EATONTOWN, N.J., Aug. 1 /PRNewswire-FirstCall/ -- Osteotech, Inc.
(Nasdaq: OSTE) reported today that net income for the three months ended
June 30, 2007 was $.9 million, or $.05 diluted earnings per share, compared
to net income of $1.1 million, or $.06 diluted earnings per share, for the
three months ended June 30, 2006. Revenue for the three months ended June
30, 2007 increased 5% to $26.5 million from $25.3 million for the three
months ended June 30, 2006. Gross margin was 48% and 49% in the second
quarter of 2007 and 2006, respectively. Net income for the three months
ended June 30, 2007 was negatively impacted by the costs associated with
our annual preventative maintenance activities of $.3 million and the
investment in our distribution effectiveness initiatives, which we
previously estimated would be $4.0 million annually.
Sam Owusu-Akyaw, Osteotech's President and Chief Executive Officer,
stated, "Our financial results continue to favorably indicate the
successful execution of our strategic initiatives. We are pleased that the
business is moving forward and the team is focused on revenue growth."
Net income for the six months ended June 30, 2007 was $.2 million, or
$.01 diluted earnings per share. Net income for the first half of 2007 was
negatively impacted by the first quarter costs related to the settlement of
certain litigation of $1.1 million, the costs associated with our annual
preventative maintenance activities and the costs associated with improving
our distribution capabilities. Net income for the six months ended June 30,
2006 was $1.6 million, or $.09 diluted earnings per share. Revenue for the
six months ended June 30, 2007 increased 3% to $51.7 million from $50.4
million for the six months ended June 30, 2006. Gross margin was 49% for
the first half of 2007 compared to 48% for the first half of 2006.
DBM Segment revenue increased 13% to $16.2 million for the three months
ended June 30, 2007 from $14.3 million for the three months ended June 30,
2006, primarily as a result of increased unit sales volume. Revenue in the
Hybrid/Synthetic Segment increased 3% for the three months ended June 30,
2007 as compared to the same respective period in 2006.
DBM Segment revenue increased 8% to $31.6 million for the six months
ended June 30, 2007 from $29.3 million in the corresponding period in 2006,
substantially as a result of increased unit sales volume. Revenue in the
Hybrid/Synthetic Segment for the six months ended June 30, 2007 was
relatively flat with increased revenues from our Plexur(TM) P Biocomposite
and a decline in revenue from the GraftCage(TM) Spacers.
Traditional Tissue Segment revenue increased 5% and 13% in the second
quarter and first half of 2007, respectively, as compared to the same
corresponding periods in 2006, primarily due to increased unit volume.
Revenue in the Client Services Segment, which represents fees from the
processing of donors for clients, declined 21% and 12% for the three and
six months ended June 30, 2007, respectively, compared to the same periods
in 2006, principally as a result of a decline in the number of donors
processed for the Musculoskeletal Transplant Foundation. A decrease in
units sold in our Spinal Allografts Segment resulted in declines in revenue
of 10% and 21% for the three and six months ended June 30, 2007,
respectively, as compared to the same respective periods in 2006.
Mr. Owusu-Akyaw will host a conference call on August 1, 2007 at 9:00
a.m. Eastern Time to discuss second quarter results. You are invited to
listen to the conference call by dialing 706-643-1624. The conference will
also be simultaneously webcast at http://www.osteotech.com. Automated
playback will be available two hours after completion of the live call,
through midnight, August 15, 2007, by dialing 706-645-9291 and indicating
access code 10144176.
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global
leader in providing OsteoBiologic solutions to surgeons and patients for
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,
this press release or the conference call, please go to Osteotech's website
at http://www.osteotech.com.
Certain statements made throughout this press release that are not
historical facts contain forward-looking statements (as such are defined in
the Private Securities Litigation Reform Act of 1995) regarding the
Company's 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, 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.
Certain of these factors are detailed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission. All
information in this press release is as of August 1, 2007 and the Company
does not intend to update this information.
OSTEOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED SEGMENT REVENUE DETAIL
(dollars in thousands)
Three Months Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
(restated) (restated)
DBM $16,161 $ 14,348 $31,643 $ 29,322
Traditional Tissue 4,558 4,361 9,169 8,115
Spinal Allografts 3,221 3,573 6,009 7,609
Hybrid/Synthetic 408 395 641 613
Client Services 1,944 2,463 3,872 4,383
Other Product Lines 178 142 353 320
Revenue $26,470 $ 25,282 $51,687 $ 50,362
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
(restated) (restated)
Revenue $26,470 $ 25,282 $ 51,687 $ 50,362
Cost of revenue 13,680 12,879 26,580 26,123
Gross profit 12,790 12,403 25,107 24,239
Marketing, selling
and general and
administrative 10,513 10,009 22,290 20,105
Research and
development 1,202 1,143 2,279 2,315
11,715 11,152 24,569 22,420
Operating income 1,075 1,251 538 1,819
Interest expense, net (152) (249) (302) (519)
Other (114) 246 22 490
Income before
income taxes 809 1,248 258 1,790
Income tax provision
(benefit) (46) 136 51 179
Net Income $ 855 $ 1,112 $ 207 $ 1,611
Earnings per share:
Basic $ .05 $ .06 $ .01 $ .09
Diluted $ .05 $ .06 $ .01 $ .09
Shares used in
computing earnings
per share:
Basic 17,466,368 17,273,778 17,442,969 17,274,846
Diluted 18,009,774 17,336,679 17,912,380 17,354,906
OSTEOTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
June 30, December 31,
2007 2006
Assets
Cash and cash equivalents $ 19,430 $ 17,946
Accounts receivable, net 20,209 18,507
Deferred processing costs 30,357 29,067
Inventories 1,240 1,005
Prepaid expenses and other current assets 3,147 2,795
Total current assets 74,383 69,320
Property, plant and equipment, net 34,511 36,340
Other assets 5,798 7,373
$114,692 $113,033
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 18,644 $ 15,861
Current maturities of capital lease obligation 766 727
Total current liabilities 19,410 16,588
Capital lease obligation 14,484 14,876
Other liabilities 5,778 7,716
Total liabilities 39,672 39,180
Stockholders' equity 75,020 73,853
$114,692 $113,033
SOURCE Osteotech, Inc.
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Related links:
http://www.osteotech.com/
http://www.prnewswire.com/comp/668050.html /
CONTACT:
Mark H. Burroughs of Osteotech, Inc.,
+1-732-542-2800
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