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OSTEOTECH ANNOUNCES 35 PERCENT REVENUE INCREASE FOR SIX-MONTH PERIOD; EARNINGS ALSO INCREASE SIGNIFICANTLY

 SHREWSBURY, N.J., Aug. 4 /PRNewswire/ -- Osteotech, Inc. (NASDAQ: OSTE) announced today that revenues in the first six months of 1993 increased 35 percent to $9,041,000 as compared to $6,690,000 in the six-month period ended June 30, 1992.
 The increase in revenues was due to increased revenues from Grafton(SM) Allogeneic Bone Matrix (ABM), allograft tissue processing and revenues from ceramic coating services and products resulting from the acquisition of HC Implants BV during the second quarter of 1992. Revenues in the second quarter ended June 30, 1993 increased 14 percent to $4,301,000 from $3,776,000 in the second quarter of 1992. The increase for the second quarter of 1993 was due to increased revenues from Grafton and allograft tissue processing, partly offset by a decrease in revenues from ceramic coating services and products.
 Net income in the six months ended June 30, 1993, was $376,000 or 5 cents per share, compared to net income of $93,000 or 1 cent per share in the first six months of 1992. The 1992 six-month results include a one-time pretax benefit of $670,000 from the settlement of a joint development agreement. Net income in the second quarter of 1993 was $101,000 or 1 cent per share compared to a net loss of $232,000 or 3 cents per share in the second quarter of 1992.
 Patrick A. McBrayer, president and chief executive officer of Osteotech, stated, "The decline in ceramic coating services revenue was due to a general decline in the orthopedic prosthetic market. Through our previously announced arrangement with APS-Materials, Inc., the company has taken actions designed to reduce spray coating operating costs which are expected to be fully implemented by first quarter 1994. We also are extremely pleased with the progress of products under development which utilize HC Implants' Polyactive(TM) technology and the marketing and licensing potential of these products."
 Mr. McBrayer also stated, "The goal of Osteotech is sustained growth so we are very pleased with our 35 percent revenue increase for the six- month period. As already announced, marketing agreements with Heinrich C. Ulrich KG and AAP, GmbH & Co. combined with anticipated continued growth in Grafton and allograft processing are expected to provide significant sales growth in 1994."
 Osteotech, Inc., headquartered in Shrewsbury, is a leading processor of human bone and bone connective tissue for transplantation and an innovator in the development and marketing of biologic, biomaterial and implant products for musculoskeletal surgery.
 OSTEOTECH, INC.
 Consolidated Summary Financial Information
 (Unaudited, in thousands, except per-share data)
 Periods ended Three Months Six Months
 June 30 1993 1992 1993 1992(A)
 Revenues:
 Service $3,947 $3,177 $8,114 $5,910
 Product 285 525 767 706
 Grant 69 74 160 74
 Total 4,301 3,776 9,041 6,690
 Costs and expenses:
 Cost of services 2,104 1,694 4,091 3,180
 Cost of products 177 276 420 400
 Marketing, general and admin. 2,011 1,704 4,001 3,091
 Research and development 737 694 1,420 1,174
 Total 5,029 4,368 9,932 7,845
 Other income (expense):
 Interest income, net 88 365 189 556
 Gain on termination of joint
 development agreement -- -- -- 670
 Recovery of principal on note
 from a significant customer 750 -- 1,100 --
 Other 29 (5) 41 14
 Total 867 360 1,330 1,240
 Inc. (loss) bef. inc. taxes and
 cumulative effect of acctg. chnge 139 (232) 439 85
 Provision for income taxes 38 -- 63 7
 Inc. (loss) bef. cumulative effect
 of a change in acctg. principle 101 (232) 376 78
 Cumulative effect of change in
 accounting for income taxes -- -- -- 15
 Net income (loss) 101 (232) 376 93(B)
 Net income (loss) per share $.01 $(.03) $.05 $.01
 Shares used in computing net
 income (loss) per share 7,974,082 7,500,426 8,038,764 8,215,058
 (A) -- Includes the results of operations of HC Implants BV commencing April 1, 1992.
 (B) -- Includes a one-time pretax benefit of $670,000 from the gain on termination of a joint development agreement.
 -0- 8/4/93
 /CONTACT: Michael J. Jeffries of Osteotech, Inc., 908-542-2800/
 (OSTE)


CO: Osteotech, Inc. ST: New Jersey IN: MTC SU: ERN

WB-CK -- NY037 -- 9334 08/04/93 11:30 EDT
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Date:Aug 4, 1993
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