RTI Biologics Announces 2012 Third Quarter Results

Before you go, we thought you'd like these...
Before you go close icon

RTI Biologics Announces 2012 Third Quarter Results

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

ALACHUA, Fla.--(BUSINESS WIRE)-- RTI Biologics Inc. (RTI) (NAS: RTIX) , a leading provider of orthopedic and other biologic implants, reported operating results for the third quarter of 2012 as follows:


Quarterly Highlights:

  • Achieved quarterly revenues of $44.6 million, a 5 percent increase over the third quarter of 2011.
  • Achieved quarterly net income per fully diluted share of $0.05.
  • Achieved quarterly revenues of $11.8 million in the sports medicine business, a 7 percent increase over the third quarter of 2011.
  • Achieved quarterly revenues of $7.9 million in the surgical specialties business, a 5 percent increase over the third quarter of 2011.
  • Achieved quarterly revenues of $7.9 million in the bone graft substitutes and general orthopedic (BGS/GO) business, a 13 percent increase over the third quarter of 2011.
  • Achieved quarterly revenues of $5.2 million in the dental business, a 15 percent increase over the third quarter of 2011.
  • Achieved quarterly revenues of $12.8 million in the U.S. direct distribution organization, a 5 percent increase over the third quarter of 2011. The U.S. direct distribution organization includes sports medicine and certain BGS/GO implants.

"Revenues in the third quarter met expectations and were driven primarily by continued growth in our dental, BGS/GO, direct sports medicine and surgical specialties businesses," said Brian K. Hutchison, president and chief executive officer of RTI.

Worldwide revenues of $44.6 million for the third quarter of 2012 increased 5 percent compared to the third quarter of 2011. Domestic revenues of $39.6 million for the third quarter of 2012 grew by 6 percent compared to the third quarter of 2011, primarily based on the strength of the dental, BGS/GO, surgical specialties and direct sports medicine businesses and were offset by continued weakness in the spine business. International revenues of $4.9 million for the third quarter of 2012 declined slightly as compared to the third quarter of 2011. On a constant currency basis, international revenues increased 9 percent as compared to the third quarter of 2011 due to higher distributions of BGS/GO.

For the third quarter of 2012, the company reported net income of $2.8 million and net income per fully diluted share of $0.05, based on 56.1 million fully diluted shares outstanding, compared to net income of $2.7 million or $0.05 per fully diluted share for the third quarter of 2011, based on 55.4 million fully diluted shares outstanding. Net income per fully diluted share for the third quarter of 2011 was favorably impacted by approximately $0.01 due to the de-recognition of an uncertain tax liability as a result of Internal Revenue Service guidance provided during the third quarter of 2011 and applicable to the deductibility of transaction fees incurred as part of the Tutogen merger in 2008.

FDA Warning Letter

On Oct. 23, 2012 the company received a warning letter from the FDA related to environmental monitoring activities in certain areas of its Alachua, Fla. processing facility. The company is committed to actively working with the FDA to address their concerns. The warning letter does not restrict the company's ability to process or distribute implants, nor does it require the withdrawal of any implants from the marketplace. The issuance of the warning letter has no impact on patient safety.

"We pride ourselves on operating in the right way, and are dedicated to providing high quality, safe biologic implants to surgeons and their patients," Hutchison said. "While this issue has no impact on patient safety, we take this matter very seriously, and are committed to fully resolve any issues."

Fiscal 2012 and Fourth Quarter Outlook

Based on results through the first three quarters, the company is narrowing its full year revenue guidance for 2012. The company expects full year revenues for 2012 to be between $178 million and $179 million.

The company expects full year net income per fully diluted share for 2012 to be approximately $0.15, based on 56.1 million shares outstanding. Excluding a pre-tax litigation settlement charge of $2.35 million taken in the second quarter of 2012, or $0.03 per fully diluted share, the company expects full year net income per fully diluted share for 2012 to be approximately $0.18, based on 56.1 million shares outstanding.

For the fourth quarter of 2012, the company expects revenues to be between $44 million and $45 million, and net income per fully diluted share to be $0.04.

"With solid results for the third quarter of 2012, we remain on track to meet our financial goals for the year," Hutchison said.

Conference Call

RTI will host a conference call and simultaneous audio webcast to discuss the third 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 Processhave 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 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 Nine Months Ended
September 30,September 30,
2012 20112012 2011
Revenues:
Tissue distribution$ 43,034$ 40,490$ 128,866$ 121,513
Other revenues1,5321,7674,6404,872
Total revenues44,56642,257133,506126,385
Costs of processing and distribution22,87422,93470,03769,006
Gross profit21,69219,32363,46957,379
Expenses:
Marketing, general and administrative14,49913,66443,16741,759
Research and development3,1092,5109,2797,407
Asset abandonments-11858
Litigation settlement--2,350-
Total operating expenses17,60816,17554,81449,224
Operating income4,0843,1488,6558,155
Total other income (expense) - net32(29)138(168)
Income before income tax provision4,1163,1198,7937,987
Income tax provision(1,308)(377)(2,662)(1,979)
Net income$ 2,808$ 2,742$ 6,131$ 6,008
 
Net income per common share - basic$ 0.05$ 0.05$ 0.11$ 0.11
Net income per common share - diluted$ 0.05$ 0.05$ 0.11$ 0.11
Weighted average shares outstanding - basic55,908,57455,167,17855,826,30655,071,761
Weighted average shares outstanding - diluted56,110,89855,397,79456,013,54155,205,997
 
RTI BIOLOGICS, INC. AND SUBSIDIARIES
Reconciliation of Net Income and Net Income Per Diluted Share to
Adjusted Net Income and Adjusted Net Income Per Diluted Share
(In thousands except per share data)
(Unaudited)
 
 
 Nine Months Ended
September 30, 2012 September 30, 2011
 Amount Amount
Netper DilutedNetper Diluted
IncomeShareIncomeShare
 
As reported$6,131$0.11$6,008$0.11
Litigation settlement charge,
net of tax effect (1) 1,444  0.03 - -
Adjusted$7,575 $0.14$6,008$0.11
 
 
 
 
 
(1) Litigation settlement charge, net of tax effect, as follows:
 
Litigation settlement charge$2,350
Tax effect on litigation settlement charge (906)
Litigation settlement charge, net of tax effect$1,444 
 

Use of Non-GAAP Financial Measures

To supplement RTI Biologic's condensed consolidated financial statements presented on a GAAP basis, the company discloses certain non-GAAP financial measures that exclude certain amounts, including non-GAAP net income and non-GAAP net income per fully diluted share. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measures are included in the reconciliation above.

The following is an explanation of the adjustment that management excluded as part of the non-GAAP measures for the nine month period ended September 30, 2012 as well as the reasons for excluding the individual item:

Litigation settlement - This adjustment represents a charge and relates to a litigation settlement of certain BTS related lawsuits. Management removes the amount of the litigation settlement charge from the Company's operating results to assist in assessing its operating performance in the year-to-date period and to supplement a comparison to the Company's past operating performance.

Material Limitations Associated with the Use of Non-GAAP Financial Measures

Non-GAAP net income and non-GAAP net income per fully diluted share should not be considered in isolation, or as a replacement for GAAP measures.

Usefulness of Non-GAAP Financial Measures to Investors

The Company believes that presenting non-GAAP net income and non-GAAP net income per fully diluted share in addition to the related GAAP measures provide investors greater transparency to the information used by management in its financial decision-making which excludes the litigation settlement charge. The Company further believes that providing this information better enables RTI Biologic's investors to understand the Company's overall core performance and to evaluate the methodology used by management to assess and measure such performance.

RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Revenues
(In thousands)
(Unaudited)
 
 Three Months Ended Nine Months Ended
September 30,September 30,
 2012  2011 2012  2011
 
Revenues from tissue distribution:
Sports medicine$11,811$11,072$38,573$34,881
Spine10,18710,32228,53231,060
Surgical specialties7,8807,51924,13622,583
Bone graft substitutes and general orthopedic7,9167,02621,94719,374
Dental5,2404,55115,67813,615
Other revenues 1,532 1,767 4,640 4,872
Total revenues$44,566$42,257$133,506$126,385
Domestic revenues39,64337,282116,707110,507
International revenues 4,923 4,975 16,799 15,878
Total revenues$44,566$42,257$133,506$126,385
 
RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
  September 30, December 31,
 2012  2011 
Assets
Cash and cash equivalents$55,242$46,178
Accounts receivable - net20,74220,674
Inventories - net72,31676,598
Prepaid and other current assets 16,887  16,231 
Total current assets165,187159,681
 
Property, plant and equipment - net46,61344,532
Other assets - net 24,257  25,814 
Total assets$236,057 $230,027 
 
Liabilities and Stockholders' Equity
Accounts payable$9,790$11,141
Accrued expenses and other current liabilities24,47424,028
Current portion of long-term obligations 185  448 
Total current liabilities34,44935,617
 
Deferred revenue19,99520,589
Long-term liabilities 1,082  1,402 
Total liabilities55,52657,608
Stockholders' equity:
Common stock and additional paid-in capital413,882411,741
Accumulated other comprehensive loss(2,344)(2,184)
Accumulated deficit (231,007) (237,138)
Total stockholders' equity 180,531  172,419 
Total liabilities and stockholders' equity$236,057 $230,027 
 
RTI BIOLOGICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
 Three Months Ended Nine Months Ended
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Sat, Dec 03
Set Your Location
City, State, or Zip