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8-K - FORM 8-K - OSTEOTECH INC | c00523e8vk.htm |
Exhibit 99.1
Contacts | ||||
Company: | Mark H. Burroughs | |||
FOR IMMEDIATE RELEASE
|
(732) 542-2800 | |||
Investors: | Jennifer Beugelmans | |||
(646) 596-7473 | ||||
Media: | Dan Budwick | |||
(973) 271-6085 | ||||
May 10, 2010 |
OSTEOTECH REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
First Quarter Results Include 88% Sequential Sales Growth for New Products
Company Reiterates 2010 Guidance
Company Reiterates 2010 Guidance
Osteotech, Inc. (NASDAQ: OSTE), a leader in the emerging field of biologic products for
regenerative healing, today reported financial results for the first quarter ended March 31, 2010.
During the first quarter our focus on building on the initial, strong interest in our newly
launched Plexur M® Innovative Grafting and MagniFuse Bone Graft products resulted in overall
sequential revenue growth of 117% compared with the fourth quarter, said Sam Owusu-Akyaw,
President and Chief Executive Officer of Osteotech. We have been preparing for the national
launches of both product families, which will each be fully executed during the second quarter of
this year. In addition, we have recently released an expanded instrument set for our FacetLinx
Fusion Technology. We believe that the national launches and increased functionality of FacetLinx
will continue to drive our new product growth trajectory throughout 2010 as well as begin to
provide new sales opportunities for our other core bone grafting family of products. Throughout
2010, we will continue to focus on creating opportunities to capitalize on our innovative
technology and procedure-specific biologics, which should result in meaningful improvements to our
financial results. As a result, we remain on track to achieve our guidance for 2010.
Recent and Upcoming Corporate Developments
| Osteotech showcased its new proprietary biologic product portfolio at its booth
during the Annual Meeting of the American Academy of Orthopaedic Surgeons (AAOS), in
New Orleans, Louisiana from March 10 to 12, 2010. A number of surgeons presented
clinical results stemming from their use of MagniFuse and Plexur M at the Osteotech
booth during the meeting. |
| During the first quarter of 2010, the MagniFuse customer base grew nearly 90% to a total
of 84 accounts, with a re-order rate of 73%. MagniFuse revenue was $1.1 million in the
first quarter of 2010 after only its second quarter on the market. |
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| 75 new accounts were added to the Plexur M customer base, bringing the total number of
accounts to 111 at the end of the first quarter of 2010. Plexur M revenue grew 72%
sequentially to $.6 million in the first quarter of 2010. |
||
| Sales of new products, including MagniFuse, Plexur M and FacetLinx, were $1.8 million
during the first quarter of 2010, up 88% compared with the fourth quarter of 2009. The
Company is currently executing national launches for both MagniFuse and Plexur M. |
Financial Results
Revenue for the three months ended March 31, 2010 was $22.5 million, including $1.8 million from
new products, compared with $23.9 million for the three months ended March 31, 2009. Revenue from
client services and private label DBM declined, as expected, by $1.8 million year-over-year.
Excluding client services and private label DBM revenue, first quarter 2010 revenue was $21.6
million compared with $21.1 million in the first quarter of 2009 with the increase in revenue
reflecting sales of new products during the first quarter of 2010.
Net loss for the first quarter ended March 31, 2010 was $1.6 million, or $0.09 per diluted share,
compared with a net loss of $1.8 million, or $0.10 per share, for the first quarter of 2009.
Looking ahead, we remain excited about the opportunities for our new products, continued Mr.
Owusu-Akyaw. We were pleased with the interest our innovative biologics generated at AAOS and the
encouraging clinical results surgeons presented based upon their use of both MagniFuse and Plexur
M. Our national launches for both products are well underway and we look forward to gaining market
share as the year progresses. Our results this quarter are in line with our expectations and place
us squarely on track to achieve our 2010 guidance. Based upon our anticipated sales trajectory, we
expect the second half of 2010 to be stronger than the first half of 2010.
Guidance
Osteotech is reiterating the financial guidance it previously established for 2010:
| Total revenue is expected to range between $97 million and $101 million; and |
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| Net income is expected to range between breakeven and a loss of $.05 per share. |
Conference Call Today, May 10, 2010
The Osteotech management team will host a conference call on May 10, 2010 at 9:00 a.m. (EDT) to
discuss first quarter 2010 financial results, recent corporate developments and guidance for 2010.
The call can be accessed by dialing 1-866-783-2142 (domestic) or 1-857-350-1601 (international) and
indicating access code 45753886. The conference call will also be simultaneously webcast at
www.osteotech.com. A replay of the call will be available two hours after completion of the live
call through midnight, Monday, May 24, 2010 by dialing 1-888-286-8010 and indicating access code
86998695.
About Osteotech
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global leader in providing biologic
solutions for regenerative medicine to support surgeons and their patients in the repair of the
musculoskeletal system through the development of innovative therapy-driven products that alleviate
pain, promote biologic healing and restore function. For further information regarding Osteotech
or the conference call, please go to Osteotechs website at www.osteotech.com.
Certain statements made throughout this press release that are not historical facts are
forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995)
regarding the
Companys future plans, objectives and expected performance. Any such forward-looking statements
are based on assumptions that the Company believes are reasonable, but are subject to a wide range
of risks and uncertainties and, therefore, there can be no assurance that actual results may not
differ materially from those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially include, but are not limited to, the Companys
ability to develop and introduce new products, differences in anticipated and actual product and
service introduction dates, the ultimate success of those products in the marketplace, the
continued acceptance and growth of current products and services, the impact of competitive
products and services, the availability of sufficient quantities of suitable donated tissue and the
success of cost control and margin improvement efforts. For a more detailed discussion of certain
of these factors, see the Companys periodic reports filed with the Securities and Exchange
Commission from time to time, including the latest Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q. All information in this press release is as of May 10, 2010 and the Company does not
intend to update this information.
OSTEOTECH, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
Three Months | ||||||||
Ending March 31, | ||||||||
2010 | 2009 | |||||||
Revenue |
$ | 22,527 | $ | 23,931 | ||||
Cost of revenue |
11,557 | 11,964 | ||||||
Gross profit |
10,970 | 11,967 | ||||||
Marketing, selling and
general and administrative expenses |
10,703 | 11,618 | ||||||
Research and development expenses |
1,208 | 1,653 | ||||||
11,911 | 13,271 | |||||||
Operating loss |
(941 | ) | (1,304 | ) | ||||
Interest expense, net |
(339 | ) | (354 | ) | ||||
Other |
(187 | ) | (83 | ) | ||||
Loss before income taxes |
(1,467 | ) | (1,741 | ) | ||||
Income tax provision |
116 | 55 | ||||||
Net loss |
$ | (1,583 | ) | $ | (1,796 | ) | ||
Loss per share: |
||||||||
Basic |
$ | (0.09 | ) | $ | (0.10 | ) | ||
Diluted |
$ | (0.09 | ) | $ | (0.10 | ) | ||
Shares used in computing loss per share: |
||||||||
Basic |
18,073,471 | 17,874,236 | ||||||
Diluted |
18,073,471 | 17,874,236 |
CONSOLIDATED SEGMENT REVENUE DETAIL
(dollars in thousands)
(unaudited)
(dollars in thousands)
(unaudited)
Three Months | ||||||||
Ended March 31, | ||||||||
2010 | 2009 | |||||||
DBM |
$ | 13,133 | $ | 14,026 | ||||
Hybrid/Synthetic |
2,380 | 748 | ||||||
Traditional Tissue |
5,070 | 5,277 | ||||||
Spinal Allografts |
1,699 | 1,880 | ||||||
Client Services |
12 | 1,633 | ||||||
Other Product Lines |
233 | 367 | ||||||
Revenue |
$ | 22,527 | $ | 23,931 | ||||
OSTEOTECH, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 10,271 | $ | 10,708 | ||||
Accounts receivable, net |
16,424 | 16,165 | ||||||
Deferred processing costs |
34,123 | 38,562 | ||||||
Inventories |
1,589 | 1,819 | ||||||
Prepaid expenses and other current assets |
2,908 | 3,247 | ||||||
Total current assets |
65,315 | 70,501 | ||||||
Property, plant and equipment, net |
28,300 | 29,575 | ||||||
Other assets |
17,649 | 16,861 | ||||||
$ | 111,264 | $ | 116,937 | |||||
Liabilities and Stockholders Equity |
||||||||
Accounts payable and accrued liabilities |
$ | 12,302 | $ | 16,206 | ||||
Current maturities of capital lease obligation |
1,020 | 994 | ||||||
Total current liabilities |
13,322 | 17,200 | ||||||
Capital lease obligation |
11,916 | 12,181 | ||||||
Other liabilities |
7,167 | 7,270 | ||||||
Total liabilities |
32,405 | 36,651 | ||||||
Stockholders equity |
78,859 | 80,286 | ||||||
$ | 111,264 | $ | 116,937 | |||||
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