Osteotech Reports 2008 Second Quarter Diluted Earnings Per Share of $.10 on Revenues of $27...( EATONTOWN N.J. July 31 /- Osteote...),Health

EATONTOWN, N.J., July 31 /PRNewswire-FirstCall/ -- Osteotech, Inc. (Nasdaq: OSTE), a leader in the emerging field of biologic products for regenerative healing, reported today that net income for the three months ended June 30, 2008 was $1.7 million, or $.10 diluted earnings per share compared to net income of $.9 million, or $.05 diluted earnings per share, for the second quarter of 2007. Revenue for the three months ended June 30, 2008 increased 4% to $27.6 million from $26.5 million for the same period in the prior year. Gross margin was 53% and 48% in the second quarter of 2008 and 2007, respectively. Net income for the three months ended June 30, 2008 included $1.0 million associated with the settlement of certain litigation.

Net income for the six months ended June 30, 2008 was $2.6 million, or $.14 diluted earnings per share, compared to net income of $.2 million, or $.01 diluted earning per share, for the same period in the prior year. Revenue for the six months ended June 30, 2008 increased 7% to $55.2 million from $51.7 million for the six months ended June 30, 2007. Gross margin was 52% for the first half of 2008 compared to 49% for the first half of 2007. Net income for the first half of 2007 was negatively impacted by first quarter costs of $1.1 million related to the settlement of certain litigation.

Sam Owusu-Akyaw, Osteotech's President and Chief Executive Officer, stated, "Our financial performance continues to demonstrate our ability to effectively manage the business. The key initiative for 2008 is distribution effectiveness. The international sales team is taking shape and the domestic sales initiatives, including the focus on master sales agencies, are moving forward."

Mr. Owusu-Akyaw will host a
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