RTI Biologics reports record revenue but also lost sales over letter, reporting

Published: Thursday, February 7, 2013 at 5:27 p.m.
Last Modified: Thursday, February 7, 2013 at 5:27 p.m.

RTI Biologics reported record annual revenues of $178.1 million in 2012, but positive fourth-quarter growth was partially offset by lost sales from customer reaction to an FDA warning letter in the U.S. and media coverage in Europe.

Alachua-based RTI produces surgical implants from human donated and bovine tissue. It trades on the Nasdaq stock exchange under the symbol RTIX. The stock opened at $4.40 per share Thursday following release of the earnings report, down $0.34 from Wednesday’s close.

President and CEO Brian Hutchison said in a Thursday morning conference call that unanticipated publicity and aggressive marketing tactics from competitors created confusion about the content of an October warning letter from the Food and Drug Administration.

FDA inspections revealed “significant weakness” in RTI’s system to measure levels of bacteria that can come in on materials in its tissue processing facility.

Hutchison reiterated that they have corrected procedures, that there were no patient safety issues and that he expected the FDA to close out the warning after the next inspection.

RTI also saw fourth-quarter international sales drop 12 percent from the same period in 2011 to $4.5 million as a result of what Hutchison called inaccurate reporting about RTI and the tissue industry by a “zealot reporter” in Germany who contacted government officials in many European markets.

Hutchison said the FDA recently completed a two-week inspection of its German facility and had no adverse findings.

The full-year revenues of $178.1 million were a 5 percent increase over 2011. Annual net income was $8.4 million, or $0.15 per fully diluted share in 2011 and 2012.

Fourth-quarter revenues were $44.6 million, up 4 percent over the fourth quarter of 2011. Net income was $2.3 million for the quarter, or $0.04 per share, compared with $2.4 million and $0.04 in fourth quarter 2011.

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