Osteotech (OSTE:NASDAQ) Reports 4Q:04 and 2004 Earnings
BY JOHN CHOPACK, APRIL 4, 2005
OSTE reported 4Q:04 revenues of $20.4 million which was a 15% lower than 4Q:03 revenues of $24.0 million. Earnings totaled ($0.27) per diluted share which included a pre-tax gain of $1.1 million related to the sale of inventory and intellectual property of the Ovation Polyaxial System and a $5.9 million charge for impaired assets and reserves for remediation of OSTE's former processing facility.
The company reported 2004 revenues of $88.6 million compared to $94.4 million in 2003. On January 6/2005, management announced it anticipated 2004 revenues to range between $86.5 million and $87.5 million. The decline in 2004 revenues compared to 2003 was attributed to exiting the spine metal implant business which contributed $1.7 million in revenues during 2004 and $4.9 million in 2003. The balance of the decline in revenues between 2004 and 2003 ($2.6 million) was attributed to lower unit volume in the domestic Grafton DBM and Graftech Bio-implant product lines.
Osteotech Summary Financials 2001-2004E
Source: Company Documents
The decline in 2004 revenues was attributed to lower processing of fewer donors for clients and lower demand for the Graftech Bio-implants. Richard Bauer, CEO of Osteotech commented that "The results reported for the fourth quarter and the full year continues to be a disappointment to all of us at Osteotech". He continued, "we have instituted a number of programs aimed at turning our domestic tissue business around and to restore our revenue and growth".
Osteotech Revenues 2003 & 2004
Source: Company Documents
Osteotech's stock was down 7% during the previous five trading sessions and has fallen 46% during the trailing twelve months. OSTE is not the only allograft company which has experienced a significant decline in valuation. Tutogen was fallen 44% and Isotis has dropped by 19% during the previous twelve months.
Management updated its 2005 previous guidance provided on January 6/2005. Revenues are expected to range between $94 million and $98 million which remained in-line with the Company's previous guidance. However, the Company now anticipates a net loss of $0.25 to $0.28 compared to $0.45 to $0.48 previously provided.
