Full Press Release Details
Bacterin Announces Record 2012
Revenue of $33 Million
Full Year 2012 Highlights:
Fourth Quarter 2012 Highlights:
BELGRADE, MT, March 26, 2013 -- Bacterin
International Holdings, Inc. (NYSE MKT: BONE), a leader in the development of revolutionary bone graft material and coatings for
medical applications, today reported its financial results for the fourth quarter and full year ended December 31, 2012. The Company
reported 2012 revenues of $33.0 million, an increase of 9% from reported 2011 revenues of $30.1 million. In addition, the Company
reported a net loss for 2012 of approximately $7.7 million, or ($0.18) per common share, compared to a net loss of approximately
$3.0 million, or ($0.08) per common share, reported during the same period in 2011.
Revenue for the year was a record $33.0
million, up 9% compared to approximately $30.1 million for 2011. The increase during the period was primarily attributed to the
higher sales from the Company's sales force combined with improved penetration into its existing accounts.
Revenue softened during the fourth quarter
to $8.1 million, compared to $9.1 million reported for the fourth quarter of 2011. The lower results reflect not closing anticipated,
larger sales to corporate entities as well as increased pricing pressure. Excluding a $1.4 million corporate stocking order sale
in the fourth quarter of 2011, revenue increased 5% for the fourth quarter of 2012.
"Despite competitive challenges in
the marketplace during the fourth quarter, we were able to deliver an improved topline for the year," said Guy Cook, Chairman,
Chief Executive Officer and President of Bacterin International. "Our sales approach and model has adapted to this evolving
sales environment and we have made solid progress in mitigating the factors that impeded our sales growth during the fourth quarter."
Mr. Cook continued, "We will continue
to develop our core-business, while focusing on channel development to enhance our distribution capabilities domestically and internationally,
and we believe these efforts are now beginning to gain traction. "
For 2012, gross profit was $22.6 million,
an increase of 7.6% over $21.0 million in 2011. Gross margins for the period were 69%, a 1% decrease from gross margins reported
Gross profit for the fourth quarter was
$4.6 million, or 56% of sales, and includes the impacts associated with an increase in inventory reserves and a write-down of expired
inventory of approximately $671,000. In addition, fourth quarter gross margins were negatively impacted by increased sales price
discounts for hospital accounts and higher sales of lower gross margin products compared to the prior quarter. Excluding the increase
in reserves and write off of expired products, gross margins would have been 65% for the quarter.
Sales and Marketing Expenses
Sales and marketing expenses decreased
to $15.6 million as compared to $18.5 million for 2011. As a percentage of revenues, selling and marketing expenses decreased to
47% in 2012 from 61% in the prior year.
Fourth quarter 2012 sales and marketing
expenses decreased $813,000 to $4.3 million from $5.1 million reported in the fourth quarter of 2011.
The decrease was primarily the result of
more variable compensation paid to the direct sales force in 2012 compared to fixed salaries earned in the comparable period of
2011, and a lower corporate sales commission structure for direct sales representatives and independent distributors.
General and Administrative Expenses
In 2012, general and administrative expenses
increased to $11.1 million for the period as compared to $6.9 million reported for the same period last year. As a percentage of
revenues, general and administrative expenses increased to 34% for 2012 compared to 23% in 2011.
Fourth quarter 2012, general and administrative
expenses increased to $3.8 million compared to $908,000 in 2011. Sequentially, compared to the third quarter of 2012, higher expenses
are due, in large part, to a decrease in overhead applied to cost of goods sold, the recording of royalty expense, an increase
in allowance for doubtful accounts, an increase in non-cash stock option expense, and increases in salaries, wages and benefits.
"We've initiated a Company
wide cost reduction program to align our expense levels with our revenue expectations for 2013. This will reduce our current spending
by approximately $1.7 million per year as well as an additional $1.3 million of previously planned expenditures which will not
be made," said John Gandolfo, Chief Financial Officer.
EBITDA for 2012 improved to a loss of $2.6
million, compared to a loss of $3.0 million in 2011.
Mr. Gandolfo further commented, "If
we are successful in achieving the previously given 2013 revenue guidance of $38 to $40 million, as well as the expense reductions
referred to above, we believe we would generate positive operating income as well as positive EBITDA for the year."
Cash and cash equivalents and net accounts
receivable, was $12.1 million at December 31, 2012, compared to $7.8 million at December 31, 2011.
On August 24, 2012, the Company entered
into a Credit Agreement with an entity managed by OrbiMed, whereby OrbiMed agreed to provide an initial $20 million term loan and
Bacterin may also borrow an additional approximately $5 million upon achievement of certain revenue objectives prior to December
31, 2013. Approximately half of the proceeds of this credit facility were used to repay existing debt and expenses related to the
Conference Call Details
The company also announced that it will
hold a conference hosted by Guy Cook, Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss its financial
results at 10:00 a.m. ET, on Wednesday, March 27, 2013. Please refer to the information below for conference call dial-in information
and webcast registration.
Please call the conference telephone number
5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting
with the conference call, please contact The Cockrell Group at 1-877-889-1972.
Following the live call, a replay will
be available on the Company's website, www.bacterin.com, under "Investor Info".
About the Presentation of EBITDA
EBITDA is not a financial measure calculated
and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative
to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow
from operating activities as a measure of liquidity. The company defines EBITDA as net income/(loss) from operations before depreciation,
amortization and non-cash stock-based compensation. Other companies (including competitors) may define EBITDA differently. The
company presents EBITDA because management believes it to be an important supplemental measure of performance that is commonly
used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management
also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results
of Bacterin nor is it intended to be predictive of potential future results. Investors should not consider EBITDA in isolation
or as a substitute for analysis of the company's results as reported under GAAP. See "GAAP to non-GAAP Reconciliation"
below for further information on this non-GAAP measure.
About Bacterin International Holdings
Bacterin International Holdings, Inc. (NYSE
MKT: BONE) develops, manufactures and markets biologics products to domestic and international markets. Bacterin's proprietary
methods optimize the growth factors in human allografts to create the ideal stem cell scaffold to promote bone, subchondral repair
and dermal growth. These products are used in a variety of applications including enhancing fusion in spine surgery, relief of
back pain, promotion of bone growth in foot and ankle surgery, promotion of cranial healing following neurosurgery and subchondral
repair in knee and other joint surgeries.
Bacterin's Medical Device division develops,
employs, and licenses coatings for various medical device applications. For further information, please visit www.bacterin.com.
Important Cautions Regarding Forward-looking
This news release contains certain disclosures
that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are
subject to significant risks and uncertainties. Forward-looking statements include statements that are predictive in nature, that
depend upon or refer to future events or conditions, or that include words such as "continue," "efforts," "expects,"
"anticipates," "intends," "plans," "believes," "estimates," "projects,"