OraSure Technologies, Inc. (Nasdaq:OSUR), a market leader in oral
fluid diagnostics, today announced its consolidated financial
results for the second quarter and six months ended June 30, 2012.
Financial Highlights
- Consolidated revenues were $22.6 million for the second quarter
of 2012, a 19% increase from the comparable quarter of 2011.
Revenues for the current quarter included $3.3 million in revenues
from the Company's molecular diagnostic collection subsidiary, DNA
Genotek Inc. ("DNAG"), acquired in August 2011.
- Consolidated revenues were $43.6 million for the six months
ended June 30, 2012, a 19% increase from the comparable period of
2011. Revenues for the current period included $6.6 million in
revenues from DNAG operations.
- Consolidated net loss for the second quarter of 2012 was $3.6
million, or $0.07 per share, which compares to a net loss of $2.4
million, or $0.05 per share, for the second quarter of
2011. The increase in the net loss for the quarter was largely
the result of increased spending in sales and marketing associated
with the commercialization of the Company's OraQuick® In-Home HIV
Test.
- Consolidated net loss for the six months ended June 30, 2012
was $6.8 million, or $0.14 per share, which compares to a net loss
of $5.0 million, or $0.11 per share, for the six months ended June
30, 2011.
"We are pleased with the Company's second quarter financial
results, which are in line with expectations and reflect revenues
from DNA Genotek, our molecular collection systems business, and
continued sales growth for our OraQuick® HCV test," said Douglas A.
Michels, President and CEO of OraSure Technologies. "We are
also proud to have delivered one of the Company's most important
strategic objectives with the recent FDA approval of our OraQuick®
In-Home HIV Test. We can now be the first to market the only
rapid HIV test approved for sale into the U.S. consumer
marketplace. We are continuing to implement a comprehensive
commercialization plan and expect this exciting new product to be
available for purchase by consumers beginning in October."
Financial Results
Product revenues for the quarter and the six month period ended
June 30, 2012 increased 19% and 18%, respectively, primarily as a
result of the molecular collection system sales and higher sales of
the Company's cryosurgical systems products. These increases
were partially offset by lower sales of the Company's infectious
disease testing, substance abuse testing and insurance risk
assessment products.
Licensing and product development revenues for the second
quarter of 2012 decreased $87,000, or 24%, reflecting lower
royalties under a license related to the Company's cryosurgical
patents. Licensing and product development revenues for the
six months ended June 30, 2012 increased by $755,000, primarily as
a result of a $1.0 million milestone payment received under the
terms of the Company's HCV collaboration agreement with Merck,
partially offset by lower royalties related to the Company's
cryosurgical patents.
Consolidated gross margin for the three and six months ended
June 30, 2012 was 65% compared to 64% for the same periods of
2011. DNAG margins of 67% in both periods contributed to this
improvement. The increase for the current six month period was
also positively impacted by the $1.0 million HCV milestone payment,
partially offset by higher product support costs and a decline in
the absorption of labor costs when compared to the first half of
2011.
Consolidated operating expenses increased to $18.2 million in
the second quarter of 2012 from $14.6 million in the comparable
period of 2011. For the six months ended June 30, 2012,
consolidated operating expenses were $35.6 million, an increase
over the $28.4 million reported for the six months ended June 30,
2011. These increases reflect the inclusion of DNAG operating
expenses, increased sales and marketing costs associated with the
preparation for commercialization of the Company's OraQuick®
In-Home HIV Test and higher consulting, legal and staffing costs.
These increases were partially offset by lower clinical trial costs
related to the Company's OraQuick® In-Home HIV Test.
For the three and six months ended June 30, 2012, the Company
recorded an income tax benefit of $91,000 and $611,000,
respectively, associated with the DNAG loss before income taxes and
certain Canadian research and development and investment tax
credits. The income tax benefit recorded in the second quarter
of 2012 was negatively impacted by an adjustment to the Company's
Canadian deferred tax liability to reflect a change in enacted
Canadian provincial income tax rates.
Cash totaled $23.3 million at June 30, 2012 compared to $23.9
million at December 31, 2011. Working capital was $31.5
million at June 30, 2012 compared to $30.9 million at December 31,
2011. On July 11, 2012, the Company completed a public equity
offering of 6.1 million shares of its common stock, resulting in
net proceeds of approximately $70 million after expenses of the
offering.
Third Quarter 2012 Outlook
The Company expects total consolidated revenues to range from
$22.0 to $22.5 million and is projecting a consolidated net loss of
approximately $0.07 - $0.08 per share for the third quarter of
2012.
Financial
Data |
|
|
|
|
|
Condensed Consolidated
Financial Data |
(In thousands, except
per-share data) |
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
Three months
ended |
Six months
ended |
|
June
30, |
June
30, |
|
2012 |
2011 |
2012 |
2011 |
Results of Operations |
|
|
|
|
Revenues |
$ 22,616 |
$ 19,064 |
$ 43,560 |
$ 36,477 |
Cost of products sold |
7,917 |
6,803 |
15,129 |
12,949 |
Gross profit |
14,699 |
12,261 |
28,431 |
23,528 |
Operating expenses: |
|
|
|
|
Research and development |
3,113 |
5,143 |
6,557 |
9,563 |
Sales and marketing |
9,014 |
5,352 |
16,887 |
10,284 |
General and administrative |
6,112 |
4,125 |
12,178 |
8,593 |
Total operating expenses |
18,239 |
14,620 |
35,622 |
28,440 |
Operating loss |
(3,540) |
(2,359) |
(7,191) |
(4,912) |
Other expense |
(113) |
(79) |
(234) |
(124) |
Loss before income taxes |
(3,653) |
(2,438) |
(7,425) |
(5,036) |
Income tax benefit |
(91) |
-- |
(611) |
-- |
Net loss |
$ (3,562) |
$ (2,438) |
$ (6,814) |
$ (5,036) |
Loss per share: |
|
|
|
|
Basic and Diluted |
$ (0.07) |
$ (0.05) |
$ (0.14) |
$ (0.11) |
|
|
|
|
|
Weighted average shares: |
|
|
|
|
Basic and Diluted |
48,235 |
46,814 |
48,021 |
46,667 |
|
Summary of Revenues by
Market and Product (Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended June 30, |
|
|
|
Percentage
of |
|
Dollars |
|
Total
Revenues |
Market |
2012 |
2011 |
% Change |
2012 |
2011 |
|
|
|
|
|
|
Infectious disease testing |
$ 10,387 |
$ 11,284 |
(8)% |
46% |
59% |
Substance abuse testing |
2,888 |
3,185 |
(9) |
13 |
17 |
Cryosurgical systems |
4,503 |
2,802 |
61 |
20 |
15 |
Molecular collection systems |
3,341 |
-- |
N/A |
15 |
N/A |
Insurance risk assessment |
1,220 |
1,429 |
(15) |
5 |
7 |
Product revenues |
22,339 |
18,700 |
19 |
99 |
98 |
Licensing and product development |
277 |
364 |
(24) |
1 |
2 |
Total revenues |
$ 22,616 |
$ 19,064 |
19% |
100% |
100% |
|
|
|
Six Months Ended
June 30, |
|
|
|
Percentage
of |
|
Dollars |
|
Total
Revenues |
Market |
2012 |
2011 |
% Change |
2012 |
2011 |
|
|
|
|
|
|
Infectious disease testing |
$ 20,164 |
$ 21,246 |
(5)% |
47% |
58% |
Substance abuse testing |
4,974 |
6,246 |
(20) |
12 |
17 |
Cryosurgical systems |
7,981 |
5,512 |
45 |
18 |
15 |
Molecular collection systems |
6,638 |
-- |
N/A |
15 |
N/A |
Insurance risk assessment |
2,320 |
2,745 |
(15) |
5 |
8 |
Product revenues |
42,077 |
35,749 |
18 |
97 |
98 |
Licensing and product development |
1,483 |
728 |
104 |
3 |
2 |
Total revenues |
$ 43,560 |
$ 36,477 |
19% |
100% |
100% |
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
OraQuick® Revenues |
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
|
|
|
|
|
|
|
Domestic HIV |
$ 8,432 |
$ 10,069 |
(16)% |
$16,580 |
$ 18,937 |
(12)% |
International HIV |
744 |
714 |
4 |
1,403 |
1,412 |
(1) |
Domestic HCV |
742 |
98 |
657 |
1,279 |
133 |
862 |
International HCV |
212 |
144 |
47 |
493 |
192 |
157 |
Total OraQuick® revenues |
$ 10,130 |
$ 11,025 |
(8)% |
$19,755 |
$ 20,674 |
(4)% |
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
Intercept® Revenues |
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
|
|
|
|
|
|
|
Domestic |
$ 1,958 |
$ 2,083 |
(6)% |
$ 3,482 |
$ 4,049 |
(12)% |
International |
291 |
514 |
(43) |
337 |
1,035 |
(67) |
Total Intercept® revenues |
$ 2,249 |
$ 2,597 |
(13)% |
$ 3,819 |
$ 5,084 |
(24)% |
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
Cryosurgical Systems
Revenues |
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
|
|
|
|
|
|
|
Professional domestic |
$ 1,944 |
$ 1,713 |
13% |
$ 3,316 |
$ 3,055 |
9% |
Professional international |
371 |
247 |
50 |
657 |
587 |
12 |
Over-the-Counter |
2,188 |
842 |
160 |
4,008 |
1,870 |
114 |
Total cryosurgical systems revenues |
$ 4,503 |
$ 2,802 |
61% |
$ 7,981 |
$ 5,512 |
45% |
|
|
|
|
|
|
Consolidated Balance
Sheets (Unaudited) |
June 30, 2012 |
December 31,
2011 |
Assets |
|
|
Cash |
$ 23,273 |
$ 23,878 |
Accounts receivable, net |
15,413 |
17,159 |
Inventories |
11,025 |
9,621 |
Other current assets |
2,632 |
2,178 |
Property and equipment, net |
18,975 |
19,855 |
Intangible assets, net |
28,503 |
30,383 |
Goodwill |
24,843 |
24,740 |
Other non-current assets |
71 |
47 |
Total assets |
$ 124,735 |
$ 127,861 |
|
|
|
Liabilities and Stockholders' Equity |
|
|
Current portion of long-term debt |
$ 7,042 |
$ 7,292 |
Accounts payable |
4,305 |
4,142 |
Accrued expenses |
9,455 |
10,542 |
Other liabilities |
30 |
-- |
Deferred income taxes |
5,059 |
5,636 |
Stockholders' equity |
98,844 |
100,249 |
Total liabilities and stockholders'
equity |
$ 124,735 |
$ 127,861 |
|
|
|
Six months
ended |
|
June
30, |
Additional Financial
Data (Unaudited) |
2012 |
2011 |
|
|
|
Capital expenditures |
$ 730 |
$ 1,180 |
Depreciation and amortization |
$ 3,614 |
$ 1,684 |
Stock based compensation |
$ 2,521 |
$ 1,931 |
Cash used in operating activities |
$ 2,296 |
$ 373 |
Accounts receivable – days sales
outstanding |
64 days |
58 days |
Conference Call
The Company will host a conference call and audio webcast to
discuss the Company's 2012 second quarter financial results,
business developments and third quarter 2012 financial guidance,
beginning today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).
On the call will be Douglas A. Michels, President and Chief
Executive Officer, and Ronald H. Spair, Chief Financial Officer and
Chief Operating Officer. The call will include prepared remarks by
management and a question and answer session.
In order to listen to the conference call, please either dial
877-348-9357 (Domestic) or 970-315-0488 (International) and
reference Conference ID #11264311, or go to OraSure Technologies'
web site, www.orasure.com, and click on the Investor Info link. A
replay of the call will be archived on OraSure Technologies' web
site shortly after the call has ended and will be available for
seven days. A replay of the call can also be accessed until August
14, 2012, by dialing 855-859-2056 (Domestic) or 404-537-3406
(International) and entering the Conference ID #11264311.
About OraSure Technologies
OraSure Technologies is a leader in the development, manufacture
and distribution of oral fluid diagnostic and collection devices
and other technologies designed to detect or diagnose critical
medical conditions. Its innovative products include rapid tests for
the detection of antibodies to HIV and HCV at the point of care and
testing solutions for detecting various drugs of abuse. In
addition, the Company is a leading provider of oral fluid sample
collection, stabilization and preparation products for molecular
diagnostic applications. OraSure's portfolio of products is sold
globally to various clinical laboratories, hospitals, clinics,
community-based organizations and other public health
organizations, research and academic institutions, distributors,
government agencies, physicians' offices, and commercial and
industrial entities. The Company's products enable healthcare
providers to deliver critical information to patients, empowering
them to make decisions to improve and protect their
health. For more information on OraSure Technologies,
please visit www.orasure.com.
The OraSure Technologies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6440
Important Information
This press release contains certain forward-looking statements,
including with respect to expected revenues and earnings/loss per
share. Forward-looking statements are not guarantees of future
performance or results. Known and unknown factors that could cause
actual performance or results to be materially different from those
expressed or implied in these statements include, but are not
limited to: ability to market and sell products, whether through an
internal, direct sales force or third parties; ability to
manufacture products in accordance with applicable specifications,
performance standards and quality requirements; ability to obtain,
and timing and cost of obtaining, necessary regulatory approvals
for new products or new indications or applications for existing
products; ability to comply with applicable regulatory
requirements; changes in relationships, including disputes or
disagreements, with strategic partners or other parties and
reliance on strategic partners for the performance of critical
activities under collaborative arrangements; failure of
distributors or other customers to meet purchase forecasts or
minimum purchase requirements for the Company's products; impact of
replacing distributors and success of direct sales efforts;
inventory levels at distributors and other customers; ability to
integrate and realize the full benefits of the Company's
acquisition of DNA Genotek; ability to identify, complete,
integrate and realize the full benefits of future acquisitions;
impact of competitors, competing products and technology changes;
impact of the economic downturn, high unemployment and poor credit
conditions; reduction or deferral of public funding available to
customers; competition from new or better technology or lower cost
products; ability to develop, commercialize and market new
products, including the OraQuick® In-Home HIV Test; market
acceptance of oral fluid testing or other products; changes in
market acceptance of products based on product performance,
extended shelf life or other factors; ability to fund research and
development and other products and operations; ability to obtain
and maintain new or existing product distribution channels;
reliance on sole supply sources for critical product components;
availability of related products produced by third parties or
products required for use of our products; history of losses and
ability to achieve sustained profitability; ability to utilize net
operating loss carry forwards or other deferred tax assets;
volatility of our stock price; uncertainty relating to patent
protection and potential patent infringement claims; uncertainty
and costs of litigation relating to patents and other intellectual
property; availability of licenses to patents or other technology;
ability to enter into international manufacturing agreements;
obstacles to international marketing and manufacturing of products;
ability to sell products internationally, including the impact of
changes in international funding sources and testing algorithms;
adverse movements in foreign currency exchange rates; loss or
impairment of sources of capital; ability to meet financial
covenants in agreements with financial institutions; ability to
refinance outstanding debt under expiring credit facilities on
acceptable terms or at all; ability to retain qualified personnel;
exposure to product liability and other types of litigation;
changes in international, federal or state laws and regulations;
customer consolidations and inventory practices; equipment failures
and ability to obtain needed raw materials and components; the
impact of terrorist attacks and civil unrest; and general
political, business and economic conditions. These and other
factors are discussed more fully in the Company's Securities
and Exchange Commission filings, including its registration
statements, Annual Report on Form 10-K for the year ended December
31, 2011, Quarterly Reports on Form 10-Q, and other filings with
the SEC. Although forward-looking statements help to provide
information about future prospects, readers should keep in mind
that forward-looking statements may not be reliable. The
forward-looking statements are made as of the date of this press
release and OraSure Technologies undertakes no duty to update these
statements.
CONTACT: Company Contact:
Ronald H. Spair
Chief Financial Officer
610-882-1820
Investorinfo@orasure.com
www.orasure.com
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