Full Press Release Details
Chief Financial Officer
OraSure Announces 2012 Third Quarter Financial Results
BETHLEHEM, PA November 7, 2012 (Globe Newswire) OraSure Technologies, Inc. (NASDAQ: OSUR), a market leader in oral fluid diagnostics, today announced its consolidated
financial results for the third quarter and nine months ended September 30, 2012.
Quarterly Highlights
included historic achievements for our Company, said Douglas A. Michels, President and Chief Executive Officer of OraSure Technologies. We began the quarter with the receipt of FDA approval for our OraQuick In-Home HIV Test, making it the first and only rapid infectious disease test ever approved for OTC sale, and we
ended with the completion of our first shipments of this product to retailers around the country. We also commenced the commercial launch of this product in October with the initiation of a robust promotional campaign to build product and brand
awareness on a national basis. We intend to continue to devote the time and resources needed to maximize both the public health benefits and market potential of this important new product.
Product revenues for
the quarter and the nine month period ended September 30, 2012 increased 1% and 12%, respectively, primarily as a result of higher 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 third quarter of 2012 increased $108,000, or 39%, reflecting royalties received under a license related to the Company s cryosurgical patents.
Licensing and product development revenues for the nine months ended September 30, 2012 increased by $863,000, or 86%, 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 nine months ended September 30, 2012 and 2011 was 63% and
Consolidated operating expenses decreased to $16.8 million in the third quarter of 2012 from $17.8 million in the
comparable period of 2011. For the nine months ended September 30, 2012, consolidated operating expenses were $52.4 million, an increase over the $46.2 million reported for the nine months ended September 30, 2011.
The decrease in operating expenses for the third quarter of 2012 was the result of lower clinical trial costs related to the
Company s OraQuick In-Home HIV test and lower general and administrative expenses caused by the absence in
the current period of $2.1 million of DNAG transaction costs incurred during the third quarter of 2011. These decreases in expenses were partially offset by $1.8 million of additional sales and marketing costs related to the commercialization of the
Company s OraQuick In-Home HIV test and the inclusion of a full quarter of DNAG operating expenses in the
third quarter of 2012.
The increase in operating expense for the nine months ended September 30, 2012 resulted from
the inclusion of DNAG operating expenses for the full nine months in 2012, an additional $4.7 million of sales and marketing costs related to the OraQuick In-Home HIV Test commercialization and higher staffing costs included in general and administrative expenses. These increases were partially offset by lower clinical
trial costs related to the Company s OraQuick In-Home HIV Test and lower consulting and legal fees
reflecting the absence of $2.5 million of DNAG transaction costs incurred in 2011.
For the three and nine months ended September 30,
2012, the Company recorded an income tax benefit of $527,000 and $1.1 million, respectively, associated with the DNAG loss before income taxes and certain Canadian research and development and investment tax credits. The income tax benefit recorded
for the nine month period was negatively impacted by a second quarter adjustment to the Company s Canadian deferred tax liability to reflect a change in enacted Canadian provincial income tax rates.
Cash totaled $89.4 million at September 30, 2012 compared to $23.9 million at December 31, 2011. Working capital was $106.6 million at
September 30, 2012 compared to $30.9 million at December 31, 2011. On July 11, 2012, the Company completed a secondary offering of 6.1 million shares of its common stock, resulting in net proceeds of $70.3 million after expenses
Fourth Quarter 2012 Outlook
The Company expects total consolidated revenues to range from $20.5 to $21.0 million and is projecting a consolidated net loss of approximately $0.13 $0.15 per share for the fourth quarter of 2012.
Condensed Consolidated Financial Data
(In thousands, except per-share
| Unaudited | ||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Results of Operations | ||||||||||||||||
| Revenues | $ | 22,115 | $ | 21,714 | $ | 65,675 | $ | 58,191 | ||||||||
| Cost of products sold | 8,227 | 8,120 | 23,356 | 21,070 | ||||||||||||
| Gross profit | 13,888 | 13,594 | 42,319 | 37,121 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,994 | 5,546 | 9,551 | 15,110 | ||||||||||||
| Sales and marketing | 8,602 | 5,742 | 25,490 | 16,026 | ||||||||||||
| General and administrative | 5,220 | 6,510 | 17,398 | 15,103 | ||||||||||||
| Total operating expenses | 16,816 | 17,798 | 52,439 | 46,239 | ||||||||||||
| Operating loss | (2,928 | ) | (4,204 | ) | (10,120 | ) | (9,118 | ) | ||||||||
| Other expense | (34 | ) | (30 | ) | (267 | ) | (153 | ) | ||||||||
| Loss before income taxes | (2,962 | ) | (4,234 | ) | (10,387 | ) | (9,271 | ) | ||||||||
| Income tax benefit | (527 | ) | (315 | ) | (1,138 | ) | (315 | ) | ||||||||
| Net loss | $ | (2,435 | ) | $ | (3,919 | ) | $ | (9,249 | ) | $ | (8,956 | ) | ||||
| Loss per share: | ||||||||||||||||
| Basic and Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.19 | ) | ||||
| Weighted average shares: | ||||||||||||||||
| Basic and Diluted | 54,441 | 47,028 | 50,177 | 46,788 |
Summary of Revenues by Market and Product (Unaudited)
| Three Months Ended September 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Revenues | |||||||||||||||||||
| Market | 2012 | 2011 | % Change | 2012 | 2011 | |||||||||||||||
| Infectious disease testing | $ | 10,717 | $ | 11,854 | (10 | )% | 48 | % | 55 | % | ||||||||||
| Substance abuse testing | 2,331 | 2,765 | (16 | ) | 11 | 13 | ||||||||||||||
| Cryosurgical systems | 4,199 | 3,395 | 24 | 19 | 16 | |||||||||||||||
| Molecular collection systems | 3,353 | 2,022 | 66 | 15 | 9 | |||||||||||||||
| Insurance risk assessment | 1,128 | 1,399 | (19 | ) | 5 | 6 | ||||||||||||||
| Product revenues | 21,728 | 21,435 | 1 | 98 | 99 | |||||||||||||||
| Licensing and product development | 387 | 279 | 39 | 2 | 1 | |||||||||||||||
| Total revenues | $ | 22,115 | $ | 21,714 | 2 | % | 100 | % | 100 | % |
| Nine Months Ended September 30, | ||||||||||||||||||||
| Dollars | Percentage of Total Revenues | |||||||||||||||||||
| Market | 2012 | 2011 | % Change | 2012 | 2011 | |||||||||||||||
| Infectious disease testing | $ | 30,880 | $ | 33,100 | (7 | )% | 47 | % | 57 | % | ||||||||||
| Substance abuse testing | 7,305 | 9,011 | (19 | ) | 11 | 16 | ||||||||||||||
| Cryosurgical systems | 12,181 | 8,907 | 37 | 19 | 15 | |||||||||||||||
| Molecular collection systems | 9,992 | 2,022 | 394 | 15 | 3 | |||||||||||||||
| Insurance risk assessment | 3,448 | 4,145 | (17 | ) | 5 | 7 | ||||||||||||||
| Product revenues | 63,806 | 57,185 | 12 | 97 | 98 | |||||||||||||||
| Licensing and product development | 1,869 | 1,006 | 86 | 3 | 2 | |||||||||||||||
| Total revenues | $ | 65,675 | $ | 58,191 | 13 | % | 100 | % | 100 | % |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| OraQuick Revenues | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||||
| Domestic HIV | $ | 8,527 | $ | 10,010 | (15 | )% | $ | 25,106 | $ | 28,948 | (13 | )% | ||||||||||||
| International HIV | 884 | 878 | 1 | 2,287 | 2,290 | |||||||||||||||||||
| Domestic HCV | 678 | 332 | 104 | 1,958 | 464 | 322 | ||||||||||||||||||
| International HCV | 241 | 93 | 159 | 734 | 284 | 158 | ||||||||||||||||||
| Total OraQuick revenues | $ | 10,330 | $ | 11,313 | (9 | )% | $ | 30,085 | $ | 31,986 | (6 | )% |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| Intercept Revenues | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||||
| Domestic | $ | 1,499 | $ | 1,947 | (23 | )% | $ | 4,981 | $ | 5,909 | (16 | )% | ||||||||||||
| International | 279 | 438 | (36 | ) | 616 | 1,472 | (58 | ) | ||||||||||||||||
| Total Intercept revenues | $ | 1,778 | $ | 2,385 | (25 | )% | $ | 5,597 | $ | 7,381 | (24 | )% |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| Cryosurgical Systems Revenues | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||||
| Professional domestic | $ | 2,025 | $ | 2,042 | (1 | )% | $ | 5,342 | $ | 5,097 | 5 | % | ||||||||||||
| Professional international | 453 | 402 | 13 | 1,110 | 989 | 12 | ||||||||||||||||||
| Over-the-Counter | 1,721 | 951 | 81 | 5,729 | 2,821 | 103 | ||||||||||||||||||
| Total cryosurgical systems revenues | $ | 4,199 | $ | 3,395 | 24 | % | $ | 12,181 | $ | 8,907 | 37 | % |
Condensed Consolidated Balance Sheets
| (Unaudited) | September 30, 2012 | December 31, 2011 | ||||||
| Assets | ||||||||
| Cash | $ | 89,415 | $ | 23,878 | ||||
| Accounts receivable, net | 19,310 | 17,159 | ||||||
| Inventories | 12,845 | 9,621 | ||||||
| Other current assets | 2,037 | 2,178 | ||||||
| Property and equipment, net | 18,811 | 19,855 | ||||||
| Intangible assets, net | 28,351 | 30,383 | ||||||
| Goodwill | 25,682 | 24,740 | ||||||
| Other non-current assets | 105 | 47 | ||||||
| Total assets | $ | 196,556 | $ | 127,861 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current portion of long-term debt | $ | $ | 7,292 | |||||
| Accounts payable | 5,132 | 4,142 | ||||||
| Accrued expenses | 11,867 | 10,542 | ||||||
| Other liabilities | 67 | |||||||
| Deferred income taxes | 4,705 | 5,636 | ||||||
| Stockholders equity | 174,785 | 100,249 | ||||||
| Total liabilities and stockholders equity | $ | 196,556 | $ | 127,861 |
| Nine months ended | ||||||||
| September 30, | ||||||||
| Additional Financial Data (Unaudited) | 2012 | 2011 | ||||||
| Capital expenditures | $ | 1,402 | $ | 1,806 | ||||
| Net proceeds from public offering | $ | 70,293 | $ | |||||
| Acquisition of DNA Genotek, Inc., net of cash acquired | $ | $ | 49,973 | |||||
| Depreciation and amortization | $ | 5,455 | $ | 3,011 | ||||
| Stock based compensation | $ | 3,845 | $ | 3,016 | ||||
| Cash used in operating activities | $ | 4,006 | $ | 4,079 |
The Company will host a conference call and audio webcast to discuss the Company s 2012 third quarter financial results, business developments and financial guidance for the fourth quarter of 2012,
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 #51186733, 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 November 14, 2012, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID #51186733.
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 July 2012, the Company received approval from the U.S. Food
and Drug Administration for the Company s OraQuick In-Home HIV Test for sale directly to consumers in the
over-the-counter (OTC) market making it the first and only rapid OTC HIV test approved in the U.S. 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.
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 of DNA Genotek to achieve its
financial and strategic objectives; 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
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