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OSTEOTECH ANNOUNCES PROFITABLE YEAR END RESULTS AND 28.6 PERCENT REVENUE INCREASE

 OSTEOTECH ANNOUNCES PROFITABLE YEAR END RESULTS
 AND 28.6 PERCENT REVENUE INCREASE
 SHREWSBURY, N.J., March 4 /PRNewswire/ -- Osteotech, Inc. (NASDAQ: OSTE) today announced net income of $606,000 or 9 cents per share for the year ended Dec. 31, 1991, compared to a net loss of $609,000 or 14 cents per share in 1990. Revenues for 1991 increased 28.6 percent to $9,686,000 from $7,531,000 in 1990.
 Net income for the fourth quarter ended Dec. 31, 1991 was $55,000 or one cent per share as compared to a net loss of $405,000 or 9 cents per share in the fourth quarter of 1990. Revenues for the fourth quarter of 1991 were $2,721,000 or approximately 26.4 percent higher than the $2,153,000 reported in the 1990 fourth quarter.
 Patrick McBrayer, president and chief executive officer of the company, said, "the increases in revenue and net income for the year and fourth quarter were primarily attributable to both an increase in donors processed by the company and more efficient tissue yield. Additionally, net income in each of the periods was also favorably impacted by the increase in interest income received on the loan to one of the company's major customers and as a result of the investment of the net proceeds from the company's initial public offering."
 McBrayer also stated that, "as previously planned, in connection with the expansion of the marketing and education force to launch Grafton(TM) processed bone gel in the first quarter of 1992, the company added five individuals to the marketing force in the fourth quarter of 1991, and added eight in February 1992." As a result, he said, "1991's fourth quarter earnings were reduced by costs associated with the hiring and training of the five individuals added to the staff late in the quarter. It is anticipated that the added costs associated with the expansion of the marketing force will similarly impact earnings for at least the first two quarters of 1992. However, in the first quarter of 1992 the earnings impact of these costs will be offset by the one time benefit of $670,000, before taxes, that will be realized as a result of the settlement with Alza Corporation." He further indicated that, "the company expects 1992 full year results will be higher than 1991 results."
 Osteotech, Inc. headquartered in Shrewsbury, is a leading processor of human bone and bone connective tissue for transplantation and an innovator in the development of tissue related biomaterial and pharmaceutical delivery systems for musculoskeletal surgery.
 OSTEOTECH, INC.
 Summary Financial Information
 (In thousands, except per share data)
 Periods ended: Twelve months Quarter
 Dec. 31: 1991 1990 1991 1990
 (Unaudited)
 Revenues $9,686 $7,531 $2,721 $2,153
 Costs and expenses:
 Cost of sales 5,457 4,528 1,453 1,244
 Marketing, general &
 administrative 3,290 2,751 1,107 1,017
 R&D 1,354 967 392 261
 Interest (income)
 expense, net (1,040) (74) (298) (1)
 Other (income) expense 4 (32) 4 37
 Total costs and expenses 9,065 8,140 2,658 2,558
 Income (loss) before
 income taxes 621 (609) 63 (405)
 Provision for income
 taxes before benefit
 of net operating loss
 carryforward 272 -- 38 --
 Benefit of utilization of
 net operating loss
 carryforward (257) -- (30) --
 Total 15 -- 8 --
 Net income (loss) 606 (609) 55 (405)
 Net income (loss) per
 share (Pro forma as
 to 1990) (A) $0.09 ($0.14) $0.01 ($0.09)
 Shares used in computing
 net income (loss)
 per share (A) 6,967,597 4,385,978 8,247,093 4,580,030
 (A) -- During the third quarter of 1991, in connection with its initial public offering, the company issued 1,437,500 shares of common stock and converted 4,376,762 shares of convertible preferred stock to common on a share-for-share basis. For purposes of computing the pro forma net income (loss) per share for the quarter and the twelve months ended Dec. 31, 1990, convertible preferred stock has been treated on a pro forma basis as if converted to common stock on their respective dates of original issuance.
 -0- 3/4/92
 /CONTACT: Michael J. Jeffries of Osteotech, 908-542-2800/
 (OSTE) CO: Osteotech Inc. ST: New Jersey IN: SU: ERN


SH-TS -- NY012 -- 4838 03/04/92 09:42 EST
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Date:Mar 4, 1992
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