RTI Surgical (RTIX) 8-K Regeneration Technologies Announces 2007 Third Quarter Results

Exhibit 99.1

FOR RELEASE AT 8:00 AM ET	For more information, contact:
THURSDAY, OCT. 25, 2007	Thomas F. Rose
	Chief Financial Officer
	Wendy Crites Wacker, APR
	Corporate Communications
	Phone (386) 418-8888
	Susan A. Noonan
	The SAN Group, LLC
	Phone (212) 966-3650
	Kate Sharadin
	The Sharadin Group, LLC
	Phone (425) 869-9778

REGENERATION TECHNOLOGIES ANNOUNCES 2007 THIRD QUARTER RESULTS

Company Reports Record Levels of Quarterly Revenues, Will Hold Conference

Call at 9 a.m. ET

ALACHUA, Fla. (Oct. 25, 2007) – Regeneration Technologies, Inc. (RTI) (Nasdaq: RTIX), a leading processor of orthopedic and other biologic implants, announced today that the company’s third quarter revenues were $23.8 million and $68.7 million for the nine months ended Sept. 30, 2007, compared to $18.1 million for the third quarter and $54.9 million for the nine months ended Sept. 30, 2006, representing year over year increases of 31 percent and 25 percent, respectively.

For the third quarter, the company reported a net income of $178,000 and a net income per diluted share of $0.01, compared to a net loss of $1.5 million and a net loss per diluted share of $0.05 for the third quarter of 2006. For the nine months ended Sept. 30, 2007, the company reported a net income of $507,000 and a net income per diluted share of $0.02, compared to a net loss of $4.4 million or $0.15 per diluted share for the same period last year.

During the third quarter and first nine months of 2007, the company recorded stock-based compensation expense totaling $742,000 and $2.2 million, respectively, before income taxes, representing an after tax expense of $600,000 and $1.8 million, respectively, or decreased earnings per diluted share of $0.02 and $0.06, respectively, under the provisions of Statement of Financial Accounting Standards No. 123R, Share-Based Payment. This compares to stock-based

compensation expense totaling $814,000 and $2.3 million, respectively, before income taxes for the third quarter and first nine months of 2006, representing an after tax expense of $637,000 and $1.8 million, respectively, and increased net loss per diluted share by $0.02 and $0.06, respectively.

“Throughout 2007, we have focused on execution to improve our financial performance,” said Brian K. Hutchison, RTI chairman, president and CEO. “The impact of implementing our growth strategies resulted in a more than 40 percent growth rate in third quarter revenues compared to last year in our core businesses, excluding results in our cardiovascular product line. In particular, our sports medicine line has experienced a 90 percent growth rate over third quarter 2006, as we pursue our goal to become the recognized leader in providing safe and effective sports medicine implants.”

Quarterly Highlights

Highlights for the third quarter include:

• Record quarterly revenues

• Gross margin increase of 870 basis points over prior year to 40 percent

• Third consecutive quarter of positive cash flow

• Initial shipments of spine allograft to Stryker Corporation

Third Quarter and Nine Month 2007 Analysis

Spinal Constructs:Revenues from distribution of spinal implants were $10.8 million for the third quarter, compared to $9.1 million in the prior year period, representing an increase of 19 percent. Revenues for the nine months ended Sept. 30, 2007 were $30.7 million, compared to $27 million in the prior year period, representing an increase of 14 percent. The increase for the periods reflects higher shipments of cervical implants and the company’s ability to fulfill customer orders including initial shipments to Stryker Corporation in the quarter.

Sports Medicine:Revenues from distribution of sports medicine implants were $6.8 million for the third quarter, compared to $3.6 million for the prior year period, representing an increase of 90 percent. Revenues for the nine months ended Sept. 30, 2007 were $18.7 million, compared to $10.3 million for the prior year period, representing an increase of 80 percent. Unit volumes for the third quarter and nine month period increased by 16 percent and 39 percent, respectively, primarily due to increased levels of tissue available for distribution from recovery agreements entered into in late 2006. Sports medicine revenue increases were favorably impacted by changes in the mix of implants distributed, the introduction of new BioCleanse^®-sterilized implants and higher average revenue per unit on ancillary tendons.

Bone Graft Substitutes: Revenues from distribution of bone graft substitutes were $4.4 million for the third quarter, compared to $2.6 million for the prior year period, an increase of 67 percent. Revenues for the nine months ended Sept. 30, 2007 were $13.1 million, compared to $10.1 million for the prior year period, an increase of 30 percent. Bone graft substitutes consist of all moldable and flowable bone pastes, as well as all cancellous chips and cubes. The revenues were favorably impacted by increased volumes through all of our distribution channels.

General Orthopedic: Revenues from general orthopedic implants were $279,000 for the third quarter, compared to $223,000 for the prior year period. Revenues for the nine months ended Sept. 30, 2007 were $744,000, compared to $726,000 for the prior year period. General orthopedic revenue consists of bone blocks, strips, wedges and shafts.

Cardiovascular: Revenues from distribution of cardiovascular implants were $257,000 for the third quarter, compared to $1.4 million for the prior year period. Revenues for the nine months ended Sept. 30, 2007 were $1.8 million, compared to $4.3 million for the prior year period. The decreased revenue reflected the company’s ongoing exit activities in this product line as remaining inventories continue to be distributed.

Other Revenues: Other revenues were $1.2 million for the third quarter, compared to $1.1 million for the prior year period. Other revenues for the nine months ended Sept. 30, 2007 were $3.7 million, compared to $2.4 million for the nine months of the prior year period. Other revenues consist of tissue recovery fees, biomedical laboratory fees, revenue from exclusivity rights, grant revenue, shipping fees, distribution of reproductions of our allografts to distributors for demonstration purposes and restocking fees. Fees for tissue recoveries for other processors and grant revenue represented the majority of the increase in revenues for both the third quarter and first nine months of 2007.

Conference Call

RTI will hold a live conference call and simultaneous audio Web cast on Thursday, Oct. 25, 2007 at 9:00 a.m. ET to discuss third quarter results. The conference call can be accessed by dialing 800-593-7169, passcode RTIX Q3. 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 Nov. 30, 2007 and can be accessed by calling 866-515-1617; the replay will also be available at www.rtix.com.

About Regeneration Technologies, Inc.

RTI processes allograft and xenograft tissue into shaped implants for use in orthopedic and other surgeries with a commitment to science, safety and innovation.

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 tissue. The company has distributed more than half a million allograft implants sterilized with the BioCleanse process with zero incidence of infection. RTI is accredited by the American Association of Tissue Banks.

Except for historical information, any statements made in this press release about the company’s anticipated financial results, growth rates, new product introductions, future operational improvements and 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.

REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Revenues:
Fees from tissue distribution	$	22,599		$	17,010		$	64,969		$	52,438
Other revenues		1,169			1,101			3,737			2,441
Total revenues		23,768			18,111			68,706			54,879
Costs of processing and distribution		14,222			12,410			42,235			37,692
Gross profit		9,546			5,701			26,471			17,187
Operating expenses		9,165			7,851			25,363			23,707
Operating income (loss)		381			(2,150	)		1,108			(6,520	)
Total other income - net		44			17			43			30
Income before income tax (expense) benefit		425			(2,133	)		1,151			(6,490	)
Income tax (expense) benefit		(247	)		606			(644	)		2,054
Net income (loss)	$	178		$	(1,527	)	$	507		$	(4,436	)
Net income (loss) per common share - basic	$	0.01		$	(0.05	)	$	0.02		$	(0.15	)
Net income (loss) per common share - diluted	$	0.01		$	(0.05	)	$	0.02		$	(0.15	)
Weighted average shares outstanding - basic		29,850,187			29,768,916			29,822,472			29,753,084
Weighted average shares outstanding - diluted		30,694,660			29,768,916			30,296,635			29,753,084

REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES

Revenues

(Unaudited)

(In thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Fees from tissue distribution:
Spinal constructs	$	10,843	$	9,139	$	30,719	$	26,950
Sports medicine		6,824		3,597		18,651		10,348
Bone graft substitutes		4,396		2,626		13,062		10,088
General orthopedic		279		223		744		726
Cardiovascular		257		1,425		1,793		4,326
Other revenues		1,169		1,101		3,737		2,441
Total	$	23,768	$	18,111	$	68,706	$	54,879

REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

	September 30, 2007		December 31, 2006
Assets
Current Assets:
Cash and cash equivalents	$	18,795	$	15,509
Accounts receivable - net		8,806		9,337
Inventories		38,707		37,026
Other current assets		13,976		11,429
Assets held for sale		3,233		—
Total current assets		83,517		73,301
Property, plant and equipment - net		36,006		41,047
Other assets		17,371		15,460
Total assets	$	136,894	$	129,808
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,671	$	7,949
Other current liabilities		7,436		8,568
Total current liabilities		16,107		16,517
Other liabilities		7,345		3,401
Total liabilities		23,452		19,918
Total stockholders’ equity		113,442		109,890
Total liabilities and stockholders’ equity	$	136,894	$	129,808

REGENERATION TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Cash flows from operating activities:
Net income (loss)	$	178		$	(1,527	)	$	507		$	(4,436	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense		1,379			1,302			4,252			3,848
Amortization of deferred financing costs		43			43			127			127
Change in working capital		(1,474	)		251			(6,262	)		(2,825	)
Other		637			(3,156	)		6,930			(3,267	)
Net cash provided by (used in) operating activities		763			(3,087	)		5,554			(6,553	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(781	)		(370	)		(1,319	)		(1,075	)
Proceeds from sale of property, plant and equipment		21			—			80			200
Net cash used in investing activities		(760	)		(370	)		(1,239	)		(875	)
Cash flows from financing activities:
Proceeds from exercise of stock options		532			38			651			46
Excess tax benefit from exercise of stock options		81			11			145			14
Payments on long-term obligations		(587	)		(575	)		(1,825	)		(1,719	)
Net cash provided by (used in) financing activities		26			(526	)		(1,029	)		(1,659	)
Net increase (decrease) in cash and cash equivalents		29			(3,983	)		3,286			(9,087	)
Cash and cash equivalents, beginning of period		18,766			20,455			15,509			25,559
Cash and cash equivalents, end of period	$	18,795		$	16,472		$	18,795		$	16,472

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