Full Press Release Details
Chief Financial Officer
OraSure Announces Record Full-Year and Quarterly Revenues
BETHLEHEM, PA February 5, 2014 (Globe Newswire) OraSure Technologies, Inc. (NASDAQ: OSUR), a market leader in oral fluid
diagnostics, today announced its consolidated financial results for the full-year and fourth quarter of 2013.
Financial Highlights
We are pleased with the Company s overall financial results and especially the solid revenue growth delivered in 2013, said Douglas A.
Michels, President and CEO of OraSure Technologies. Our molecular collection systems business was particularly strong, growing by more than 40% for the year. Infectious disease revenues also increased largely due to contributions from our
newest products, the OraQuick In-Home HIV test and the OraQuick rapid HCV test. The transition to a new collaboration for the supply
of high throughput homogeneous drug assays represents another highlight from the year that should enable growth in our substance abuse testing business.
Consolidated net product revenues for
the fourth quarter and full-year of 2013 increased 31% and 15%, respectively, from the comparable periods of 2012. The fourth quarter increase was primarily a result of higher sales of the Company s infectious disease testing products, which
included the non-recurring net favorable $2.5 million accounting adjustment, and higher molecular collection systems and cryosurgical systems product sales, partially offset by lower sales of the Company s insurance risk assessment
products. The increase in net product
revenues for the full-year of 2013 was primarily the result of higher sales of the Company s infectious disease testing products, including the
$2.5 million net accounting adjustment, and higher sales of molecular collections systems products, partially offset by lower sales of the Company s substance abuse testing, cryosurgical systems and insurance risk assessment products.
The Company had no consolidated licensing and product development revenues for the fourth quarter of 2013 as a result of the expiration of certain
patents licensed to a third party. This compares to $198,000 recorded for the fourth quarter of 2012. Consolidated licensing and product development revenues for the year ended December 31, 2013 decreased to $623,000
from $2.1 million in the comparable period of the prior year, primarily due to the absence of a $1.0 million milestone payment received in the first quarter of 2012 under the Company s HCV collaboration agreement
with Merck. No similar payment was received during 2013 because the collaboration agreement with Merck was terminated in November 2012.
Consolidated gross margin for the three months and year ended December 31, 2013 was 60% and 59%, respectively. Consolidated gross margin for the
three months and year ended December 31, 2012 was 60% and 63%, respectively. Gross margin for the current year was negatively impacted by higher royalties, an unfavorable change in product mix and the absence of the $1.0 million HCV
milestone payment, partially offset by an improvement in overhead absorption.
Consolidated operating expenses decreased to $11.1 million during the
fourth quarter of 2013 compared to $19.4 million in the comparable period of 2012. For the year ended December 31, 2013, consolidated operating expenses were $70.8 million, a decrease from the $71.8 million reported for
the year ended December 31, 2012. The decrease for the fourth quarter of 2013 was primarily due to the inclusion of the $8.3 million Roche settlement payment partially offset by higher promotional and advertising expenses associated
with the Company s OraQuick In-Home HIV test. The current quarter and full-year period
expenses included $4.6 million and $18.8 million of promotional and advertising costs related to this product, compared to $5.2 million and $9.9 million spent in the fourth quarter and full-year of 2012, respectively.
For the three months ended December 31, 2013, the Company recorded Canadian income tax expense of $14,000. For the year ended December 31,
2013, the Company recorded a Canadian income tax benefit of $772,000 associated with the loss before income taxes and certain Canadian research and development and investment tax credits at DNAG.
The Company s cash balance totaled $93.2 million at December 31, 2013 compared to $87.9 million at December 31, 2012. Working capital
was $100.6 million at December 31, 2013 compared to $103.5 million at December 31, 2012. For the year ended December 31, 2013, the Company generated $8.3 million from operations, which included the $8.3 million
settlement payment from Roche. Cash generated by operations in the fourth quarter of 2013 was $11.4 million which also included the $8.3 million Roche payment.
First Quarter 2014 Outlook
The Company expects consolidated net revenues to range from $23.0 to $23.5 million and is projecting a consolidated net loss of approximately
$0.13 $0.14 per share for the first quarter of 2014.
| Condensed Consolidated Financial Data | ||||||||||||||||
| (In thousands, except per-share data) | ||||||||||||||||
| Unaudited | ||||||||||||||||
| Three months ended | Year ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Results of Operations | ||||||||||||||||
| Net revenues (1) | $ | 28,768 | $ | 22,144 | $ | 98,940 | $ | 87,820 | ||||||||
| Cost of products sold | 11,640 | 8,893 | 40,351 | 32,249 | ||||||||||||
| Gross profit | 17,128 | 13,251 | 58,589 | 55,571 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,212 | 2,893 | 10,932 | 12,445 | ||||||||||||
| Sales and marketing | 11,241 | 11,597 | 46,465 | 37,087 | ||||||||||||
| General and administrative | 5,912 | 4,911 | 21,654 | 22,309 | ||||||||||||
| Gain on contract termination settlement | (8,300 | ) | (8,300 | ) | ||||||||||||
| Total operating expenses | 11,065 | 19,401 | 70,751 | 71,841 | ||||||||||||
| Operating income (loss) | 6,063 | (6,150 | ) | (12,162 | ) | (16,270 | ) | |||||||||
| Other income (expense) | 164 | 25 | 200 | (242 | ) | |||||||||||
| Income (loss) before income taxes | 6,227 | (6,125 | ) | (11,962 | ) | (16,512 | ) | |||||||||
| Income tax expense (benefit) | 14 | (259 | ) | (772 | ) | (1,397 | ) | |||||||||
| Net income (loss) | $ | 6,213 | $ | (5,866 | ) | $ | (11,190 | ) | $ | (15,115 | ) | |||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic and Diluted | $ | 0.11 | $ | (0.11 | ) | $ | (0.20 | ) | $ | (0.29 | ) | |||||
| Weighted average shares: | ||||||||||||||||
| Basic | 55,616 | 55,224 | 55,555 | 51,457 | ||||||||||||
| Diluted | 56,176 | 55,224 | 55,555 | 51,457 |
Summary of Revenues by Market and
| Three Months Ended December 31, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2013 | 2012 | % Change | 2013 | 2012 | |||||||||||||||
| Infectious disease testing | $ | 15,436 | $ | 11,846 | 30 | % | 54 | % | 54 | % | ||||||||||
| Substance abuse testing | 2,116 | 2,101 | 1 | 7 | 9 | |||||||||||||||
| Cryosurgical systems | 3,558 | 2,696 | 32 | 12 | 12 | |||||||||||||||
| Molecular collection systems | 6,831 | 4,266 | 60 | 24 | 19 | |||||||||||||||
| Insurance risk assessment | 827 | 1,037 | (20 | ) | 3 | 5 | ||||||||||||||
| Net product revenues | 28,768 | 21,946 | 31 | 100 | 99 | |||||||||||||||
| Licensing and product development | 198 | (100 | ) | 1 | ||||||||||||||||
| Net revenues | $ | 28,768 | $ | 22,144 | 30 | % | 100 | % | 100 | % |
| Year Ended December 31, | ||||||||||||||||||||
| Dollars | Percentage of Total Net Revenues | |||||||||||||||||||
| Market | 2013 | 2012 | % Change | 2013 | 2012 | |||||||||||||||
| Infectious disease testing | $ | 50,961 | $ | 42,728 | 19 | % | 51 | % | 49 | % | ||||||||||
| Substance abuse testing | 8,571 | 9,407 | (9 | ) | 9 | 11 | ||||||||||||||
| Cryosurgical systems | 14,468 | 14,876 | (3 | ) | 14 | 17 | ||||||||||||||
| Molecular collection systems | 20,381 | 14,258 | 43 | 21 | 16 | |||||||||||||||
| Insurance risk assessment | 3,936 | 4,484 | (12 | ) | 4 | 5 | ||||||||||||||
| Net product revenues | 98,317 | 85,753 | 15 | 99 | 98 | |||||||||||||||
| Licensing and product development | 623 | 2,067 | (70 | ) | 1 | 2 | ||||||||||||||
| Net revenues | $ | 98,940 | $ | 87,820 | 13 | % | 100 | % | 100 | % |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| OraQuick Revenues | 2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||||
| Domestic HIV | $ | 8,447 | $ | 9,157 | (8 | )% | $ | 32,301 | $ | 34,265 | (6 | )% | ||||||||||||
| International HIV | 907 | 773 | 17 | 3,365 | 3,061 | 10 | ||||||||||||||||||
| Domestic HIV OTC | 3,909 | 546 | 616 | 9,106 | 546 | 1568 | ||||||||||||||||||
| Net HIV revenues | 13,263 | 10,476 | 27 | 44,772 | 37,872 | 18 | ||||||||||||||||||
| Domestic HCV | 1,073 | 847 | 27 | 2,847 | 2,805 | 1 | ||||||||||||||||||
| International HCV | 860 | 326 | 164 | 2,268 | 1,059 | 114 | ||||||||||||||||||
| Net HCV revenues | 1,933 | 1,173 | 65 | 5,115 | 3,864 | 32 | ||||||||||||||||||
| Net OraQuick revenues | $ | 15,196 | $ | 11,649 | 30 | % | $ | 49,887 | $ | 41,736 | 20 | % |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| Intercept Revenues | 2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||||
| Domestic | $ | 1,453 | $ | 1,354 | 7 | % | $ | 5,693 | $ | 6,335 | (10 | )% | ||||||||||||
| International | 115 | 90 | 28 | 500 | 706 | (29 | ) | |||||||||||||||||
| Net Intercept revenues | $ | 1,568 | $ | 1,444 | 9 | % | $ | 6,193 | $ | 7,041 | (12 | )% |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| Cryosurgical Systems Revenues | 2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||||
| Domestic professional | $ | 1,828 | $ | 1,818 | 1 | % | $ | 6,020 | $ | 7,159 | (16 | )% | ||||||||||||
| International professional | 402 | 352 | 14 | 1,441 | 1,462 | (1 | ) | |||||||||||||||||
| International over-the-counter | 1,328 | 526 | 152 | 7,007 | 6,255 | 12 | ||||||||||||||||||
| Net cryosurgical systems revenues | $ | 3,558 | $ | 2,696 | 32 | % | $ | 14,468 | $ | 14,876 | (3 | )% |
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| December 31, 2013 | December 31, 2012 | |||||||
| Assets | ||||||||
| Cash | $ | 93,191 | $ | 87,888 | ||||
| Accounts receivable, net | 12,957 | 17,469 | ||||||
| Inventories | 11,444 | 12,758 | ||||||
| Other current assets | 1,983 | 2,002 | ||||||
| Property and equipment, net | 17,933 | 18,546 | ||||||
| Intangible assets, net | 22,226 | 27,207 | ||||||
| Goodwill | 23,782 | 25,445 | ||||||
| Other non-current assets | 729 | 124 | ||||||
| Total assets | $ | 184,245 | $ | 191,439 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Accounts payable | $ | 4,834 | $ | 3,380 | ||||
| Deferred revenue | 1,119 | 5,504 | ||||||
| Accrued expenses | 13,032 | 7,750 | ||||||
| Other non-current liabilities | 677 | 89 | ||||||
| Deferred income taxes | 3,437 | 4,401 | ||||||
| Stockholders equity | 161,146 | 170,315 | ||||||
| Total liabilities and stockholders equity | $ | 184,245 | $ | 191,439 |
| Year ended December 31, | ||||||||
| Additional Financial Data (Unaudited) | 2013 | 2012 | ||||||
| Capital expenditures | $ | 2,462 | $ | 2,019 | ||||
| Net proceeds from public offering | $ | $ | 70,246 | |||||
| Depreciation and amortization | $ | 6,492 | $ | 7,250 | ||||
| Stock based compensation | $ | 5,572 | $ | 5,197 | ||||
| Cash provided by (used in) operating activities | $ | 8,286 | $ | (5,373 | ) |
Company will host a conference call and audio webcast to discuss the Company s 2013 fourth quarter and full-year financial results, certain business developments and financial guidance for the first quarter of 2014, 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, Ronald H. Spair, Chief Financial Officer and Chief Operating Officer,
and Kathleen Weber, Senior Vice President and General Manager, Consumer Products. 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 #37105448 or go to
OraSure Technologies web site, www.orasure.com, and click on the Investor Relations page. Please click on the webcast link and follow the prompts for registration and access 10 minutes prior to the call. 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 12, 2014, by dialing 855-859-2056 (Domestic) or 404-537-3406 (International) and entering the Conference ID
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. The Company
sells the OraQuick In-Home HIV Test, the first and only rapid HIV test approved by the U.S. Food and
Drug Administration for sale to the consumer over-the-counter market 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 the Company, 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 our 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; ability to effectively resolve 483 observations, warning letters and
other findings or comments from the FDA or other regulators; 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, historic purchase levels or minimum purchase requirements for the Company s products; impact of replacing distributors; inventory levels at
distributors and other customers; ability of DNA Genotek to achieve its financial and strategic objectives and continue to
increase its revenues; ability to identify, complete, integrate and realize the full benefits of future acquisitions; impact of competitors, competing products and technology changes; impact of
negative economic conditions, 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 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 products and components; availability of related products produced by third parties or products required for use of the Company s 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 the Company s 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, 2012, 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.