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OSTEOTECH REPORTS RECORD NINE MONTHS AND THIRD QUARTER REVENUES AND EARNINGS

 SHREWSBURY, N.J., Nov. 3 /PRNewswire/ -- Osteotech, Inc. (NASDAQ: OSTE) announced today that it had achieved record levels of revenues and earnings in the third quarter and first nine months of 1993. Revenues in the quarter increased 20 percent to $4,884,000 from $4,072,000 in the third quarter ended Sept. 30, 1992. Revenues in the nine months ended Sept. 30, 1993, increased 29 percent to $13,925,000 from $10,762,000 in the same period of 1992. These increases in revenues are due to the strong demand for allograft processed tissue, partly offset, in the third quarter, by a decrease in revenues from ceramic coating services and products.
 Net income in the third quarter of 1993 was $386,000 or $.05 per share, compared to net income of $51,000 or $.01 per share in the third quarter of 1992. Net income for the nine months ended Sept. 30, 1993, was $762,000 or $.10 per share as compared to net income of $144,000 or $.02 per share in the nine months ended Sept. 30, 1992. The 1992 nine month results include a one-time pretax benefit of $670,000 from the settlement of a joint development agreement.
 Patrick A. McBrayer, president and chief executive officer of Osteotech, stated that "the third quarter results reflect the continuing strong demand for the company's processing services and products. In October, 1993," he further stated, "Osteotech launched the Zielke Spinal Implant System in the U.S. This is an important milestone for Osteotech because it complements our current technology and sales call patterns. The Zielke system is a well known, high quality, cost-effective spine system which fits the current cost containment environment. It is expected that this system, in combination with the distribution of trauma products obtained under and exclusive U.S. marketing agreement with AAP, GmbH & Co., plus the expected continued growth of allograft processing services, will result in continuing sales growth in 1994," he said.
 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)
 Period ended Sept. 30 Three months Nine months
 1993 1992 1993 1992(A)
 Revenues:
 Service $4,328 $3,521 $12,442 $9,431
 Product 498 479 1,265 1,185
 Grant 58 72 218 146
 Total 4,884 4,072 13,925 10,762
 Costs and expenses:
 Cost of services 2,067 1,689 6,158 4,869
 Cost of products 224 257 644 657
 Marketing, general & admin. 2,502 1,606 6,503 4,697
 Research & development 730 742 2,150 1,916
 Total 5,523 4,294 15,455 12,139
 Other income (expense):
 Interest income, net 131 204 320 760
 Gain on termination of joint
 development agreement -- -- -- 670
 Recovery of principal on note
 from a significant customer 900 20 2,000 20
 Other 31 60 72 74
 Total 1,062 284 2,392 1,524
 Income before income taxes and
 cumulative effect of accounting
 change 423 62 862 147
 Provision for income taxes 37 11 100 18
 Income before cumulative effect of
 change in accounting principle 386 51 762 129
 Cumulative effect of change in
 accounting for income taxes -- -- -- 15
 Net income $386 $51 $762 $144(B)
 Net income per share $.05 $.01 $.10 $.02
 Shares used in computing
 net income per share 7,993,874 8,116,092 8,023,570 8,174,132
 (A) Includes the results of operations of HC Implants BV since April 1, 1992.
 (B) Includes a one-time benefit of $670,000 before income taxes from the gain on termination of a joint development agreement.
 -0- 11/3/93
 /CONTACT: Michael J. Jeffries of Osteotech, 908-542-2800/
 (OSTE)


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

LD-JS -- NY003 -- 9952 11/03/93 08:15 EST
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Date:Nov 3, 1993
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