Concerned Osteotech Stockholders Comment on Company's Lackluster Second Quarter Financial Results and Management's Half-Hearted Evaluation of Strategic Alternatives
NEW YORK, Aug. 11 /PRNewswire/ -- Spencer Capital, Boston Avenue Capital LLC and Heartland Advisors, Inc. (the "Concerned Osteotech Stockholders"), which collectively own approximately 24% of Osteotech Inc.'s (Nasdaq: OSTE) outstanding common stock, commented today on Osteotech's second quarter 2010 financial results and management's evaluation of strategic alternatives.
The Concerned Osteotech Stockholders view the company's second quarter results as a further example of management's failure to achieve meaningful revenue growth. Revenue continued to decline for the six months ended June 30, 2010 compared to the prior year period. Though the company increased sales in its hybrid/synthetic segment by $3.8 million during the first half of the year through the continuing limited launch of the Magnifuse and Plexur product lines, these increases were offset by declines in the company's other segments, including a 5% decline in the company's core Demineralized Bone Matrix (DBM) segment. Even with the new products, the company is just treading water.
In addition, the Concerned Osteotech Stockholders are extremely skeptical of the Board's efforts to explore strategic alternatives to maximize shareholder value. The Board hired an investment bank in 2009 to evaluate strategic alternatives, incurring $930,000 in costs and expenses in the first half of the year, and yet the Board announced this evaluation just two weeks prior to the 2010 annual meeting and the same day as the announcement of disappointing second quarter results. In the meantime, since the Board commenced its evaluation, it has adopted a poison pill, entered into a credit facility containing a poison put provision, provided for exorbitant compensation to executives in the event they are terminated following a change in control and delayed the annual meeting of stockholders.
Commenting on the company's results and the Board's actions, Dr. Kenneth Shubin Stein of Spencer Capital said: "The Board's actions demonstrate that the Directors are no longer in touch with the stockholders' best interests. There is an urgent need for change at the Board level."
VOTE THE WHITE PROXY CARD TODAY
The Committee urges stockholders to vote the WHITE proxy card and NOT to sign any gold proxy card sent to you by Osteotech. Even if you have sent a gold proxy card to Osteotech, you have every right to change your vote. You may revoke that proxy and vote FOR the Committee's director nominees – Gary L. Alexander, Michelle Rachael Forrest, Michael J. McConnell and Dr. Kenneth H. Shubin Stein – by signing, dating and mailing a later-dated WHITE proxy card.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
THE CONCERNED OSTEOTECH STOCKHOLDERS STRONGLY ADVISE ALL STOCKHOLDERS OF THE COMPANY TO READ THE DEFINITIVE PROXY STATEMENT, DATED AUGUST 4, 2010, BECAUSE IT CONTAINS IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN THIS SOLICITATION. SUCH DEFINITIVE PROXY STATEMENT IS AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE SOLICITATION WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO OUR PROXY SOLICITOR, OKAPI PARTNERS LLC, AT ITS TOLL-FREE NUMBER: (877) 274-8654.
About the Concerned Osteotech Stockholders:
The Participants of the Concerned Osteotech Stockholders are Heartland Advisors, Inc., Spencer Capital Opportunity Fund, LP, Spencer Capital Management, LLC, Spencer Capital Partners, LLC, Boston Avenue Capital LLC, Gary L. Alexander, Michelle Rachael Forrest, Michael J. McConnell and Kenneth H. Shubin Stein, M.D.
SOURCE Concerned Osteotech Stockholders
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