EATONTOWN, N.J., Aug. 4 /PRNewswire-FirstCall/ -- Osteotech, Inc.
(Nasdaq: OSTE) reported today that net income for the three months ended
June 30, 2006 was $.8 million, or $.04 diluted earnings per share, compared
to a net loss of $1.9 million, or $.11 diluted net loss per share, for the
three months ended June 30, 2005. Consolidated revenues for the three
months ended June 30, 2006 and 2005 were $25.3 million in each respective
period. Gross margins increased to 48% in the second quarter of 2006 from
40% in the second quarter of 2005, mainly due to improved inventory and
processing productivity. As a result, there was a reduced need for reserves
for expiring, excess and obsolete tissue inventories in 2006 compared to
2005.
Sam Owusu-Akyaw, Osteotech's President and Chief Executive Officer,
stated, "Throughout the first half of 2006, we continued to execute on our
strategic initiatives. Our team was able to continue to improve gross
margins and control operating expenses, and our progress on these
initiatives is reflected in our second quarter profitability. As a result,
we more than doubled operating income in the second quarter of 2006
compared to the first quarter of 2006 on a very similar revenue base. The
team is committed to continuing these efforts and providing improvements in
gross margins and operating income throughout 2006 and 2007."
Mr. Owusu-Akyaw concluded, "Our team understands the challenges we face
and is dedicated to tackling each new challenge with the same level of
determination and intensity we have applied to other challenges over the
past eighteen months."
Net income for the six months ended June 30, 2006 was $1.0 million, or
$.06 diluted earnings per share, compared to a net loss of $2.7 million, or
$.16 diluted net loss per share, for the six months ended June 30, 2005.
Consolidated revenues for the six months ended June 30, 2006 and 2005 were
$50.4 million and $49.1 million, respectively. Gross margins increased to
47% in the first half of 2006 from 42% in the first half of 2005.
DBM Segment revenues were $13.7 million and $14.0 million for the three
months ended June 30, 2006 and 2005, respectively. The decline in DBM
Segment revenues was substantially the result of lower domestic unit sales
volume and continued pricing pressures on our domestic sales efforts.
Operating income in the DBM Segment was $.6 million and $1.2 million for
the three months ended June 30, 2006 and 2005, respectively. The reduction
in operating income in the second quarter of 2006 was primarily due to the
decline in domestic Grafton(R) DBM revenues, which resulted in lower gross
margins, partially offset by our ability to control operating expenses in
2006 compared to 2005.
DBM Segment revenues increased 5% to $28.2 million for the six months
ended June 30, 2006 compared to revenues of $26.9 million in the
corresponding period in 2005. The increase in DBM Segment revenues was
substantially the result of increased unit sales volume in all product
categories, partially offset by pricing pressures on our domestic sales
efforts. Operating income in the DBM Segment was $2.1 million and $1.9
million for the six months ended June 30, 2006 and 2005, respectively. The
improvement in operating income in the first half of 2006 was primarily due
to the increase in revenues and our ability to control operating expenses
in 2006 compared to 2005.
Base Tissue Segment revenues were $10.8 million for the three months
ended June 30, 2006 compared to $11.0 million in the corresponding period
in 2005. Base Tissue Segment revenues were primarily impacted by a 31%
decline in service fees generated by processing allograft bone tissue for
clients in the second quarter of 2006 as compared to 2005. We also
experienced a 25% decline in revenues from the distribution of Graftech(R)
Bio-implants in the three months ended June 30, 2006 compared to the same
period in 2005 due to continued lower demand and increased competition from
polymer-based spinal implants. Revenues from the worldwide distribution of
traditional tissue increased 82% in the second quarter of 2006 compared to
the second quarter of 2005, principally from increased unit sales volume.
Base Tissue Segment revenues were $20.8 million for the six months ended
June 30, 2006 compared to $21.5 million in the corresponding period in
2005. Base Tissue Segment revenues were negatively impacted by a 37%
decline in service fees generated by processing allograft bone tissue for
clients and a 19% decline in revenues from the distribution of Graftech(R)
Bio-implants in the six months ended June 30, 2006 compared to the
corresponding period in 2005. Revenues from the worldwide distribution of
traditional tissue increased 69% in the first half of 2006 compared to the
first half of 2005, mainly from increased unit sales volume.
Operating income in the Base Tissue Segment was $.9 million and $31,000
in the three months and six months ended June 30, 2006, respectively,
compared to operating losses of $3.4 million and $4.9 million for the same
respective periods in 2005. The improvement in operating income in both
periods is primarily due to a substantial increase in gross margins
resulting from improved inventory and processing productivity, which
reduced the need for tissue inventory reserves in 2006 compared to 2005.
A conference call will be conducted by Sam Owusu-Akyaw, President and
Chief Executive Officer, as well as other members of Osteotech management,
on August 4, 2006 at 9:00 a.m. Eastern Time to discuss second quarter
results. You are invited to listen to the conference call by dialing
1-706-643-1624. The conference will also be simultaneously web cast at
http://www.osteotech.com. Automated playback will be available two hours
after completion of the live call, through midnight, August 18, 2006, by
dialing 1-706-645-9291 and indicating access code 2521726.
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 4, 2006 and the Company
does not intend to update this information.
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a leading
provider of human bone and bone connective tissue for transplantation and
an innovator in the development and marketing of biomaterial and implant
products for musculoskeletal surgery. For further information regarding
Osteotech, this press release or the conference call, please go to
Osteotech's website homepage at http://www.osteotech.com and to Osteotech's
Financial Information Request Form website page at
http://www.osteotech.com/finrequest.htm.
OSTEOTECH, INC. and SUBSIDIARIES
CONSOLIDATED REVENUE DETAIL
(dollars in thousands)
Second Quarter Six Months
Ended June 30, Ended June 30,
2006 2005 2006 2005
DBM Segment
Domestic $11,359 $11,761 $23,699 $22,758
International 2,353 2,251 4,502 4,149
Total DBM Segment 13,712 14,012 28,201 26,907
Base Tissue Segment
Domestic:
Client Processing 2,277 3,523 4,056 6,767
Traditional Tissue 2,906 1,524 5,409 2,883
Graftech(R)
Bio-implants 3,533 4,727 7,531 9,271
8,716 9,774 16,996 18,921
International:
Client Processing 244 109 385 247
Traditional Tissue 1,871 1,102 3,467 2,360
2,115 1,211 3,852 2,607
Total Base Tissue
Segment 10,831 10,985 20,848 21,528
Other Product Lines 739 293 1,313 703
Net Revenues $25,282 $25,290 $50,362 $49,138
OSTEOTECH, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Second Quarter Six Months
Ended June 30, Ended June 30,
2006 2005 2006 2005
Net revenues:
Service $24,543 $24,997 $49,049 $48,435
Product 739 293 1,313 703
25,282 25,290 50,362 49,138
Cost of services 12,610 15,110 25,775 28,173
Cost of products 612 107 948 265
13,222 15,217 26,723 28,438
Gross profit 12,060 10,073 23,639 20,700
Marketing, selling,
general and
administrative 10,009 10,967 20,105 21,573
Research and
development 1,143 1,224 2,315 2,186
11,152 12,191 22,420 23,759
Operating income (loss) 908 (2,118) 1,219 (3,059)
Interest expense
and other, net (3) (677) (29) (973)
Income (loss) before
income taxes 905 (2,795) 1,190 (4,032)
Income tax provision
(benefit) 136 (917) 179 (1,323)
Net Income (loss) $769 $(1,878) $1,011 $(2,709)
Earnings (loss) per share:
Basic $.04 $(.11) $.06 $(.16)
Diluted $.04 $(.11) $.06 $(.16)
Shares used in
computing earnings
(loss) per share:
Basic 17,273,778 17,187,792 17,274,846 17,182,245
Diluted 17,336,679 17,187,792 17,354,906 17,182,245
OSTEOTECH, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, December 31,
2006 2005
Assets
Cash and cash equivalents $13,813 $13,484
Accounts receivable, net 17,373 14,879
Deferred processing costs 28,554 28,805
Inventories 1,578 1,278
Other current assets 3,550 3,438
Total current assets 64,868 61,884
Property, plant and equipment, net 38,605 39,962
Other assets 8,468 9,176
$111,941 $111,022
Liabilities and Stockholders' Equity
Accounts payable and accrued expense $16,309 $16,320
Current maturities of capital lease
obligation 690 655
Total current liabilities 16,999 16,975
Capital lease obligation 15,249 15,603
Other liabilities 7,399 7,689
Total liabilities 39,647 40,267
Stockholders' equity 72,294 70,755
$111,941 $111,022
SOURCE Osteotech, Inc.
 back to top
Related links:
http://www.osteotech.com
http://www.prnewswire.com/comp/668050.html /
CONTACT:
Mark H. Burroughs, Osteotech, Inc.,
+1-732-542-2800
|
