Exhibit 99.1
REGENERATION TECHNOLOGIES ANNOUNCES 2004 FIRST QUARTER RESULTS
Company Posts Record Quarterly Net Revenue;
Will Hold Conference Call at 5:30 p.m. ET
ALACHUA, Fla. (April 22, 2004) – Regeneration Technologies, Inc. (RTI) (Nasdaq: RTIX), the Florida-based processor of orthopedic, cardiovascular and other allograft implants, announced today that the company’s net revenue was $23.6 million for the first quarter of 2004. This compares to net revenues of $19.8 million for the first quarter 2003.
For the first quarter ended March 31, 2004, the company reported net income of $1.4 million and net income per diluted share of $0.05. Net income and net income per share for the first quarter 2003 were also $1.4 million and $0.05, respectively.
“We are pleased to report the highest quarterly net revenues in the history of the company,” said Brian K. Hutchison, RTI’s chairman, president and CEO, “however, gross profit margins were impacted by a deliberate slow down of our processing in a responsible effort to reduce inventory.
“The increase in revenues was driven by our spinal implants, reflecting Medtronic Sofamor Danek’s commitment to delivering safe, high-quality implants to the market. We also made significant progress on all of our operational goals, poising our company for long-term success.”
Outlook
For the second quarter 2004, management expects net revenues to be between $22 and $24 million, and net income per share is expected to be between $0.05 and $0.07. For the full year 2004, the company maintains its goal to increase revenues by 20 percent or more in each of RTI’s product categories.
Conference Call
RTI will hold a live conference call and simultaneous audio web cast today, April 22, 2004 at 5:30 p.m. ET to discuss 2004 first quarter results. The conference call can be accessed by dialing 888-928-9177, passcode RTIXQ ONE. The web cast can be accessed through the investor section of RTI’s web site at www.rtix.com. A telephone replay of the call will be available through May 31, 2004 and can be accessed by calling 800-337-6875; the replay will also be available at www.rtix.com.
About Regeneration Technologies, Inc.
RTI processes allograft tissue into shaped implants for use in orthopedic, cardiovascular and other surgeries with a commitment to science, safety and innovation. By processing allograft tissue into forms that can be used in many types of surgical procedures, RTI enables patients to benefit from the gift of donated tissues.
RTI also holds the patents on BioCleanse®, the only proven tissue sterilization process validated to eliminate viruses, bacteria, fungi and spores from tissue without impacting the structural or biomechanical integrity of the allograft. The company has distributed almost 500,000 implants sterilized with the BioCleanse process with zero incidence of infection. RTI is accredited by the American Association of Tissue Banks and was named a 2004 Technology Pioneer by the World Economic Forum.
Except for historical information, any statements made in this press release about the company’s anticipated financial results, future operational results, regulatory approvals or changes to the company’s agreements with its distributors are forward-looking statements subject to risks and uncertainties, such as those described in the company’s public filings on file with the Securities and Exchange Commission. Actual results may differ materially from 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 web site atwww.rtix.com or the SEC’s web site atwww.sec.gov.
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
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| | | Three Months Ended March 31,
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| | | 2004
| | | 2003
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Net Revenues: | | | | | | | | |
Fees from tissue distribution | | $ | 23,082 | | | $ | 19,339 | |
Other revenues | | | 562 | | | | 493 | |
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Total net revenues | | | 23,644 | | | | 19,832 | |
Costs of processing and distribution | | | 14,943 | | | | 10,942 | |
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Gross profit | | | 8,701 | | | | 8,890 | |
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Operating Expenses | | | 6,419 | | | | 6,339 | |
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Operating income | | | 2,282 | | | | 2,551 | |
Net interest expense | | | (250 | ) | | | (231 | ) |
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Income before income tax expense | | | 2,032 | | | | 2,320 | |
Income tax expense | | | (651 | ) | | | (921 | ) |
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Net income | | $ | 1,381 | | | $ | 1,399 | |
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Net income per common share - basic | | $ | 0.05 | | | $ | 0.05 | |
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Net income per common share - diluted | | $ | 0.05 | | | $ | 0.05 | |
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Weighted average shares outstanding - basic | | | 26,539,620 | | | | 26,238,641 | |
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Weighted average shares outstanding - diluted | | | 27,092,144 | | | | 26,727,133 | |
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Net Revenues
(Unaudited)
(In thousands)
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| | | Three Months Ended March 31,
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| | | 2004
| | 2003
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Fees from tissue distribution: | | | | | | |
Spinal | | $ | 15,871 | | $ | 12,151 |
Sports medicine | | | 2,781 | | | 2,493 |
Cardiovascular | | | 1,527 | | | 1,201 |
General orthopedic | | | 2,903 | | | 3,494 |
Other non-tissue | | | 562 | | | 493 |
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Total | | $ | 23,644 | | $ | 19,832 |
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
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| | | March 31, 2004
| | December 31, 2003
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| Assets | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 20,879 | | $ | 10,051 |
Restricted deposits | | | — | | | 14,757 |
Accounts receivable - net | | | 7,569 | | | 5,942 |
Inventories | | | 40,707 | | | 41,655 |
Other current assets | | | 5,495 | | | 6,177 |
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Total current assets | | | 74,650 | | | 78,582 |
Property, plant and equipment - net | | | 43,070 | | | 43,689 |
Other assets | | | 14,970 | | | 14,145 |
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| | | $ | 132,690 | | $ | 136,416 |
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| Liabilities and Stockholders’ Equity | | | | | | |
Current Liabilities: | | | | | | |
Accounts payable | | $ | 18,960 | | $ | 18,919 |
Other current liabilities | | | 9,167 | | | 19,967 |
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Total current liabilities | | | 28,127 | | | 38,886 |
Other liabilities | | | 10,690 | | | 5,133 |
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Total liabilities | | | 38,817 | | | 44,019 |
Total stockholders’ equity | | | 93,873 | | | 92,397 |
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| | | $ | 132,690 | | $ | 136,416 |
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
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| | | Three Months Ended March 31,
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| | | 2004
| | | 2003
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Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 1,381 | | | $ | 1,399 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization expense | | | 1,100 | | | | 1,214 | |
Change in working capital | | | (861 | ) | | | (2,965 | ) |
Other | | | (162 | ) | | | 1,065 | |
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Net cash provided by operating activities | | | 1,458 | | | | 713 | |
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Cash flows from investing activities: | | | | | | | | |
Purchase of property, plant and equipment | | | (476 | ) | | | (1,002 | ) |
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Net cash used in investing activities | | | (476 | ) | | | (1,002 | ) |
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Cash flows from financing activities: | | | | | | | | |
Payment made to terminate swap agreement | | | (1,552 | ) | | | — | |
Payments on capital lease and note obligations | | | (324 | ) | | | (616 | ) |
Repayment of term loan | | | (12,068 | ) | | | — | |
Proceeds of issuance of term loan | | | 9,000 | | | | — | |
Decrease (increase) in restricted deposits | | | 14,757 | | | | (129 | ) |
Other | | | 33 | | | | 68 | |
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Net cash provided by (used in) financing activities | | | 9,846 | | | | (677 | ) |
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Net increase (decrease) in cash and cash equivalents | | | 10,828 | | | | (966 | ) |
Cash and cash equivalents, beginning of period | | | 10,051 | | | | 9,811 | |
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Cash and cash equivalents, end of period | | $ | 20,879 | | | $ | 8,845 | |
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