneer by the World Economic Forum.
Except for historical information, any statements made in this press release about the company’s anticipated financial results, future operational results, regulatory approvals or changes to the company’s agreements with its distributors are forward-looking statements subject to risks and uncertainties, such as those described in the company’s public filings on file with the Securities and Exchange Commission. Actual results may differ materially from 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 web site at www.rtix.com or the SEC’s web site at www.sec.gov.
REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Net Revenues: Fees from tissue distribution $22,089 $22,289 $53,116 $67,771 Other revenues 460 479 1,957 1,725 Total net revenues 22,549 22,768 55,073 69,496 Costs of processing and distribution 17,955 13,347 40,887 41,675 Gross profit 4,594 9,421 14,186 27,821 Operating Expenses 7,207 6,527 20,351 20,116 Operating (loss) income (2,613) 2,894 (6,165) 7,705 Net interest expense (136) (198) (492) (660) (Loss) income before income tax (expense) benefit (2,749) 2,696 (6,657) 7,045 Income tax benefit (expense) 1,152 (1,043) 2,813 (2,504) Net (loss) income $(1,597) $1,653 $(3,844) $4,541 Net (loss) income per common share -- basic $(0.06) $0.06 $(0.14) $0.17 Net (loss) income per common share -- diluted $(0.06) $0.06 $(0.14) $0.17 Weighted average shares outstanding -- basic 27,834,975 26,625,999 27,132,660 26,575,956 Weighted average shares outstanding -- diluted 27,834,975 27,053,585 27,132,660 27,070,782 REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES Net Revenues (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Fees from tissue distribution: Spinal $ 13,216 $ 14,969 $ 32,322 $ 45,816 Sports medicine 3,352 1,911 7,591 6,967 Cardiovascular 2,182 2,047 6,223 5,178 General orthopedic 3,339 3,362 6,980 9,810 Other non-tissue 460 479 1,957 1,725 Total $ 22,549 $ 22,768 $ 55,073 $ 69,496 REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (In thousands) September 30, December 31, Assets 2005 2004 Current Assets: Cash and cash equivalents $ 23,198 $ 11,484 Accounts receivable - net 10,214 9,544 Inventories 39,806 40,431 Other current assets 9,068 7,655 Total current assets 82,286 69,114 Property, plant and equipment - net 44,991 44,424 Other assets 13,577 11,192 $ 140,854 $ 124,730 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 6,975 $ 7,797 Other current liabilities 7,142 7,125 Total current liabilities 14,117 14,922 Other liabilities 7,094 10,206 Total liabilities 21,211 25,128 Total stockholders’ equity 119,643 99,602 $ 140,854 $ 124,730 REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Cash flows from operating activities: Net (loss) income $(1,597) $1,653 $(3,844) $4,541 Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization expense 1,121 1,135 3,345 3,333 Amortization of deferred financing costs 43 41 131 92 Change in working capital 1,470 (2,397) (1,402) (15,211) Other (1,381) 840 (3,339) 2,040 Net cash (used in) provided by operating activities (344) 1,272 (5,109) (5,205) Cash flows from investing activities: Purchases of property, plant and equipment (638) (1,126) (3,359) (2,188) Purchase of intellectual property - - (1,600) - Decrease in restricted deposits - - - 14,757 Net cash (used in) provided by investing activities (638) (1,126) (4,959) 12,569 Cash flows from financing activities: Proceeds from stock offering 23,940 - 23,940 - Stock issuance costs (1,565) - (1,565) - Payment made to terminate swap agreement - - - (1,613) Payments on capital lease and note obligations (564) (787) (1,749) (1,898) Payments on note payable - - - (12,068) Proceeds from issuance of term loan - - - 9,000 Proceeds from revolving line of credit - - 3,000 - Payment on revolving line of credit (3,000) - (3,000) - Other 687 317 1,156 (377) Net cash provided by (used in) financing activities 19,498 (470) 21,782 (6,956) Net increase (decrease) in cash and cash equivalents 18,516 (324) 11,714 408 Cash and cash equivalents, beginning of period 4,682 10,783 11,484 10,051 Cash and cash equivalents, end of period $23,198 $10,459 $23,198 $10,459
Regeneration Technologies, Inc.
CONTACT: Thomas F. Rose, Chief Financial Officer, or Wendy Crites Wacker,APR, Corporate Communications, both of Regeneration Technologies,+1-386-418-8888; or Susan A. Noonan, The SAN Group, LLC, +1-212-966-3650,for Regeneration Technologies
Web site: http://www.rtix.com/
