EATONTOWN, N.J., Nov. 4, 2010 /PRNewswire-FirstCall/ -- Osteotech,
Inc. (Nasdaq: OSTE), a leader in the emerging field of biologic
products for regenerative healing, today reported financial results
for the third quarter ended September 30,
2010.
“During the third quarter, we focused a significant amount of
our internal resources on activities associated with our merger
with Medtronic, Inc., which we continue to believe is in the best
interest of our stockholders, and a good path forward for our
organization and products,” said Sam Owusu-Akyaw, President and
Chief Executive Officer of Osteotech. “We believe we remain on
track to finalize the transaction during the fourth quarter of 2010
and, as previously announced, intend to hold our special meeting of
stockholders to approve the transaction on November 9, 2010. The third quarter 2010
financial results reflect increased costs and expenses associated
with our strategic alternatives process and the merger.”
Financial Results
Revenue for the three months ended September 30, 2010 was $23.1 million, including $3.0 million from the company’s new products
(primarily MagniFuse® Bone Graft and Plexur M® Innovative Grafting)
compared with $23.0 million for the
three months ended September 30,
2009. Client services and private label revenue was
$1.2 million in the third quarter of
2010 compared with $0.8 million
during the same period of 2009. Excluding client services and
private label revenue, third quarter 2010 revenue was $21.9 million compared with $22.2 million in the third quarter of 2009.
Revenue for the first nine months ended September 30, 2010 was $69.6 million compared with revenue of
$70.4 million for the nine-month
period ended September 30, 2009.
Excluding client services and private label revenue, revenue for
the first nine months of 2010 was $66.7
million compared with $65.5
million in the first nine months of 2009. Client services
and private label revenue declined, as expected, by $2.0 million year-over-year during the first nine
months of 2010.
Net loss for the third quarter ended September 30, 2010 was $2.5 million, or $0.14 per share, compared with a net loss of
$1.9 million, or $0.11 per share, for the third quarter of 2009.
Net loss for the nine months ended September
30, 2010 was $3.9 million, or
$0.22 per share, compared with
$4.9 million, or $0.27 per share, for the nine-month period ended
September 30, 2009.
About Osteotech
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global leader in
providing biologic solutions for regenerative medicine to support
surgeons and their patients in the repair of the musculoskeletal
system through the development of innovative therapy-driven
products that alleviate pain, promote biologic healing and restore
function. For further information regarding Osteotech, please go to
Osteotech’s website at www.osteotech.com.
Additional Information about the Proposed Transaction and
Where You Can Find It
Osteotech has filed with the Securities and Exchange Commission
(the “SEC”) a definitive proxy statement and other relevant
materials in connection with the proposed acquisition of Osteotech
by Medtronic. The definitive proxy statement has been mailed to
Osteotech stockholders. Before making any voting or investment
decisions with respect to the transaction, investors and security
holders of Osteotech are urged to read the proxy statement and the
other relevant materials because they contain important information
about the transaction, Osteotech and Medtronic. Investors and
security holders may obtain free copies of these documents and
other documents filed with the SEC at the SEC’s website at
www.sec.gov. In addition, investors and security holders may obtain
free copies of the documents filed with the SEC by accessing
Osteotech’s website at www.osteotech.com or by writing to
Osteotech’s Assistant Secretary at 51 James Way, Eatontown, New Jersey, 07724.
Information Regarding Participants
Osteotech, Medtronic and their respective directors, executive
officers, certain other members of management and certain employees
may be soliciting proxies from Osteotech stockholders in favor of
the merger. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
the Osteotech stockholders in connection with the proposed merger
is set forth in the proxy statement as filed with the SEC. You can
find information about Medtronic’s executive officers and directors
in its definitive proxy statement filed with the SEC on
July 16, 2010. You can obtain a
free copy of this document at the SEC’s website at www.sec.gov or
by accessing Medtronic’s website at www.medtronic.com and clicking
on the investors link. You can find information about Osteotech’s
executive officers and directors in its definitive proxy statement
filed with the SEC August 3, 2010.
You can obtain a free copy of this document at the SEC’s website at
www.sec.gov or by accessing Osteotech’s website at
www.osteotech.com or by writing Osteotech at 51 James Way,
Eatontown, New Jersey, 07724.
Safe Harbor
Certain statements made throughout this press release that
are not historical facts are forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995) regarding
the Company’s future plans, objectives and expected performance.
Any such forward-looking statements are based on assumptions that
the Company believes are reasonable, but are subject to a wide
range of risks and uncertainties (including but not limited to the
risk that the acquisition of Osteotech by Medtronic may not close
due either to litigation filed by certain stockholders seeking to
enjoin the merger or to a failure by the Company to satisfy certain
closing conditions such as obtaining certain regulatory approvals
of the propose acquisition and the approval of the transaction by
Osteotech’s stockholders) and, therefore, there can be no assurance
that actual results may not differ materially from those expressed
or implied by such forward-looking statements. Other factors that
could cause actual results to differ materially include, but are
not limited to, the Company’s ability to develop and introduce new
products, differences in anticipated and actual product and service
introduction dates, the ultimate success of those products in the
marketplace, the continued acceptance and growth of current
products and services, the impact of competitive products and
services, the availability of sufficient quantities of suitable
donated tissue and the success of cost control and margin
improvement efforts. For a more detailed discussion of certain of
these factors, see the Company’s periodic reports filed with the
Securities and Exchange Commission from time to time, including the
latest Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. All information in this press release is as of November 4, 2010 and the Company does not intend
to update this information.
OSTEOTECH, INC. and
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
(dollars in thousands, except
per share data)
|
|
(unaudited)
|
|
|
Three Months
|
|
Nine Months
|
|
|
Ended September 30,
|
|
Ended September 30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
Revenue
|
$
23,104
|
$
22,961
|
|
$
69,628
|
$
70,363
|
|
Cost of revenue
|
11,521
|
12,502
|
|
35,000
|
36,406
|
|
Gross profit
|
11,583
|
10,459
|
|
34,628
|
33,957
|
|
|
|
|
|
|
|
|
Marketing, selling
and
|
|
|
|
|
|
|
general and administrative
expenses
|
13,096
|
10,648
|
|
34,189
|
33,034
|
|
Research and development
expenses
|
920
|
1,544
|
|
3,179
|
5,195
|
|
|
14,016
|
12,192
|
|
37,368
|
38,229
|
|
|
|
|
|
|
|
|
Operating loss
|
(2,433)
|
(1,733)
|
|
(2,740)
|
(4,272)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest expense, net
|
(310)
|
(354)
|
|
(965)
|
(1,063)
|
|
Other
|
136
|
58
|
|
(198)
|
106
|
|
|
(174)
|
(296)
|
|
(1,163)
|
(957)
|
|
Loss before income
taxes
|
(2,607)
|
(2,029)
|
|
(3,903)
|
(5,229)
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
(150)
|
(122)
|
|
22
|
(322)
|
|
Net loss
|
$
(2,457)
|
$
(1,907)
|
|
$
(3,925)
|
$
(4,907)
|
|
Loss per share:
|
|
|
|
|
|
|
Basic
|
$
(0.14)
|
$
(0.11)
|
|
$
(0.22)
|
$
(0.27)
|
|
Diluted
|
$
(0.14)
|
$
(0.11)
|
|
$
(0.22)
|
$
(0.27)
|
|
Shares used in computing loss
per share:
|
|
|
|
|
|
|
Basic
|
18,182,443
|
18,120,350
|
|
18,134,819
|
17,925,718
|
|
Diluted
|
18,182,443
|
18,120,350
|
|
18,134,819
|
17,925,718
|
|
|
|
|
|
|
|
CONSOLIDATED SEGMENT REVENUE
DETAIL
|
|
(dollars in
thousands)
|
|
(unaudited)
|
|
|
Three Months
|
|
Nine Months
|
|
|
Ended September 30,
|
|
Ended September 30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
(restated)
|
|
|
(restated)
|
|
DBM
|
$
13,241
|
$
14,611
|
|
$
40,502
|
$
43,445
|
|
Hybrid/Synthetic
|
3,353
|
894
|
|
8,588
|
2,289
|
|
Traditional Tissue
|
4,972
|
5,101
|
|
14,975
|
15,821
|
|
Spinal Allografts
|
1,384
|
1,966
|
|
4,969
|
5,708
|
|
Other
|
154
|
389
|
|
594
|
3,100
|
|
Total
|
$
23,104
|
$
22,961
|
|
$
69,628
|
$
70,363
|
|
|
|
|
|
|
|
OSTEOTECH, INC. and
SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
(dollars in
thousands)
|
|
(unaudited)
|
|
|
September 30,
|
|
December 31,
|
|
|
2010
|
|
2009
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
13,777
|
|
$
10,708
|
|
Accounts receivable,
net
|
15,815
|
|
16,165
|
|
Deferred processing
costs
|
31,715
|
|
38,562
|
|
Inventories
|
1,602
|
|
1,819
|
|
Prepaid expenses and other
current assets
|
2,998
|
|
3,247
|
|
Total current assets
|
65,907
|
|
70,501
|
|
Property, plant and equipment,
net
|
25,637
|
|
29,575
|
|
Other assets
|
17,752
|
|
16,861
|
|
|
$
109,296
|
|
$
116,937
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
$
12,454
|
|
$
16,206
|
|
Current maturities of capital
lease obligation
|
1,074
|
|
994
|
|
Total current liabilities
|
13,528
|
|
17,200
|
|
Capital lease
obligation
|
11,365
|
|
12,181
|
|
Other liabilities
|
7,006
|
|
7,270
|
|
Total liabilities
|
31,899
|
|
36,651
|
|
Stockholders' equity
|
77,397
|
|
80,286
|
|
|
$
109,296
|
|
$
116,937
|
|
|
|
|
|
SOURCE Osteotech, Inc.