Full Press Release Details
Bacterin Reports Third Quarter
2012 Financial Results
Revenue Increases 18%; Company
Reports 71% Gross Margins and Attains Operational Profitability
Conference Call at 4:30pm ET to Discuss Third Quarter
BELGRADE, Mont. November 07, 2012 - Bacterin International Holdings,
Inc. (NYSE MKT: BONE), a leader in the development of revolutionary bone graft material and antimicrobial coatings for medical
applications, today announced its financial results for the third quarter ended September 30, 2012:
Management Commentary
"Bacterin had a very productive third quarter, reaching
new milestones, and turning the corner from a slower first half that had been impacted by production issues that are now resolved,"
said Guy Cook, CEO of Bacterin. "We generated over $ 800,000 dollars in positive EBITDA, up from about break even in the
previous quarter, and more than a quarter million loss one year ago. We delivered our first quarter of positive operating income,
and continued to report strong gross margins at 71%. With the ramp in revenue, we are beginning to get a glimpse of the earnings
potential of the company."
Mr. Cook continued, "We expect revenue in Q4 to be even
better and to further support this sales expansion, we have already launched new marketing investments. Bacterin has instituted
a key opinion leader (KOL) program enabling top surgeons to travel to our Montana headquarters, witness the production of OsteoSponge
and become greater advocates for our products. We have also started more training sessions in the field to help surgeons gain a
comprehensive understanding of the intended uses, capabilities and performance of OsteoSponge. With the recent financing secured
from OrbiMed, in addition to being EBITDA positive, we now have greater capital and flexibility to accelerate the awareness of
our products, with these types of campaigns, which we did not have before.
the past, surgeons who had been introduced to our products, ordered it in such rapid abundance, we slipped into a backorder situation.
New clean rooms will be ready to go by Q1 2013, an upgrade which supports
throughput capacity of $120-$150 million. With capital and capacity needs met, we can now focus our attention more fully on restoring
growth trends in sales and anticipated profitability, to industry best levels."
Q3 2012 Financial Results
Revenue for the three months ended September 30, 2012 increased
18% to $8,879,765 compared to $7,539,501 in the comparable prior year period. The increase was largely the result of increased
sales generated from our direct sales force and independent distributors compared to the third quarter of 2011.
sales consist primarily of tissue and medical device manufacturing costs. Costs of sales increased by 97% or $1.3 million to $2.6
million compared to $1.3 million for the three months ended September 30, 2011. As a percentage of tissue sales, cost of tissue
sales was 29% of revenues for the third quarter of 2012 compared to 17% in the comparable prior year period. In the last quarter
of 2011, we experienced an increase to the percentage of our overhead expense allocated to cost of tissue sales based upon increased
production which resulted in a higher cost of tissue sales than the prior year period.
Gross profit margin for the quarter was 71%, as compared to
72% in the previous quarter and 83% in the year-ago quarter.
Operating expenses decreased 22%, or $1.7 million for the three
months ended September 30, 2012 compared to the three months ended September 30, 2011.
General and administrative expenses increased 13%, or $290,037,
to $2.4 million for the three months ended September 30, 2012 compared to the same period of 2011. The increase is primarily due
to higher administrative costs supporting the higher revenue in addition to added rental and maintenance expense for increased
As a percentage of revenue, selling and marketing expenses decreased
to 38% in the third quarter of 2012 from 64% in the third quarter of 2011. The decrease was primarily the result of more variable
compensation paid to our direct sales force compared to salaries earned in the comparable period of 2011 and a lower corporate
sales commission structure.
EBITDA for the quarter totaled $820,154, compared to EBITDA
of $8,000 for the previous quarter, and an EBITDA loss of $(315,898) for the third quarter of 2011.
YTD 2012 Financial Results
nine months ended September 30, 2012 increased 18% to $24.9 million compared to $21.0 million in the comparable prior year period.
The increase of $3.8 million was largely the result of increased sales generated from our direct sales force and independent distributors
compared to the first nine months of 2011.
sales consist primarily of tissue and medical device manufacturing costs. Costs of sales increased by 68% or $2.7 million to $6.8
million for the first nine months of 2012. The increase was largely the result of increased costs associated with our higher sales.
As a percentage of tissue sales, cost of tissue sales was 27% of revenues for the first three quarters of 2012 compared to 19%
in the comparable prior year period. In the last quarter of 2011, we experienced an increase to the percentage of our overhead
expense allocated to cost of tissue sales based upon increased production which resulted in a higher cost of tissue sales than
the prior year period.
Gross profit margin was 73%, as compared to 81% in the previous
Operating expenses decreased 6%, or $1.3 million, for the nine
months ended September 30, 2012 compared to the nine months ended September 30, 2011.
General and administrative expenses increased 22%, or $1.3 million
to $7,349,852, for the nine months ended September 30, 2012 compared to the same period of 2011. The increase is primarily due
to higher administrative costs supporting the higher revenue in addition to added rental and maintenance expense for increased
As a percentage of revenue, selling and marketing expenses decreased
to 46% in the first nine months of 2012 from 64% in the first nine months of 2011. The decrease was primarily the result of more
variable compensation paid to our direct sales force compared to salaries earned in the comparable period of 2011 and a lower corporate
sales commission structure.
EBITDA for the first nine months of 2012 totaled $292,657 compared
an EBITDA loss of $(1.4) million for the comparable period of 2011.
Cash and cash equivalents and net accounts receivable was $15.8
million at September 30, 2012, compared to a total of $7.8 million at June 30, 2012.
"We believe that product constraints were a short term
issue we have resolved and that the future and long term opportunity for Bacterin products, in multi-billion dollar addressable
markets, remain very strong. Accordingly, we are narrowing our 2012 revenue guidance to $35 to $37 million, within the previously
stated revenue guidance range of $35 to $40 million," said Mr. Cook.
Conference Call Details:
Conference Call Details:
Date: Wednesday, November 7, 2012
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 1-877-941-1429
International: 1-480-629-9857
Conference ID#: 4572762
The conference call will be broadcast
simultaneously and available for replay here and at the investor section of the company's Web site at http://bacterin.com/index.htm.
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 Hayden IR at 1-646-755-7412.
A replay of the call will be available after 7:30 p.m. Eastern
time on the same day and until December 7, 2012.
Replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay pin number: 4572762
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