Exhibit 99.1
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For more information, contact: |
Thomas F. Rose |
Chief Financial Officer |
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Wendy Crites Wacker, APR |
Corporate Communications |
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Phone (386) 418-8888 |
REGENERATION TECHNOLOGIES ANNOUNCES 2004 SECOND QUARTER RESULTS
Company Will Hold Conference Call at 5:30 p.m. ET
ALACHUA, Fla. (July 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 $23.1 million for the second quarter of 2004, the same level as second quarter 2003.
For the second quarter ended June 30, 2004, the company reported net income of $1.5 million and net income per diluted share of $0.06. Net income and net income per share for the second quarter 2003 were $1.9 million and $0.07, respectively.
“We have had some significant developments for RTI this quarter that will lead to long-term growth,” said Brian K. Hutchison, RTI’s chairman, president and CEO. “The launch of the BioCleanse® Tissue Sterilization Process for musculoskeletal soft tissue, in addition to BioCleanse being referenced inThe New England Journal of Medicine, has generated excitement in the medical community. What’s more, in the second quarter we passed the half million mark in distributing tissue sterilized through BioCleanse with zero incidence of infection.”
Outlook
For the third quarter 2004, management expects net revenues to be between $22 and $24 million, and net income per share is expected to be between $0.06 and $0.08. For the full year 2004, the company has set a goal for revenues of $95 million or an increase of 26 percent over 2003.
Conference Call
RTI will hold a live conference call and simultaneous audio web cast today, July 22, 2004 at 5:30 p.m. ET to discuss 2004 second quarter results. The conference call can be accessed by dialing 888-913-9965, passcode RTIX. 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 August 31, 2004 and can be accessed by calling 800-925-1760; 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 more than 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 share and per share data)
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| | | Three Months Ended June 30,
| | | Six Months Ended June 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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Net Revenues: | | | | | | | | | | | | | | | | |
Fees from tissue distribution | | $ | 22,400 | | | $ | 22,515 | | | $ | 45,482 | | | $ | 41,854 | |
Other revenues | | | 684 | | | | 566 | | | | 1,246 | | | | 1,059 | |
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Total net revenues | | | 23,084 | | | | 23,081 | | | | 46,728 | | | | 42,913 | |
Costs of processing and distribution | | | 13,385 | | | | 12,624 | | | | 28,328 | | | | 23,566 | |
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Gross profit | | | 9,699 | | | | 10,457 | | | | 18,400 | | | | 19,347 | |
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Operating Expenses | | | 7,220 | | | | 6,906 | | | | 13,639 | | | | 13,245 | |
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Operating income | | | 2,479 | | | | 3,551 | | | | 4,761 | | | | 6,102 | |
Net interest expense | | | (162 | ) | | | (516 | ) | | | (412 | ) | | | (747 | ) |
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Income before income tax expense | | | 2,317 | | | | 3,035 | | | | 4,349 | | | | 5,355 | |
Income tax expense | | | (810 | ) | | | (1,154 | ) | | | (1,461 | ) | | | (2,075 | ) |
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Net income | | $ | 1,507 | | | $ | 1,881 | | | $ | 2,888 | | | $ | 3,280 | |
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Net income per common share - basic | | $ | 0.06 | | | $ | 0.07 | | | $ | 0.11 | | | $ | 0.12 | |
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Net income per common share - diluted | | $ | 0.06 | | | $ | 0.07 | | | $ | 0.11 | | | $ | 0.12 | |
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Weighted average shares outstanding - basic | | | 26,551,914 | | | | 26,284,547 | | | | 26,549,723 | | | | 26,258,994 | |
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Weighted average shares outstanding - diluted | | | 27,009,598 | | | | 26,905,067 | | | | 27,069,233 | | | | 26,812,415 | |
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Net Revenues
(Unaudited)
(In thousands)
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| | | Three Months Ended June 30,
| | Six Months Ended
June 30,
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| | | 2004
| | 2003
| | 2004
| | 2003
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Fees from tissue distribution: | | | | | | | | | | | | |
Spinal | | $ | 14,976 | | $ | 15,642 | | $ | 30,847 | | $ | 27,793 |
Sports medicine | | | 2,275 | | | 1,921 | | | 5,055 | | | 4,413 |
Cardiovascular | | | 1,604 | | | 1,317 | | | 3,131 | | | 2,518 |
General orthopedic | | | 3,545 | | | 3,635 | | | 6,449 | | | 7,130 |
Other non-tissue | | | 684 | | | 566 | | | 1,246 | | | 1,059 |
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Total | | $ | 23,084 | | $ | 23,081 | | $ | 46,728 | | $ | 42,913 |
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REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
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| | | June 30,
2004
| | December 31,
2003
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| Assets | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 10,783 | | $ | 10,051 |
Restricted deposits | | | — | | | 14,757 |
Accounts receivable - net | | | 7,420 | | | 5,942 |
Inventories | | | 41,272 | | | 41,655 |
Other current assets | | | 6,355 | | | 6,177 |
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Total current assets | | | 65,830 | | | 78,582 |
Property, plant and equipment - net | | | 42,558 | | | 43,689 |
Other assets | | | 14,028 | | | 14,145 |
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| | | $ | 122,416 | | $ | 136,416 |
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| Liabilities and Stockholders’ Equity | | | | | | |
Current Liabilities: | | | | | | |
Accounts payable | | $ | 7,547 | | $ | 18,919 |
Other current liabilities | | | 9,291 | | | 19,967 |
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Total current liabilities | | | 16,838 | | | 38,886 |
Other liabilities | | | 10,026 | | | 5,133 |
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Total liabilities | | | 26,864 | | | 44,019 |
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Total stockholders’ equity | | | 95,552 | | | 92,397 |
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| | | $ | 122,416 | | $ | 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
June 30,
| | | Six Months Ended
June 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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Cash flows from operating activities: | | | | | | | | | | | | | | | | |
Net income | | $ | 1,507 | | | $ | 1,881 | | | $ | 2,888 | | | $ | 3,280 | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | | | | | | | | | | | | | | | |
Depreciation and amortization expense | | | 1,098 | | | | 1,199 | | | | 2,198 | | | | 2,413 | |
Change in working capital | | | (11,953 | ) | | | (2,777 | ) | | | (12,814 | ) | | | (5,742 | ) |
Other | | | 520 | | | | 1,101 | | | | 419 | | | | 2,166 | |
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Net cash (used in) provided by operating activities | | | (8,828 | ) | | | 1,404 | | | | (7,309 | ) | | | 2,117 | |
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Cash flows from investing activities: | | | | | | | | | | | | | | | | |
Purchases of property, plant and equipment | | | (586 | ) | | | (274 | ) | | | (1,062 | ) | | | (1,276 | ) |
Additional cash paid for purchases of assets | | | — | | | | (250 | ) | | | — | | | | (250 | ) |
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Net cash used in investing activities | | | (586 | ) | | | (524 | ) | | | (1,062 | ) | | | (1,526 | ) |
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Cash flows from financing activities: | | | | | | | | | | | | | | | | |
Payment made to terminate swap agreement | | | — | | | | — | | | | (1,613 | ) | | | — | |
Payments on capital lease and note obligations | | | (787 | ) | | | (400 | ) | | | (1,111 | ) | | | (1,016 | ) |
Payment on note payable | | | — | | | | — | | | | (12,068 | ) | | | — | |
Proceeds from issuance of term loan | | | — | | | | — | | | | 9,000 | | | | — | |
(Increase) decrease in restricted deposits | | | — | | | | (272 | ) | | | 14,757 | | | | (401 | ) |
Other | | | 105 | | | | 236 | | | | 138 | | | | 304 | |
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Net cash (used in) provided by financing activities | | | (682 | ) | | | (436 | ) | | | 9,103 | | | | (1,113 | ) |
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Net (decrease) increase in cash and cash equivalents | | | (10,096 | ) | | | 444 | | | | 732 | | | | (522 | ) |
Cash and cash equivalents, beginning of period | | | 20,879 | | | | 8,845 | | | | 10,051 | | | | 9,811 | |
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Cash and cash equivalents, end of period | | $ | 10,783 | | | $ | 9,289 | | | $ | 10,783 | | | $ | 9,289 | |
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