Exhibit 99.1
|
For more information, contact: |
Thomas F. Rose |
Chief Financial Officer |
|
Wendy Crites Wacker, APR |
Corporate Communications |
|
Phone (386) 418-8888 |
REGENERATION TECHNOLOGIES ANNOUNCES 2004 THIRD QUARTER RESULTS
Company Meets Revenue Goal; Will Hold Conference Call at 5:30 p.m. ET
ALACHUA, Fla. (Oct. 26, 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 $22.8 million for the third quarter of 2004, an increase of 13 percent as compared to third quarter 2003.
For the third quarter ended Sept. 30, 2004, the company reported net income of $1.7 million and net income per diluted share of $0.06, the same levels as third quarter 2003.
“RTI was able to meet our financial goals for the third quarter, despite some challenges,” said Brian K. Hutchison, RTI’s chairman, president and CEO. “While Florida endured historical levels of hurricane activity during the third quarter, the hard work and dedication of all of our employees ensured that tissue entrusted to RTI was protected during the storms. All backup systems worked, and we were able to bring our Alachua facilities back to full operation very quickly after each storm passed through our area.”
5
Outlook
For the fourth 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. This compares to net revenues of $12.4 million and net income per share of $0.05 for the fourth quarter 2003, which included a reversal of deferred tax valuation allowances of $2.7 million or $0.10 per share.
Conference Call
RTI will hold a live conference call and simultaneous audio web cast on Tuesday, Oct. 26, 2004 at 5:30 p.m. ET to discuss third quarter results. The conference call can be accessed by dialing 888-791-2132, passcode RTIXQ THREE. 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 Dec. 2, 2004 and can be accessed by calling 800-216-3051; 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.
6
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.
###
7
REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Net Revenues: | | | | | | | | | | | | | | | | |
Fees from tissue distribution | | $ | 22,289 | | | $ | 19,675 | | | $ | 67,771 | | | $ | 61,529 | |
Other revenues | | | 479 | | | | 479 | | | | 1,725 | | | | 1,538 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total net revenues | | | 22,768 | | | | 20,154 | | | | 69,496 | | | | 63,067 | |
Costs of processing and distribution | | | 13,347 | | | | 10,856 | | | | 41,675 | | | | 34,422 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Gross profit | | | 9,421 | | | | 9,298 | | | | 27,821 | | | | 28,645 | |
| | | | |
Operating Expenses | | | 6,527 | | | | 6,780 | | | | 20,116 | | | | 20,025 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating income | | | 2,894 | | | | 2,518 | | | | 7,705 | | | | 8,620 | |
Net interest (expense) income | | | (198 | ) | | | 20 | | | | (660 | ) | | | (727 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income tax expense | | | 2,696 | | | | 2,538 | | | | 7,045 | | | | 7,893 | |
Income tax expense | | | (1,043 | ) | | | (919 | ) | | | (2,504 | ) | | | (2,994 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 1,653 | | | $ | 1,619 | | | $ | 4,541 | | | $ | 4,899 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income per common share - basic | | $ | 0.06 | | | $ | 0.06 | | | $ | 0.17 | | | $ | 0.19 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income per common share - diluted | | $ | 0.06 | | | $ | 0.06 | | | $ | 0.17 | | | $ | 0.18 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Weighted average shares outstanding - basic | | | 26,625,999 | | | | 26,442,783 | | | | 26,575,956 | | | | 26,318,618 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Weighted average shares outstanding - diluted | | | 27,053,585 | | | | 27,304,880 | | | | 27,070,782 | | | | 26,972,226 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
8
REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Net Revenues
(Unaudited)
(In thousands)
| | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | Nine Months Ended
September 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
Fees from tissue distribution: | | | | | | | | | | | | |
Spinal | | $ | 14,969 | | $ | 13,297 | | $ | 45,816 | | $ | 41,091 |
Sports medicine | | | 1,911 | | | 2,220 | | | 6,966 | | | 6,634 |
Cardiovascular | | | 2,047 | | | 1,372 | | | 5,179 | | | 3,890 |
General orthopedic | | | 3,362 | | | 2,786 | | | 9,810 | | | 9,914 |
Other non-tissue | | | 479 | | | 479 | | | 1,725 | | | 1,538 |
| | |
|
| |
|
| |
|
| |
|
|
Total | | $ | 22,768 | | $ | 20,154 | | $ | 69,496 | | $ | 63,067 |
| | |
|
| |
|
| |
|
| |
|
|
9
REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
| | | | | | |
| | | September 30,
2004
| | December 31,
2003
|
| Assets | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 10,459 | | $ | 10,051 |
Restricted deposits | | | — | | | 14,757 |
Accounts receivable - net | | | 10,029 | | | 5,942 |
Inventories | | | 41,679 | | | 41,655 |
Other current assets | | | 5,707 | | | 6,177 |
| | |
|
| |
|
|
Total current assets | | | 67,874 | | | 78,582 |
Property, plant and equipment - net | | | 42,558 | | | 43,689 |
Other assets | | | 13,851 | | | 14,145 |
| | |
|
| |
|
|
| | | $ | 124,283 | | $ | 136,416 |
| | |
|
| |
|
|
| Liabilities and Stockholders’ Equity | | | | | | |
Current Liabilities: | | | | | | |
Accounts payable | | $ | 8,355 | | $ | 18,919 |
Other current liabilities | | | 8,787 | | | 19,967 |
| | |
|
| |
|
|
Total current liabilities | | | 17,142 | | | 38,886 |
Other liabilities | | | 9,549 | | | 5,133 |
| | |
|
| |
|
|
Total liabilities | | | 26,691 | | | 44,019 |
| | |
Total stockholders’ equity | | | 97,592 | | | 92,397 |
| | |
|
| |
|
|
| | | $ | 124,283 | | $ | 136,416 |
| | |
|
| |
|
|
10
REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Cash flows from operating activities: | | | | | | | | | | | | | | | | |
Net income | | $ | 1,653 | | | $ | 1,619 | | | $ | 4,541 | | | $ | 4,899 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | | | | | | | | | | |
Depreciation and amortization expense | | | 1,135 | | | | 1,117 | | | | 3,333 | | | | 3,530 | |
Change in working capital | | | (2,397 | ) | | | (4,091 | ) | | | (15,211 | ) | | | (9,833 | ) |
Other | | | 881 | | | | 351 | | | | 2,132 | | | | 2,517 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net cash provided by (used in) operating activities | | | 1,272 | | | | (1,004 | ) | | | (5,205 | ) | | | 1,113 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash flows from investing activities: | | | | | | | | | | | | | | | | |
Purchases of property, plant and equipment | | | (1,126 | ) | | | (76 | ) | | | (2,188 | ) | | | (1,352 | ) |
Additional cash paid for purchases of assets | | | — | | | | — | | | | — | | | | (250 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net cash used in investing activities | | | (1,126 | ) | | | (76 | ) | | | (2,188 | ) | | | (1,602 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash flows from financing activities: | | | | | | | | | | | | | | | | |
Payment made to terminate swap agreement | | | — | | | | — | | | | (1,613 | ) | | | — | |
Payments on capital lease and note obligations | | | (787 | ) | | | (427 | ) | | | (1,898 | ) | | | (1,443 | ) |
Payment on note payable | | | — | | | | — | | | | (12,068 | ) | | | — | |
Proceeds from issuance of term loan | | | — | | | | — | | | | 9,000 | | | | — | |
Decrease in restricted deposits | | | — | | | | 534 | | | | 14,757 | | | | 133 | |
Other | | | 317 | | | | 1,409 | | | | (377 | ) | | | 1,713 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net cash (used in) provided by financing activities | | | (470 | ) | | | 1,516 | | | | 7,801 | | | | 403 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net (decrease) increase in cash and cash equivalents | | | (324 | ) | | | 436 | | | | 408 | | | | (86 | ) |
Cash and cash equivalents, beginning of period | | | 10,783 | | | | 9,289 | | | | 10,051 | | | | 9,811 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash and cash equivalents, end of period | | $ | 10,459 | | | $ | 9,725 | | | $ | 10,459 | | | $ | 9,725 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
11
