RTI Announces 2009 Third Quarter Results

10/28/2009

• Wendy Crites Wacker, APR
• Director, Corp Communications
• wwacker@rtix.com
• 386-418-8888 (4220)

– Company Will Hold Conference Call at 9:00 a.m. ET –

ALACHUA, Fla. (Oct. 28, 2009) – RTI Biologics Inc. (RTI) (Nasdaq: RTIX), a leading processor of orthopedic and other biologic implants, reported operating results for the third quarter ended Sept. 30, 2009.

Quarterly Highlights:

• Record revenues of $42.8 million
• Net income of $2.3 million, or $0.04 per fully diluted share, compared to $388,000, or $0.01 per fully diluted share, as a result of continued increased revenues and margins
• Amended agreement for exclusive worldwide distribution rights for dermal allografts for use in hernia repair with Davol Inc., a subsidiary of C.R.Bard Inc., to include dermal allografts for breast reconstruction
• Record revenues in domestic hernia repair, an increase of more than 150 percent over the previous year’s period
• Increased breast reconstruction revenues by 66 percent over the prior year’s period, reflecting launch quantity shipments to Davol Inc.
• Launched four new orthopedic implants
• Received FDA clearance to market bovine pericardium for use in ENT procedures

Revenues were $42.8 million for the third quarter of 2009, representing an 11 percent increase compared to revenues of $38.5 million for the third quarter of 2008. Revenues were $122.6 million for the first nine months of 2009, representing a 12 percent increase compared to revenues of $109.3 million for the first nine months of 2008. The increase in year-over-year revenues for the first nine months reflects the inclusion of Tutogen Medical for the full nine months of 2009 compared to the period of Feb. 28 to Sept. 30, 2008 in the prior year. Tutogen revenues for the period Jan. 1, 2008 to Feb. 27, 2008 were $8.5 million, including international revenues of $3.0 million.

For the third quarter of 2009, the company reported net income of $2.3 million and net income per fully diluted share of $0.04 based on 55 million fully diluted shares outstanding, compared to net income of $388,000 and net income per fully diluted share of $0.01 for the third quarter of 2008, based on 55.7 million fully diluted shares outstanding. For the first nine months of 2009, the company reported net income of $4.4 million and net income per fully diluted share of $0.08 based on 54.7 million fully diluted shares outstanding, compared to net income of $2.5 million and net income per fully diluted share of $0.05 based on 50.4 million fully diluted shares outstanding for the same period last year.

“Our third quarter results were in line with our expectations,” said Brian K. Hutchison, RTI chairman and chief executive officer. “As we enter the last quarter of the year, we are mindful of the continued weakness in the global economy and its impact on procedure volumes and the orthopedic markets in general. Accordingly, we are working diligently to ensure we meet our goals for our distributors and our shareholders.”

Revenue Analysis

Domestic revenues were $37.4 million for the third quarter and $105.4 million for the first nine months of 2009, both representing increases of 12 percent over prior year results for each period. The increase in revenues for the first nine months reflects the inclusion of Tutogen revenues for nine months in 2009 versus the period of Feb. 28 to Sept. 30, 2008 in the prior year. For the third quarter and first nine months of 2009, the strongest domestic performance was in surgical specialties, with sequential and year-over-year growth rates that exceeded market growth rates as we continue to increase sourcing of membrane tissue to support these markets. Growth in surgical specialties offset a decline in dental revenues, which have been significantly impacted by the global economic slowdown. The sports medicine business continues to grow; however, the third quarter revenues were negatively impacted by both a seasonal slowdown in procedures and deferral of procedures due to global economic conditions.

International revenues, which include exports and distribution from our German and French operations, were $5.4 million for the third quarter of 2009 and $17.2 million for the first nine months of 2009, representing increases of 8 percent and 13 percent respectively compared to the prior year period. During the third quarter and first nine months of 2009, currency exchange fluctuations resulted in a decrease in revenues of $229,000 and $1.5 million respectively compared to prior year periods. In addition, first nine month revenues reflect the inclusion of Tutogen revenues for the full nine months in 2009 versus the period of Feb. 28 to Sept. 30, 2008 in the prior year.

2009 Outlook

The company’s 2009 financial guidance includes revenues estimated to be $166 to $168 million, with fully diluted earnings per share of $0.11 to $0.13. There are no changes to this guidance at this time.

Conference Call

RTI will hold a live conference call and simultaneous audio Web cast on Wednesday, Oct. 28, 2009 at 9:00 a.m. ET to discuss third quarter results. The conference call can be accessed by dialing (888) 452-4004. The Web cast can be accessed through the investor section of RTI’s Web site at www.rtix.com. A telephone replay of the call will be available through Nov. 18, 2009 and can be accessed by calling (888) 203-1112, passcode 7047465; the replay will also be available at www.rtix.com.

About RTI Biologics Inc.

RTI Biologics Inc. was formed when Regeneration Technologies Inc. and Tutogen Medical Inc. merged on Feb. 27, 2008. The company is a leading provider of sterile biological implants for surgeries around the world with a commitment to advancing science, safety and innovation. RTI prepares human donated tissue and bovine tissue for transplantation through extensive testing and screening, precision shaping and when possible, using proprietary, validated sterilization processes. These allograft and xenograft implants are used in orthopedic, dental, hernia and other specialty surgeries.

RTI’s innovations continuously raise the bar of science and safety for biologics – from being the first company to offer precision-tooled bone implants and assembled technology to maximize each gift of donation, to inventing validated sterilization processes that include viral inactivation steps. Two such processes – the BioCleanse® Tissue Sterilization Process and the Tutoplast® Tissue Sterilization Process – have a combined record of more than two million implants distributed with zero incidence of allograft-associated infection. These processes have been validated by tissue type to inactivate or remove viruses, bacteria, fungi and spores from the tissue while maintaining biocompatibility and functionality.

RTI’s worldwide corporate headquarters are located in Alachua, Fla., with international locations in Neunkirchen, Germany, and Aix-en-Provence, France. The company is accredited by the American Association of Tissue Banks in the United States.

Forward Looking Statement

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates and projections about our industry, our management’s beliefs and certain assumptions made by our management. Words such as “anticipates”, “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, except for historical information, any statements made in this communication about anticipated financial results, growth rates, new product introductions, future operational improvements and results or regulatory approvals or changes to agreements with distributors also are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties, including the risks described in public filings with the U.S. Securities and Exchange Commission (SEC). Our actual results may differ materially from the anticipated results reflected in these forward-looking statements. Copies of the company’s SEC filings may be obtained by contacting the company or the SEC or by visiting RTI’s website at www.rtix.com or the SEC’s website at www.sec.gov.