RTI Biologics Inc. (RTI) (Nasdaq: RTIX), a leading provider of orthopedic and other biologic implants, announced today the signing of an exclusive, 10-year distribution agreement with Zimmer Dental Inc. for biologic implants for the dental market worldwide.
“We remain committed to delivering excellent, long-term service and safe biologic implants to Zimmer for use in dental surgeries. The financial structure of the new agreement will improve operating margins for RTI in the dental segment of our business and will immediately strengthen our financial position.”
Under the new agreement, which is effective Sept. 30, 2010, RTI will supply sterilized allograft and xenograft implants for an agreed upon transfer fee, as opposed to the marketing fee structure of the companies' previous agreement. Zimmer will be responsible for worldwide marketing and distribution of the biologic implants for use in dental applications.
The new agreement includes an initial payment, as well as annual payments for the length of the contract, to secure exclusive distribution rights in the dental market. Additionally, Zimmer has committed to annual order minimums to preserve exclusivity.
"We are very pleased to continue our long-standing relationship with Zimmer, a leader in the dental market," said Brian K. Hutchison, RTI chairman and CEO. "We remain committed to delivering excellent, long-term service and safe biologic implants to Zimmer for use in dental surgeries. The financial structure of the new agreement will improve operating margins for RTI in the dental segment of our business and will immediately strengthen our financial position."
2010 Outlook
The company is modifying its 2010 annual financial guidance to reflect the impact on revenues from the terms of the new dental agreement, as well as increased pricing pressures and slowdown in procedure volumes in certain of its markets, primarily the spinal market. The company now expects 2010 revenues in the range of $165 million to $168 million and full year earnings per fully diluted share to be in the range of $0.10 to $0.12, based on 55.0 million fully diluted shares outstanding.
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