Regeneration Technologies Inc. (RTIX, Financial) filed Quarterly Report for the period ended 2009-03-31.
RTI BIOLOGICS Inc. prepares human donated tissue and bovine tissue for transplantation with a commitment to advancing science safety and innovation. These allograft and xenograft implants are used in orthopedic dental hernia and other specialty surgeries. RTI's innovations continuously raise the bar of science and safety for biologics - from being the first company to offer precision-tooled bone implants and assembled technology to maximize each gift of donation to inventing fully validated sterilization processes that include viral inactivation steps. Regeneration Technologies Inc. has a market cap of $189.8 million; its shares were traded at around $3.5 with a P/E ratio of 35 and P/S ratio of 1.4.
Research and Development Expenses. Research and development expenses decreased by $93,000, or 4.8%, to $1.8 million for the three months ended March 31, 2009 from $1.9 million for the three months ended March 31, 2008. As a percentage of revenues, research and development expenses decreased from 6.4% for the three months ended March 31, 2008 to 4.7% for the three months ended March 31, 2009. The decrease was primarily due to lower studies and research expenses of $275,000, lower legal and consulting expenses of $141,000 offset by an increase in domestic payroll and benefits expense of $170,000, and the addition of $156,000 in research and development expenses associated with the TMI German operations.
Net Other Income (Expense). Net other income was $93,000 for the three months ended March 31, 2009 compared to net other expense of $11,000 for the three months ended March 31, 2008. Interest expense decreased by $52,000 for the three months ended March 31, 2009 to $123,000 from $175,000 for the three months ended March 31, 2008 due to additional interest paid on long-term obligations. Interest income decreased by $71,000 for the three months
Our cash used in investing activities was $420,000 for the three month period ended March 31, 2009, compared to cash provided by investing activities of $840,000 for the three month period ended March 31, 2008. Our investing activities for the three month period ended March 31, 2009 consisted primarily of purchases of property, plant and equipment of $308,000. Our investing activities for the three months ended March 31, 2008 consisted primarily of purchases of property, plant and equipment of $803,000, offset by cash acquired with the merger with TMI, net of transaction costs, of $1.6 million.
Our net cash used in financing activities was $17,000 for the three months ended March 31, 2009 compared to $325,000 for the three month period ended March 31, 2008. Net cash used in financing activities for the three months ended March 31, 2009 consisted of net payments on short-term obligations of $1.2 million, proceeds on long-term obligations of $1.5 million, proceeds from exercises of stock options of $19,000, and payments on long-term obligations of $301,000. Net cash used in financing activities for the three months ended March 31, 2008 consisted of payments on long-term obligations of $606,000 and proceeds from exercise of stock options of $281,000.
On May 14, 2007, we entered into an exclusive distribution agreement with Zimmer with an initial term of 10 years, relating to certain new bone graft substitutes products. As part of the agreement, Zimmer has agreed to make three payments to us totaling $5.0 million for the aforementioned exclusive distribution rights, and maintain certain minimum order volumes commencing in 2010. The first payment of $1.0 million was made at the time of entering the agreement. The second payment of $2.0 million was made in the first quarter of 2008. As a result of a product launch delay, the final payment of $2.0 million is expected to be paid in the second quarter of 2009. The $5.0 million exclusivity payment has been deferred and is being recognized as other revenue on a straight-line basis over the initial term of the contract. The contract provides for repayment, on a pro rata basis, of the exclusivity payments during the initial contract term for specific events of non-performance, as defined in the agreement. The agreement also includes automatic two-year renewal terms, as well as buy-out provisions by both parties upon proper notice of cancellation.
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RTI BIOLOGICS Inc. prepares human donated tissue and bovine tissue for transplantation with a commitment to advancing science safety and innovation. These allograft and xenograft implants are used in orthopedic dental hernia and other specialty surgeries. RTI's innovations continuously raise the bar of science and safety for biologics - from being the first company to offer precision-tooled bone implants and assembled technology to maximize each gift of donation to inventing fully validated sterilization processes that include viral inactivation steps. Regeneration Technologies Inc. has a market cap of $189.8 million; its shares were traded at around $3.5 with a P/E ratio of 35 and P/S ratio of 1.4.
Highlight of Business Operations:
Marketing, General and Administrative Expenses. Marketing, general and administrative expenses increased by $4.4 million, or 42.7%, to $14.9 million for the three months ended March 31, 2009 from $10.5 million for the three months ended March 31, 2008. Marketing, general and administrative expenses increased as a percentage of revenues from 35.0% for the three months ended March 31, 2008 to 38.7% for the three months ended March 31, 2009. The increase is primarily attributable to including three months of TMI expenses in 2009 versus one month in the prior year. Domestic increases included distributor commissions of $743,000, as a result of higher commissions on the acquired dental product line of implants; an increase in domestic payroll and benefits expense of $647,000, an increase in legal expenses of $611,000 due primarily to on-going patent litigation; an increase in travel of $300,000; an increase in marketing programs of $165,000; an increase in accounting, bank fees, bad debt expense and executive meeting fees of $379,000; and an increase in utilities, rent and insurance of $253,000. In addition, a $1.4 million increase in marketing, general and administrative costs was associated with the TMI German and French business operations.Research and Development Expenses. Research and development expenses decreased by $93,000, or 4.8%, to $1.8 million for the three months ended March 31, 2009 from $1.9 million for the three months ended March 31, 2008. As a percentage of revenues, research and development expenses decreased from 6.4% for the three months ended March 31, 2008 to 4.7% for the three months ended March 31, 2009. The decrease was primarily due to lower studies and research expenses of $275,000, lower legal and consulting expenses of $141,000 offset by an increase in domestic payroll and benefits expense of $170,000, and the addition of $156,000 in research and development expenses associated with the TMI German operations.
Net Other Income (Expense). Net other income was $93,000 for the three months ended March 31, 2009 compared to net other expense of $11,000 for the three months ended March 31, 2008. Interest expense decreased by $52,000 for the three months ended March 31, 2009 to $123,000 from $175,000 for the three months ended March 31, 2008 due to additional interest paid on long-term obligations. Interest income decreased by $71,000 for the three months
Our cash used in investing activities was $420,000 for the three month period ended March 31, 2009, compared to cash provided by investing activities of $840,000 for the three month period ended March 31, 2008. Our investing activities for the three month period ended March 31, 2009 consisted primarily of purchases of property, plant and equipment of $308,000. Our investing activities for the three months ended March 31, 2008 consisted primarily of purchases of property, plant and equipment of $803,000, offset by cash acquired with the merger with TMI, net of transaction costs, of $1.6 million.
Our net cash used in financing activities was $17,000 for the three months ended March 31, 2009 compared to $325,000 for the three month period ended March 31, 2008. Net cash used in financing activities for the three months ended March 31, 2009 consisted of net payments on short-term obligations of $1.2 million, proceeds on long-term obligations of $1.5 million, proceeds from exercises of stock options of $19,000, and payments on long-term obligations of $301,000. Net cash used in financing activities for the three months ended March 31, 2008 consisted of payments on long-term obligations of $606,000 and proceeds from exercise of stock options of $281,000.
On May 14, 2007, we entered into an exclusive distribution agreement with Zimmer with an initial term of 10 years, relating to certain new bone graft substitutes products. As part of the agreement, Zimmer has agreed to make three payments to us totaling $5.0 million for the aforementioned exclusive distribution rights, and maintain certain minimum order volumes commencing in 2010. The first payment of $1.0 million was made at the time of entering the agreement. The second payment of $2.0 million was made in the first quarter of 2008. As a result of a product launch delay, the final payment of $2.0 million is expected to be paid in the second quarter of 2009. The $5.0 million exclusivity payment has been deferred and is being recognized as other revenue on a straight-line basis over the initial term of the contract. The contract provides for repayment, on a pro rata basis, of the exclusivity payments during the initial contract term for specific events of non-performance, as defined in the agreement. The agreement also includes automatic two-year renewal terms, as well as buy-out provisions by both parties upon proper notice of cancellation.
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