RTI Surgical Releases Third Quarter Results

Alachua, Fla.-based RTI Surgical Inc. has released its results for the third fiscal quarter of 2014. Highlights include revenue of $65.2 million, up $10.5 million from the same quarter last year for an increase of 19 percent. Sports medicine also rose 19 percent bringing in revenues of $11.4 million, and spine rose 16 percent achieving revenues of $20.5 million. Orthofixation shot up 41 percent over the same quarter last year, bringing in $9.5 million.

RTI introduced two new products in the sports medicine business in Q3: the Pack precision allograft cartilage instrument kit and Allowedge bicortical bone wedges and instrument kit.

In comparison with the same quarter last year, worldwide revenues were $65.2 million to $54.7 million; Domestic revenue was $59.7 million to $49.3 million; and international revenue was $5.5 million, comparable to the same quarter last year.

Worldwide revenues were $65.2 million for the third quarter of 2014 compared to revenues of $54.7 million for the third quarter of 2013, an increase of 19 percent. Domestic revenues were $59.7 million for the third quarter of 2014 compared to revenues of $49.3 million for the third quarter of 2013. International revenues were $5.5 million for the third quarter of 2014 and were comparable to the third quarter of 2013. Our prior year revenues include Pioneer-related revenues for the stub period of July 16, 2013 to September 30, 2013, whereas our current year period includes a full quarter of Pioneer-related revenues. If Pioneer revenues had been included for the third quarter for both 2013 and 2014, worldwide revenues for the third quarter of 2014 would have increased by 13 percent as compared to the third quarter of 2013.

“Revenues from the third quarter met our expectations. As anticipated, we saw some impact from seasonality in surgical cases, primarily in international markets, but we were able to offset that with sequential growth in the U.S.,” said President and CEO Brian K. Hutchison. “We continued to make progress in meeting the goals we shared in our first quarter earnings release—growth in our sports and spine businesses, traction in surgical specialties and expanded distribution of Map3 cellular allogeneic bone graft.”

The U.S. Food and Drug Administration issued a letter in September stating that RTI’s processing of stem cells for its map3 cellular allogeneic bone graft does not qualify as minimal manipulation and should be subject to higher levels of regulation.

During a conference call about the earnings report on Oct. 30, Hutchison said an unintended claim on RTI’s website that has since been removed triggered the letter.

Carrie Hartill, executive vice president and chief scientific officer, said RTI has provided information to show that its process does not change any characteristics of the cell and that the FDA is reviewing the response.

Based on results from the first three quarters of the year, the company is narrowing its full year revenue guidance for 2014. The company now expects full year revenues for 2014 to be between $260 million and $261 million, as compared to prior guidance of between $258 million and $261 million.

“Results from the first nine months have met or exceeded our expectations and we continue to be optimistic that we can meet our goals for the year,” Hutchison said. “We are focused on delivering a strong fourth quarter and positioning our business for success in 2015.”

RTI Surgical makes biologic, metal and synthetic orthopedic implants.