RTI Biologics Inc. (RTI), the processor of orthopedic, dental, hernia and other biologic implants, has reported a total revenues of $37.4 million, compared to the total revenues of $25.5 million in the year-ago quarter. It has also reported a net loss of $102.5 million, or $1.89 per diluted share, for the fourth quarter of 2008, compared to the net loss of $2.6 million, or $0.09 per diluted share, in the year-ago quarter.
Quarterly Highlights:
Achieved quarterly revenues of $37.4 million, with gross margins of 47%.
Negotiated new US financing agreements with Mercantile Bank, a division of Carolina First Bank, including $1.75 million term loan and a $10 million line of credit facility.
Introduced new lumbar implant to Stryker.
Signed a new agreement to provide spinal allograft implants to Aesculap Implant Systems, Inc.
Net loss of $102.5 million, or $1.89 per fully diluted share, was due primarily to a non-cash asset impairment charge to the company’s goodwill.
Adjusted net income excluding purchase accounting adjustments, restructuring charges and the impairment charge was $1.1 million, or $0.02 per fully diluted share.
Increased number of direct biologic representatives by 5 to a total of about 30.
2008 Full Year Highlights:
Achieved annual revenues of $146.6 million, with gross margins of 47%.
Completion of the merger with Tutogen Medical, Inc. (Tutogen) and the successful integration with the company.
Net loss of $100.0 million, or $2.00 per fully diluted share, was due primarily to a non-cash asset impairment charge to the company’s goodwill.
Adjusted net income excluding purchase accounting adjustments, restructuring charges and the impairment charge was $5.1 million, or $0.10 per fully diluted share, compared to a net loss of $2.1 million, or $0.07 per fully diluted share in the prior year.
Launched nine new implants in sports medicine, spine, dental and bone graft substitutes.
Increased number of direct biologic representatives by 15 to a total of about 30.
Achieved more than 30% growth in sports medicine.
“While we have had successes in 2008, such as completing the merger and integration of Tutogen, refinancing our debt arrangement, launching numerous new products and improving our supply of donated tissue,” said Brian K. Hutchison, RTI chairman and chief executive officer, “we maintain a conservative outlook for 2009 as we monitor the overall economic conditions and how they will affect procedure volume and demand in our markets. Our sports medicine business has historically performed significantly above market growth and has done so again, even with the change in our distribution force in the second half of the year. We believe we can continue to achieve results that exceed our overall market in this area.”
Revenues were $37.4 million for the fourth quarter of 2008, compared to revenues of $25.5 million for the fourth quarter of 2007. Revenues for the full year 2008 were $146.6 million, compared to revenues of $94.2 million for the full year 2007. The increase in year-over-year revenues includes the revenues from Tutogen since the completion of the merger on Feb. 27, 2008.
For the full year 2008, the company reported a net loss of $100 million, compared to a net loss of $2.1 million for the full year 2007. Net loss per diluted share for 2008 was $2.00, compared to a net loss per diluted share for 2007 of $0.07.
Fourth quarter and full year results include a $103.9 million or $1.91 decrease in income per fully diluted share due to a non-cash impairment charge related to goodwill and intangible assets. The impairment charge is a result of an analysis of our recorded goodwill in accordance with the financial accounting and reporting requirements of the Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, considering the significant deterioration in the market environment and decline in the market value of the company’s equity during the fourth quarter.
For the fourth quarter and full year 2008, the company’s net income was reduced by purchase accounting adjustments and restructuring charges associated with the Tutogen merger of $91,000 and $2.4 million before income taxes respectively, representing an after tax expense of $57,000 and $1.5 million respectively and a decrease in income per fully diluted share of $0.03 for the full year. The adjustments for the fourth quarter and full year 2008 relate to intangibles amortization expense of $90,000 and $678,000 respectively, included in marketing, general and administrative expenses; $1,000 and $451,000 in restructuring charges respectively; and inventory step-up adjustments of $1.3 million for the full year 2008, included in the cost of goods sold.
During the fourth quarter and full year ending December 31, 2008, the company recorded stock-based compensation expense totaling $412,000 and $1.6 million respectively, before income taxes, representing an after tax expense of $256,000 and $1.0 million respectively, and decreased income per diluted share by $0.02 for the full year, under the provisions of Statement of Financial Accounting Standards No. 123R, Share-Based Payment. This compares to stock-based compensation expense totaling $724,000 and $3.0 million respectively, before income taxes for the fourth quarter and full year ending December 31, 2007, representing an after tax expense of $451,000 and $1.9 million respectively, and increased net loss per diluted share by $0.01 and $0.04 respectively.