RTI Biologics Announces 2013 First Quarter Results

ALACHUA, Fla.--(BUSINESS WIRE)--

RTI Biologics Inc. (RTI) (RTIX), a leading provider of orthopedic and other biologic implants, reported operating results for the first quarter of 2013 as follows:

Quarterly Highlights:

• Achieved quarterly revenues of $40.4 million.
• Achieved net income of $1.5 million, or $0.03 per fully diluted share.
• Launched direct surgical specialties business with new line of biologic implants for hernia repair.
• Received 510(k) clearance for porcine dermis implant.
• Announced positive clinical results for BioCleanse®-processed BTB allografts.

Worldwide revenues of $40.4 million for the first quarter of 2013 decreased 8 percent compared to the first quarter of 2012. Domestic revenues of $36.1 million for the first quarter of 2013 decreased by 5 percent compared to the first quarter of 2012, primarily due to weakness of the sports medicine, bone graft substitutes and general orthopedic, and dental businesses and offset by strength in the spine business. In addition, domestic other revenue was positively impacted by the acceleration of deferred revenues resulting from our hernia distributor relinquishing exclusive distribution rights in the hernia market. International revenues of $4.3 million for the first quarter of 2013 decreased 27 percent as compared to the first quarter of 2012. On a constant currency basis, international revenues for the first quarter of 2013 also decreased 27 percent as compared to the first quarter of 2012.

For the first quarter of 2013, the company reported net income of $1.5 million and net income per fully diluted share of $0.03, based on 56.3 million fully diluted shares outstanding, compared to net income of $2.0 million or $0.04 per fully diluted share for the first quarter of 2012, based on 55.9 million fully diluted shares outstanding. First quarter 2013 net income per fully diluted share was favorably impacted by approximately $0.01 due to recognition of the full 2012 research and experimentation tax credit in the quarter.

“Our first quarter results were in line with our expectations,” said Brian K. Hutchison, president and chief executive officer of RTI. “In a very challenging environment, our distribution team has worked hard to respond to customer reaction to the FDA warning letter that was received in October 2012. International revenues continued to be negatively impacted by inaccuracies in European media coverage about the company and the tissue industry. We will continue to diligently work through these issues until we bring them to resolution.”

Fiscal 2013 and Second Quarter Outlook

Based on results from the first quarter, the company is raising the low end of its full year revenue guidance for 2013 from $178 million to $179 million. The company now expects full year revenues for 2013 to be between $179 million and $182 million. Full year net income per fully diluted share is expected to be in the range of $0.17 to $0.19, based on 56.7 million fully diluted shares outstanding. In 2013, the company will continue to make investments in distribution, marketing and development activities to support the launch of its direct surgical specialties business and expand its presence in general orthopedics.

For the second quarter of 2013, the company expects revenues to be between $42 million and $43 million, and net income per fully diluted share to be approximately $0.03.

“As mentioned in our 2012 fourth quarter and year-end earnings release, we expect weakness in the first half of the year due to customer reaction to the FDA warning letter and inaccuracies in media coverage,” said Hutchison. “However, we anticipate that following closure of the warning letter and the introduction of new implants, the second half of the year will be strong.”

Conference Call

RTI will host a conference call and simultaneous audio webcast to discuss the first 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 Process have 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 actions or 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.