RTI Biologics second-quarter worldwide revenues in sports medicine increase 14%

RTI Biologics Inc. (RTI) (Nasdaq:RTIX), a leading processor of orthopedic and other biologic implants, reported operating results for the second quarter ended June 30, 2010 as follows:

“During the second quarter we were able to make significant progress on reducing inventory levels to meet our goals for the year. For the first six months we recognized a significant improvement in cash from operations compared to the prior year”

Quarterly Highlights:

• Achieved revenues of $41.2 million and net income of $948,000, or $0.02 per fully diluted share
• Achieved record worldwide revenues in sports medicine, which increased 14 percent over Q2 2009
• Increased worldwide revenues in bone graft substitutes/general orthopedics by 41 percent
• Renewed line of credit for three years including maximum borrowings of $15.0 million and elimination of a $5.0 million compensating balance requirement
• Reaffirmed 2010 earnings per share guidance of $0.15 to $0.17 cents per fully diluted share

Revenues were $41.2 million for the second quarter of 2010, compared to revenues of $41.1 million for the second quarter of 2009. Revenues were $79.0 million for the first half of 2010, compared to revenues of $79.8 million for the first half of 2009.

For the second quarter of 2010, the company reported net income of $948,000 and net income per fully diluted share of $0.02 based on 55.1 million fully diluted shares outstanding, compared to net income of $1.0 million and net income per fully diluted share of $0.02 for the second quarter of 2009, based on 54.7 million fully diluted shares outstanding. For the first half of 2010, the company reported net income of $894,000 and net income per fully diluted share of $0.02 based on 55.0 million fully diluted shares outstanding, compared to net income of $2.1 million and net income per fully diluted share of $0.04 based on 54.6 million fully diluted shares outstanding for the same period last year.

"During the second quarter we were able to make significant progress on reducing inventory levels to meet our goals for the year. For the first six months we recognized a significant improvement in cash from operations compared to the prior year," said Brian K. Hutchison, chairman and CEO of RTI. "Revenues met expectations, and we are confident we can reach our financial goals for the second half of the year due to the ongoing strong performance by our direct distribution group and higher orders from our distributors."

Revenue Analysis

Domestic revenues were $36.2 million for the second quarter and $69.2 million for the first half of 2010, representing increases of 1 percent and 2 percent, respectively, over prior year results. The strongest domestic growth areas for the quarter and six month periods were sports medicine and BGS/general orthopedics which offset declines in spine and surgical specialties.

International revenues, which include exports and distribution from our German and French operations, were $5.0 million for the second quarter of 2010 and $9.8 million for the first half of 2010, representing a decrease of 9 percent and 17 percent, respectively, compared to the prior year periods. During the second quarter and first half of 2010, currency exchange fluctuations resulted in a decrease in revenues of $292,000 and $43,000, respectively, compared to prior year periods. Declines in dental revenues during the periods were partially offset by increases in BGS general orthopedic revenues.

2010 Outlook

The company provided guidance that 2010 revenues are estimated to be 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 55.0 million fully diluted shares outstanding. The company is estimating that the strengthening of the dollar to the euro for the year will reduce the original revenue guidance by approximately $3 million. There is no change to the earnings per share guidance at this time.