Exactech Q1 Revenue Increases 9% to $43.3 Million Net Income $2.5 Million and EPS of $0.19

GAINESVILLE, Fla.--(Business Wire)--
Exactech, Inc. (Nasdaq:EXAC), a developer and producer of bone and joint
restoration products for hip, knee, shoulder, spine and biologic materials,
announced today revenue of $43.3 million for the first quarter of 2009, a 9%
increase over $39.8 million in the first quarter of 2008. Net income was $2.5
million, or $0.19 per diluted share, compared to $2.8 million, or $0.23 per
diluted share, in the same quarter a year ago. Net income for the quarter,
excluding pre-tax legal expenses and costs of $1.4 million related to the
ongoing Department of Justice (DOJ) inquiry, was $3.3 million or $0.26 EPS.

First Quarter Highlights and Segment Performance

* First quarter revenue increased 9% to $43.3 million
* Net income excluding DOJ inquiry costs increased 12% to $3.3 million or $0.26
EPS
* Knee implant revenue remained unchanged at $18.5 million
* Hip implant revenue increased 3% to $6.5 million
* Biologic and Spine revenue increased 6% to $7.1 million
* Extremity implant revenue increased 57% to $5.8 million
* Other products revenue increased 19% to $5.4 million, including $2.3 million
of other revenue from our French distributor acquired in April 2008

Exactech Chairman and CEO Bill Petty said, "Our financial results for the
quarter were within our expectations as our company performed well in a
challenging economic environment. The slowdown in our major segments was offset
by strong results in our extremity revenues and continued favorable comparisons
in international sales.

"Sales from knee implants remained unchanged at $18.5 million for the first
quarter of 2009. Hip implant sales for the first quarter were $6.5 million, a 3%
increase from revenue of $6.4 million in the first quarter of 2008, due to
domestic strength in our Novation® hip products. Biologic-spine revenue was up
6% to $7.1 million from $6.7 million in the same quarter last year. Extremity
revenues increased to $5.8 million, a 57% increase from last year`s revenue of
$3.7 million, as a result of the continued momentum of our Equinoxe® shoulder
products. Other products increased 19% to $5.4 million."

Exactech President David Petty said, "Continued progress of our French
distributor was the primary driver behind a 9% increase in international sales
to $12.5 million from $11.5 million in the first quarter of 2008. International
sales for the quarter remained at 29% of total sales, identical with last year.
U.S. sales increased 9% to $30.8 million compared with $28.3 million in the
first quarter of 2008."

Chief Financial Officer Jody Phillips said, "Net income for the quarter was down
12% to $2.5 million from $2.8 million in the same quarter last year primarily
due to legal costs that masked a solid operating performance. During the
quarter, legal and other expenses related to the DOJ inquiry were $874,000, net
of tax, compared to $188,000 of DOJ-related expenses in the first quarter of
2008. Excluding the impact of the DOJ-related expenses, our net income increased
12%. Gross margins increased to 66.5% in 2009 from 62.9% in 2008, primarily as a
result of a stable mix of domestic and international sales and continued benefit
from our internal manufacturing cost reduction efforts.

"Total operating expenses for the quarter were $24.7 million, an increase of 20%
from $20.6 million in the comparable period. As a percentage of sales, operating
expenses increased to 57% from 52% for 2008. Total sales and marketing expenses
were up 18%, and increased to 34% as a percentage of sales from 31% during 2008.
General and administrative expenses including DOJ-related expenses of $1.4
million increased 29% in the first quarter to $5.1 million from $3.9 million
during the first quarter of 2008. Research and development expenses increased
12% to $2.9 million from $2.6 million in the first quarter of 2008, reflecting
our continuing focus on development of products."

Looking forward, Exactech updated its revenue targets for 2009 to a range of
$176 million to $184 million and diluted earnings per share for the year 2009 in
the range of $1.02 to $1.08. For the second quarter ending June 30, 2009, the
company targets revenue in the range of $44 million to $46 million and diluted
earnings per share in the range of $0.26 to $0.28. These EPS target ranges
exclude the impact of DOJ inquiry costs. The foregoing statements regarding
targets for the quarter and full year are forward-looking and actual results may
differ materially. These are the company`s targets, not predictions of actual
performance.

The financial statements are below.

The company has scheduled a conference call at 10:00 a.m. Eastern Time on
Thursday, April 30. The call will cover the company`s first quarter results. CEO
Bill Petty will open the conference call and a question-and-answer session will
follow.

To participate in the call, dial 1-888-549-7750 any time after 9:50 a.m. EDT on
April 30. International and local callers should dial 1-480-629-9868. While in
conference, if callers should require operator assistance, they can press the
star followed by the zero button. This will call an operator to the line.

A live webcast of the call will be available at
http://viavid.net/dce.aspx?sid=000062D1. A podcast will be available
approximately one hour after the event ends and can be accessed
athttp://viavid.net/mp3/000062D1.mp3. Both will be archived for approximately 90
days.

About Exactech

Based in Gainesville, Fla., Exactech develops and markets orthopaedic implant
devices, related surgical instruments and biologic materials and services to
hospitals and physicians. The company manufactures many of its orthopaedic
devices at its Gainesville facility. Exactech`s orthopaedic products are used in
the restoration of bones and joints that have deteriorated as a result of injury
or diseases such as arthritis. Exactech markets its products in the United
States and Australia, in addition to more than 30 markets in Europe, Asia and
Latin America. Additional information about Exactech, Inc. can be found at
http://www.exac.com. Copies of Exactech`s press releases, SEC filings, current
price quotes and other valuable information for investors may be found at
http://www.exac.com and http://www.hawkassociates.com.

An investment profile on Exactech may be found at
http://www.hawkassociates.com/profile/exac.cfm.

Investors may contact Chief Financial Officer Jody Phillips at 352-377-1140 or
Julie Marshall or Frank Hawkins, Hawk Associates Inc., at 305-451-1888, e-mail:
exactech@hawkassociates.com. To receive future releases in e-mail alerts, sign
up at http://www.hawkassociates.com/about/alert.

This release contains various forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which represent the company`s expectations or beliefs
concerning future events of the company`s financial performance. These
forward-looking statements are further qualified by important factors that could
cause actual results to differ materially from those in the forward-looking
statements. These factors include the effect of competitive pricing, the
company`s dependence on the ability of third party manufacturers to produce
components on a basis which is cost-effective to the company, market acceptance
of the company`s products and the effects of government regulation. Results
actually achieved may differ materially from expected results included in these
statements.

EXACTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

(unaudited) (audited)
March 31, December 31,
2009 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,375 $ 3,285
Accounts receivable, net of allowances of $1,307 and $1,006 33,910 31,750
Prepaid expenses and other assets, net 1,845 2,193
Income taxes receivable 190 359
Inventories - current 61,059 61,866
Deferred taxes 1,363 1,119
Total current assets 100,742 100,572

PROPERTY AND EQUIPMENT:
Land 1,225 1,231
Machinery and equipment 22,771 21,528
Surgical instruments 40,990 38,012
Furniture and fixtures 2,767 2,746
Facilities 13,498 13,551
Projects in process 2,141 2,221
Total property and equipment 83,392 79,289
Accumulated depreciation (34,969 ) (32,950 )
Net property and equipment 48,423 46,339

OTHER ASSETS:
Deferred financing and deposits, net 1,915 2,252
Other investments 1,328 1,387
Non-current inventory 1,904 -
Product licenses and designs, net 3,065 2,724
Customer relationships, net 2,179 2,418
Patents and trademarks, net 2,182 2,272
Goodwill 9,652 9,556
Total other assets 22,225 20,609
TOTAL ASSETS $ 171,390 $ 167,520

LIABILITIES AND SHAREHOLDERS` EQUITY
CURRENT LIABILITIES:
Accounts payable $ 14,290 $ 13,065
Income taxes payable 981 242
Accrued expenses and other liabilities 7,456 7,067
Current portion of long-term debt 1,370 1,415
Total current liabilities 24,097 21,789

LONG-TERM LIABILITIES:
Deferred tax liabilities 1,368 835
Line of credit 14,253 14,802
Long-term debt, net of current portion 7,316 7,610
Other long-term liabilities 849 869
Total long-term liabilities 23,786 24,116
Total liabilities 47,883 45,905

SHAREHOLDERS` EQUITY:
Common stock 127 127
Additional paid-in capital 51,678 51,223
Accumulated other comprehensive income (loss), net of tax (2,047 ) (1,019 )
Retained earnings 73,749 71,284
Total shareholders` equity 123,507 121,615

TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY $ 171,390 $ 167,520

EXACTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)

Three Month Periods
Ended March 31,
2009 2008
NET SALES $ 43,304 $ 39,791

COST OF GOODS SOLD 14,507 14,766
Gross profit 28,797 25,025

OPERATING EXPENSES:
Sales and marketing 14,596 12,335
General and administrative 5,084 3,938
Research and development 2,853 2,551
Depreciation and amortization 2,179 1,726
Total operating expenses 24,712 20,550

INCOME FROM OPERATIONS 4,085 4,475

OTHER INCOME (EXPENSE):
Interest income 6 3
Other income - 485
Interest expense (150 ) (295 )
Foreign currency exchange loss (33 ) (54 )
Total other expenses (177 ) 139

INCOME BEFORE INCOME TAXES 3,908 4,614

PROVISION FOR INCOME TAXES 1,443 1,712
INCOME BEFORE EQUITY IN NET LOSS OF 2,465 2,902
OTHER INVESTMENTS

EQUITY IN NET LOSS OF OTHER INVESTMENTS - (98 )
NET INCOME $ 2,465 $ 2,804

BASIC EARNINGS PER SHARE $ 0.19 $ 0.24

DILUTED EARNINGS PER SHARE $ 0.19 $ 0.23

SHARES - BASIC 12,716 11,688

SHARES - DILUTED 12,859 12,128

Adjusted net income to exclude the effect of DOJ related expenses:
Net Income $ 2,465 $ 2,804
Adjustments for DOJ related expenses:
DOJ related expenses, pre-tax 1,391 299
Income tax benefit (517 ) (111 )
874 188
Adjusted net income - excluding DOJ related expense $ 3,339 $ 2,992

Diluted earnings per share $ 0.19 $ 0.23
Adjustment of DOJ related expenses, net 0.07 0.02
Adjusted diluted earnings per share $ 0.26 $ 0.25

Exactech, Inc.
Investors:
Jody Phillips, CFO, 352-377-1140
or
Hawk Associates Inc.
Julie Marshall or Frank Hawkins, 305-451-1888
exactech@hawkassociates.com.

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