- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
05 November 2010 - 2:44PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Osteotech, Inc.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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On November 4, 2010, Osteotech, Inc. issued the following news release.
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Contacts
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FOR IMMEDIATE RELEASE
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Company:
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Mark H. Burroughs
(732) 542-2800
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Investors:
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Jennifer Beugelmans
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(646) 596-7473
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Media:
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Dan Budwick
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(973) 271-6085
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November 4, 2010
OSTEOTECH REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS
Acquisition by Medtronic Scheduled for Approval by Stockholders at Special
Meeting on November 9
th
Osteotech, Inc. (NASDAQ: OSTE), a leader in the emerging field of biologic products for
regenerative healing, today reported financial results for the third quarter ended September 30,
2010.
During the third quarter, we focused a significant amount of our internal resources on activities
associated with our merger with Medtronic, Inc., which we continue to believe is in the best
interest of our stockholders, and a good path forward for our organization and products, said Sam
Owusu-Akyaw, President and Chief Executive Officer of Osteotech. We believe we remain on track to
finalize the transaction during the fourth quarter of 2010 and, as previously announced, intend to
hold our special meeting of stockholders to approve the transaction on November 9, 2010. The third
quarter 2010 financial results reflect increased costs and expenses associated with our strategic
alternatives process and the merger.
Financial Results
Revenue for the three months ended September 30, 2010 was $23.1 million, including $3.0 million
from the companys new products (primarily MagniFuse
®
Bone Graft and Plexur M
®
Innovative Grafting)
compared with $23.0 million for the three months ended September 30, 2009. Client services and
private label revenue was $1.2 million in the third quarter of 2010 compared with $0.8 million
during the same period of 2009. Excluding client services and private label revenue, third quarter
2010 revenue was $21.9 million compared with $22.2 million in the third quarter of 2009.
Revenue for the first nine months ended September 30, 2010 was $69.6 million compared with revenue
of $70.4 million for the nine-month period ended September 30, 2009. Excluding client services and
private label revenue, revenue for the first nine months of 2010 was $66.7 million compared with
$65.5 million in
the first nine months of 2009. Client services and private label revenue declined, as expected, by
$2.0 million year-over-year during the first nine months of 2010.
Net loss for the third quarter ended September 30, 2010 was $2.5 million, or $0.14 per share,
compared with a net loss of $1.9 million, or $0.11 per share, for the third quarter of 2009. Net
loss for the nine months ended September 30, 2010 was $3.9 million, or $0.22 per share, compared
with $4.9 million, or $0.27 per share, for the nine-month period ended September 30, 2009.
About Osteotech
Osteotech, Inc., headquartered in Eatontown, New Jersey, is a global leader in providing biologic
solutions for regenerative medicine to support surgeons and their patients in the repair of the
musculoskeletal system through the development of innovative therapy-driven products that alleviate
pain, promote biologic healing and restore function. For further information regarding Osteotech,
please go to Osteotechs website at
www.osteotech.com
.
Additional Information about the Proposed Transaction and Where You Can Find It
Osteotech has filed with the Securities and Exchange Commission (the SEC) a definitive proxy
statement and other relevant materials in connection with the proposed acquisition of Osteotech by
Medtronic. The definitive proxy statement has been mailed to Osteotech stockholders. Before making
any voting or investment decisions with respect to the transaction, investors and security holders
of Osteotech are urged to read the proxy statement and the other relevant materials because they
contain important information about the transaction, Osteotech and Medtronic. Investors and
security holders may obtain free copies of these documents and other documents filed with the SEC
at the SECs website at www.sec.gov. In addition, investors and security holders may obtain free
copies of the documents filed with the SEC by accessing Osteotechs website at www.osteotech.com or
by writing to Osteotechs Assistant Secretary at 51 James Way, Eatontown, New Jersey, 07724.
Information Regarding Participants
Osteotech, Medtronic and their respective directors, executive officers, certain other members of
management and certain employees may be soliciting proxies from Osteotech stockholders in favor of
the merger. Information regarding the persons who may, under the rules of the SEC, be considered
participants in the solicitation of the Osteotech stockholders in connection with the proposed
merger is set forth in the proxy statement as filed with the SEC. You can find information about
Medtronics executive officers and directors in its definitive proxy statement filed with the SEC
on July 16, 2010. You can obtain a free copy of this document at the SECs website at www.sec.gov
or by accessing Medtronics website at www.medtronic.com and clicking on the investors link. You
can find information about Osteotechs executive officers and directors in its definitive proxy
statement filed with the SEC August 3, 2010. You can obtain a free copy of this document at the
SECs website at
www.sec.gov
or by accessing Osteotechs website at www.osteotech.com or by writing
Osteotech at 51 James Way, Eatontown, New Jersey, 07724.
Safe Harbor
Certain statements made throughout this press release that are not historical facts are
forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995)
regarding the Companys future plans, objectives and expected performance. Any such forward-looking
statements are based on assumptions that the Company believes are reasonable, but are subject to a
wide range of risks and uncertainties (including but not limited to the risk that the acquisition
of Osteotech by Medtronic may not close due either to litigation filed by certain stockholders
seeking to enjoin the merger or to a failure by the Company to satisfy certain closing conditions
such as obtaining certain regulatory approvals of the propose acquisition and the approval of the
transaction by Osteotechs stockholders) and, therefore, there can be no assurance that actual
results may not differ materially from those expressed or implied by such forward-looking
statements. Other factors that could cause actual results to differ materially include, but are not
limited to, the Companys ability to develop and introduce new products, differences in anticipated
and actual product and service introduction dates, the ultimate success of those products in the
marketplace, the continued acceptance and growth of current products and services, the impact of
competitive products and services, the availability of sufficient quantities of suitable donated
tissue and the success of cost control and margin improvement efforts. For a more detailed
discussion of certain of these factors, see the Companys periodic reports filed with the
Securities and Exchange Commission from time to time, including the latest Annual Report on Form
10-K and Quarterly Reports on Form 10-Q. All information in this press release is as of November 4,
2010 and the Company does not intend to update this information.
OSTEOTECH, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
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Three Months
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Nine Months
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Ended September 30,
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Ended September 30,
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2010
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2009
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2010
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2009
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Revenue
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$
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23,104
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$
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22,961
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$
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69,628
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$
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70,363
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Cost of revenue
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11,521
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12,502
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35,000
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36,406
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Gross profit
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11,583
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10,459
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34,628
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33,957
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Marketing, selling and
general and administrative expenses
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13,096
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10,648
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34,189
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33,034
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Research and development expenses
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920
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1,544
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3,179
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5,195
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14,016
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12,192
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37,368
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38,229
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Operating loss
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(2,433
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(1,733
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(2,740
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(4,272
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Other income (expense):
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Interest expense, net
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(310
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(354
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(965
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(1,063
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Other
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136
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58
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(198
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106
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(174
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(296
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(1,163
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(957
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Loss before income taxes
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(2,607
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(2,029
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(3,903
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(5,229
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Income tax provision (benefit)
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(150
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(122
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22
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(322
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Net loss
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$
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(2,457
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$
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(1,907
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$
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(3,925
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$
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(4,907
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Loss per share:
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Basic
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$
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(0.14
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$
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(0.11
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$
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(0.22
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$
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(0.27
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Diluted
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$
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(0.14
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$
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(0.11
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$
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(0.22
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$
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(0.27
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Shares used in computing loss per
share:
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Basic
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18,182,443
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18,120,350
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18,134,819
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17,925,718
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Diluted
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18,182,443
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18,120,350
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18,134,819
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17,925,718
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CONSOLIDATED SEGMENT REVENUE DETAIL
(dollars in thousands)
(unaudited)
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Three Months
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Nine Months
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Ended September 30,
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Ended September 30,
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2010
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2009
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2010
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2009
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(restated)
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(restated)
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DBM
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$
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13,241
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$
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14,611
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$
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40,502
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$
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43,445
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Hybrid/Synthetic
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3,353
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894
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8,588
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2,289
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Traditional Tissue
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4,972
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5,101
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14,975
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15,821
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Spinal Allografts
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1,384
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1,966
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4,969
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5,708
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Other
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154
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389
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594
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3,100
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Total
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$
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23,104
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$
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22,961
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$
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69,628
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$
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70,363
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-more-
OSTEOTECH, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
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September 30,
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December 31,
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2010
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2009
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Assets
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Cash and cash equivalents
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$
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13,777
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$
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10,708
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Accounts receivable, net
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15,815
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16,165
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Deferred processing costs
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31,715
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38,562
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Inventories
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1,602
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1,819
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Prepaid expenses and other current assets
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2,998
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3,247
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Total current assets
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65,907
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70,501
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Property, plant and equipment, net
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25,637
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29,575
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Other assets
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17,752
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16,861
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$
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109,296
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$
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116,937
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Liabilities and Stockholders Equity
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Accounts payable and accrued liabilities
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$
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12,454
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$
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16,206
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Current maturities of capital lease obligation
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1,074
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994
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Total current liabilities
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13,528
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17,200
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Capital lease obligation
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11,365
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12,181
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Other liabilities
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7,006
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7,270
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Total liabilities
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31,899
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36,651
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Stockholders equity
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77,397
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80,286
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$
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109,296
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$
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116,937
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# # #
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