Full Press Release Details
Chief Financial Officer
OraSure Announces Fourth Quarter and Full-Year 2011 Financial Results
Company Reports Record Quarterly Revenues
BETHLEHEM, PA February 8, 2012 (Globe Newswire) OraSure Technologies, Inc. (NASDAQ: OSUR), a market leader in oral fluid diagnostics, today announced its consolidated
financial results for the fourth quarter and full year of 2011.
Financial Highlights
During the fourth quarter of 2011, we achieved two major milestones in our principal clinical development programs, said
Douglas A. Michels, President and CEO of OraSure Technologies. We successfully obtained a CLIA waiver for our
OraQuick HCV rapid test, thereby substantially expanding the potential market for this product, and we filed
with the FDA the final of three modules to our pre-market approval application for an OraQuick HIV OTC test.
These significant developments along with the acquisition of DNA Genotek earlier in the year, resulted in a successful 2011 and will provide us with the opportunity to drive growth through new product offerings and access to new markets in 2012 and
Excluding DNAG sales, product revenues for the quarter and year ended December 31, 2011 increased 4% and 5%, respectively, primarily as a result of higher sales of the Company s infectious
disease testing, substance abuse and cryosurgical systems products, partially offset by lower sales of its insurance risk assessment products. Licensing and product development revenues for the full year decreased by $2.6 million primarily as a
result of the absence of $2.0 million in milestone payments received in 2010 under the terms of the Company s collaboration agreement with Merck for the development and promotion of the
OraQuick rapid HCV test.
The Company reported consolidated net income of $115,000, or $0.00 per share, for the fourth quarter of 2011, compared to a net loss of $1.0 million, or $0.02 per share, for the fourth quarter of 2010.
The current quarter results include $813,000 of intangible asset amortization and a $102,000 purchase accounting inventory adjustment resulting from the DNAG acquisition.
The purchase accounting inventory adjustment is related to the write up of DNAG s finished goods inventory to fair market value as of the acquisition date. For the quarter and year ended
December 31, 2011, this adjustment increased cost of products sold by $102,000 and $852,000, respectively, based on the amount of the acquired inventory sold during each period.
The Company reported a consolidated net loss of $8.8 million, or $0.19 per share, for the year ended December 31, 2011, compared
to a net loss of $3.5 million, or $0.08 per share, for the year ended December 31, 2010. The current year s consolidated loss included $6.2 million of incremental costs associated with the OraQuick HIV OTC clinical trials, $2.6 million of transaction costs associated with
the acquisition of DNAG, $1.2 million in amortization of acquired intangible assets and the $852,000 purchase accounting inventory adjustment described above.
Consolidated gross margin for the three months ended December 31, 2011 was 62% compared to 64% for the three months ended December 31, 2010.
Consolidated gross margin was 63% for the years ended December 31, 2011 and 2010. The decrease in gross margin in the current quarter was largely due to an unfavorable change in product revenue mix. Gross margin remained relatively flat for the
full year 2011 as the negative impact of the purchase accounting inventory adjustment discussed above was offset by the benefits derived from lower direct labor costs, improved absorption of overhead costs as a result of staffing optimization, and
the full implementation of automated manufacturing during 2011.
Consolidated operating expenses increased to $14.9
million in the fourth quarter of 2011 from $12.9 million in the comparable period of 2010 and also increased to $61.1 million for the year ended December 31, 2011, from $50.7 million for the year ended December 31, 2010. These increases
reflect the inclusion of DNAG operating expenses, higher clinical trial spending related to the Company s
OraQuick HIV OTC product and increased legal, accounting, consulting and other transaction costs incurred by
OraSure in connection with the DNAG acquisition.
For the quarter and year ended December 31, 2011, the Company also recorded an income
tax benefit associated with the DNAG loss before income taxes and certain Canadian research and development and investment tax credits.
cash equivalents and short-term investments totaled $23.9 million and working capital was $30.9 million at December 31, 2011, compared to $75.7 million and $77.8 million, respectively, at December 31, 2010. The decrease in cash and working
capital was largely due to the use of $52.3 million in cash to fund the DNAG acquisition and related transaction expenses.
The Company expects total consolidated revenues for the first quarter of 2012 to range from $20.5 to $21.0 million and is
projecting a net loss of approximately $0.08 - $0.09 per share for the first quarter of 2012.
| Condensed Consolidated Financial Data | ||||||||||||||||
| (In thousands, except per-share data) | ||||||||||||||||
| Unaudited | ||||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Results of Operations | ||||||||||||||||
| Revenues | $ | 23,690 | $ | 18,817 | $ | 81,881 | $ | 75,015 | ||||||||
| Cost of products sold | 9,094 | 6,853 | 30,164 | 27,656 | ||||||||||||
| Gross profit | 14,596 | 11,964 | 51,717 | 47,359 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 3,297 | 4,048 | 18,407 | 13,192 | ||||||||||||
| Sales and marketing | 6,357 | 4,830 | 22,383 | 20,727 | ||||||||||||
| General and administrative | 5,222 | 4,018 | 20,325 | 16,794 | ||||||||||||
| Total operating expenses | 14,876 | 12,896 | 61,115 | 50,713 | ||||||||||||
| Operating loss | (280 | ) | (932 | ) | (9,398 | ) | (3,354 | ) | ||||||||
| Other expense | (158 | ) | (91 | ) | (312 | ) | (143 | ) | ||||||||
| Loss before income taxes | (438 | ) | (1,023 | ) | (9,710 | ) | (3,497 | ) | ||||||||
| Income tax benefit | (553 | ) | (869 | ) | ||||||||||||
| Net income (loss) | $ | 115 | $ | (1,023 | ) | $ | (8,841 | ) | $ | (3,497 | ) | |||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic and Diluted | $ | $ | (0.02 | ) | $ | (0.19 | ) | $ | (0.08 | ) | ||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 47,264 | 46,221 | 46,908 | 46,187 | ||||||||||||
| Diluted | 48,893 | 46,221 | 46,908 | 46,187 |
| Three Months Ended December 31, | ||||||||||||||||||||
| Dollars | Percentage of Total Revenues | |||||||||||||||||||
| Market | 2011 | 2010 | % Change | 2011 | 2010 | |||||||||||||||
| Infectious disease testing | $ | 11,592 | $ | 11,437 | 1 | % | 49 | % | 61 | % | ||||||||||
| Substance abuse testing | 3,487 | 2,886 | 21 | 15 | 15 | |||||||||||||||
| Cryosurgical systems | 3,139 | 2,844 | 10 | 13 | 15 | |||||||||||||||
| Molecular collection systems | 4,194 | 100 | 17 | |||||||||||||||||
| Insurance risk assessment | 1,087 | 1,355 | (20 | ) | 5 | 7 | ||||||||||||||
| Product revenues | 23,499 | 18,522 | 27 | 99 | 98 | |||||||||||||||
| Licensing and product development | 191 | 295 | (35 | ) | 1 | 2 | ||||||||||||||
| Total revenues | $ | 23,690 | $ | 18,817 | 26 | % | 100 | % | 100 | % | ||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| Dollars | Percentage of Total Revenues | |||||||||||||||||||
| Market | 2011 | 2010 | % Change | 2011 | 2010 | |||||||||||||||
| Infectious disease testing | $ | 44,691 | $ | 41,738 | 7 | % | 55 | % | 55 | % | ||||||||||
| Substance abuse testing | 12,498 | 11,671 | 7 | 15 | 16 | |||||||||||||||
| Cryosurgical systems | 12,046 | 11,965 | 1 | 15 | 16 | |||||||||||||||
| Molecular collection systems | 6,216 | 100 | 8 | |||||||||||||||||
| Insurance risk assessment | 5,232 | 5,825 | (10 | ) | 6 | 8 | ||||||||||||||
| Product revenues | 80,683 | 71,199 | 13 | 99 | 95 | |||||||||||||||
| Licensing and product development | 1,198 | 3,816 | (69 | ) | 1 | 5 | ||||||||||||||
| Total revenues | $ | 81,881 | $ | 75,015 | 9 | % | 100 | % | 100 | % |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| OraQuick Revenues | 2011 | 2010 | % Change | 2011 | 2010 | % Change | ||||||||||||||||||
| Domestic HIV | $ | 9,775 | $ | 10,093 | (3 | )% | $ | 38,722 | $ | 38,172 | 1 | % | ||||||||||||
| International HIV | 721 | 766 | (6 | ) | 3,011 | 1,800 | 67 | |||||||||||||||||
| Domestic HCV | 426 | 44 | 868 | 890 | 46 | 1,835 | ||||||||||||||||||
| International HCV | 387 | 63 | 514 | 672 | 119 | 465 | ||||||||||||||||||
| Total OraQuick revenues | $ | 11,309 | $ | 10,966 | 3 | % | $ | 43,295 | $ | 40,137 | 8 | % |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| Intercept Revenues | 2011 | 2010 | % Change | 2011 | 2010 | % Change | ||||||||||||||||||
| Domestic | $ | 2,096 | $ | 1,883 | 11 | % | $ | 8,004 | $ | 7,274 | 10 | % | ||||||||||||
| International | 439 | 454 | (3 | ) | 1,912 | 1,976 | (3 | ) | ||||||||||||||||
| Total Intercept revenues | $ | 2,535 | $ | 2,337 | 8 | % | $ | 9,916 | $ | 9,250 | 7 | % | ||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| Cryosurgical Systems Revenues | 2011 | 2010 | % Change | 2011 | 2010 | % Change | ||||||||||||||||||
| Professional domestic | $ | 1,678 | $ | 1,492 | 12 | % | $ | 6,775 | $ | 5,967 | 14 | % | ||||||||||||
| Professional international | 412 | 520 | (21 | ) | 1,400 | 1,385 | 1 | |||||||||||||||||
| Over-the-Counter | 1,049 | 832 | 26 | 3,871 | 4,613 | (16 | ) | |||||||||||||||||
| Total cryosurgical systems revenues | $ | 3,139 | $ | 2,844 | 10 | % | $ | 12,046 | $ | 11,965 | 1 | % |
| Consolidated Balance Sheets (Unaudited) | December 31, 2011 | December 31, 2010 | ||||||
| Assets | ||||||||
| Cash, cash equivalents and short-term investments | $ | 23,878 | $ | 75,738 | ||||
| Accounts receivable, net | 17,159 | 12,471 | ||||||
| Inventories | 9,621 | 7,346 | ||||||
| Other current assets | 2,178 | 1,930 | ||||||
| Property and equipment, net | 19,855 | 19,611 | ||||||
| Intangible assets, net | 30,383 | 4,807 | ||||||
| Goodwill | 24,740 | |||||||
| Other non-current assets | 47 | 617 | ||||||
| Total assets | $ | 127,861 | $ | 122,520 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current portion of long-term debt | $ | 7,292 | $ | 7,791 | ||||
| Accounts payable | 4,142 | 2,899 | ||||||
| Accrued expenses | 10,542 | 8,987 | ||||||
| Deferred income taxes, net | 5,636 | |||||||
| Stockholders equity | 100,249 | 102,843 | ||||||
| Total liabilities and stockholders equity | $ | 127,861 | $ | 122,520 |
| Year ended December 31, | ||||||||
| Additional Financial Data (Unaudited) | 2011 | 2010 | ||||||
| Capital expenditures | $ | 2,505 | $ | 2,106 | ||||
| Acquisition of DNA Genotek, Inc. (net of cash acquired) | $ | 49,730 | $ | |||||
| Depreciation and amortization | $ | 4,915 | $ | 3,012 | ||||
| Stock based compensation | $ | 4,101 | $ | 3,229 | ||||
| Cash provided by (used in) operating activities | $ | (2,991 | ) | $ | 3,887 | |||
| Accounts receivable days sales outstanding | 68 days | 61 days |
The Company will host a conference call and audio webcast to discuss the Company s 2011 fourth quarter and full-year financial results, business developments and first 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 #44923763, 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 February 15, 2012, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and
entering the Conference ID #44923763.
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, through its wholly-owned subsidiary, DNA Genotek
Inc., the Company also 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.
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; 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;
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, 2010, 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.