RTI Biologics reports revenues of $37.8M for first-quarter 2010

RTI Biologics Inc. (RTI) (Nasdaq:RTIX), a leading processor of orthopedic and other biologic implants, reported operating results for the first quarter ending March 31, 2010 as follows:

“Despite the reduced revenue, we controlled expenses and generated positive operating cash flow during the quarter.”

Quarterly Overview:

• Achieved revenues of $37.8 million and net loss of $54,000, or break even per fully diluted share
• Revenue impacted by $4.0 million inventory reduction by largest spine distributor
• Grew surgical specialties revenues 28 percent over first quarter 2009
• Launched one spinal implant, as well as three implants for bone graft substitutes and general orthopedics with three different distributors
• Launched the next-generation BTB Select®, which allows for precision sized matching relative to the intra-articular length of BTB allografts
• Reaffirms 2010 revenues guidance of $174.5 million to $177.5 million, and $0.15 to $0.17 cents per fully diluted share

Revenues were $37.8 million for the first quarter of 2010, compared to revenues of $38.6 million for the first quarter of 2009. For the first quarter of 2010, the company reported net loss of $54,000, or break even per fully diluted share based on 54.6 million fully diluted shares outstanding, compared to net income of $1.0 million and net income per fully diluted share of $0.02 based on 54.5 million fully diluted shares outstanding for the first quarter of 2009.

"Our results were significantly impacted by inventory reductions by our largest spine distributor and lower orders in the European markets," said Brian K. Hutchison, chairman and CEO of RTI. "Despite the reduced revenue, we controlled expenses and generated positive operating cash flow during the quarter."

First Quarter 2010 Analysis

Domestic revenues were $33.0 million for the first quarter of 2010, representing an increase of 2 percent over the prior year period. For the first quarter 2010, the strongest domestic performance was in surgical specialties and sports medicine, with year over year growth rates of 37 percent and 20 percent, respectively. In addition, domestic dental revenues grew 2 percent, and bone graft substitutes revenues grew 11 percent compared to the prior year period. Spine revenues, which declined by 33 percent, were negatively impacted by an inventory reduction of approximately $4 million from our largest distributor.

International revenues, which include exports and distribution from our German and French facilities, were $4.8 million for the first quarter of 2010, representing a decrease of 24 percent compared to the prior year period. Decreases in revenues were directly related to economic difficulties in several European countries, which impacted orders. Foreign currency translation adjustments resulted in an increase in first quarter revenues of $248,000 compared to the prior year period.

2010 Outlook

The company has provided guidance that 2010 revenues are estimated to grow between 6 percent and 8 percent, to between $174.5 million and $177.5 million. Full year earnings per fully diluted share are expected to be in the range of $0.15 to $0.17, based on 55.7 million fully diluted shares outstanding. There are no changes to this guidance at this time.

"We are confident that we will meet our financial expectations for the full year," Hutchison said. "Our annual guidance reflected the inventory reductions by our largest spine distributor. We expect revenues to increase sequentially in the upcoming quarters due to new product launches, business development opportunities and stronger orders from each of our distributors."